GDP: Tame Health Spending in Weak Report

For those (like me) concerned about how much health spending continues to increase after Obamacare, today’s flash report of fourth quarter Gross Domestic Product confirmed good news.

Overall, real GPD increased 1.9 percent on the quarter, while health services spending increased only 1.6 percent, and contributed only 10 percent of real GDP growth. Growth in health services spending was somewhat higher than growth in non-health services spending (1.2 percent) but significantly lower than non-health personal consumption expenditures (2.7 percent). Further, the implied annualized change in the health services price index increased by just 1.5 percent, lower than the price increase of 2.4 percent for non-health services, 2.3 percent for non-health PCE, and 2.2 percent for non-health GDP.

(See Table I below the fold.)

JRG's Oral Testimony at House Ways & Means Committee 1/24/17

Highlight reel (2.44 minutes) of my testimony to U.S. House of Representatives Ways & Means Committee Oversight Subcommittee on Obamacare's individual mandate (1/24/17):



The full oral testimony is at this link and my written testimony is at this link.

Massachusetts Governor Hiking Taxes To Rescue Failed Health Reform

(A version of this column was published by Forbes.)

Governor Charlie Baker of Massachusetts has proposed a tax of $2,000 per worker on businesses which do not offer health coverage to employees who become dependent on Medicaid. This makes him the second Republican governor of Massachusetts to buy into the notion that imposing taxes (or fines or penalties or fees) on individuals and businesses can force them to accept responsibility for government failure at getting health spending under control.

Evidence from Massachusetts and the nation shows the opposite is true. Yesterday, I testified on the effect of Obamacare’s individual mandate before the Oversight Subcommittee of the U.S. House of Representatives’ Ways and Means Committee. (The video is at this link, and my written testimony is at this link.)

Obamacare’s Bureaucracy: The Amazing Rise in Health Insurance Jobs

As Congress and President Trump debate how to repeal and replace Obamacare, the obsession with health insurance, rather than actual access to health care, has dominated the debate. It invites the question: How have jobs in health insurance fared before and after Obamacare?

They have boomed, growing over one quarter since the January 20 employment pre-recession high-tater mark.

Feel The Bern! No Right to Health Care in Canada

On Wednesday, I watched the Senate’s Health, Education, Labor, & Pensions (HELP) Committee’s courtesy hearing for Dr. Tom Price, MD, whom President-elect Trump has nominated to be the next United States Secretary of Health & Human Services. As a game of “gotcha,” the hearing played out predictably.

However, Senator Bernie Sanders (I-VT) stood out for asking a pointless “question” (actually a statement), which was because it was based on an error. As he has many times, Senator Sanders made the false claim that health care is a right in Canada and other countries outside the United States. According to Mr. Sanders, this is a unique stain on the United States.With respect to Canada, it is simply and plainly not true that health care is a “right.”

CPI: Moderate Health Price Inflation

The Consumer Price Index rose 0.3 percent in December. Medical prices rose only 0.2 percent. This is the fourth month in a row we have enjoyed medical price relief. Even prices of prescription drugs rose by only 0.2 percent. Prices of health insurance even dropped a smidgeon!

Prices for medical care commodities rose the most, by 0.6 percent, followed closely hospital services (0.3) percent).

Over the last 12 months, however, medical prices have increased over twice as fast as non-medical prices: 1.9 percent versus 4.1 percent. Price changes for medical care contributed 16 percent of the overall increase in CPI.

Many observers of medical prices decline to differentiate between nominal and real inflation. Because CPI is has been low until recently, even relatively moderate nominal price hikes for medical care are actually substantial real price hikes. More than six years after the Affordable Care Act was passed, consumers have not seen relief from high medical prices, which have increased over twice as much as the CPI less medical care since March 2010, the month President Obama signed the law.

(See Figure I and Table I below the fold.)

Graham To Testify at House Ways & Means Oversight Subcommittee Hearing January 24

I will be testifying in person on Capitol Hill on January 24 at 2 p.m. EST. The topic will be Obamacare's individual mandate to buy health insurance.

Come in person or watch online: More details at this link.