Category: Health Alerts

Doctors and Guns

By Lawrence N. Pivnick MD JD

Something is rotten with the state of medicine today. Well, more than one thing actually, but today’s complaint concerns the fact that your doctor has been conscripted by the federal government to spy on your gun closet. This has occurred despite the fact that as Obamacare moved its way through Congress, gun rights proponents, fearing the establishment of a federal firearm registry, acted to ensure that the program could not be used as a legal basis for mandating inquiries about gun ownership.

Money for Nothing: California’s Reckless Medicaid Expansion

(A version of this Health Alert was published by the Riverside Press-Enterprise on August 14, 2015.)

California has enrolled three times as many people as originally projected in Medi-Cal, the welfare program that subsidizes low-income Californians’ access to health care. The total is now 12 million, about one third of the population.

The current over-enrollment is provoking yet another fiscal crisis for the state, which is in a downward spiral of tax hikes and welfare dependency that is crushing job growth. Californians should be outraged that the state has condemned one third of their neighbors to dependence on this poorly performing welfare program.

Medi-Cal’s costs have jumped from $91.5 billion to $115.4 billion since Obamacare was passed in 2010. These costs are partially disguised because the federal government picks up much of the tab. However, federal handouts only camouflage real fiscal pain for the state. Legislators reconvened on August 17, in the hopes of finding $2.3 billion dollars to pony up the state’s share.  $1.3 billion is needed to increase fees to doctors and dentists who are paid so little that they are increasingly unwilling to see Medi-Cal patients. Another $1 billion has to be found to replace a deceptive “tax” that manipulates the formula to calculate federal funding, which the Obama administration has declared illegitimate.

Don’t Eat That Salad! It’s Bad for You; Bad for the Planet!

According to an article in the Washington Post, “There’s one food, though, that has almost nothing going for it. It occupies precious crop acreage, requires fossil fuels to be shipped, refrigerated, around the world, and adds nothing but crunch to the plate.”

The culprit is the ubiquitous salad. As any meat-eater will tell you, salads are worthless and should be banned from the dinner table! Salad vegetables are very low in nutrition. Salads mislead dieters and fools them into loading up on high fat additives to make them palatable. Salads are also the chief source of vegetable food waste; about one billion pounds of uneaten salads are “tossed” out annually. Salad is also a vector for food-borne diseases; nearly one-quarter of food poisonings are from salads.

Congress’ Mental Health Mandate Debate is Voodoo Health Economics

Recent episodes of mass violence have raised awareness of severe mental illness. The perpetrators of these horrendous crimes were undoubtedly suffering from significant psychiatric problems. Policies that aim to prevent mass violence have found broad bipartisan support in Congress. During the month of August while Congress is in recess, some Member of Congress are hard at work crafting bills designed to reduce the likelihood of future violence.

Republican Presidential Candidates Roll on Health Reform

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

Republican presidential candidates are starting to roll on health reform. I mean that in a good way, like when the pilot accelerates down the runway and says “Let’s roll”. Governor Scott Walker (WI) just released his 15-page “Day One Patient Freedom Plan.” U.S. Senator Marco Rubio (FL) has written an op-ed in Politico that needs more detail, but contains a significant reform similar to Governor Walker’s.

Both Walker’s and Rubio’s proposals are very good. Let’s focus on private health insurance, leaving Medicare and Medicaid aside for now. Both offer refundable tax credits to people without employer-based health benefits. In Walker’s plan, these tax credits adjust with age (from $900 for a child to $3,000 for someone between 50 and 64 years old). Rubio does not specify whether his tax credits would adjust with age. For political purposes, it is likely better that they do (because older people vote).

The important thing is that the tax credits do not phase out as household incomes increase, which is the major problem with Obamacare’s tax credits. Millions of people have been wrangling with the IRS to figure out whether they received enough tax credits or have to pay some back. Even worse, the phasing out imposes extremely high effective marginal income tax rates on people at certain incomes. Obamacare punishes them for working and earning more. This is likely the main reason for the rise in part-time work in this weak recovery.

