Category Archives: Healthcare Spending

Healthcare System in Campaign 2024: Out of Sight, Out of Mind?

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Healthcare System in Campaign 2024: Out of Sight, Out of Mind?

The GOP Presidential debate marked the unofficial start of the 2024 Presidential campaign. With the exception of continued funding for Ukraine, style points won over issue distinctions as each of the 8 White House aspirants sought to make the cut to the next debate September 27 at the Reagan Library in Simi Valley, CA.

For the candidates in Milwaukee, it’s about “Stayin’ Alive” per the BeeGee’s hit song: that means avoiding self-inflicted harm while privately raising money to keep their campaigns afloat. And, based on Debate One, with the exception of abortion, that means they’ll not face questions about their positions on the litany of issues that dominate healthcare these days i.e., drug prices, hospital consolidation, price transparency, workforce burnout and many others. In Milwaukee, healthcare was essentially ‘out of sight our of mind’ to the moderators and debaters despite being 18% of the U.S. economy and its biggest employer.

For now, each will enlist ghostwriters to produce position papers for their websites, and, on occasion, reporters will press for specifics to test their grasp on a topic but that’s about it. Based on last Wednesday’s 2-hour event, it’s unlikely general media outlets like Fox News (which also hosts Debate Two) will explore healthcare issues except for abortion.

That means healthcare will be subordinated to the economy, inflation, immigration and crime—the top issues to GOP voters—for most of the Presidential primary season.  

Next November, voters will also elect 34 US Senators, 435 members of the House of Representatives, 11 Governors and their representatives in 85 state legislative bodies. This will be the first election cycle after reapportionment of votes in the United States Electoral College following the 2020 United States census. Swing states (WI, MI, PA, NV, AZ, GA, FL, OH, CO, VA) will again be keys to the Presidential results since demographics and population shifts have increased the concentrations of each party’s core voters in so-called Blue States and Red States:

  • The Democratic voter core is diverse, educated and culturally liberal with its strongest appeal to African-Americans, Latinos, women, educated professionals and urban voters. Blue States are predominantly in the Northeast, Upper Midwest and West Coast regions.
  • The Republican voter core consists of rural white voters, evangelicals, the elderly, and non-college educated adults. Red States are predominantly in the South and Southwest.

The increased concentrations of Blue or Red voters in certain states and regions has contributed to political polarization in the U.S. electorate and presents an unusual challenge to healthcare. Per Gallup: “Political polarization since 2003 has increased most significantly on issues related to federal government power, global warming and the environment, education, abortion, foreign trade, immigration, gun laws, the government’s role in providing healthcare, and income tax fairness. Increased polarization has been less evident on certain moral issues and satisfaction with the state of race relations.” 

Thus, healthcare issues are increasingly subject to hyper partisanship and often misinformation.

Given the limited knowledge voters have on most health issues and growing prevalence of social media fueled misinformation, political polarization creates echo chambers in healthcare—one that thinks the system works for those who can afford it and another that thinks that’s wrong.

It’s dicey for politicians: it’s political malpractice to offer specific solutions on anything, especially healthcare. It’s safer to attack its biggest vulnerabilities—affordability and equitable access—even though they mean something different in every echo chamber.

My take:

Barring a second Covid pandemic or global conflict with Russia/China, it’s unlikely healthcare issues will be prominent in Campaign 2024 at the national level except for abortion.  At least through the May primary season, here’s the political landscape for healthcare:

Affordability and inequitable access will be the focus of candidate rhetoric at the national level: Trust and confidence in the U.S. health system has eroded. That’s fertile political turf for critics.

In Congress, the fiercest defenders of the status quo have joined efforts to impose restrictions on consolidation and price transparency for hospitals and price controls for prescription drugs. There’s Bipartisan acknowledgement that inequities in accessing care are significant and increasing, especially in minority and low income populations. They differ over the remedy. Employers expect their health costs to increase at least 8% next year and blame hospitals and drug companies for price gauging and want Congress to do more. 85% of Democrats think “the government should insure everyone” vs. 33% of Republican voters which calcifies inaction in a divided Congress though. Opposition to the Affordable Care Act (2010) has softened and Medicaid expansion has passed in 40 Blue and Red states.

In the 2024 election cycle, remedies for increased access and more affordability will pit Republicans calling for more competition, consumerism and transparency and Democrats calling for more government funding, regulation and fairness. 

But more important, voter and employer frustration with partisan bickering sans solutions will set the stage for the vigorous debate about a single payer system in 2026 and after,

State elections will give more attention to healthcare issues than the Presidential race: That’s because Governors and state legislators set direction on issues like abortion rights, drug price controls, Medicaid funding, scope of practice allowances and others.

