Congressional GOP’s Budget Hits Reality Hard


iStock_000007047153XSmall(A version of this Health Alert was published by Real Clear Policy.)

The Congressional Budget Office’s recent budget update revealed a dramatic deterioration in the federal government’s finances. The cumulative deficit over the next ten years, through 2025, is now estimated to add up to $8.5 trillion. Just last August, the number was $7 trillion.

The CBO itself notes that “about half of the $1.5 trillion increase stems from the effects of laws enacted since August.” In other words, this is the work of the 114th Congress, in which Republicans hold the majority in both chambers for the first time in the Obama presidency.

Republican apologists assert that Congress’ powers to shrink the government are limited as long as President Obama is in office. This is true. So, let’s see where Congress can go from here.

Will Congress Fix Its Electronic Health Records Fiasco?


electronic-medical-recordThere is some hope that Congress will fix – at least partially – the largely bungled Electronic Health Records (EHRs) deployment on which it spent $30 billion since 2009. Doctors are very frustrated by EHRS, which interfere with their practice of medicine. The current government program to have them installed nationwide should be abandoned.

Today, the Senate Health, Education, & Labor Committee marks up a number of bills to remove the regulatory burden in health care. One of them will address EHRs. Will it help? Maybe a little. First, it would force the federal government to reduce the administrative burdens associated with EHRs. Second, it would force the federal government to defer to the private sector on interoperability.

Ohamacare’s Robin Hood Scheme and the Socioeconomics of Health


Robin Hood was a mythical figure from 12th Century England whose legend became famous for stealing from the rich to help the poor. His legend wasn’t lost on Obamacare proponents, who incorporated the idea into health plan regulations.  As I’ve explained in the past, the Affordable Care Act (ACA) had two primary goals. The first was to expand health coverage to the uninsured. The second goal was to force everyone into health plans where premiums could not rise or fall based on health status.  Purportedly, prior to Obamacare a small segment of the public could not find affordable coverage due to health concerns that made them unprofitable customers or their health plan rather costly. The number was relatively small, about 4 million individuals out of a society of 320 million by some estimates. Most could have gotten coverage, but not on terms they were willing to pay. Obama care was intended to “fix” that problem by banning discounts to favorable risks or people with healthy lifestyles.

Huge Health Jobs Hike, Especially in Hospitals


BLSThis morning‘s tepid jobs report (Employment Situation Summary) was dominated by health services, which added 37,000 jobs in January. That is just one percentage point shy of one quarter of all nonfarm civilian jobs added (Table I).

Within health care, hospitals dominated, accounting for 24,000 of the 37,000 increase – almost two thirds. (This is interesting because there has been a slowdown in health construction starts. So, there must be a lot of slack in already built facilities.) Hospitals are generally inefficient locations of care, so the pickup in employment in January is actually of concern because it likely indicates more expensive care.

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Is Health Inflation Really Quite Tame?


increaseI sometimes feel the odd man out when addressing inflation in U.S. health care. I discuss the monthly Consumer Price Index and Producer Price Index releases, as well as other monthly and quarterly economic releases that include health spending. I have suggested health inflation is stirring, which is counter to respected scholars like Chris Conover of Duke University and those at the Altarum Institute, the “go to” source for analysis of health inflation.

However, I seem to be siding with ordinary Americans, who are struggling as much as they ever did to pay medical bills. I expect people still struggle because, although inflation in health goods and services is low by historical standards, it is high relative to general inflation faced by consumers.

Affordable Health Plans Have Gone Extinct; Obamacare Killed them Off


Obamacare declared open season on affordable health plans. Qualifying health plans must now provide a costly essential benefit package. There are also limits placed on how much premiums can differ between older applicants and younger ones; between men and women; and sick and healthy. Moreover, at a minimum all but a few plans must cover 60 percent of all medical costs with no lifetime or annual caps on benefits. These rules may sound benign, but the results are skyrocketing premiums.

Health Construction Collapses in December


Construction of new health facilities collapsed in December, shrinking 3.2 percent since November, while other construction eked out growth of 0.2 percent (Table I).

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Most of the decline occurred in public health facilities, for which construction starts shrank 7.3 percent, versus 2.2 percent growth in other public construction starts. Private health facilities construction shrank 1.9 percent in a shrinking private construction market.

Over the last twelve months, health facilities construction starts have lagged other construction significantly. This suggests health systems are pessimistic about their ability to extract further revenue from the system.

Ted Cruz and Health Reform


CruzSenator Ted Cruz has won the Iowa Republican caucuses. Over the weekend, Chris Wallace of Fox News challenged Mr. Cruz on his proposal “to sell health insurance across state lines,” citing research published by NCPA that concludes federal action to mandate this would be ineffective. The research in question is on this blog, here and here.

We got quite a bit of feedback yesterday on this topic. As a think tank, we endorse policies, not politicians. Nevertheless, some of our audience took Mr. Wallace’s question to reflect opposition to Senator Cruz.

In fact, Senator Cruz’ proposal to sell health insurance across state lines does not appear in his presidential campaign platform. It is in a Senate bill he proposed last March, in anticipation of the Supreme Court’s decision in King v. Burwell.

Obamacare’s Premium Hikes Are Much Bigger Than You’ve Been Told


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

Yesterday was the last date for open enrollment in Obamacare’s third season. Since October, at least six independent and credible sources have confirmed rate increases will be in the double digits. However, these are gross premium hikes. Net premium hikes paid by enrollees are distorted by tax credits paid to insurers. These badly designed tax credits have a number of perverse consequences. It is widely understood that they impose disincentives to work.

What is less well understood is that the tax credits are so badly designed that they impose a ratchet effect causing net premium hikes greater than the gross premium hikes. According to new research published by the National Center for Policy Analysis, this effect is concentrated among Obamacare enrollees in the lowest income brackets.

GDP: Health Services Are 39 Percent of Growth


BEAToday’s advance release of Q4 GDP showed the production of goods actually shrank in the fourth quarter. As a result, the (annualized) $26.3 billion growth in health services spending accounted for 39 percent of GDP growth of $68.0 billion. It comprised 32 percent of services spending growth and 38 percent of growth in personal consumption expenditure (Table I). This means that health services spending continues to devour more of our budgets. The evidence continues to indicate Obamacare is not bending the cost curve.

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