Elementary, My Dear Watson: IBM Enters Medical Image Storage

Doctors Examining X-Rays ca. 1980s-1990s(A version of this Health Alert was published by Forbes.)

IBM has suffered declining revenues for 13 consecutive quarters. Although (like many U.S. companies) it attributes its poor results to the strong dollar, its once-praised pivot from hardware to software has put in into some crowded and stagnant markets. Nevertheless, it remains a company with great ambitions, largely built around Watson, the supercomputer which famously beat human beings on the game show Jeopardy! In 2011.

IBM has always hoped Watson would transform health care. It launched Watson Health as a strategic business unit in April, since which it has announced three small but significant acquisitions. Last week, IBM announced the friendly takeover of Merge Healthcare for $1 billion.

Obamacare Now Hurts Republican Politicians More than Obama

index1(A version of this Health Alert was published in the San Francisco Chronicle on August 10, 2015.)

Polls consistently show that Obamacare is unpopular. Back in April 2010, the month before the law was signed, 46 percent of all adults surveyed had a favorable view of the Affordable Care Act, while just 40 percent had an unfavorable view, according to the Kaiser Family Foundations’ regular tracking poll. Things have not changed much since then.

Yet, the law now appears to be hurting Republicans politicians more than Democrats. It looks like Congressional Republicans, who have controlled both chambers of Congress since January, are running out of excuses for failing to advance a comprehensive proposal to repeal and replace Obamacare.

Medicare Devours the Federal Government

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

Every year, the Medicare Trustees issue a report on the program’s financial status. Reaction to the last few years’ reports has been complacency. Because Medicare’s fiscal problems do not appear to be getting worse, people have the misconception that Medicare’s finances are improving. Nothing could be further from the truth.

Indeed, the Trustees themselves insist that: “Notwithstanding recent favorable developments, current-law projections indicate that Medicare still faces a substantial financial shortfall that will need to be addressed with further legislation. Such legislation should be enacted sooner rather than later to minimize the impact on beneficiaries, providers, and taxpayers.”

In 2014, Medicare’s taxes and premiums added up to $342 billion dollars, just 11 percent of federal tax and fee revenue of a little over $3 trillion. However, its spending of $600 billion comprised 17 percent of $3.5 trillion of federal spending. This is just short of defense and security-related spending, which amounted to $615 billion.

Health Insurer Earnings and Merger Update

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

The major health insurers have announced their quarterly earnings. For UnitedHealth Group, the largest health insurer, plus the six which are currently engaged in take-over deals, the results were largely positive. The results, and the market’s reaction, indicate three things:

  • Health plans have largely been able to pass increases in medical costs onto their members, challenging the notion that Obamacare’s regulations on profit have benefited consumers.
  • The risk of participating in Obamacare’s exchanges is not decreasing and insurers continue to be challenged pricing premiums, even though the taxpayer funded training wheels (risk corridors and reinsurance) come off in 2017.
  • Investors continue to assign very high risk premiums to two of the three recently announced mergers of health plans.

The Cost of Over Insurance: National Health Expenditures Rising Again

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

Actuaries at the Centers for Medicare & Medicaid Services, the government agency that runs those programs, have released their estimates of national health spending for 2014 through 2024:

Health spending growth in the United States is projected to average 5.8 percent for 2014–24, reflecting the Affordable Care Act’s coverage expansions, faster economic growth, and population aging. Recent historically low growth rates in the use of medical goods and services, as well as medical prices, are expected to gradually increase.

The health share of US gross domestic product is projected to rise from 17.4 percent in 2013 to 19.6 percent in 2024.

It is a little too easy to say that this outbreak of higher health spending is just due to Obamacare. To be sure, Obamacare has increased health spending with only marginal improvement in access to care. However, the population is aging, too; and the actuaries also take account the positive relationship between economic growth and health spending. The actuaries expect the economy to be relatively strong over the next decade, and estimate the rate of growth of health spending will exceed the rate of growth of Gross Domestic Product by only 1.1 percent. This is less excessive than in most recent decades. Yet, it is still excessive, and a change for the worse.