Unbiased Analysis of Today's Healthcare Issues

The Apple Watch and Health

Written By: Jason Shafrin - Sep• 10•14

Apple recently unveiled its smart watch.  The watch not only is a mini-computer, but it can help improve your health.

Pharmafile reports:

The watch comes with an app that promises to calculate all kinds of data including heart rate, calories burned and other metrics in one place – and can also count how many stairs you climb.

Although the Apple’s new technology is exciting, some health experts are disappointed.

Much of this monitoring software and hardware is already available through a variety of existing apps from Apple and its rivals Samsung, along with Google’s Android…One of the largest omissions – but the most anticipated in the healthcare market – was the release of more details on the new HealthKit platform. This will allow users to pool their personal data and also share it with doctors – should they so wish.

Apple will also face significant competition from other big tech firms.

Google is another tech giant to step into the health world taking on both Apple and Samsung with its ‘Google Fit’ service, which collects and aggregates data from common fitness trackers and health-related apps.

Google has also recently launched a new healthcare company called ‘Calico’ – and last month joined forces with AbbVie to help develop new treatments for conditions that affect the elderly.

Nevertheless, this innovation appears to be a positive step for improving patient health.

Will Obamacare Increase the share of Part-Time Workers?

Written By: Jason Shafrin - Sep• 10•14

The ACA requires large employers to provide coverage to all full-time workers. However, providing insurance is costly. Will employers avoid this requirement by hiring more part-time workers? An Urban Institute report claims that this is not the case.

We find no evidence that the ACA had already started increasing part-time work before 2014. We find a small increase in part-time work in 2014 beyond what would be expected at this point in the economic recovery based on prior experience since 2000. This increase in part-time work is fully attributable to an increase in involuntary part-time work.

Does this mean that the ACA will not increase the share of workers who are part-time? My guess is that the ACA will increase the share of workers who are part time, although this effect is more likely to occur gradually over multiple years.

Employers could shift existing workers from full to part-time, but doing so would likely alienate workers and demoralize staff. The other mechanism for increasing the share of part-time workers is hiring part-time workers who replace full time workers after the quit, retire or are fired. The latter approach would not demoralize the current workforce, but would lead to a gradual shift in the share of part-time workers. However, it may take a number of years before there is a noticeable change in the share of part-time workers due to the ACA.

Health Insurance and ER Use

Written By: Jason Shafrin - Sep• 09•14

One of the big political selling points of the Affordable Care Act (ACA) was that by providing people with health insurance, they can get the primary care they need and avoid expensive ER visits. While the expansion of health insurance never claimed to be cost savings, did the ACA reduce ER visits? A paper by Hernandez-Boussard et al. finds the following:

The Affordable Care Act (ACA) extended eligibility for health insurance for young adults ages 19–25. This extension may have affected how young adults use emergency department (ED) care and other health services. To test the impact of the ACA on how young adults used ED services, we used 2009–11 state administrative records from California, Florida, and New York to compare changes in ED use in young adults ages 19–25 before and after the ACA provision was implemented with changes in the same period for people ages 26–31 (the control group). Following implementation of the ACA provision, the younger group had a decrease of 2.7 ED visits per 1,000 people compared to the older group—a relative change of −2.1 percent.


Docs benefiting from Medicaid Expansions

Written By: Jason Shafrin - Sep• 08•14

PwC’s Health Research Institute reports that times are good if you are a safety net provider in a state that expanded Medicaid coverage:

Physicians, hospitals and health systems operating in the 26 states and the District of Columbia that pursued the option to broaden Medicaid coverage with federal dollars have seen a significant rise in paying customers and volume, while dramatically reducing uncompensated care levels. This year alone LifePoint Hospitals has seen a 30.3% reduction in its uninsured and charity care patients, according to reports filed with the US Securities and Exchange Commission (SEC) and data released during their second quarter earnings call.

On the other hand, things aren’t as rosy if you are a hospital in a state that did not expand Medicaid rolls.

