Boom! Hospital Revenue Up 5 Percent in Twelve Months

 

This morning’s Quarterly Services Survey (QSS) released by the Census Bureau reported that hospitals’ revenue rose 4.9 percent from the end of the second quarter in 2013 to the end of the second quarter in 2014. From the first quarter to the second quarter of 2014, it jumped 2.8 percent, overcoming a first quarter drop of minus 0.8 percent. Revenue for ambulatory services rose only 2.4 percent in the same twelve months. It jumped 3.0 percent from the first quarter of 2014, but had dropped 2 percent in the first quarter from the end of 2013.

The QSS surveys a sample of service businesses, and is assuming increasing importance in economic research. It is important because it reveals complementary — and in this case contradictory — data about health spending. As I’ve discussed frequently at this blog, healthcare employment is growing steadily, but not in hospitals. Growth is in the outpatient setting. I had hoped that this indicated that health services were moving out of the high fixed-cost hospital setting and into lower fixed-cost outpatient settings, especially convenient retail clinics.

The State of Telemedicine — State by State

 

doctor-technologyThe American Telemedicine Association (ATA) has released two thorough and valuable reports on the state of telemedicine in all fifty states.

The first ranks states by policies on physician practice and licensure. This covers informed consent, standards for the physician-patient encounter, and permission for out-of-state practice. (The latter is the special concern of the proposed interstate compact proposed by the Federation of State Medical Boards).

If telemedicine is to be exploited to its maximum potential, it is critical that the highest professional standards be recognized and adhered to. That means out-of-state practitioners need to be able to treat patients via telemedicine.

Who Should Regulate Telemedicine, and How?

 

Readers of this blog know that NCPA has long been a supporter of telemedicine. The question of who should regulate telemedicine, and how, is now coming to a head.

The practice of medicine is regulated by the states. For many years, advocates of telemedicine have pointed to inconsistencies in how medical licensing boards recognize out-of-state physicians as a limit to telemedicine. In 2012, health economist Jason Shafrin reviewed literature, which indicates that requiring a doctor to be physically present with a patient to prescribe reduces access and harms patients.

State-based medical licensing boards’ inability to overcome this problem, despite many years of effort, has led to frustration and the rise of a movement that has not quite come out for a federal takeover of telemedical licensing — but certainly looks like it might tip that way.

Visits to Emergency Departments Increased Three Times Faster in States that Expanded Medicaid than Those that Did Not

 

The Colorado Hospital Association has issued a report comparing certain trends in states that expanded Medicaid under Obamacare with states that did not. The most important take-away is how much Emergency Department visits increased in expansion states versus non-expansion states:

The average number of emergency department (ED) visits to hospitals in expansion states increased 5.6 percent from second-quarter 2013 to second-quarter 2014. This change was greater than expected from the variation over the last two years, and resulted in the highest number of average visits over that time. In comparison, hospitals in non-expansion states reported a 1.8 percent increase in Emergency Department visits between the second quarters of 2013 and 2014.

Indian Patients Suffer from India’s Weak Pharmaceutical Patents

 

A version of this Health Alert appeared at Forbes.

India’s recently elected Prime Minister, Narendra Modi, will visit the United States later this month. One of the sticking points in the U.S.-India relationship is weakness in India’s laws governing intellectual property (IP). The Global Intellectual Property Center of the U.S. Chamber of Commerce ranks 25 countries in its Global IP Index, and India comes in last place. Indian growth will continue to lag as long as this persists, as researchers have demonstrated the positive relationship between IP protection and a country’s prosperity.

One of India’s weak spots is patent protection for new prescription drugs. New research also shows, counterintuitively, that this limits patients’ access to new medicines. Professors Ernst R. Berndt and Ian M. Cockburn analyzed the 184 new medicines approved by the U.S. Food and Drug Administration between 2000 and 2009. Shockingly, it took more than five years for half of those drugs to become available in India.

Ten years after being launched in the United States or elsewhere, almost one quarter of the new medicines were still not available in India. The authors also compared when the drugs were available in other developed countries. For example, in 2010, 160 of the new medicines were available in Germany, but only 111 were available in India.

Berndt and Cockburn conclude that India’s patent law is to blame for this long lag in access versus the United States and other countries. The authors found that half of the new medicines faced copycats within one year of launching in India, and 85 percent faced copycats within three years. In Germany, by contrast, none of the drugs faced copycats within five years.

