Category: Health Alerts

Obamacare’s Rose-Colored Short-Sighted Vision

A similar version of this Health Alert appeared at Forbes.

Last summer, my colleague Devon Herrick accused the Centers for Medicare & Medicaid Services of looking at Medicare’s solvency through rose-colored glasses. Well, CMS has passed those shiny spectacles to another government agency.

In the January 2015 Budget and Economic Outlook, the Congressional Budget Office (CBO) has pronounced that Obamacare’s future costs will be seven percent less than were projected in April 2014. Looking even further back in the rear-view mirror, the CBO itself has an even more exciting story to tell:

In March 2010, CBO and JCT projected that the provisions of the ACA related to health insurance coverage would cost the federal government $710 billion during fiscal years 2015 through 2019 (the last year of the 10-year projection period used in that estimate). The newest projections indicate that those provisions will cost $571 billion over that same period, a reduction of 20 percent (p. 129).

Table 1 decomposes this $139 billion of reduced costs over the five-year period. It shows that $5 billion are due to higher tax receipts than originally projected, while $134 billion are due to reduced costs.

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Source: Author’s calculations from CBO’s March 2010 estimate (Table 4) and January 2015 estimate (Table B-1)

Under Obamacare, Will America Keep Winning the War on Cancer?

A similar version of this Health Alert was posted at Forbes.

The American Cancer Society (ACS) has just released its annual Cancer Facts and Figures. The announcement describes how successful the war on cancer has been:

Annual statistics reporting from the American Cancer Society shows the death rate from cancer in the US has fallen 22% from its peak in 1991. This translates to more than 1.5 million deaths from cancer that were avoided.

There are a number of explanations for this success. The most important appears to be the reduction in smoking in the population. Lung cancer is still very deadly. However, because fewer people are diagnosed, the death rate from lung cancer has dropped dramatically since the early 1990s for men and turned around for women starting about 2005.

As shown in the two graphs below, deaths from lung cancer had actually increased dramatically for men since the 1930s and for women since the 1960s, so a reduction is a welcome break in the trend. Still, almost one in three cancer deaths in the United States in 2015 will be due to smoking.

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The NCPA Fact Checks Obama’s Health Policy Address during SOTU

Paid Family and Sick Leave for Workers

The president emphasized the plight of the 43 million American workers who do not have paid sick leave. Many of them feel they cannot afford to take a sick day to convalesce after an illness or to care for a sick child. He proposes to mandate that employers provide seven days of paid sick leave to workers each year.

The president didn’t mention that an estimated 100 million workers who have paid sick leave likely don’t get seven days annually. He also didn’t mention that his own advisor Jonathan Gruber has research showing workers themselves wind up paying the cost of mandatory benefits through lower wages.

Thus, if employers are forced to provide seven paid days off of work for every worker, employers will adjust worker pay to compensate for the cost. This will inhibit pay raises, and it will impact paid vacation days. It could even harm the employment prospects of workers most likely to stay home and care for a sick child.

The president should have called for expanding Health Savings Accounts (HSAs) to all workers, allowing them to set aside funds for medical needs. The president could have also proposed allowing workers to use HSAs to compensate for income lost to sick days.

Currently, workers who have HSAs can use funds from their accounts to replace income lost due to sick days. However, this is considered a non-medical use and exposes workers to a penalty of 20 percent, plus ordinary income taxes.

Moving Beyond the Heliocentric Doctrine of Health Insurance

A similar version of this Health Alert appeared at The Daily Caller.

Whether you have job-based health benefits, are in an Obamacare exchange or are on Medicare, you have likely recently gone through the difficult experience called open enrollment. As a result, you may have lost access to your physician or nearby hospital. Think about how little sense this makes. Did you change anything else in your life for the sole reason that the calendar turned a page? I’ll bet you’ve had the same car insurance and homeowner’s insurance for years. If you rent your business premises, your lease can cover whichever period you and your landlord negotiate.

I call this the Heliocentric Doctrine of health insurance: Designing coverage around the period of time the earth takes to revolve around the sun, instead of patients’ health status. It has harmful consequences.

Consider two identical twins, recently diagnosed with the same catastrophic illness last June. They both have the same health insurance. Whether it is through their employer or an Obamacare exchange or Medicare does not really matter.

They have been diagnosed with the same cancer. It is genetically determined: There is nothing that either of them could have done to avoid it. It will require many months of treatment by drugs and surgery, and the treatment will evolve as oncologists observe how the twins’ cancers respond to different therapies.

