Checking Up On Health: January 21, 2014

Health Policy News and Views
Compiled by Benita M. Dodd


This week, “Checking Up On Health” focuses on the alternatives. What if you want to opt out of the Patient Protection and Affordable Care Act coverage mandate? There are ways, and unlike the morbid saying, they are indeed “better than the alternative:” You don’t have to “check” out to “opt out” of ObamaCare.

Health care on your terms: Wondering if that’s a flu, cold, bronchitis or pneumonia? What if, even if you’re feeling miserable, you could consult your doctor without leaving home? Teladoc, operating since 2002, describes itself as the nation’s largest telehealth provide and promises a call-back within 24 minutes. The Web site claims its U.S. board-certified doctors can resolve many of your medical issues, 24/7/365, via phone or online video consults from wherever you happen to be. Even more interesting, Teladoc claims 90 percent of its 4.5 million members said the Teladoc physician resolved their issue and 95 percent would recommend Teladoc to a friend. Other companies that offer similar services include 247DocRxDocDialAmeridoc and CallMD.The Georgia Public Foundation held an event last year to highlight telemedicine; watch panelist Dr. Jeffrey Grossman encourage Georgia to get with the program here.

Want to pay your $95 and sidestep the ObamaCare mandate? Telemedicine is just one option, according to an article on by Dr. Susan Berry. The eight recommendations she cites are from Sean Parnell, author of the newly released The Self-Pay Patient, and they include health-care sharing ministries, short-term health insurance policies, alternative insurance plans, cash-only doctors and retail clinics.

Health fraud prosecutions climb: Federal prosecutors filed a record-setting number of health care fraud cases in fiscal year 2013, according to analysis by researchers at Syracuse University. The number of prosecutions went up 3 percent, from 366 in FY 2012 to 377 in FY 2013. That 2013 number is up 7.7 percent from five years ago, and 9.9 percent from the 343 prosecutions reported in 2003. The lead investigative agency for the most prosecutions was the FBI, taking 46.4 percent of the prosecutions referred. Health and Human Services was the lead agency for 36.6 percent of cases. Source: Becker’s Hospital Review

What will the market bear when bearing children? The cost of baby births in hospitals can differ by tens of thousands of dollars, a variation largely unexplained by market forces, according to a California study published in the British Medical Journal. After adjusting for patient demographic and clinical characteristics, reserachers found the average California woman could be charged as little as $3,296 or as much as $37,227 for a normal delivery, and $8,312 to $70,908 for a caesarean section, depending on the hospital. Researchers found institutional and market-level factors (e.g. facility wages, the area, patient insurance) included in their models explained only up to 36 percent of the variation in charges between hospitals. Source: Becker’s Hospital Review

FDA OKs test for developmental delays in children. The Food and Drug Administration has approved a blood-based test designed to identify chromosomal changes that could be linked to intellectual disability or developmental delay in children. CytoScan Dx, manufactured by Affymetrix, can help U.S. clinicians and parents provide proper support and care, an FDA official said. Source: GenomeWeb Daily News

The cost of a doc: Academic medical centers are teaching hospitals – such as Georgia Regents, Grady and Emory University hospitals – that train medical residents. On average, the cost of training a physician (direct graduate medical education, or GME) in the United States is $100,000. Medicare pays hospitals just $40,000 per physician through GME funding to academic medical centers. Indirect medical education (the opportunity cost of slower procedure times and fewer procedures, and/or less productive attending physicians) adds $27 billion in costs to these teaching hospitals. Estimates are that the country will have a shortage of nearly 90,000 physicians by 2020, and these facilities are worried about funding slots as well as programs. Medical school enrollment has increased by 30 percent in recent years to help meet future physician demand, but residency and fellowship slots have not. Many of these hospitals specialize, increasing costs – and insurers and consumers may no longer want to pay for such specialization. Many of these hospitals are the safety-net provider for their market: Nationally, they treat 40 percent of hospitalized uninsured patients and 23 percent of Medicaid patients. Source: Becker’s Hospital Review

Benefits justify costs: The prices of brand-name treatments will continue to increase primarily because their use cuts other health care costs, according to drugmakers. Companies are having to prove cost-effectiveness to both insurers and governments, Eli Lilly and Co. CEO John Lechleiter told the JP Morgan Healthcare Conference in San Francisco. “With personalized medicine, we’re able to be much more precise and much more specific about which drugs may benefit certain patients more than others,” he added. Source: Reuters

