Tag: "health policy"

Crowd-out Effect of CHIP Expansion 44 to 70 Percent

In 2009, Congress reauthorized the Children’s Health Insurance Program (CHIP), providing states added resources and options to insure children. About 15 states expanded CHIP eligibility to families with incomes up to 400 percent of the federal poverty level (an income of $94,000 for a family of four) with a median upper limit for coverage at 250 percent of poverty, the highest since CHIP’s inception in 1997. Federal CHIP funding is up for reauthorization in 2015 and some argue that CHIP is unnecessary because of Obamacare’s subsidies, which kicked in this year.

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Source: “The Impact of Recent CHIP Eligibility Expansions on Children’s Insurance Coverage” from Health Affairs.

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.”

Half of Doctors Give Obamacare D or F

Confident DoctorsThe Physicians Foundation and Merritt Hawkins (a physician recruiting firm) have just published their biennial physicians’ survey. The survey interviews over twenty thousand physicians in all fifty states and multiple specialties:

  • Only 19 percent say they have time to see more patients.
  • 44 percent plan to take steps to reduce services or find non-clinical employment.
  • Only 35 percent describe themselves as “independent practice owners,” down from 62 percent in 2008.
  • 53 percent describe themselves as hospital or medical-group employees, up from 38 percent in 2008.

Price Transparency: Even Hospitals are Starting to Figure It Out!

credit-card-2Like many, we’ve been frustrated at the lack of price transparency in U.S. health care, especially form hospitals. Good news: They are coming around!

The American Hospital Association (AHA) has published an informative white paper, clearly explaining the state of price transparency for both hospitals and health plans. It surveys what hospitals are doing to ensure patients better understand their expected out-of-pocket costs, what tools health plans are offering beneficiaries to estimate costs, and the legal and regulatory environment. The language used in the white paper is strikingly different from that which we are used to seeing from hospitals:

Price transparency also can lead to improved quality and efficiency as providers benchmark and improve their performance against peers and national averages. To realize these potential benefits, policymakers and the public increasingly are calling for greater access to information.

Federal Courts Zig and Zag on Obamacare Tax Credits

index1Obamacare opponents’ hearts rose this morning, as a three-judge panel of the DC Circuit Court of Appeals struck down the power of federal Obamacare exchanges to pay out tax credits to health insurers who sign up beneficiaries for subsidized Obamacare coverage. Because most states declined to set up their own Obamacare health insurance exchanges, subsidies to insurers would have come to a screaming halt in most of the country. Opponents have long hoped that such a decision would force the Administration back to the negotiating table with Congress.

However, merely a couple of hours later, the 4th Circuit Court of Appeals in Richmond, VA upheld the Administration’s position: That federal exchanges have the same powers as state exchanges to pay out subsidies to health insurers. The Administration plans to appeal the DC panel’s decision to the entire DC Circuit, en banc (i.e. all eleven judges).

Yippee! Medicare Won’t Go Bust Until 2030!

The latest Congressional Budget Office’s latest Long-Term Budget Outlook now asserts that Medicare’s so-called “Trust fund”. Talk about kicking the can down the road!

As the chart below shows, the problem is not that the “trust fund” will go bust in any given year, but that the federal government is borrowing money to finance consumption. “Other non-interest spending” includes major infrastructure and defense, tasks which constitutionally and under a proper economic understanding fall to the federal government. These were the purposes for which the Founders gave Congress the power to borrow money in the people’s name. Borrowing to finance seniors’ healthcare consumption does nothing for future generations’ prosperity.

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Healthcare Prices Jumped 50 Percent Year on Year from 12-Month Moving Average

The Altarum Institute is the go-to source for understanding healthcare prices and employment. According to its latest report:

Health care prices in May 2014 were 1.8% higher than in May 2013, well above the 12-month moving average of 1.3%. Hospital prices grew 2.1% while prescription drug prices rose 3.6%.  Physician and clinical services prices, which exhibited near-zero growth in the first quarter of 2014, grew by 0.6%. Health care gained 21,000 jobs in June 2014. Over the first half of 2014, the health sector grew by over 20,000 jobs per month, about 20 percent higher than in the first half of 2013.

Prices of prescription drugs jumped higher than prices of other healthcare goods and services. Further, healthcare prices continue to grow significantly faster than the Consumer Price Index (CPI). Exhibit 7 illustrates how ineffective Obamacare is at restraining costs: Per capita healthcare utilization increased at about 5.5 percent (year on year) in the first half of 2002, well before the December 2007 onset of recession, and dropped until the end of 2010. The growth of consumer-driven health care, including Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) remains the most plausible explanation for this effect.

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Insurers are Starting to Pay for Cross-Border Treatment

In the New Republic, Adam Teicholz and Glenn Cohen discuss insurers whose provider networks run across the border:

conceptBefore dawn on a Wednesday in January, Cesar Flores, a 40-year-old employed by a large retail chain, woke up at his home in Chula Vista, California. He got in his car and crossed the border into Tijuana. From there, he headed for a local hospital, where he got lab tests — part of routine follow-up to a kidney stone procedure. He had his blood drawn and left the hospital at 7:30. He arrived home before 10.

But Flores’s situation isn’t medical tourism as we know it. Flores has insurance through his wife’s employer. But his insurer, a small, three-year-old startup H.M.O. called MediExcel, requires Flores to obtain certain medical treatment at a hospital across the border. In part due to cost-pressures generated by the Affordable Care Act, other sorts of plans that require travel have the potential to expand.

OxyContin Abuse: Stopping the Dealers Helps; Suing the Drugmaker Does Not

One of the biggest challenges with the regulation of prescription drugs is how to prevent the abuse of addictive ones. OxyContin, a powerful painkiller is probably the best known example. There are two ways to reduce the abuse of OxyContin: Punish the inventor and manufacturer of this valuable medicine; or go after those to take advantage of addicts who need help.

HSAAlthough OxyContin is widely prescribed by physicians and valued by patients who need powerful pain relief, trial lawyers decided that the medicine, not the addiction, was the problem. Years ago, the decided they could make some money by suing the manufacturer, Purdue Pharma. Back in 2008, Heartland Institute’s Lawsuit Abuse Fortnightly reported on the cost of this effort:

If anyone doubts tort claims are a burden on American drugmakers, consider the fees for Purdue Pharma L.P.’s defense of 1,400 lawsuits in 32 states, alleging that OxyContin, its prescription painkiller, is addictive.

CEO: “Soul-Crushing Regulations” Driving Entrepreneurs Out of Health Information Technology

Jonathan Bush, CEO of athenaHealth (NASDAQ: ATHN), testified to a Congressional committee on the impact the federal government has on entrepreneurship in health IT.

g“You guys have made things that work in every other industry illegal in healthcare,” he said. “You can be drunk and in the wrong country and you can get your bank balance reconciled because the bank that needed the info can pay the other bank $3 to get it. If that happened between a doc and hospital, it’s prison time for that crime of supply-chain partnership.” (Veronica Combs, MEDCIty News)

(It is always a good idea to pay attention to athenaHealth executives when they speak on public policy. They never churn out the “go along to get along” PR-speak generated by too many corporate spokespeople when they are trying to get something out of Uncle Sam.)