Category: Health Alerts

Here’s an Example of Why Obamacare is a Job-Killer

A recent New York Times article illustrates what a job killer Obamacare really is. That comes as no surprise to economists who tried to warn Obamacare proponents six years ago. But an “I told you so!” hardly makes workers out of a job feel any better.  As Obama advisor Jonathan Gruber found more than 20 years ago, employer mandates raise the cost of employing workers. In the process, employer mandates depress wages and reduce employment. Gruber also found employer mandates tend to harm the very people they were intended to help.

Connected Care: Moving (And Keeping) Patients Out Of Hospitals

Doctors Rushing Patient down Hall(Part one of a two-part series. A version of this Health Alert was published by Forbes.)

One of the greatest frustrations in health care is that technology tends to drive up costs. In pretty much every other area of our lives, technology reduces costs. Increased health spending is associated with better health outcomes (as recently summarized by Cynthia Cox of the Kaiser Family Foundation). Nevertheless, we would like to get these benefits at less cost.

The opportunity to achieve this is at hand. A host of technologies promises to significantly reduce costs by eliminating friction in the flow of clinical data between providers and patients, making sense of data from different sources, and allowing patients and providers to interact in new, cost-effective ways. This will allow patients to get more care where they want it, and not where the system demands they show up.

Research Explains Why the Obamacare Marketplace is Slowly Failing

With great fanfare, the U.S. Department of Health and Human Services issued a press release in mid-October estimating enrollment in the Obamacare Marketplace (i.e. the exchange) at 10 million by the end of 2016. HHS Secretary Burwell said, “We believe 10 million is a strong and realistic goal.”

Before you burst out with excitement, keep in mind enrollment for 2015 is estimated at 9.1 million. As recently as March 2015, estimates by the Congressional Budget Office (CBO) projected 21 million would sign up in 2016. Enrollment is only about half what the CBO originally estimated and is likely to gradually decline into what actuaries sometimes refer to as an adverse selection death spiral.

GOP Debate Highlights

The debate was all about the economy and economic security. Many of the candidates referenced Obamacare as a drag on the economy. But when pressed for examples of intrusive government regulations, too often they reached for more nebulous regulations and government obstructions rather than discuss the most expensive regulation most employers face — Obamacare.

Some of their comments and my observations:

Rubio: Obamacare is a drag on the economy and job creation.

Rubio’s new name for Obamacare: that crazy health care law.

Trump: Obamacare will be repealed.

Carly Fiorina wants to review every government regulation and repeal the bad ones. But she didn’t mention Obamacare until later in the debate, when she said it must be repealed.

Jeb Bush talked about ways to boost jobs and get the government out of the way. He didn’t mention the negative impact Obamacare has on hiring.

Kasich may have cut taxes, but his backing of Medicaid expansion is bad news for Ohio taxpayers in the future

Kasich would reform Medicare, but he expanded Medicaid rather than hold out for the flexibility to tailor Ohio’s Medicaid program.

Jeb Bush’s Positive Plan to Reform Medicare

Bush2(A version of this Health Alert was published by RealClearPolicy.)

Jeb Bush’s Medicare reform contains two proposals — premium support and Health Savings Accounts — that will have a significant, positive effect on seniors’ access to care and Medicare’s finances. In particular, the proposals will address four flaws in Medicare Advantage, an alternative to traditional Medicare in which seniors choose a plan from a private insurer.

Although Obamacare tried to cut seniors’ access to private plans, the use of these plans continues to grow. Before Obama took office, one-quarter of beneficiaries chose Medicare Advantage plans. Today, about one-third do. But despite their popularity, private Medicare plans do not live up to their potential for cost-effectiveness.

Why Do States Expand Medicaid?

In September the Kaiser Family Foundation released a report comparing Medicaid expansion states with states that have chosen not to expand Medicaid. The report generated little fanfare among either supporters or opponents of Medicaid expansion. It should have created a firestorm. The report sheds light on why many states have seemingly turned down free federal Medicaid funds, while other states eagerly gorge at the public trough.

