Divergence in Private Versus Public Health Facilities Construction Continues in September

 

Census2Construction of health facilities slowed in September, along with other construction. Overall, health facilities construction starts declined 0.3 percent in September, versus a drop of 0.4 percent for other construction. Health facilities construction accounted for 6 percent of non-residential construction starts. However, the divergence between private and public continued.

Construction of private health facilities dropped 1.0 percent, versus a drop of 0.2 percent for other private construction. Private health facilities construction starts accounted for almost 8 percent of private nonresidential construction starts. Construction of public health facilities increased a whopping 2.4 percent, versus a drop of 1.0 percent for other public construction. Is this what they mean by “infrastructure” spending – broken bridges and roads, while more VA and county hospitals spring up?

(See Table I below the fold.)

GDP: Tame Health Spending Growth in Strong Third Quarter

 

BEAFor those (like me) concerned about how much health spending continues to increase after Obamacare, today’s flash report of third quarter Gross Domestic Product brings good news. Of course, the flash GDP report is subject to significant revision. Nevertheless, it is good to have a breather from the second quarter, which was dominated by growth in health services spending.

Overall, real GPD increased 2.9 percent on the quarter, while health services spending increased only 2.3 percent, and contributed only 9 percent of real GDP growth. Growth in health services spending was also in line with other services spending and personal consumption expenditures (PCE). Also, the annualized change in the health services price index increased by 1.6 percent, very close to overall GDP.

(See Table I below the fold.)

Obamacare 2017 Premium Hikes 25 Percent. What Next?

 

p_kleyman_medicut_500x279The Administration has confessed the average 2017 Obamacare premium hike for the benchmark (second-lowest cost) Silver plan will be 25 percent. (Back in June, it looked like the hike would be 16 percent.)

Don’t worry, says the Administration, tax credits will ensure beneficiaries only pay a fraction of their premiums. It is true, very few people would buy Obamacare plans without the tax credits the Administration cheers. However, that is not a sign the plans are “affordable,” but only that taxpayers are bearing more of the burden.

Nor do the tax credits actually prevent people from sticker shock. In fact, the design of the tax credits usually makes the net premium hike higher than the gross premium hike. For example, the average premium hike next year in California will be 13.2 percent, but a 56-year old woman in Los Angeles just learned her premium will jump 57 percent next year.

California’s Public Option Would Not Rescue Obamacare

 

jones(A version of this Health Alert was published by the Orange County Register.)

Dave Jones, California’s Insurance Commissioner, has lifted a page from Hillary Clinton’s playbook for the rescue of Obamacare – the so-called “public option.” The public option would probably look at lot like Medicaid. Its proponents give it a less pejorative name to lull people into a false sense of confidence that the market for private health insurance would not be harmed more than it already has by Obamacare. However, the public option would surely lead to more of the same problems Medi-Cal (California’s Medicaid program) has experienced – poor access to care and exploding costs to taxpayers.

They Can’t Even Give It Away: Global Charity Rejects Free Vaccines

 

vaccine-shotDoctors Without Borders /Médecins Sans Frontières (MSF) has decided to reject a donation of one million doses of pneumonia vaccine from Pfizer, Inc. The global health charity’s convoluted reasoning goes like this:

There is No Such Thing as “Free” Vaccines

Pneumonia claims the lives of nearly one million kids each year, making it the world’s deadliest disease among children. Although there’s a vaccine to prevent this disease, it’s too expensive for many developing countries and humanitarian organizations, such as ours, to afford.

Free is not always better. Donations often involve numerous conditions and strings attached, including restrictions on which patient populations and what geographic areas are allowed to receive the benefits.

Critically, donation offers can disappear as quickly as they come. The donor has ultimate control over when and how they choose to give their products away, risking interruption of programs should the company decide it’s no longer to their advantage.

This remarkable document goes on to praise GSK, a competitor of Pfizer’s, for having declined to offer pneumonia vaccines for free, but instead offer them for $3.05 per dose to all humanitarian organizations. I don’t know about you, but I will take free over three bucks any day.