Obamacare Has Eliminated 350,000 Jobs, Cut Small-Biz Payrolls $22.6 Billion

 

New research published by the American Action Forum further corroborates our conclusion that Obamacare is harming U.S. employment. In a new scholarly paper, Ben Gitis and colleagues estimate that:

…Affordable Care Act (ACA) regulations are reducing small business (20 to 99 workers) pay by at least $22.6 billion annually. In addition, ACA regulations and rising premiums have reduced employment by more than 350,000 jobs nationwide, with five states losing more than 20,000 jobs.

We found that, on average, employees who work a full year for a business with 50-99 employees lose $935 annually due to ACA regulations, while employees of businesses with 20-49 employees, on average lose $827.50 annually.

Third-Party Billing “Bordering on Mail Fraud”

 

Billing in U.S. health care: You can’t believe it until you’ve experienced it. Price transparency seems to be coming gradually, at least in convenient clinics and places like the Surgery Center of Oklahoma, which post their prices. However, when it comes to hospitals and health insurers, we do not appear to be making much progress.

Last month, I wrote about two healthcare experts who became patients and who got befuddled and bemused by the outrageous and appalling bills that started flying at them soon after their procedures. Here are a couple more examples.

Healthcare entrepreneur John Sung Kim, who founded one healthcare company that went public and is now growing a second one, recently suffered a motorcycle accident. After being patched up, he suffered a third-party billing that he described as “bordering on mail fraud”:

After $26 Billion Paid Out, Meaningful Use of Electronic Health Records Only 4 Percent of Target

 

At a September 3 meeting of the Administration’s Health IT Policy Committee, the Administration disclosed that only 3,154 eligible professionals (doctors, dentists, etcetera) had “attested” to so-called “meaningful use Stage 2″ to get their bounties from the federal government for installing electronic health records. Only 143 hospitals had attested.

One healthcare leader, who was at the meeting, was disappointed:

“The numbers are very low, particularly for Stage 2 attestation. I mean they are like 4 percent of [providers] that should be currently going for Stage 2,” HITPC member and Intermountain Healthcare CIO Marc Probst commented during the meeting.

Laszewski, Back From Summer Vacation, Still Predicts Obamacare Train Wreck

 

health-insuranceIf I have one complaint about the summer of 2014, it was the absence of health insurance expert Bob Laszewski from his blog since July 31. Well, he came back last Sunday, and the summer break did not temper his criticism of Obamacare.

Obamacare supporters have applauded announcements of relatively moderate rate increases for 2015. Laszewski points out that the name of the game for insurers is market share. The risk-mitigation mechanisms that Obamacare erected (about which I recently testified at a Congressional committee hearing) largely immunize insurers from losses for three years, so premiums do not really indicate how much Obamacare is costing. Here’s Laszewski:

Obamacare and Employment

 

The media cheered a report published by the Urban Institute and the Robert Wood Johnson Foundation, which asserts that Obamacare (“the ACA”) does not explain the high proportion of part-time workers:

This increase in part-time work is fully attributable to an increase in involuntary part-time work. The increase in involuntary part-time work, however, is not specific to the category of part-time work defined by the ACA (i.e., less than 30 hours per week), but applies to part-time work more broadly (also between 30 and 34 hours per week). Moreover, transitions between full-time and part-time work in 2014 are in line with historic patterns. These findings suggest that the increase in part-time work in 2014 is not ACA related, but more likely due to a slower than normal recovery of full-time jobs following the Great Recession.

Perhaps we should celebrate this conclusion from Obamacare’s supporters. Previously, some cheered the theory that Obamacare, which expands Medicaid eligibility and heavily subsidizes health insurance for middle income households, would lead people to voluntarily reduce their working hours. In 2010, then Speaker Nancy Pelosi encouraged people who wanted to be musicians, for example, to quit their jobs and focus on their (as yet undiscovered) talents, because taxpayers would underwrite their health coverage.

This approach was endorsed in the Congressional Budget Office’s conclusion that Obamacare would reduce employment by 1.5 percent in 2017 and 2.0 percent in 2024 (amounting to 2 million to 2.5 million jobs). As the CBO summarized its conclusion: “Also, the ACA’s subsidies effectively boost the income of recipients, which will lead some of them to decide they can work less and still maintain or improve their standard of living.”