Slow Growth, Downward Revisions in Health Jobs Continue

For the second month in a row, the Employment Situation Summary showed a slowing down in the growth of jobs in health services versus non-health jobs, relative to recent history. Further, revisions to data in this morning’s very strong jobs report indicate high job growth reported in health services for December and January were not correct.

Health jobs increased only 0.17 percent in this morning’s jobs report, versus 0.16 percent for non-health jobs. With 27,000 jobs added, health services accounted for 11 percent of new nonfarm civilian jobs.

This continues a welcome development. The previous disproportionately high share of job growth in health services was a deliberate outcome of Obamacare. If this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals (0.25 percent versus 0.12 percent). This was concentrated in physicians’ offices and home health. This is a good sign because these are low-cost locations of care.

See Table I below the fold:

QSS: Good Growth in Health Services Revenue

This morning’s Quarterly Services Survey (QSS), published by the Census Bureau, showed good revenue growth across health services, except for specialty hospitals. 

Overall, revenue grew 4.2 percent in the fourth quarter. Further, growth versus Q4 2015 was a strong 6.9 percent and YTD growth is up 5.9 percent. Only specialty (except psychiatric and substance abuse) hospitals showed a decline. Revenue at outpatient care centers has grown 10.5 percent, Q4 2016 versus Q4 2015, a remarkable growth which hopefully reflects a change in location of care to lower cost settings versus hospitals. Although, hospitals’ revenues still grew a healthy 7.5 percent.

See Table I below the fold:

Every State Must Close Obamacare’s Special Enrollment Loopholes

(A version of this Health Alert was published by Forbes.)

So, the Republican Repeal-and-Replace Obamacare train has finally left the station. Although free-market health reformers are divided on the merits of the American Health Care Act, as introduced by the Energy & Commerce and Ways & Means Committees of the U.S. House of Representatives, no-one can deny the Republicans have kept their promise to take up health reform as their first order of legislative business.

However, new legislation takes a long time to get to the President’s desk. Meanwhile, the Trump Administration has the unenviable task of enforcing a law they know harms Americans. They are doing the best they can to offer relief through administrative rule-making.

On February 17, the Centers for Medicare & Medicaid Services proposed a new rule to address one reason why Obamacare premiums jumped 25 percent this year: The exchanges attract too many sick people and not enough healthy people. This is called a death spiral; and one reason it occurs is the Obama Administration allowed people to jump in and out of the exchanges too easily.

Replacing Obamacare with A Means-Tested Tax Credit

In his joint address to Congress last Tuesday, President Trump promoted the idea of a tax credit to support people’s purchase of health care. This is in line with the approach taken by Secretary Tom Price when he was in Congress, and that of the House Republican leadership.

Some self-styled conservatives oppose a refundable tax credit because it would cost taxpayers a lot of money. That which we currently understand to be the Republican replacement bill would offer a tax credit to individuals based on age but not on income, if they do not get employer-based health benefits.

That may be changing to a means-tested tax credit in order to win the support of conservative Republican lawmakers. “Oh, the irony,” exclaims one journalist: Don’t those Republicans know Obamacare contains means-tested tax credits? It’s still Obamacare-Lite!

No, it would not be.

Why Do Late Middle-Aged Women Allow Obamacare To Gouge Them?

In February, Professor Mark Pauly of the Wharton Business School wrote a short article proposing reforms to individual health insurance, in which he reminded us the biggest premium hike in the market for individual insurance consequent to Obamacare was among women in their 60s. The actual research was published in 2014, but I have wondered about it ever since.

Obamacare prevents insurers from charging premiums for 64-year olds that are more than three times those charged to 18-year olds. (A multiple of about five would be fairer, according to actuaries’ consensus.) Intuition tells us that should reduce premiums for older people. That intuition is wrong. Nevertheless, if politicians can convince people it is true, it makes political sense to impose the rule, because older people are much more likely to vote than younger people.

Health Construction Declined in January, Robust Year on Year

The construction market was weak overall in January, especially in health facilities, where construction starts declined 1.6 percent from December. Other construction starts declined only 1.0 percent. Health facilities construction accounted for just under six percent of the value of all new nonresidential construction (Table I).

Repealing Obamacare Will Create Jobs

(A version of this Health Alert was published by InsideSources.com and widely syndicated in local newspapers.)

Obamacare channeled billions of dollars out of the productive economy and diverted it towards a health-services sector that has become even more bloated than it was before 2010.

Last July, Dr. Bob Kocher, a venture capitalist who served as a special assistant to President Obama when the Affordable Care Act was created, noted that more than half of all health care workers today are administrators, up from just over a third before Obamacare became law.

These are paper pushers, not doctors and nurses—not the kind of jobs we should be bragging about.