Consumer-Driven Health Care Round Up

 

Lots going on in the Consumer-Driven space these days.

AHIP released its latest version of the annual HSA enrollment census. The results are impressive, though still understated since they only received responses from 71% of the companies. It finds enrollment growth of about 15% every year, now reaching 17.4 million. Perhaps the most interesting aspect is the state-by-state breakdown of market penetration. The old Red State/Blue State divide does not hold up when it comes to market behavior. Some of the states with low enrollment include Mississippi, Alabama, and South Carolina, while some of the highest enrollments are found in Minnesota, Illinois, and Maine.

AHIP also released, along with the American Bankers’ Association, a report on HSA account activity. One notable tidbit from this report is the size of the contributions, both personal and from employers. The average personal contribution in 2012 was $2,337, and the average employer contribution was $1,142. Also interesting is that only 19% of all the accounts had $0 balances at the end of the year, indicating that most people are retaining funds in their accounts at least for future use, if not for long-term savings.

Dr. Ben Carson has become a passionate advocate for HSAs, seeing them as a viable alternative to much of Obamacare. An op-ed he wrote has been widely circulated.

How Good is Obamacare for the Healthcare Industry?

 

Last Wednesday, NCPA hosted a briefing on Capitol Hill, where professors Tom Saving and Andy Rettenmaier discussed the findings of their latest issue brief on health spending and the Affordable Care Act. Part of their presentation was an analysis of the stock-market performance of companies in the health sector in the wake of Obamacare. As the chart below shows, the healthcare sector has outperformed the overall market on either side of the passage of Obamacare. Obamacare has not punished listed healthcare firms, and may well have boosted them.

qw

Thanks, Suckers

 

HHS is crowing about how much money has been returned to consumers due to the Medical Loss Ratio (MLR) rules.

The Hill reports –

Insurance companies returned about $ 9 billion dollars from premiums since 2011 because of an Obamacare provision to cap how much profit they can make, according to a new Department of Health and Human Services (HHS) report released Thursday.

Actually the MLR thingy was always a con. First, this regulation had never been tried anywhere. A couple of states tried it with lower ratios but without success. There was absolutely no evidence it was either a good idea or would work without big unintended consequences.

One of those consequences is obvious. Insurers are free to overcharge people, collect the money, earn interest on it during the course of a year, and rebate the overcharge 18 months later. So consumers in effect are simply giving the insurers an interest free loan for a year. That is why there has been $9 billion in rebates. This is not a good thing. Consumers unwillingly loaned insurers $9 billion for a year and got nothing in return.

Hits and Misses

 

woman-with-childIf your parent died young, you may too! Death of a parent during childhood is associated with greater mortality in early adulthood.

Don your pith helmet and Bermuda shorts before heading to the burger joint: Eating meat contributes to climate change.

Empathetic people talk with their hands! (But hopefully not with their fists!)

Social media causes antisocial behavior: Facebook usage “is positively correlated with increasing divorce rates

There are regional variations in happiness: Residents of the Rust Belt cities are among the least happy residents of any U.S. city, but so are residents Gotham.

Medical Technology Adds $23.6 Billion Annually to U.S. Incomes

 

Scholars at the Milken Institute have published an estimate of the net value to American society of four types of diagnostic and therapeutic technologies recently introduced. Their conclusion? That the net benefit of these technologies adds up to $23.6 billion, and increases federal income-tax receipts by $7.2 billion. Table ES1 shows the results by technology.

bv

What are the Causes of Projected Growth in Spending for Social Security and Major Health Care Programs?

 

We’ve already noted that the media and many other got overly excited about a trivial delay in the date of the impending bankruptcy of the Medicare “trust fund”, as estimated by the Congressional Budget Office (CBO).

The CBO has followed up with a more sober article on its blog:

Under current law, spending for Social Security would increase from almost 5 percent of gross domestic product (GDP) in 2014 to more than 6 percent in 2039 and beyond (see the figure below). Even more of the anticipated growth is expected to come from the government’s major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies offered through health insurance exchanges): CBO projects that, under current law, total outlays for those programs, net of Medicare premiums and certain other offsetting receipts, would grow much faster than the overall economy, increasing from just below 5 percent of GDP now to 8 percent in 2039.

How to Pay for the Next Sovaldi

 

prescription-bottleImagine a pill that could cure cancer with one course of therapy or reverse an inherited, deadly disease. If it cost $1 million, could you access it?

This was the question asked at a recent panel discussion held by the American Enterprise Institute. The panel discussed a couple of new proposals to finance new medicines that come at a high price. Because these medicines address the needs of only a small number of patients, manufacturers contend that prices need to be high to make the investment worthwhile.

Hits and Misses

 

Jcigarettes-2ury awards $23.6 billion in Florida smoking case.

India to pay whistleblowers for info on counterfeit drugs.

Self-measurement of blood pressure at home is cost effective.

Seniors: A host of digital health tools can save you money, and your life.

Stroke rates declining for seniors — cholesterol, blood pressure meds credited.

Who Patents Genes? The U.S. National Institutes of Health Has More than Twice as Many Patent Applications as the Runner-Up

 

Gene patents are one of the most controversial areas of intellectual property. “How can they patent genes?” people ask. “It’s like patenting blue eyes.” Even those not deep into the issue have likely heard of the cloud of litigation surrounding Myriad Genetics, a Salt Lake City company that sells a test for diagnosing breast cancer based on a woman’s genetic make-up. (Myriad Genetics has an informative backgrounder explaining what can and what cannot be patented.) The U.S. Supreme Court struck down one Myriad Genetics’ patent-protection in June 2013.

So, I was somewhat surprised to see a new report by the global law firm, Marks Clerk, which reported that the leading patent-filer for sequencing technology, personalized medicine and synthetic biology in the decade to 2013 was not a corporation, but the U.S. National Institutes of Health, with 360 applications of the total 1,752. Indeed, government research facilities, both in the U.S. and other countries, accounted for 617 applications — over one third of the total (and this does not include public universities, like the University of California.)

The Good, the Bad and the Ugly Truth about Specialty Drugs

 

Recently, my colleague Linda Gorman wrote about Sovaldi, a new treatment for Hepatitis C that actually cures about 90 percent of patients taking it within three months. A regimen of this drug costs $1,000 per pill — or about $84,000 for a course of treatment. Despite its high cost, drug maker Gilead Sciences argues the lifetime costs of treating patients with Sovaldi are lower than older, less effective drugs that merely suppress Hepatitis C, as though it were a chronic condition. The ability to actually cure the disease is a huge bonus, which definitely bolsters Gilead Sciences’ argument. When deciding how to price Sovaldi, Gilead Sciences undoubtedly took the efficacy and cost of competing drug therapies into account. For example, a liver transplant can cost $600,000.

But what if Sovaldi merely held the disease Hepatitis C at bay, and only as long as it was taken regularly? What if Sovaldi had to be taken 6 days a week — year in and year out — at a cost of more than $300,000 per year? That is the type of question Joe Nocera tackles in a recent New York Times article.

Writing in the Times, Nocera actually discusses another wonder drug, Kalydeco, developed by Vertex Pharmaceuticals. Kalydeco targets a specific subset of people with the genetic lung disease cystic fibrosis. For this small subset of patients, the drug works wonders. According to the New York Times:

…it is the first drug that attacks not just the symptoms but the underlying cause of cystic fibrosis, a genetic lung disease that usually kills victims by the time they reach their 40s. It doesn’t work for every sufferer of the disease, but rather for a small subset — probably around 2,000 people — who have a specific genetic mutation that the drug targets. But for those it helps, it is life changing.