Selling Health Insurance Across State Lines


Here we go again: Republican politicians are rolling out the easily digested soundbite of “selling health insurance across state lines” as a solution to high premiums.

In the New York Times, Margot Sanger-Katz examines the idea:

At the Fox News Republican debate last month, Donald Trump offered a way to lower health care costs: allow insurers to sell their policies across state lines.

The idea of developing a more national market for health insurance has become a major part of Republican health reform orthodoxy. A bill to allow interstate insurance sales was introduced in Congress in 2005, and, since then, has been a part of the platform of every Republican presidential nominee. Mr. Trump is not alone in his view: Scott Walker, Marco Rubio, Ted Cruz, Rand Paul, Rick Santorum and Bobby Jindal have all endorsed it.

The only problem? It makes no sense. “I’ve tried for 10 years to explain this to Republicans; it is a big problem,” said Merrill Matthews, a resident scholar at the Institute for Policy Innovation.

42 Percent of Immigrant Households Used Medicaid in 2012, Vs. 23 Percent of Native-Born


The Center for Immigration Studies’ latest report concludes that 42 percent of immigrant households, both legal and illegal, used Medicaid in 2012. Only 23 percent of households headed by a native-born American used Medicaid.


Occupational Licensing and Health Spending


(A version of this Health Alert was published by The Hill.)

In July, the Obama administration released an important report on the harmful effects of occupational licensing. Compiled by experts at the Department of the Treasury, the Council of Economic Advisers, and the Department of Labor, and bearing the imprimatur of the White House itself, the report concludes that:

There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines.

Reducing the burden of licensing would give consumers more choices at lower prices. Nowher Nowhere is this need more pressing than in healthcare, where licensing restrictions dominate. According to the report, almost 90 percent of health professionals need licenses to practice.

This seems reasonable. After all, most people don’t want just any old Joe ripping out their wisdom teeth or handing out medicines for any ailment. However, even in these cases, the argument for licensing is overblown.

Physicians Relatively Happy with Their Careers


How happy are physicians with their careers?

In a recent survey of 1001 physicians,

• About 84% said they like being a physician.
• Nearly as many were happy with their choice of specialty.
• Yet, two-thirds said they used to enjoy being a physician much more than they do today.

More than half do not regret anything about their choice of a career path. However, one-in-five would choose a career outside of medicine if they could go back and do it all over again.

What bugs doctors?

• Four-in-ten believe there is too much interference by third-parties;
• Nearly 14% believe their ability to practice independently is slipping.
• Nearly three-quarters have no interest in becoming a patient-centered medical home.

About 10% are working in a direct-pay practice, while 43% are considering it. Yet, nearly 40% believe high deductible health plans and cost-sharing are a barrier to good health care for their patients.

Most docs are workaholics

• Only one-quarter work fewer than 40 hours per week,
• About 46% work more than 50 hours per week.
• Understandably, 70 percent don’t have as much personal time as they wish they had.

Only about half believe they have a good work/life balance. Just over half do not believe they can afford to sacrifice income to work less.

Health Facilities Lag Booming Building Market


This morning’s release of a booming construction report from the Census Bureau once again shows lagging spending on new health facilities, especially in the public sector (see Table I).

20150901 TI

A Welcome Break – Moderate Health Spending Growth in Q2 GDP


Last week’s second estimate of Gross Domestic Product for the second quarter confirms that growth in health spending took a welcome break. Unfortunately, it is not a clear break in the trend of health spending consuming an increasing share of our national income.

When we compare 2015 Q2 to 2014 Q2 annualized spending, health care is still consuming a slightly disproportionate share of GDP. Health spending grew $106 billion, comprising 17 percent of the $632 billion change in GDP. GDP only grew 3.66 percent, while health spending grew 5.47 percent.

