We’re Number 44! Bloomberg Ranks Countries on Efficient Health Care


Bloomberg (the media business, not the former mayor of New York, although the latter appears to have regained control of the former), has ranked 51 high- and middle-income countries on healthcare efficiency. The U.S ranks 44th.

44 of 51 is pretty bad. (Indeed, we are bracketed by the Dominican Republican and Bulgaria). However, the Bloomberg rankings suffer from some of the same problems that we see with other rankings. NCPA has never thought the U.S. healthcare system was efficient, but neither do we think that other countries do a great job. NCPA scholars addressed this in a monograph published in 2009: Health Care Reform: Do Other Countries Have the Answers? My criticism of Bloomberg’s rankings draws largely from that monograph.

32 Percent of Employers May Move to Private Health Insurance Exchanges within 3 Years


Mature Businessman Seated at a TablePricwaterhouseCoopers has released new results from its 2014 Touchstone survey of employers. The major take-away is that one third of employers are considering moving their active employers to private health insurance exchanges in the next three years.

I have been excited about private exchanges for a while now. Private exchanges are a way for us to solve a problem that we’ve been beating our heads against for years: Employers’ monopoly control of our health dollars is the “original sin” of U.S. health care. Nevertheless, it is so deeply embedded in our culture and business practices that anyone who threatens it by advocating individual choice in health benefits faces fierce blowback.

Medicaid Spending Will Be More Than Advertised


According to the Centers for Medicare & Medicaid Services, spending on Medicaid, the jointly funded state-federal welfare program that provides health benefits to low-income people, increased 6.7 percent in 2013 to $449.5 billion. And it will keep growing at a fast rate:

Total Medicaid spending is projected to grow 12.8 percent in 2014 due to increased enrollment of nearly 8 million beneficiaries. Primarily driving the increase in enrollment are states that chose to expand coverage to adults up to 138 percent of the federal poverty level.

As some states are expected to expand their Medicaid programs after 2014, an additional 8.5 million people are expected to enroll in the program by 2016. Medicaid spending is expected to grow by 6.7 percent in 2015, and 8.6 percent in 2016. For 2016 to 2023, Medicaid spending growth is projected to be 6.8 percent per year on average.

This comprises a massive increase in welfare dependency. I think it’s a low-ball estimate. The Office of the Inspector General of the U.S. Department of Health & Human Services has just released a Spotlight article on Medicaid, summarizing a decade of research on how states game the system to increase spending beyond that which the federal government anticipated.

The incentive lies in Medicaid’s perverse financing merry-go-round. In a rich state like California, for example, the federal government (pre-Obamacare) spent 50 cents on the dollar for adult dependents. So, if California spent 50 cents, it automatically drew 50 cents from the U.S. Treasury. And most states had a bigger multiplier. What politician can resist a deal like that?

Obamacare Will Devour Your Pay Raise


Mercer’s latest National Survey of Employer Sponsored Health Plans reports that the cost of employer-based benefits will jump significantly in 2015

Employers in the U.S. are predicting that health benefit cost per employee will rise by 3.9 percent on average in 2015, preliminary results from a new survey by Mercer reveal. Cost growth slowed to 2.1 percent in 2013, a 15-year low, but appears to be edging back up. Moreover, a higher percentage of employees signing up for coverage through the worksite could be a wildcard driving costs higher.

The projected increase for 2015 reflects actions employers plan to take to manage cost. If they make no changes to their plans for 2015, they predict that costs will rise by 5.9 percent on average. However, only 32 percent of respondents are simply renewing their existing plans without making changes.

Commonwealth Fund: Most Who Visited Obamacare Exchanges Rated Them Fair or Poor


The media have cheered the latest Commonwealth Fund survey of Americans who have tried to enroll in Obamacare plans on health-insurance exchanges. For those who actually read the report, the results are significantly worse for Obamacare than championed by the press release.

To put it bluntly: Visiting an Obamacare health insurance exchange to choose coverage is an experience you would not wish on your worst enemy. Things have gotten a little better during the year: Last October, 61 percent of respondents reported that it was “very difficult or impossible” to “find plans they needed and could afford by end of open enrollment,” and this had dropped in the April-June quarter to 54 percent (Exhibit 2). That is a significant improvement — but it is also a tricky question.