Rock Star Physician Rebels Against Medicare Bureaucracy

Confident DoctorsRebekah Bernard, MD, who wrote a book titled How to Be a Rock Star Doctor:  The Complete Guide to Taking Back Control of Your Life and Your Profession, has written an open letter to her Medicare patients. Here are the choice bits:

For every office visit that we spend together, I spend at least as much time on what Medicare deems as necessary documentation, especially a new program called meaningful use.

To comply with Medicare requirements, I’ve had to spend thousands of dollars and massive amounts of time instituting electronic health records, adapting my practice to conform to the computer technology that wasn’t created to help me, your physician.

And next year the whole ballgame changes for physicians as the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) goes into full effect, with a complete paradigm shift in Medicare payment from “fee-for-service” (I send a bill for your medical care, Medicare pays me), to “value-based payment” (I submit a bill, and I get paid if Medicare thinks that I’ve done a good enough job).

The kicker is that the pot of money remains constant – so even if every doctor makes an ‘A’ grade, half of them will be paid less money, just by nature of this “budget-neutral” payment system.

Up to this point, I have managed to play by the rules that Medicare has set.

In 2017, this may no longer be the case.

Unaffordable Care Act Third Open Enrollment Nothing to Celebrate

The third Obamacare Open Enrollment period began November 1st. As a result, many families are faced with a tough choice: purchase coverage they cannot afford with few tangible benefits, or pay an equally unaffordable penalty and hope they do not become sick. The Internal Revenue Service determined that 7.5 million individuals opted to pay the penalty rather than purchase health coverage in 2014, far more than originally projected. The penalty for going without coverage in 2014 was only $95 or one percent of income, whichever was greater. Yet the tax year data found the average penalty paid was double the minimum. This suggests it wasn’t the poor who were going without coverage; the poorest individuals either qualified for generous subsidies, Medicaid or got an exemption from the penalty. Many of those who paid the penalty were likely individuals who did not qualify for subsidies and could not afford Obamacare coverage due to the costly mandates. To make matters worse, the costs are rising fast.

Health Care and the Budget Deal: Three Steps Forward, One Step Back


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

Yesterday, the White House and Congressional leaders announced a last-minute budget agreement that avoids a so-called government shut-down for now. The deal has four health-related items, and is expected to reduce net federal health spending by about $4.5 billion over five years, and $15.5 billion over ten years. Overall, it is not a bad deal with respect to health care. However, some of its budget savings are fragile and it largely avoids reforms that will actually reduce the growth of health spending.

The U.S. Is The Third Lowest Health Spender of 13 Developed Countries

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

Scholars affiliated with the Commonwealth Fund recently published another report in the Fund’s series of international comparisons of U.S. health care. These reports are always well received by the media, which run articles lamenting how expensive U.S. health care is, and how great a burden on the country. Encouraged by the Commonwealth Fund to conclude that the major difference between health care in the U.S. and other developed countries is that they have “universal” health systems, many reasonable people understandably conclude that such a reform could reduce the cost of U.S. health care.

This conclusion is way off-base. According to the report, U.S. health spending accounted for 17.1 percent of Gross Domestic Product (GDP) in 2013. France comes next, at 11.6 percent. In dollar figures, the U.S. spent $9.086 per capita, versus only $6,325 in Switzerland, the runner-up. (These prices are reported at purchasing power parity, which adjusts the foreign currency exchange rates for differences in cost of living.)

These results certainly invite us to question whether we are getting our money’s worth. However, it is not clear that this spending is a burden on the U.S., given our very high incomes. Table I shows that when we subtract U.S. health spending from our Gross Domestic Product (GDP), we still had $44,049 per capita to spend on everything else we value. Only two countries, Norway and Switzerland, beat the U.S. on this measure. In the United Kingdom for example, GDP per capita after health spending was only $34,863 in 2013. So, even though American health care is significantly more expensive than British health care, the average American enjoyed $9,185 more GDP after health spending than his British peer, and just under $6,000 more than his Canadian neighbor.

20151026 Commonwealth Fund TI