Costs justify closing: Georgia hospitals want the state to reconsider its opposition to expanding Medicaid under the Affordable Care Act. They warn rural hospitals in particular are in danger of closing. By one estimate, as many as 15 hospitals are at risk. But WABE reports that State Rep. Sharon Cooper, chair of the House Health and Human Services Committee, is speaking out against Medicaid expansion and says, “There are some of those rural hospitals that need to close.”  Shutdown needn’t mean a lack of care; Governor Deal already is proposing medical airlift funding assistance in rural areas in the state budget. And as we’ve pointed out numerous times at the Georgia Public Policy Foundation, expanding Medicaid is a bad idea: There are better options.

Is the cost slowdown lasting? The feds aren’t so sure. The Centers for Medicare and Medicaid Services (CMS) notes, “This pattern [of slowing growth] is consistent with historical experience when health spending as a share of GDP often stabilizes approximately two to three years after the end of a recession and then increases when the economy significantly improves. Recently, however, the question has arisen about whether a more fundamental change is occurring within the health sector and whether this stability will endure. From our perspective, more historical evidence is needed before concluding that we have observed a structural break in the historical relationship between the health sector and the overall economy.”

That which we call a rose …” Because Arkansas’ Private Option, passed in 2013, is being held up by as a market-oriented alternative to ObamaCare’s Medicaid expansion, legislators in other states are considering replicating Arkansas. But a new Foundation for Government Accountability report warns, “The Private Option is not the free-market alternative to Medicaid expansion its architects in the Arkansas Legislature hoped it would be. In fact, the Private Option is nothing more than Medicaid expansion by another name, and its passage was the result of a series of empty promises that, until now, have gone unchecked.” Important, FGA points out, “The Private Option is a traditional Medicaid expansion by another name, using Medicaid funding to provide Medicaid benefits,” and “a new entitlement, not a block grant.” Read more here:

The case for corporate tax cuts: Reforms to the high corporate tax rates that put drugmakers and other companies in the nation at a disadvantage in the global marketplace are long overdue, Eli Lilly & Co. chief John Lechleiter writes. He maintains the R&D tax credit should be made permanent to keep U.S. firms competitive in the global race for investments in innovation and a temporary repatriation of foreign earnings could help bring cash held outside the country back into the U.S. economy. Source: Forbes

Health care, by the numbers:

  • The 10-year impact of regulatory actions on hospital payments since 2010 will involve an estimated $113 billion reduction in Medicare and Medicaid reimbursement, according to the American Hospital Association.
  • More than half (53 percent) of consumers are interested in purchasing wearable technologies to allow them to better track their personal health and fitness, according to the Accenture Digital Consumer Tech Survey 2014.
  • The North American health IT market will reach $31.3 billion by 2017, according to a report from Research and Markets. The market was valued at $21.9 billion in 2012; with the U.S. share commanding 72.6 percent. By 2017, the U.S. share is projected to reach $22.6 billion. The blame? And aging population, government incentives and pressures to increase efficiency within health care.
  • In 2012, health care costs per person averaged almost $9,000, a monumental increase from 2007’s cost, $7,600. Total spending on health care reaching $2.8 trillion in 2012, according to the latest data from the Centers for Medicare and Medicaid Services.
  • Chronic illnesses such as heart disease, cancer and diabetes cause about 70 percent of all deaths in the United States, and —  no surprise – they are the most expensive to treat. A majority of chronic illnesses stems from unhealthy behaviors. Source: State Health Care Cost Containment Commission

Quotes of Note

“People who have used accountants to complete income taxes may see where patients are coming from. Instead of doing a few tasks on a daily basis, many people find it easier to drop off their financial paperwork and receipts at the end of the year and let someone else do the math. The same is often true for patients’ expectations for health care.” – Molly Gamble

“With increased access to services and an aging population, demand for healthcare labor will continue to grow this year, which is good news for job seekers in the industry.” – Jason Lovelace, president of CareerBuilder Healthcare

“The expansion of information technology in health care has been frustratingly slow and lags behind many other industries. Contributing to that frustration has been a lack of interoperability between various electronic medical records systems and many of the other hospital and clinic applications that generate patient data. A lack of industry knowledge and the pressure from government deadlines to make big strides in a relatively short period of time complicates efforts to address these challenges” – Chris Van Gorder, president and CEO of Scripps Health

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