Tag: "Health Care Costs"

Where are the “Open Payments” from Government?

doctor-xray-2Well, now we know how much pharmaceutical companies and medical-device makers pay doctors for consulting and similar services. Paul Keckley aptly summarizes last week’s data dump from the Centers for Medicare & Medicare Services (CMS):

  • In the last five months of 2013, drug manufacturers made 4.4 million payments totaling $3.5B to 546,000 physicians and 1,360 teaching hospitals to encourage acceptance and use of their drugs/devices: $1.49B for research, $1.02B for ownership interests, $380M for speaking/consulting fees, $302M for royalties/licensing, $93M for meals, $74M for travel, and $128M for “other.”

Why are Health Insurers Persecuting Innovative Drug-Makers, Instead of Bloated Hospitals?

One constant refrain heard in national health policy circles is the need for “integrated” or “coordinated” care. To be sure, I have never heard anyone speak favorably of “disintegrated” or “un-coordinated” care. While there are many good-faith practitioners who do want to integrate and coordinate care for patients, these terms are often used to camouflage a more straightforward way to raise prices. Here’s an example from Bloomberg BusinessWeek:

money-burdenFor the past four years, Pennsylvania insurance company Highmark has watched its bills for cancer care skyrocket. The increase wasn’t because of new drugs being prescribed or a spike in diagnoses. Instead, the culprit was a change that had nothing to do with care: Previously independent oncology clinics and private practices have been acquired by big hospital systems that charge higher rates, sometimes three times as much, for chemotherapy drugs. “The site of care and the type of service provided does not change at all,” says Tom Fitzpatrick, Highmark’s vice president of contracting. “The only significant difference that we primarily see is the [patient] gets a wristband placed on them.”

Headlines I Wish I Hadn’t Seen

Confident DoctorsObamaCare made me fire my doctor.

As health care law’s employer mandate nears, firms cut worker hours, struggle with logistics.

Insurers on New York’s exchange seeking significant rate increases.

Only 25 percent of patients are offered cost estimates before treatment

Injury, violence are leading causes of death for young Americans.

Hits and Misses

yogaPractice does not make perfect; meditation does.

Two-thirds of uninsured young adults find health coverage unaffordable; nearly half do not see the value of health insurance.

New study: Cat people are smarter than dog people.

“Walking school buses” being used to combat obesity.

Random thoughts don’t necessarily provide valuable insights.

Health Wonk Review: Certain aspects of ObamaCare might be leading to unintended outcomes that improve medical care.

4 to 7 Million Will Be Fined under ObamaCare’s Individual Mandate

From the Congressional Budget Office and the Joint Committee on Taxation:

CBO and JCT estimate that 23 million uninsured people in 2016 will qualify for one or more of those exemptions. Of the remaining 7 million uninsured people, CBO and JCT estimate that some will be granted exemptions from the penalty because of hardship or for other reasons.

All told, CBO and JCT estimate that about 4 million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf). An estimated $4 billion will be collected from those who are uninsured in 2016, and, on average, an estimated $5 billion will be collected per year over the 2017–2024 period.

(CBO, Payments of Penalties for Being Uninsured Under the Affordable Care Act: 2014 Update)

Medicaid Spending More Than Doubled, 1999-2010

Sometimes a picture tells a thousand words. And this growth in Medicaid dependency happened mostly during a Republican Administration, well before ObamaCare’s expansion. And the trend from 2006 through 2010 is straight. That is, the 2008 financial crisis and subsequent recession did not cause the expansion. It’s just what our government does, apparently.

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More on Medicare’s Latest Data Dump

Yesterday, we noted the New York Times‘ analysis of hospital charges from the Centers for Medicare & Medicaid Services (CMS) latest data dump. The same data dump showed how the amounts Medicare paid to hospitals and other providers for different services. The Hill‘s Ferdous Al-Faruque has pointed out some extreme differences:

health-care-costsThe agency found wide discrepancies in how much services cost in different regions of the nation and within the same geographic area. In 2012 a major joint replacement surgery cost Medicare $15,901 in Baltimore while the same procedure cost $239,138 in Los Angeles, the report says.

This variation appears too extreme. If it is a quality difference, surely the lower-quality provider is so bad that it should not be accepting patients! The seeming arbitrariness of Medicare payments might be one good explanation for the variance in costs observed by the Dartmouth Health Atlas team.

Like the physician data dump, for which we praised CMS, this is a treasure trove of data. CMS has also presented the data in a reasonably user-friendly way. It took me less than ten minutes to figure out the dashboard, which allows users to make charts and tables of almost any shape and size.

Well done, CMS. Keep ‘em coming.

Should Taxpayers Spend $250,000 to Give an Uninsured Person 16 Days of Healthy Life?

ObamaCare spends a lot of money that could be better spent elsewhere:

money-crossroadsSo, even when we combine the most optimistic estimates of gains in mortality and morbidity, the average uninsured person would gain about 16 healthy days a year…As a comparison, 75-year-olds with foot problems prior to chiropody treatment rate their quality of life at .956. For the average uninsured person, having health insurance coverage provides health benefits that are roughly equivalent to averting the foot problems experienced by typical 75-year-olds.

More importantly, even using the most optimistic assumptions, ObamaCare does not appear to be very cost-effective in relative terms. That is, we could attain the equivalent gains in health status for only 4% of the trillions that will be spent on ObamaCare. Conversely, for the same massive expenditure, we could attain up to 27 times as much improvement in health status. In light of this rather egregious squandering of other people’s money, it’s little surprise that opposition to ObamaCare has been so persistent and widespread.

From: Christopher Conover at Forbes.

As Expected, ObamaCare Motivates Insurers to Shun the Sickest People

A patient with HIV/AIDS can expect to pay over $1,000 out of pocket for medicines, if he buys a policy on the ObamaCare health insurance exchange in Florida.

woman-in-hospitalAffordable”? Surely not. This perceived injustice has caused legal activists to file a lawsuit against four insurers, which offer plans in the Florida exchange, alleging discrimination.

Readers of this blog know that we have long warned against this consequence of ObamaCare. Insurers are not allowed to charge premiums appropriate to applicants’ expected medical claims. This is somewhat mitigated by a limited open-enrolment period. However, if applicants have chronic diseases, that provision gives little protection to insurers. While there are three methods within ObamaCare that transfer money to insurers which over-enroll sick patients, they do not eliminate the incentives for insurers to design plans that are not attractive to very sick patients. This results in a death spiral of antiselection.

Hits and Misses

Surgeon Operating on a PatientVA hospital administrators close operating rooms at 3 p.m.

ObamaCare causes hospitals to cut back on charity care.

Reference pricing for elective surgeries saved one large public employer $5.5 million in two years.

77 percent of doctors sanctioned by New York State Department of Health continue to practice.

Hospitals are lobbying to obliterate Medicare oversight that has recovered $8 billion in improper payments.