Category: Science and Other News

Medical-Device Excise Tax Revenues 24 Percent Short of Target

The medical-device excise tax is supposed to raise $20 billion of Obamacare’s $438 billion of revenue through 2019. The IRS started collecting the tax in January 2013, and expected to get $1.2 billion in the first half of 2013. The actual take? $913 million — a shortfall of almost one quarter.

This is the conclusion of a report by the Tax Inspector General for Tax Administration (TIGTA). However, the report also found a “discrepancy” of $118 million between what the IRS collected and the amount TIGTA believes was owed. Why? To put it simply, it is proving very difficult to determine which firms owe the tax.

How We Once Provided Medical Benefits

Our country suffers from amnesia about how we used to solve problems in the not-so-distant past. It is something I hope to help correct in a new paper published by the Citizens’ Council for Health Freedom, “Safe Haven: How Mutual Aid Can Protect Families in Times of Trouble.”

This paper shows how fraternal associations once provided the vast bulk of medical benefits and life insurance in the United States and Britain. These associations were formed by working class men and women from all ethnic groups. In some cases they owned and operated their own hospitals. They also provided schools and orphanages for the children of deceased members, sickness funds for members who were unable to work, relocation assistance to help workers go where the jobs were, and moral support to families in times of trouble.

Silicon Valley Plans to Bring Digital Health to Seniors

Happy Older Couple in Beach ChairsDigital health apps and wearable devices generally attract a niche market of young, healthy individuals and fitness enthusiasts. However, this may shift in 2014 as startup companies are shifting their digital health funding to focus on seniors.

A report sponsored by Startup Health and AARP found digital health startups are targeting the aging population. Digital health funding for seniors more than doubled at $928 million by the end of 2013, compared to $413 million at 2010.

Libertarians against Innovation?

Two researchers at the Mercatus Center, a think tank that produces excellent research on any number of economic issues, have published a challenge to intellectual property — trademark, copyright, and patents. The paper ridicules claims made by a number or sources in the last few years that laws which protect intellectual property (IP) create jobs. For example, The U.S. Chamber of Commerce’s Global Intellectual Property Center, which estimates that 55.7 million jobs are created by IP. The paper challenges the evidence presented by these sources, and rebuts them with — to be blunt — a purely theoretical, evidence-free argument that:

Proponents of the IP-created-jobs argument also tend to underestimate the extent to which resources not spend on IP-protected products are spent elsewhere. Other issues aside, this means that stronger IP protection is more likely to change the distribution of employment than the overall number of jobs.

Patents are Critical to Pharmaceutical Innovation

prescription-bottleOne of the reasons why Sovaldi, for example, costs so much is that competitors cannot copy the pill and just churn it out at a lower price. It is protected by patents. Clearly patents have costs, and this blog has discussed alternatives.

No alternative has demonstrated that it can do what patents do: Attract R&D capital investment to pharmaceutical development. Will Rinehart of the American Action Forum has written a primer on the role of patents in pharmaceutical innovation:

Gross Domestic Product: Is Health Spending Figured Out?

Health spending was a non-issue in the Department of Commerce’s release of the advanced estimate of second-quarter GDP, which came in at four percent (annualized). Much of the second quarter’s improvement was business spending and consumer spending on durable goods. Health spending increased by a muted 0.08 percent. The final estimate for first-quarter GDP was improved to minus 2.1 percent, up from minus 2.9 percent.

What is a relief is that the final estimate for health spending in the first quarter, minus 0.16 percent, was unchanged from the previous estimate. Previous estimates of first-quarter GDP were whipsawed by huge changes in the health estimate, and many were concerned that the Department of Commerce had no idea how to measure health spending under Obamacare. Yet more changes in the estimate were feared.

Advanced estimates of GDP are always subject to significant revision, but the previous uncertainty about health spending was unprecedented. If the Department of Commerce has figured out how to measure health spending in the new regime, at least that’s one Obamacare uncertainty that we can stop worrying about.

Is the Health IT Punchbowl Being Taken Away?

This blog has been very critical of the federal government’s blowing $30 billion to bribe doctors and hospitals to install Electronic Medical Records (EMRs) that they do not want, and which do not appear to help patient care.

electronic-medical-recordWell, the punchbowl may be taken away soon. One of the goals of the $30 billion was to install EMRs that would talk to each other. Well, in fact, many EMRs do not share information but actually block it:

“ONC should use its authority to certify only those products that…do not block health information exchange,” the budget report states. “ONC should take steps to decertify products that proactively block the sharing of information because those practices frustrate congressional intent, devalue taxpayer investments in [certified EHR technology], and make [the technology] less valuable and more burdensome for eligible hospitals and eligible providers to use.

Paging Dr. Google

Laptop and StethoscopeThe Wall Street Journal reports that Google has begun a project called the Baseline Study to collect individual health information and correlate this with diseases conditions over time. The Google project leader, Andrew Conrad, is best known for his work on quick, cheap HIV screening of blood donations. At Google, Conrad supervises a team of 70-to-100 people, made up of physiologists, biochemists, and experts in optics, imaging and molecular biology. The goal is to amass a behemoth database of hundreds of different sample observations from thousands of individuals, including biology, genetics, blood chemistry, etc. and analyze how it correlates to disease patterns. According to the Journal:

The study may, for instance, reveal a biomarker that helps some people break down fatty foods efficiently, helping them live a long time without high cholesterol and heart disease. Others may lack this trait and succumb to early heart attacks. Once Baseline has identified the biomarker, researchers could check if other people lack it and help them modify their behavior or develop a new treatment to help them break down fatty foods better…

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.


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.)