Generally speaking, both twins have been healthy up to now. All of a sudden, in the second half of 2014, they entered that small minority of patients who, in any period of time, account for a large share of health spending.

Asian Firm to Launch Innovative TeleMedical Service in U.S.

An American entrepreneur has spent two years building a telemedicine business in Singapore and is ready to enter the U.S. market. RingMD is a web-based physician referral, telemedicine website and smartphone application. Prospective patients select doctors by viewing physicians’ profiles, locations, insurance acceptance, ratings or specialties. The software draws information from 543 medical conditions to connect patients with physicians from 17 different specialties. Patients just enter their symptoms (and preferences), and the website app will list qualified physicians who meet their criteria.

Participating physicians charge for consultations by the minute, and their prices vary. Some providers only charge $1 per minute, while others charge $5 per minute. It’s a competitive market with dynamic pricing. Patients select a provider and only pay for the time they need. Currently, most of RingMD’s physicians are based in Asia, but the firm is adding doctors from all over the world.

The 22-year-old CEO of the organization reports he is now considering entry into the U.S. market. But the question remains: Why did a Silicon Valley entrepreneur choose to start his Health Tech venture in Singapore? The Singapore government was impressed enough with the idea that it invested $500,000 through its National Research Foundation to help fund the tech startup. But there must be other reasons.

The Singapore health care system is often touted by conservatives as a model for health reform in this country. Singaporeans have been required to set aside a portion of their income into a Medisave account (6.5 percent – 9 percent) to fund their current and future health care needs since 1984.  Medisave accounts are a type of health savings account (HSA), while MediShield is an insurance scheme that functions similar to a major medical or high-deductible plan.

How to Get a Medicaid Work Requirement? Bundle It with Paul Ryan’s Opportunity Grants

A similar version of this Health Alert appeared at Forbes.

Utah Governor Gary Herbert and North Carolina Governor Pat McCrory have asked President Obama to allow them to include work requirements in their Medicaid programs. Work requirements were critical to the success of welfare reform in 1996 and would also change Medicaid from a dependency-trap to a true safety net. The best way to achieve it would be through legislation, not relying on executive action.

A new study I’ve written for the National Center for Policy Analysis explains how including Medicaid and the State Children’s Health Insurance Program (CHIP) as part of safety-net reform, instead of keeping health care in its own silo, would greatly improve the federal welfare state for both recipients and taxpayers. Fortunately, House Ways and Means Committee Chairman Paul Ryan (R-Wis.) has proposed reforms to the federal safety net that could include Medicaid and CHIP.

Mr. Ryan’s proposal, Expanding Opportunity in Americafocuses on the Earned Income Tax Credit (EITC), housing and home-energy assistance, education assistance, food stamps (SNAP) and criminal sentencing reform. Ryan’s proposal hinges on the Opportunity Grant (OG). States would apply for OGs that would roll some or all of the federal spending on individuals and families in poverty into one lump sum for distribution to the states. States, civil society organizations and recipients themselves would all be responsible for transitioning recipients out of dependency and into self-reliance.

Ryan is looking back to the success of the 1996 welfare reform signed by a reluctant President Clinton after a successful campaign by House Speaker Newt Gingrich. Ten years after the reform, it was widely recognized as a significant success, even by the mainstream media. Medicaid, unfortunately, was never reformed in 1996.

There are very good reasons to reform all of these safety-net programs comprehensively, in one fell swoop.

Digital Health Venture Funding Doubled in 2014

A similar version of this Health Alert appeared at Forbes.

If it hasn’t happened to you already, it will soon: Your doctor, employer, health insurer, friend, or colleague will recommend you try a new smartphone app to keep you healthy. Apps are just one example of the fast growing area of “digital health,” which refers to applying the digital technology that has changed so much of our lives to the health care industry.

Two recent reports show how important digital health is becoming, and how fast. StartUp Health, a New York-based accelerator, and Rock Health, a San Francisco-based accelerator and seed fund, have independently reported that funding for new digital health ventures in the United States doubled in 2014.

Looking only at investments worth at least $2 million, Rock Health estimates that $4.1 billion of new capital was invested in digital health, up from less than $1 billion in 2011.

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StartUp Health, which also captures smaller deals, estimates that $6.5 billion in new capital was invested in digital health in 2014, up from $1.2 billion in 2010.

