Tag: "Health Care Costs"

Would Medicare Pay for Robohand?

Leon McCarthy of Marblehead, Massachusetts, was born without fingers on one of his hands. When Leon was 10, his father Paul learned about the Robohand and purchased a 3-D printer to build one for his son.

Although the hand reportedly costs $500 to make, the printer required currently sells for $2,399. Even so, the Robohand is far less expensive than available finger prosthetics. Many of the Robohand’s parts can be reused when new fittings are printed as children grow. Though it not be as functional as some of the much more expensive creations available, people buying their own prosthetics are willing to trade some functionality for the Robohand’s lower cost.

Would Robohand be covered by Medicaid and Medicare? Probably not.

Medicare and Medicaid require a prescription to purchase durable medical equipment like hand prostheses. Leon did not have a prescription. He probably could not have gotten one since the Robohand is not an FDA approved medical device. His father obviously does not meet Medicare requirements for suppliers of custom fabricated and fitted prosthetic devices.

The next time someone argues that deregulation will do nothing to reduce health care costs, keep in mind Medicare and Medicaid durable medical equipment regulations, regulations that both raise costs and act as a competitive deterrent to people who might have ideas for products like the Robohand.

Dec 16, 2013 | 12 comments | by Linda Gorman

Sky-High Hospital Prices are a Result of Government Interference

Despite its editorial position in favor of more government control of people’s access to medical care, the New York Times has an excellent track record of journalism covering the real problems in U.S. health care. A fine example is Elisabeth Rosenthal’s report last Monday (“As Hospital Prices Soar: A Stitch Tops $500”, December 2, 2013) on outrageous hospital prices, including $500 for a single stitch.

She identifies something that we don’t hear from hospitals themselves: Emergency rooms are profit centers. And we are not talking about rocket surgery: As Rosenthal notes, stitching a wound with needle and thread ― a procedure undertaken since antiquity – routinely leads to a charge of over $1,500.

Rosenthal filed her story from San Francisco. California requires hospitals to file all their charges for procedures (the “chargemaster”) with the Office of Statewide Health Planning and Development (OSHPOD), which publicizes them. Many observers believe that the state forcing hospitals to publicize prices will lead to price reductions. However, this is a misdiagnosis: Addressing the symptoms and not the cause.

Dec 10, 2013 | 19 comments | by John R. Graham

Headlines I Wish I Hadn’t Seen

Harry Reid: “Under ObamaCare, my insurance costs me about $4,500 more than it did before.”

Harry Reid: I’m not the only one to exempt “some of my staff from having to buy insurance through the law’s new exchanges.”

Zeke Emanuel: If you like your doctor, you can pay more.

Dec 09, 2013 | 13 comments | by John Goodman

Why Is Telling the Truth so Hard for This White House?

Here is the latest Barrack Obama statement fact checked by the Washington Post:

“We believe we’re a better country than a country where we allow, every day, 14,000 Americans to lose their health coverage; or where every year, tens of thousands of Americans died because they didn’t have health care; or where out-of-pocket costs drove millions of citizens into poverty in the wealthiest nation on Earth.”

The Post gives the president a pass on the first claim, citing previous fact checking, but awards 1½ Pinocchios for the next two.

Even the first claim is false, however. The 14,000 figure was an estimate of the number losing health insurance because they lost a job and it was made during the recession, when there was rising unemployment. But the president, remember, has pledged to reverse the jobs picture. If he is successful, we should have 14,000 a day gaining insurance ― unless of course the private insurance industry is in turmoil because of ObamaCare.

Claim number two, the Post reports is cherry picking the data. And claim number three is refuted by a study by an economist who is actually working for the Obama administration! The original claim that lack of insurance kills was based on a thoroughly discredited study by the Institute of Medicine. Richard Kronick, now working for HHS, concluded that if the study were done correctly,

the IOM study “would almost certainly have found no difference in survival between the uninsured and similar insured respondents.” As part of his study, Kronick took a sample of more than 600,000 people, interviewed from 1986 to 2002, with follow-ups, and then controlled for a variety of factors, including how long they went without insurance. He consistently found no difference in the [mortality] outcome.