The growth in Medicaid expansion states starkly contrasts the experience in the 24 states that did not expand the joint federal-state health program. In those states, hospitals continued to see
flat or sagging admission rates and little reduction in the number of uninsured, largely non-paying patients.

Doctors, hospitals and patients benefit from increasing Medicaid coverage, but taxpayers must foot the bill for the additional insurance coverage. Is expanding Medicaid worth the cost? Twenty six states think yes and 24 think no.

1 in 5 dollars of the US economy to be spent on healthcare by 2023

Written By: Jason Shafrin - Sep• 07•14

CMS Office of the Actuary (OACT) projects that the slowdown in healthcare spending will not last. From an article in Health Affairs this month:

In 2013 health spending growth is expected to have remained slow, at 3.6 percent, as a result of the sluggish economic recovery, the effects of sequestration, and continued increases in private health insurance cost-sharing requirements. The combined effects of the Affordable Care Act’s coverage expansions, faster economic growth, and population aging are expected to fuel health spending growth this year and thereafter (5.6 percent in 2014 and 6.0 percent per year for 2015–23)…Because health spending is projected to grow 1.1 percentage points faster than the average economic growth during 2013–23, the health share of the gross domestic product is expected to rise from 17.2 percent in 2012 to 19.3 percent in 2023.



Capitalism vs. Competition

Written By: Jason Shafrin - Sep• 05•14

Nevertheless, devaluing competition is a central theme of Thiel’s new book. He asserts that “capitalism and competition are opposites,” because “under perfect competition, all profits get competed away.” He exhorts entrepreneurs to seek out monopolies, concluding, “All happy companies are different: Each one earns a monopoly by solving a unique problem. All failed companies are the same: They failed to escape competition.”

End of Week Links

Written By: Jason Shafrin - Sep• 04•14

Pharmaceuticals in China

Written By: Jason Shafrin - Sep• 03•14

As China is now the second largest economy in the world, spending on medical services and medications is also growing. Pharmafile reports:

China is positioned to become the second-largest pharmaceutical market, after the US, by next year, according to healthcare analysts IMS Health; meanwhile, by growing an estimated 15% to 18% annually, the organisation says its market is expected to reach $155 to $165 billion.

Further research by the same organisation indicates that emerging markets such as China are projected to make up 30% of global medicine expenditures by 2016, spending $35-$40 billion on pharmaceuticals alone.

One reason pharmaceutical use is high in China is that doctors are incentivized to prescribe medications here.

[D]octors receive bonuses from departmental profits, which are also generated from pharmaceutical products and diagnoses, among other options.

However, pricing pressure is likely to increase in China. The Economist reports:

Even the expansion of state health insurance, which will soon cover nearly everyone in China, is not the good news it seems for drugs firms. The government will become a near-monopsony buyer, and is determined to use the power this brings, as well as explicit price controls, to rein in the cost of all but the most innovative treatments.

Pharmaceutical firms face great opportunity in China but also many challenges.

CoR #216: The End of Summer Edition

Written By: Jason Shafrin - Sep• 03•14

Tim Dodge of iiabny makes a fine CavRisk debut with an impressive and eclectic collection of risky posts – everything from stolen kayaks to legalized marijuana. You can find the posts here: 

Do we need to go back to PHRs?

Written By: Jason Shafrin - Sep• 01•14

There has been lots of public outcry for integrated, interoperable electronic health records (EHR).  Having EHRs silos makes it difficult for physicians, hospitals and other providers to share information with one another and with patients.  However, there is one benefit of these silos; any data breach will be somewhat contained.

Are data breaches of EMRs a problem.  A recent hacker attack on a hospital system clearly shows the answer is yes.

Community Health Systems Inc, one of the biggest U.S. hospital groups, said on Monday it was the victim of a cyber attack from China, resulting in the theft of Social Security numbers and other personal data belonging to 4.5 million patients.

That would make the attack the largest of its type involving patient information since a U.S. Department of Health and Human Services website started tracking such breaches in 2009.

It almost (I said almost) makes you yearn for the days of PHRs (paper health records).