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Open Enrollment in Obamacare’s Second Year: Early Lessons Learned

On November 15, Obamacare’s second enrollment season opened. Applicants who wanted coverage starting on January 1 had to apply by December 15. Now that the New Year is upon us, we can take three early lessons away from the first six weeks of open enrollment:

  1. Obamacare’s enrollment target of 9 million to 10 million for 2015 (reduced from 13 million) is still very optimistic.
  2. Inertia rules: It appears that two-thirds of 2014 enrollees have auto-enrolled in the same plan, although most could have saved on premiums if they had shopped around.
  3. On average, each new 2015 enrollee is receiving a bigger subsidy than the average 2014 enrollee. So, even though there are fewer Obamacare dependents than initially expected, the total cost to taxpayers may not go down.

On November 10, the U.S. Department of Health & Human Services (HHS) predicted 9.1 million enrollees, within an expected range of 9.0 million to 9.9 million. This was a retreat from an estimate of 13 million enrollees made by the Congressional Budget Office.

In light of reported enrollments, this prediction appears very optimistic. About 7.1 million applicants had “selected” (which includes auto-enrollment for 2014 enrollees) a plan on an Obamacare exchange by December 26. This is likely an underestimate, because data from state exchanges were updated only to December 13, by which date 14 states with their own Obamacare exchanges reported over 600,000 enrollees (p. 16). Let’s upgrade that to an even million, making the total enrolled 7.6 million as of December 26. Obamacare would still have to add one-fifth more enrollees to hit its low target.

Exclusive: The People Still Don’t Trust the Government to Stop Ebola

A similar version of this Health Alert was posted at Forbes.

Remember Ebola? Sure, we still hear about it once in a while, but it doesn’t scare us like did earlier in the year. A few months ago, the media had many of us convinced that America would turn into an Ebola-ridden wasteland. Although no Ebola outbreak has occurred in the United States, most Americans still believe that the public authorities are unable to protect us from this threat, according to previously unpublished research conducted the RIWI Corporation.

In November, Gallup reported that “Ebola may not be the dominant news story it was a month ago, but it is still on the minds of Americans, 17% of whom cite it when asked to name the top health problem facing the U.S. Still, Gallup’s history of asking this question strongly suggests that without continued incidents of Americans catching the virus on U.S. soil, this flare of concern will be temporary.”

At the time, ordinary citizens also had a level of anxiety over Ebola that could be described as irrational or overly cautious, depending on one’s perspective. Especially, about 80 percent of people thought that persons infected with Ebola were likely to pass it to others via bodily fluids, according to a survey conducted by the Harvard School of Public Health. While Ebola is passed through direct contact, many people appear to believe that it can be passed though coughing or sneezing, which public health experts believe is unlikely.

RIWI randomly intercepts people who are searching the Internet, which captures many respondents who have never participated in traditional surveys. RIWI reported two waves of the Ebola survey, conducted from September 16 to November 30 and December 1 to December 17. The early wave had 26,369 respondents (53.5 percent) opt in, the latter 4,984 (48.8 percent). It also located respondents in blue or red states, according to the results of the 2012 presidential election.

Regulating Mobile Health Apps under a 38-Year-Old Law: It’s Time for Congress to Act

A similar version of this Health Alert appeared at Forbes.

1976: The United States celebrated the bicentennial of our independence; Jimmy Carter was elected president; young men wore bell bottoms and middle-aged ones wore leisure suits; advertising encouraged women to smoke Kool cigarettes. And the Food and Drug Administration (FDA) first regulated medical devices.

Although we fantasized about having Captain Kirk’s communicator or Dr. McCoy’s tricorder, nobody would have known what to do with an actual smartphone or tablet, had they existed in those days. Today, increasing numbers of us use them to keep track of medical information, to remind us to take our meds or do countless other tasks important to our health. In 2013, the Apple app store had 97,000 mobile health apps, and over 60 percent of physicians were using tablets.

And yet, the FDA is still regulating these 21st century technologies under legislation passed when Wings’ Silly Love Songs topped the pop music charts. It’s past time for Congress to amend the Food, Drug and Cosmetic Act to clarify the FDA’s regulatory authority over these new tools for our health.

According to the 1976 amendments, a medical device is an “instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory…” [21 U.S.C. 321(h)]. That does not really give the FDA much direction with respect to apps, smartphones and tablets, does it?

Left to its own devices (excuse the pun), the FDA has actually done a very effective job of letting the industry and patients know how it intends to regulate these new technologies. Dr. Jeffrey Shuren, Director of the Center for Devices and Radiological Health, and Bakul Patel, who is responsible for writing the FDA’s final guidance, promised a light regulatory touch. The final guidance was published in September 2013, at which time the FDA noted, “The agency has cleared about 100 mobile medical applications over the past decade; about 40 of those were cleared in the past two years.”