Wal-Mart Shakes Up Primary Care — and the Whole System

 

Wal-Mart has a new take on retail clinics. These newly launched clinics will charge patients $40 for a visit — but only $4 for Wal-Mart associates. Anybody, with or without insurance, can go into one of these clinics and be seen by a qualified health professional, without the usual paperwork. Although the mega-retailer has operated clinics in its stores for a few years now, the new ones are different in a couple of ways.

First, Wal-Mart’s previous clinics were collaborations with local hospitals, which had “mixed success”. So, it appears to have decided to do it alone. I am not surprised. Can you imagine a company like Wal-Mart, which succeeds in an unregulated industry with ruthless price competition, trying to negotiate a deal with hospital executives? The communications challenges must be almost insurmountable — sort of a Mars and Venus situation.

Tax Expenditure from Employer-Based Health Benefits Hits $785.1 Billion, 2014-2018

 

How much tax revenue does the Treasury lose by exempting employer-based benefits from households’ taxable income? $785.1 billion over the next five years, according to the latest estimate by the Joint Committee on Taxation.

To put that in perspective, Obamacare’s exchange premium tax credits and cost-sharing subsidies are reckoned to amount to $276 billion over the same period. So the exclusion of employer-based benefits from taxable income costs 2.8 times more than the Obamacare tax credits.

I anticipate your objections: Yes, the exclusion is not a subsidy, whereas the Obamacare payments clearly are. Nevertheless, if everyone received the same tax credit, it would be a lot fairer and easier to navigate than taxing high-income households via Uncle Sam’s left hand to fund Obamacare subsidies (not to mention Medicare and Medicaid) for other households; and then giving them a significant tax break via Uncle Sam’s right hand for their own health benefits. A universal, refundable tax credit for every household would simplify our healthcare finances dramatically.

People Are Not Very Satisfied with Their Health Plans

 

The Employee Benefit Research Institute (EBRI) has just released a survey of beneficiaries in traditional health plans, high-deductible health plans (HDHPs), and consumer-driven health plans (CDHPs). EBRI defines a CDHP as a HDHP with a Health Savings Account or Health Reimbursement Arrangement. What is interesting about the results is that satisfaction in traditional plans dropped significantly in 2010 and has never recovered. Although satisfaction with HDHPs and CDHPs is worse than with traditional plans (because of higher out-of-pocket payments), they have not suffered the same drop. However, having an HSA or HRA really improves satisfaction: Last year, 47 percent of CDHP beneficiaries were satisfied, versus only 40 percent of HDHP beneficiaries. On the other hand, only 58 percent of beneficiaries in traditional plans were satisfied.

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Obamacare Enrollment is Shrinking

 

After Obamacare’s first open enrollment ended, the Administration stopped releasing enrollment figures. Jed Graham (no relation) of Investors Business Daily has been following the health insurers, and has come to a startling conclusion — Obamacare enrollment is dropping:

The nation’s third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects to fall to “just over 500,000″ by the end of the year.

Cigna (NYSE:CI) said that it expects its individual market customers, including more than 100,000 in the exchanges, to “move from 300,000 down to 280,000 in that range,” Cigna CEO David Cordani said in a conference call.

What is To Be Done with Health Insurance Exchanges, Post-Obamacare?

 

Any time a Republican politician suggests that there is anything positive in Obamacare, the media are eager to declare this means the Republican establishment is backing away from repealing the Affordable Care Act and wants to “fix” it instead.

This, of course, is what most businesses and their lobbyists would prefer take place. It is consistent with the Kaiser Family Foundation’s drumbeat of monthly polls reporting that “over half the public has an unfavorable view of the Affordable Care Act (ACA) in July, up eight percentage points since last month,” but that a “majority continues to prefer Congress improve ACA rather than repeal and replace.”

The latest exhibit is a report in the Wall Street Journal that U.S. Senator Bob Corker (R-TN) thinks that “we could build on the exchange concept.” What? Build on a legacy of bloated and broken IT contracts, which swallowed up billions of dollars (including $655 million on three state-based exchanges that shut down after a few months of operation) and failed in so many different ways to enroll people properly?

“Building” on that would be a strange way to “fix” Obamacare. Fortunately, a member of Senator Corker’s staff has told me privately that he meant nothing of the sort. Instead, what he meant was expressed in a rhetorical question reported below the lede in the Wall Street Journal:

“Don’t we really want individuals in our country to have their own health insurance?” Mr. Corker said, backing the ability of individuals to take their health insurance with them as they change jobs and “move away from being dependent on employers where people feel locked in.”

7.2 Million More Americans Dependent on Medicaid since Obamacare Opened

 

The Center for Medicare & Medicaid Services (CMS) has just released more data corroborating our previous conclusion that Obamacare is mostly an expansion of welfare dependency:

The 48 states reporting both June 2014 enrollment data and data from July-September 2013 report total enrollment in June of over 65 million individuals, and July-September 2013 average enrollment of 58 million. For June 2014, we are reporting growth of 7.2 million compared to July-September 2013…

What is really remarkable is that the government thinks this is something to be proud of. It is a far greater number than the increase in those enrolled in individual plans (even with Obamacare subsidies), and will impose a significant drag on employment growth as long as Obamacare’s Medicaid expansion persists.

Fourth Month of Healthcare Price Inflation; Longest Trend since January 2012

 

increaseThe Altarum Institute’s latest Price Brief shows that prices of healthcare goods and services are rising:

In June 2014, the health care price index (HCPI) rose 1.7% above June 2013. The 12-month moving average of 1.3% is near the all-time low for our data (1.2%), but it has now risen for four straight months, the first increasing trend since January 2012.

Healthcare Prices Flummox the Experts

 

The absurdity of our healthcare pricing is never more clear than when described by experts — people who study the system for a living — who become patients and are shocked and confused by the bills that hit them. Here are three examples:

1. Paul Keckley, PhD, is one of the top consultants in the healthcare sector. From 2006 to 2013, he ran the Deloitte Center for Health Solutions, a period during which it rose to prominence and produced excellent research. Well, Mr. Keckley has just undergone knee-replacement surgery:

This week, I started getting the bills: the whopper $51,829.35 from the hospital for my 55-hour stay. And that doesn’t include professional fees for my surgeon, internist and anesthetist, the 3 medications I now take, the crutches and walker I bought, and the over-the-counter aids I’ve purchased. In all likelihood, the final tally will be close to $60,000. Wow.

The Patient Care Quarterback

 

The New England Journal of Medicine recently published an article by Matthew J. Press, MD, about the need for patients to have a quarterback to coordinate the team of care-givers. Dr. Press writes –

Care coordination is now a high priority in health care and is the backbone of new models of care, such as accountable care organizations, that aim to improve quality and reduce costs. But it remains an abstract concept to many people who are not on the front lines of clinical care, as well as to some on the front lines who lack (or don’t want to have) the quarterback’s view of the field. In replaying the highlights, we can learn some important lessons about care coordination.

Silicon Valley Plans to Bring Digital Health to Seniors

 

Happy Older Couple in Beach ChairsDigital health apps and wearable devices generally attract a niche market of young, healthy individuals and fitness enthusiasts. However, this may shift in 2014 as startup companies are shifting their digital health funding to focus on seniors.

A report sponsored by Startup Health and AARP found digital health startups are targeting the aging population. Digital health funding for seniors more than doubled at $928 million by the end of 2013, compared to $413 million at 2010.