Increasingly, state Attorney’s General and Treasurers are weighing in on consolidation and spending. States referee workforce issues like nurse staffing requirements and others. And ballot referenda on healthcare issues trail only public education as a focus of grassroots voter activity.  At the top of that list is abortion rights:

In 25 states and DC, there are no restrictions on access; in 14 states, abortion is banned and in 11 abortions—both procedures and medication—are legal, but with gestational limits from 6 weeks (GA), to between 12 and 22 weeks (AZ, UT, NE, KS, IA, IN, OH, NC, SC, FL). It’s an issue that divides legislators and increasingly delineates Blue and Red states and in many states remains unsettled.

Other healthcare issues, like ageism, will surface in Campaign 2024 in the context of other topics: Finally, healthcare will factor into other issues: Example: The leading Presidential candidates are seniors: President Biden was the oldest person to assume the office at age 78 and would be would be 86 at the end of his second term. Former President Trump was 70 when elected in 2016 and would be 81 if elected when his second term ends.

The majority of Americans are concerned about the impact of age on fitness to serve among aspirants for high office: cognitive impairment, dementia, physical limitations et al. will be necessary talking points in campaigns and media coverage. Similarly, cybersecurity looms as a focus where healthcare’s data-rich dependence is directly impacted. Growing concern about climate and the food supply, sourcing of raw good and materials from China used in drug manufacturing and many other headlines will infer healthcare context.

Summary:  

Healthcare will be on the ballot in 2024 and might very well make the difference in who wins and loses in many state and local elections.

It will make a difference in the Presidential campaign as part of the economy and a major focus of government spending. Beyond abortion, the lack of attention to other aspects of the health system in the Milwaukee debate last week should in no way be interpreted as a pass for healthcare insiders. 

Voters are restless and healthcare is contributing. Healthcare is far from  ‘out of sight, out of mind’ in Campaign 2024.

November 2022 Health Sector Economic Indicators Briefs

Posted on by • Posted in Gross Domestic Product (GDP), Health Care Job Growth, Health Care Price Growth, Health Care Price Index (HCPI), Health Sector Economic Indicators (HSEI), Health Spending Growth, Healthcare Economics, Healthcare Price Index, Healthcare Sector, Healthcare Spending • Leave a comment

https://altarum.org/publications/november-2022-health-sector-economic-indicators-briefs

Economic Indicators | November 18, 2022

Altarum’s monthly Health Sector Economic Indicators (HSEI) briefs analyze the most recent data available on health sector spending, prices, employment, and utilization. Support for this work is provided by a grant from the Robert Wood Johnson Foundation. Below are highlights from the November 2022 briefs.

Health spending growth continues to lag GDP growth

  • National health spending in September 2022 grew by 4.4%, year over year.
  • Health spending in September 2022 is estimated to account for 17.4% of GDP, essentially identical to the August 2022 value, which was the lowest share since June 2015.
  • Nominal GDP in September 2022 was 8.9% higher than in September 2021 as GDP growth continues to outpace health spending growth.
  • The health spending share of GDP has declined from a recent high of 18.5% of GDP in December 2021, largely because of high economy-wide inflation.

​Health care price growth remains moderate amid slowing economywide inflation

  • The Health Care Price Index (HCPI) increased by 2.9% year over year in October, up slightly from 2.8% a month earlier. 
  • Economywide price growth slowed this month, as overall CPI inflation fell to 7.7% and PPI price growth fell to 8.0%. Services CPI growth (excluding health care) held steady at 7.0% year over year, while commodities inflation fell for a fourth straight month to 8.6%.
  • Among the major health care categories, price growth for dental care (5.4%), nursing home care (4.2%), and hospital services (3.5%) were above average, while physician services (0.3%) and prescription drug (2.2%) price growth were the slowest growing categories.
  • Growth in our implicit measure of utilization for September was the slowest it has been in 2022, down to 1.8% year-over-year growth from 2.2% a month prior in August.

Health care job growth remains strong while health care wage growth moderates

  • Health care job growth remained strong in October, with 52,600 jobs added. Health care has averaged 47,000 new jobs per month in 2022.
  • Most of the growth in health care jobs was in ambulatory care, which added 30,700 jobs in October. Hospitals added 10,800 jobs and nursing and residential care added 11,100 jobs.
  • The economy added 261,000 jobs in October, similar to August and September gains. The unemployment rate rose slightly to 3.7%.
  • Health care wage growth appears to be moderating. After peaking at 7.4% growth year over year in July, health care wages grew by 5.6% in September, nearer to economy-wide wage growth of 5.0%.
  • Wage growth fell across all three major health care settings: residential care wages grew at 7.7% compared to a peak of 11% in March 2022, hospital wages grew by 5.8% compared to a peak of 8.5% in June, and ambulatory care wages grew by 4.6% compared to a peak of 5.8% in July.

PENNSYLVANIA HOSPITALS MADE $136.1B IMPACT IN FY 2018

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The Hospital and Healthsystem Association of Pennsylvania report found that hospitals also supported more than one in every 10 jobs.

Hospitals in Pennsylvania made a total economic impact of $136.1 billion in Fiscal Year (FY) 2018, according to a Hospital and Healthsystem Association of Pennsylvania (HAP) report released Tuesday.