The Big Box Retailer in Health Care


Back in the 1950s, department stores were the big box retailers of their day. Rather than go to different specialty stores for shoes, hats, coats and bed linen, one only had to stop by Macy’s. About that same time, discount stores like Walmart began to crop up around the country. As time went on, the size of discount stores increased to the point that super centers are now common. Other companies began to copy this retail model. Home Depot and Lowes reinvented the lumber yard and combined it into a big hardware store/home center. Sam’s Club and Costco began to sell food, electronics, clothing and merchandize in bulk — all under one big roof. Big Box retailers provide the convenience of one-stop-shopping, at prices that are lower than specialty stores. By contrast, consider the Big Box retailer in health care: hospitals.

The FDA Wants to Regulate Feces Like a Drug


Slang words describing human feces are often used to denote products of poor quality or that have absolutely no value whatsoever. A product that is substandard is sometimes derisively referred to as “crap” — or worse. Now, a company in Massachusetts is collecting fecal material into a “stool bank,” and selling the screened preparations to hospitals for $385 apiece. The material is later injected into sick patients’ digestive tracts infected with Clostridium difficile.  These are difficult-to-treat bacterial infections that kill an estimated 14,000 people annually. The donated feces are obtained from healthy donors, who are paid $40 per donation. The average donation is screened and divided into four preparations, enough to treat four patients. In a clinical trial, the results from using donated fecal material were superior to using antibiotics.

Physicians Report Declining Satisfaction with EHRs


This post is excerpted from an article, Physicians Report Declining Satisfaction with EHRs, from the American Academy of Family Physicians. The report was sent to us by Dr. Larry Pivnick, who authored a report on electronic health records.

“During the past decade, America’s physicians — particularly, family physicians — have invested lots of money and countless hours in implementing electronic health record (EHR) systems. Some physicians eagerly dived into the EHR pond; others were pushed by government initiatives, such as meaningful use, that were intended to spur technology uptake but that have become increasingly burdensome to physicians.”

[I]n 2010, 61 percent of respondents said they were “satisfied” or “very satisfied” with their EHRs, compared with just 34 percent in 2014.
Of physicians who responded to the 2014 survey,

  •  55 percent said it was difficult or very difficult to use their EHR to improve efficiency,
  •  72 percent said it was difficult or very difficult to use their EHR to decrease workload,
  •  54 percent indicated that their EHR system increased their total operating costs, and
  •  43 percent said they had not yet overcome productivity challenges associated with implementation of their EHR.

“From the physicians’ perspective, it appears that the significant investment in EHR system(s) over the past few years in the United States is failing to offer significant returns. Far from helping physicians to operate efficiently and have more time to spend with patients, the opposite appears to be the case.”

Source: Physicians Use of EHR Systems 2014

More than 40% of Employers will be Exosed to the Cadillac Tax in Coming Years


A controversial part of Obamacare imposes an excise tax on high cost health plans. Beginning in 2018, the so-called Cadillac Tax will impose a penalty of 40 percent of all costs in excess of $10,200 for employee-only coverage and $27,500 for family coverage. The threshold increases annually with inflation; that is regular inflation, not medical care inflation which rises at more than double the rate of general inflation.

Employers have a few options to avoid the tax. But all are things workers dislike, such as increasing cost-sharing, eliminating covered services, eliminating tax-free dollars for HSAs, HRAs and FSAs and adopting narrow networks.

The Kaiser Family Foundation looked at the proportion of firms offering health benefits plans that are expected to reach the threshold.




If you only look at large firms employing 200 workers or more, nearly half (46%) will have health plans subject to the tax in 2018. More than two-thirds (68%) will have health plans subject to the tax by 2028.

The tax exclusion for employee health insurance is worth approximately 40% to 45% (25% marginal tax rate, 15.3% payroll tax and maybe 5% state and local tax). What the Cadillac Tax does is impose a 40% tax on the excess costs over the threshold. What that basically means is the open-ended tax exclusion for employer sponsored health plans has been limited to $10,200 per individual and $27,500 per family.

Pro: Limiting the tax exclusion may encourage health plans to look for ways to reduce medical spending.

Con: Over time more and more people will be subject to the tax.

Should the Cadillac Tax be repealed?   Let me know what you think!