Health Jobs Explode Versus Non-Health Jobs

 

blsHealth jobs exploded in this morning’s jobs report, growing more than three times faster than non-health jobs (0.28 percent versus 0.09 percent). With 43,000 jobs added, health services accounted for over one quarter of 156,000 new nonfarm civilian jobs.

The disproportionately high share of job growth in health services is a deliberate outcome of Obamacare. While this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals (0.41 percent versus 0.21 percent). This was concentrated in offices of physicians, which alone added. Ambulatory sites added 30,000 jobs, versus 11,000 in hospitals. This is a good sign because hospitals are high-cost locations of care versus doctors’ offices and other ambulatory sites.

See Table I below the fold:

Questions On Medicare For Dr. Tom Price, Our Next Health Secretary

 

220px-Tom_Price(A version of this Health Alert was published by Forbes.)

It looks like Tom Price, MD, Donald Trump’s nominee for U.S Secretary of Health & Human Services will get his first Senate confirmation hearing on January 18. According to Morning Consult, Democratic Senators are planning to focus on Price’s support for turning Medicare into a system of “premium support.”

Fair enough: It will be a relief from all the arguments and counter-arguments about whether “repealing and replacing” Obamacare means “repeal and delay,” “repeal and de-regulate,” or “delay and delay” (as advocated by some who fear Republican politicians will repeal Obamacare immediately and never get around to a replacement bill.)

Why Did The FDA Approve 57 Percent Fewer New Medicines Last Year Than 2015?

 

captureThe Food and Drug Administration has reported it approved only 19 innovative new medicines last year, versus 51 in 2015. To be sure, 2015 was a high-water mark. Nevertheless, such a dramatic drop signals a problem for patients eager for new treatments. These new drugs, though few, represent advances in the treatment of ovarian cancer, Hepatitis C, and multiple sclerosis, among other diseases.

The FDA excuses itself for the slowdown, claiming it is receiving fewer applications from drug makers. However, this is symptomatic of a vicious circle. The regulatory burden of approval has increased so much, it is contributing to a significant reduction in the rate of return on capital invested in pharmaceutical development. According to new research by Deloitte, the rate of return has collapsed from 10.1 percent in 2010 to 3.7 percent last year.

Drop in Health Facilities Construction Continues in November

 

Census2October’s construction trend continued in November. Overall, health facilities construction starts declined 0.1 percent, versus an increase of 0.9 percent for other construction. Health facilities construction accounted for almost 6 percent of non-residential construction starts. However, there was greater gap between health and non-health starts in private than public construction.

Construction of private health facilities dropped 0.2 percent, versus an increase of 1.0 percent for private non-health facilities. Private health facilities construction starts accounted for less than 4 percent of private nonresidential construction starts. Construction of public health facilities increased by 0.4 percent, while construction of public non-health facilities increased 0.8 percent. In other words, non-health facilities construction outpaced health construction by 1.2 percentage points in the private construction market, versus only 0.4 percentage points in the public construction market.

For the twelve months ending last October, there was a significant difference in trend between private and public construction. Non-health private construction increased 4.3 percent, but private health facilities construction dropped 1.5 percent. On the other hand, non-health facilities public construction increased 2.6 percent, while public health facilities construction increased by 2.9 percent.

This suggests private investors are nervous about future revenue growth in hospitals and other facilities.

See Table I below the fold:

A Holiday Health Policy Vignette: Eye Surgery

 

Seniors-CelebratingIf the Christmas dinner table has a cross-border contingent, different national characteristics are sure to come up for discussion. I enjoyed Christmas in Naples, Florida with a mixed group of Americans and Canadians. One couple consisted of a Canadian husband and an American wife. She insisted Canada’s single-payer health system was superior in every way (despite the couple’s living in Florida, not Canada).

I had sailed with her husband the day before, and he had invited me to pay tennis and golf, too. I was exhausted. How did he have so much energy? “Ever since I was five years old, I was blind as a bat, wearing Coke-bottle thick glasses. I could never play any sports. About seven years ago I had surgery to replace my lenses, and since then I play every sport I can. It has been a liberation.”

Life Expectancy Drops First Time Since 1993

 

cdcThe Centers for Disease Control and Prevention (CDC), a federal agency, has reported the remarkable news that U.S. life expectancy has dropped for the first time since 1993. According to Mortality in the United States, 2015 (NCHS Data Brief No.  267, December 2016):

  • Life expectancy for the U.S. population in 2015 was 78.8 years, a decrease of 0.1 year from 2014.
  • The age-adjusted death rate increased 1.2% from 724.6 deaths per 100,000 standard population in 2014 to 733.1 in 2015.
  • The 10 leading causes of death in 2015 remained the same as in 2014. Age-adjusted death rates increased for eight leading causes and decreased for one.

The one death rate which improved was for cancer. So, we are “winning” that war, at least relatively speaking.

The entire decrease was for life expectancy at birth. Life expectancy at age 65 was unchanged from the previous year. In other words, children and working-age people are bearing the burden of this decline.

Obamacare Repeal Has Begun For Small Firms

 

Businessman Sitting at His Desk(A version of this Health Alert was published by Forbes.)

My previous Health Alert suggested the 21st Century Cures Act, which President Obama signed on December 13 demonstrated Republicans can lead on health reform. Promoted as a pro-innovation bill, the new law will improve the Food and Drug Administration’s regulatory processes; as well as fund Vice-President Biden’s Cancer Moonshot, the National Institutes of Health, and steps to reduce the opioid epidemic.

However, the final version of the bill also included an important payment reform, which takes a small but significant bite out of Obamacare. Tacked onto the end of the bill, section 18001of the 21st Century Cures Act expands the use of Health Reimbursement Arrangements (HRAs) by small businesses. This is a win for small businesses which were harmed by Obamacare. Indeed, given the overwhelming bipartisan support for the 21st Century Cures Act, section 18001 could be defined as Democrat politicians’ first real step towards conceding Obamacare needs to be repealed and replaced.

GDP: Health Spending Almost Flat

 

BEAFor those (like me) concerned about how much health spending continues to increase after Obamacare, the third report of third quarter Gross Domestic Product confirmed good news. Although GDP growth was revised up $14.5 billion from the second report, spending on health services was revised downward. It is good to have a breather from the second quarter, which was dominated by growth in health services spending.

Overall, real GPD increased 3.5 percent on the quarter, while health services spending increased only 0.6 percent, and contributed only 2 percent of real GDP growth. Growth in health services spending was also significantly lower than other services spending and personal consumption expenditures (PCE). However, the annualized change in the health services price index increased by 1.8 percent, lower than the price increase of 2.8 percent in non-health services, slightly more than the 1.4 percent price increase in non-health PCE, and non-health GDP.

(See Table I below the fold.)

Obamacare’s Effect on Employers’ Health Costs

 

The Bureau of Labor Statistics has published a chart showing how health benefit costs among private employers have increased over the past decade. The chart shows health benefits increased from 6.9 percent of total compensation in September 2006 to 7.6 percent last September. The 0.7 percentage point absolute increase is a relative increase of ten percent.

chart1

Zeke Emanuel, Obamacare Architect, Visits Trump To Urge One-Term Presidency

 

Confident DoctorsLast Wednesday, the Trump transition team disclosed the remarkable news that Ezekiel Emanuel, MD, an architect of Obamacare, was Mr. Trump’s first official guest of the morning. The spokesman demurred with respect to the details of the conversation, but I can guess: Dr. Emanuel was urging Mr. Trump to remain in office only one term, in accordance with Dr. Emanuel’s principle that people should be cut off at age 75.