Of the total economic impact, $60.5 billion were the result of “direct impact,” such as employee salaries, benefits, as well as goods and services for hospital operations. Another $75.6 billion were the result of “ripple impact,” such as additional economic effects of a hospital in a community.

HHAP also found that hospitals supported more than 650,000 jobs, accounting for more than one in every 10 jobs in the state and providing $32.3 billion in total wages. Nearly 300,000 jobs were directly associated with hospitals while 363,000 jobs were associated with “ripple effects” of health systems.

The study’s findings point to the significant economic impact provider organizations have in the Keystone State and the need to promote policies that foster continued growth, according to Sari Siegel, PhD, vice president of healthcare research at HAP.

“While overall growth projections are strong, some hospitals remain financially stressed. Our work illustrates that hospitals often are the backbones of their communities and closure could cause devastating economic ripples throughout a region,” Siegel said in a statement. “The findings of this report underscore the need for policies that bolster hospitals’ long-term sustainability.”

Pennsylvania hospitals have contributed significantly to the state’s economy in recent years and have also made headlines throughout 2019.

Hahnemann University Hospital, a Pennsylvania-based hospital, filed for bankruptcy and closed over the summer. A group of six Philadelphia-based health systems won the hospital at auction for $55 million in early August. 

The report was also released days after two Pennsylvania-based health systems, Tower Health and Drexel University, finalized a $50 million acquisition of St. Christopher’s Hospital for Children, a 188-bed pediatric medical center in Philadelphia.

There are 253 hospitals in Pennsylvania, according to HAP, with more than 37,600 staffed beds. The report also found that hospitals are among the 10 largest employers in 85% of counties across the state.

The total economic impact of Pennsylvania hospitals in FY 2018 grew by nearly $50 billion over the past decade, according to a HAP analysis of data collected from the Department of Health and Human Services (HHS).

Additionally, Pennsylvania hospitals received nearly $2 billion in research allocations from HHS and Patient-Centered Outcomes Research Institute in FY 2018.

 

 

 

HEALTH SPENDING GREW 4.6% IN 2018, OUTPACED BY OVERALL ECONOMY

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https://www.healthleadersmedia.com/finance/health-spending-grew-46-2018-outpaced-overall-economy

The total number of uninsured people rose by 1 million for the second consecutive year.

Healthcare spending in the U.S. grew by 4.6% in 2018, totaling $3.6 trillion, according to data released Thursday by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary.

Healthcare, as a share of the overall economy, slipped to 17.7% of gross domestic product (GDP) in 2018, down slightly from 17.9% in 2017.

The statistics, published in Health Affairs, show that healthcare spending averaged $11,172 per person in 2018, while the total personal healthcare spending growth rate held steady at 4.1%.

National healthcare spending increased faster in 2018 than it did in 2017, but it equaled the rate seen in 2016. CMS attributed the recent increase to acceleration in health insurance costs, which grew by 4.3% in 2017 and 13.2% in 2018. Another contributing factor was the reinstatement of the health insurance tax after a one-year moratorium.

For the second consecutive year, the total number of uninsured people rose by 1 million.

“Healthcare spending growth picked up across all major payers in 2018 as medical prices grew faster, due in part to the reinstatement of the health insurance tax on all health insurance providers,” Micah Hartman, a statistician in the CMS Office of the Actuary, said in a statement. “However, economic growth outpaced healthcare spending and the share of the economy devoted to health care fell.”

Rising medical prices accounted for an uptick in per capita healthcare spending last year. Hospital spending—which accounted for 33% of overall healthcare spending in 2018—led the way among goods and services spending growth, at 4.5%.

Growth in expenditures slipped slightly to 4.5%, though hospital prices rose from 1.7% in 2017 to 2.4% in 2018. Additionally, growth in total inpatient days slid from 1.7% in 2017 to 0.7% in 2018.

Physician and clinical services spending slowed to 4.1% in 2018, down from 4.7% in 2017, while retail prescription drug spending rose from 1.4% in 2017 to 2.5% in 2018.

CMS released projections in February for average healthcare spending growth rates of 5.5% annually between 2018 to 2027, totaling nearly $6 trillion.

The study projected an acceleration in hospital spending from 4.4% in 2018 to 5.1% in 2019, thanks to faster than expected growth in Medicare and Medicaid.  

The study also attributed the growth in overall healthcare spending to more baby boomers entering Medicare and a 2.5% increase in medical goods and services through 2027.

On the payer side, private health insurance spending totaled $1.2 trillion, growing by 5.8% in 2018 compared to 4.9% in 2017.

Meanwhile, both Medicare and Medicaid experienced spending growth increases of 6.4% and 3%, respectively.

The federal government’s healthcare spending rose by 5.6% in 2018, doubling the rate from 2017, as growth in Medicare and Medicaid expenditures increased significantly.

The largest of portions of healthcare spending went to the federal government and households, each with 28%, private businesses at 20%, state and local governments at 17%, and “other private revenues” at 7%.