More recent research has produced mixed results, but see this study by former Congressional Budget Office director, June O’Neill.

Dec 06, 2013 | 3 comments | by John Goodman

ObamaCare Risk Adjustment: Moving the Goalposts

As noted in a previous blog entry, the Administration has ways of partially immunizing health insurers from losing money in ObamaCare’s exchanges. A later entry proposed that early results of open enrollment for ObamaCare, which began on October 1, suggest that health insurers will require a bigger bailout than originally anticipated, and the Administration is searching for ways to do this without Congressional approval.

By the end of November, the U.S. Department of Health & Human Services (HHS) released its proposed rule for payment parameters for 2015. However, as well as proposing the parameters for reinsurance, risk adjustment, and risk corridors for the second year of the ObamaCare exchanges, the proposed rule sketched out some of the adjustments it plans to make to the previously finalized rule for 2014.

The one that jumps out is the change the attachment point for reinsurance. As described in the earlier post, the attachment point for 2014 was set at $60,000, with a maximum of $250,000.

Dec 05, 2013 | 10 comments | by John R. Graham

Headlines I Wish I Hadn’t Seen

NSA tracks 5 billion cellphone locations a day.

ObamaCare media updates are starting to get tense.

Darrell Issa: Cost of health site may top $1 billion.

15-minute ambulance trip costs $1,772.42.

Good for thee, but not for me: Reid exempts staff from ObamaCare.

White House refuses to testify about Healthcare.gov security problems.

Dec 05, 2013 | 12 comments | by John Goodman

More on the Latest Commonwealth Fund Study: The United States is the Third Lowest Spender on Health Care in Eleven Developed Countries

Devon Herrick has already addressed some of the shortcomings of the Commonwealth Fund’s latest survey of eleven developed countries, which questions thousands of residents about their health costs and access to health care. The report is inevitably spun with headlines such as: “We pay more, wait longer than other countries“.

In the United States, health spending accounted for almost 18 percent of GDP in 2011. The Netherlands comes next, at just under 12 percent. In dollar figures, the U.S. spent $8,508 per capita, versus only $5,669 in Norway, the runner-up. This certainly invites us to question whether we are getting our money’s worth. Free-market reforms, as described in Priceless, are expected to reduce costs.

However, it’s not clear that relatively high U.S. health spending is a burden on the nation. Table A, which uses data from the survey, shows that when we subtract U.S. health spending from our Gross Domestic Product (GDP), we still had $39, 560 per capita to spend on everything else we value. Only two countries, Norway and Switzerland, beat the U.S. on this measure. In the United Kingdom for example, GDP per capita after health spending was only $32,818 in 2011 (adjusted for the cost of living). So, even though American health care is significantly more expensive than British health care, the average American enjoyed $6,742 more GDP after health spending than his British peer.

Table A

Country	Health Spending/Capita (2011)	Share of GDP/Capita	GDP/Capita (2011)	GDP/Cap less Health Spending/Capita (2011)
Norway	$5,669	9%	$60,957	$55,288
Switzerland	$5,643	11%	$51,300	$45,657
United States	$8,508	18%	$48,068	$39,560
Australia	$3,800	9%	$42,697	$38,897
Netherlands	$5,099	12%	$42,849	$37,750
Sweden	$3,925	10%	$41,316	$37,391
Canada	$4,522	11%	$40,375	$35,853
Germany	$4,495	11%	$39,779	$35,284
United Kingdom	$3,405	9%	$36,223	$32,818
France	$4,118	12%	$35,500	$31,382
New Zealand	$3,182	10%	$30,893	$27,711

Source: Schoen, C., et al., “Access, Affordabiliy, and Insurance Complexity Are Often Worse in the United States Compared to Ten Other Countries”, Health Affairs (November 2013).

Dec 04, 2013 | 15 comments | by John R. Graham