Dartmouth Debunked? Providers Don’t Drive Variation in Health Spending


Central planners love to cite the Dartmouth Atlas of Health Care. The Atlas is an impressive, decades-long effort to study geographic variance in health spending. The famous Atul Gawande, MD, is likely responsible for the fact that the Dartmouth results are better known among lay people than any other research in health economics.

The reason central planners love the Dartmouth results is that they easily feed into a narrative that goes like this: “Medicare spending in McAllen, Texas, is about twice as much as it is in El Paso, Texas, even though their populations are similar. The doctors in McAllen must be twice as greedy as the doctors in El Paso. So, we need to tighten the screws on Medicare payments until costs in McAllen are cut in half. If we do that nationwide, we solve Medicare’s fiscal crisis.”

A Very Weak Argument in Favor of Hospital Mergers


Earlier this week, I discussed the rapid pace of mergers throughout health care. Hospital consolidation is one point of special concern, because it can reduce competition and increase prices. In the Wall Street Journal, Dr. Kenneth L. Davis, MD, CEO and President of Mount Sinai Health System in New York City puts forward a number of claims in favor of hospital consolidation. Each is weak, making an unconvincing argument overall.

First, Dr. Davis asserts that the new goal of hospitalization is not to make any individual patient well, but “population health management”. Greg Scandlen has thoroughly challenged this as an appropriate goal. With respect to hospitals specifically, Dr. Davis’ theory of population health management leads him to conclude that “stand-alone hospitals have neither the number of patients to manage the actuarial risk of population management, nor the geographic coverage to serve a large population. Hence the reason for allowing strategic hospital mergers.”

Number of Uninsured Americans Aged 18-64 Down 2 Percentage Points


The number of uninsured Americans, aged 18-64 has dropped by two percentage points from the first quarter of 2013 to the first quarter of this year, according the Centers for Disease Control (CDC).

As shown in figure 2, that brings the proportion of uninsured down to where it was about ten years ago. In other words, Obamacare has not managed to overcome the results of the recession that began in December 2007. Plus, much of the reduction in uninsured is a result of more people becoming dependent on Medicaid, which is welfare, so should not be viewed as the same type of benefit as individually owned or employer-based health insurance.


Obamacare’s Second Open Enrollment Starts in Two Months — and It Is Going to be Awful


A version of this Health Alert appeared at Forbes.

If there is one thing that the Administration and Democratic candidates have in their favor going into the mid-term elections, it is that election day is November 4, and Obamacare’s second open enrollment begins on November 15. If the dates were flipped, there is little doubt that voters affected by Obamacare would wreak havoc on the politicians who imposed the Rube Goldberg contraption of exchanges on them.

Despite having just tossed another $60 million out the window “to help consumers navigate their health care coverage options in the Health Insurance Marketplace,” the Administration will likely face an even more bemused and disgruntled population of Obamacare “consumers” than it did the first time around.

Obamacare enrollment may already be below the 8.1 million trumpeted by the Administration after the first enrolment season legally closed on March 31 (although it actually closed sometime around the middle of April). Because there are special circumstances (for example, marriage, divorce, or moving to a new state) that allow people to change coverage outside enrollment season, that number has changed.

Unfortunately, the Administration has stopped reporting exchange enrollment, which it used to do monthly. The latest evidence, from Amanda Kowalski of Yale University and the Brookings Institution, is that 13.2 million people were covered in the individual market at the end of June, representing an increase of 4.2 million above the pre-Obamacare trend. This includes both on-exchange and off-exchange coverage.

UnitedHealthcare’s Price-Transparency Tool is Having an Impact


UnitedHealthcare has released a study describing the results of its myHealthcare Cost Estimator, and mobile version (Health4Me). The results are, perhaps, unusual. The report concludes that patients who used these tools chose higher quality providers. However, it did not report savings from using the tools. I also note that the report was finished on February 25, but only released to the public today.

As far back as 2009, this blog discussed a previous report on consumer-driven health plans published by UnitedHealthcare, in which it promoted very precise estimates of savings through such plans. The lack of such precise estimates for the price-transparency tool suggests it is not having the same effect. On the other hand, it is having an impact by leading patients to choose higher quality providers. This must be beneficial, or UnitedHealthcare would not have released the report, even with such a long delay! And over one million people have downloaded the online app, so there is clearly a lot of interest.