Medicaid Expansion Also Expands ER Use

 

A new report in the New England Journal of Medicine found that Medicaid expansion in Oregon actually increased use of the emergency room (ER) by people newly covered by Medicaid. Policy experts had expected ER use to fall as people gained coverage and could have a usual source of care, such as a primary care physician.  Within the first 15 months after gaining coverage, ER use spiked by about 40%, and remained high for subsequent years. It did not appear the people using the emergency room were necessarily substituting ER visits for primary care physicians (PCP) visits. Rather, PCP visits and ER visits appeared to be complementary.

Mercatus senior research fellow Brian Blase covers the implications in much more detail at Forbes. Blase points out that the value of Medicaid benefits is less than the cost, enrollees are misusing their benefits (ER visits when primary care would suffice). ER overuse makes it harder for those truly in need of emergency care to be seen in a timely manner. It is also arguably why the cost of  Medicaid expansion is far above initial projections.

 

Everybody Gets A Medal: Budget Busting Performance “Incentives” In Medicare Reform

 

Confident DoctorsIn April 2015, huge bipartisan majorities passed a milestone Medicare reform bill called MACRA, which imported all the worst elements of Obamacare into Medicare. At the time, I wrote an alternative proposal, and anticipated physicians would refuse to swallow the medicine MACRA prescribed. Congress passed the flawed MACRA bill, and President Obama gave a speech describing how “this legislation builds on the Affordable Care Act.” Remarkably, Republican politicians who assert they want to “repeal and replace Obamacare” have still not recanted their support of MACRA.

The gist of MACRA is that Medicare will no longer pay for “volume” but “value” in a zero-sum game wherein physicians who do not satisfy the government’s requirements for “value” transfer income to those who do. Since the bill was signed, the details have percolated from the elite physician executives who run the medical societies which lobbied for the bill down to practicing physicians. There has been pushback.

Nervous that physicians will bail out of Medicare if the government squeezes them too hard, the Administration has backtracked on MACRA’s sticks and shifted towards carrots. Last April, the Administration published a proposed rule, 426 pages long. After a lengthy comment period, the final rule, which is 2,205 pages long (!), was published on October 14.

Will 21st Century Cures Lower Drug Costs? Maybe… But it’s a Good Start!

 

House Minority Leader Pelosi agrees with Speaker Paul Ryan and Senate Majority Leader Mitch McConnell on at least one issue: all three support the 21st Century Cures Act. They presumably want to boost access to advanced drug therapies by making it easier to bring them to market.

What Holds Back Consumer-Driven Health Plans?

 

health-insuranceA previous entry discussed new evidence that so-called consumer-driven health plans (CDHPs) reduce health spending one eighth among employer-sponsored group plans run by national health plans.

CHDPs are defined as High-Deductible Health Plans coupled with Health Savings Accounts or Health Reimbursement Arrangements). These plans became available in 2005. However, they only appear to cover a little over one quarter of employed people or their dependents who are enrolled in their benefits.

The case for CDHPs is that consumers (patients) will spend their health dollars more prudently than insurers or employers will. So: How can such a small proportion of people be enrolled in CDHPs after over a decade of evidence supporting the case that they cut the rate of growth of health spending?

California’s Surprise Medical Bill Law Papers Over A Systemic Problem

 

Doctors Rushing Patient down Hall(A version of this Health Alert was published by Fox & Hounds.)

Insured patients who go into hospital for scheduled surgery are often shocked to find they owe bills well beyond what they expected to pay, especially if they understood the hospital and surgeon to be in their health plan’s network. The problem usually occurs when an anesthesiologist or other specialist involved in the procedure is not in the insurer’s network. Until now, when it came to the amount the out-of-network specialist could charge, the sky was the limit. A recent Consumers Union survey found nearly one third of Americans who had hospital visits or surgery in the past two years were charged an out-of-network fee when they thought all care was in-network.