Category: Science and Other News

Hiring in Ambulatory Clinics Back on Track in November; Other Health Jobs Lagging

Last Friday’s employment report caused some joy in the land: 321,000 jobs were added in November. My Forbes colleague Bruce Japsen cheered an “Obamacare jobs bump” in health services. If true, this would be an example of Bastiat’s broken-window fallacy: Broken windows create employment for glaziers, so the government should encourage breaking windows.

Similarly, Obamacare “broke” health care. So, we cannot be sure if jobs added in health care are adding value to society, or just a response to Obamacare’s making health care even more inefficient than it was.

However, there was no Obamacare jobs boom in November. As shown in Table 1 and Table 2, jobs in health care increased by 0.19 percent from October. Non-health nonfarm civilian jobs increased 0.23 percent. So, healthcare jobs increased at a marginally slower rate than other jobs.


The Circular Firing Squad in U.S. Health Care

Who is to blame for the U.S. healthcare crisis? JAMA has published an opinion piece by three physicians illustrating a fundamental difficulty in identifying the causes of the healthcare crisis. Individuals construct “casual stories” to assign blame. Subjective narratives gain momentum among researchers, policy makers, journalists, and the public:

  • Payers: Insurers create barriers to health care (high deductibles and gatekeepers) and excessive administrative waste (billing and coding).
  • Life Science Industry: Manufacturers saddle patients and payers with excessively high prices and underinvest in novel therapeutics.
  • Physicians and Hospitals: Financial incentives have led clinicians and health care organizations to focus on delivering volume over value. Hospitals overinvest in high margin services (cardiology and oncology) and underinvest in essential services (obstetrics and psychiatry).

Happy Thanksgiving!

From all of us at the NCPA, we wish you and yours a happy and safe Thanksgiving!


American Medical Association Backs Telemedicine Compact

Laptop and StethoscopeOur blog usually does not cheer the American Medical Association, because it is largely responsible for the Soviet-style centrally fixed prices that prevail in Medicare. Well, today we applaud the AMA for pledging its support to an important initiative that will increase the adoption of telehealth.

The Federation of State Medical Boards (FSMB) has developed an interstate compact to allow physicians licensed in one state to provide telemedicine services in other states which join the compact. It will greatly advance the effective adoption of telehealth nationwide. Yes, I am aware that the pure libertarian view is that licensing should be abolished and certification by private organizations govern the recognition of professions. Unfortunately, that is not on the radar screen. An interstate compact allowing physicians to practice telehealth across state lines is a very positive step that will pre-empt federal interference in professional licensing.

U.S. Property Rights Maintain Global Rank

The 2014 International Property Rights Index (IPRI), published by the Property Rights Alliance, ranks the United States 17th place overall in the world (from 17th in 2013 and 18th in 2011 and 2012). The IPRI is an annual comparative study that quantifies the strength of physical and intellectual property rights and ranks countries accordingly. The U.S. improved its legal and political environment from 2013 to 2014 via marginal improvements in control of corruption, judicial independence, and political stability. Its physical property rights score improved due to increases in the country’s access to loans and real estate. Likewise, the U.S. intellectual property rights score increased due to improvements in the country’s copyright piracy score.

The NCPA has emphasized the importance of intellectual property protection in health care and this blog has written about how pharmaceutical innovation in today’s regulatory environment could not be financed without patent protection. According to the IPRI, such dynamics exist globally between many macro indicators: with each annual edition of the index, statistical strength between economic production and protection of property rights has grown.

Hiring in Outpatient Clinics Froze Last Month

Hiring in health care continued its moderate pace in October. As noted in September, the rapid hiring in the health sector, especially in outpatient services, has slowed dramatically. Health care hired about 25,000 workers in October, increasing employment by 0.17 percent. Non-farm payrolls, excluding health care increased 0.15 percent. So, job growth in health care has settled down to a rate similar to the overall economy.


Drug Patent Litigation is Robust

You may have heard the stories about brand-name drug-makers and generic competitors quietly doing deals called “pay for delay” with each other. “Pay for delay” consists of a brand-name drug-makers which has a drug coming off patent paying a generic competitor not to challenge the patent and enter the market.

It sounds pretty bad, although it may actually be an efficient way to resolve a patent dispute. In fact, generic drug makers are attacking patents more aggressively than they have in years, according to research by Lex Machina. They file faster and more often. As a result, the patented medicines being challenged are younger – only five years old, versus ten in 2010.


Breaking! Supreme Court Will Hear Subsidy Challenge

The Supreme Court has announced that it will take the case of King v. Burwell, a lawsuit challenging the Internal Revenue Service’s decision to grant health insurance premium subsidies to individuals enrolling on federally-run health care exchanges. This is significant: if the subsidies are struck down, insurance costs for many will skyrocket.

What’s so controversial about the subsidies? Currently, all Americans with incomes up to 400 percent of poverty are considered eligible for subsidies to cover the costs of their health insurance premiums. However, that is only because the administration unilaterally decided to grant subsidies to everyone — the Affordable Care Act does not, in fact, grant subsidies to all enrollees. The text of the law provides that tax credits are available only to the insured who sign up via a health exchange “established by the State” under Section 1311 of the Affordable Care Act.  A completely different section of Obamacare, Section 1321, discusses federally-established exchanges.

But only 14 states created their own exchanges; the federal government was forced to run the exchanges for the other 36 states. Under the text of the law, individuals in those 36 states are not subsidy-eligible. However, the subsidies are what make Obamacare-compliant insurance plans affordable for many, and the idea of offering unsubsidized insurance in the majority of U.S. states was less than appealing to the Obama administration. As a result, and contrary to the text of the ACA, the Internal Revenue Service (IRS) decided to interpret the provision to allow enrollees to receive subsidies in its federally-run exchanges.

Corporate Digital Health Deals are Exploding

A recent blog entry discussed a spate of reports, which demonstrated that investors are flooding into digital health, and less interested in traditional medical devices and pharmaceuticals.

A new report from CB Insights focuses on corporate investments in digital health, noting that “corporate investors from Google to Merck to BlueCross BlueShield are actively getting into the fray.”


Number of FDA’s Regulatory Requirements Increased 15 Percent, 2000-2012

The Regulatory Affairs Professionals Society (RAPS), using data from our friends at the Mercatus Center, have concluded that the Food and Drug Administration’s regulatory requirements have increased 15 percent in just over a decade:

While regulatory professionals working with FDA needed to know just 16,329 requirements in 2000, they needed to know 18,777 in 2012, according to the data.

The analysis uses two measurements of regulatory burden: “Requirements”, defined as any instance in the U.S. Code of Federal Regulations containing the words “shall”, “must”, “may not”, “prohibited” or “required”; and the number of words in the regulations. Both grew at about the same rate.