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Articles by John Hoff

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4 Principles to Guide Health Care Reform January 14, 2016

Conservative Reform Network, 1/5/16

Last month, Congress provided temporary relief from two taxes that would hamper America’s middle class: the Cadillac tax, which could have affected employees in up to 23 percent of insurance plans, and the medical device tax, which would curb critical medical research and drive up health care costs.

With the House of Representatives poised to pass a reconciliation bill that includes the repeal of substantial portions of ObamaCare, conservatives should highlight their ideas to reform America’s broken health care system.

In CRN’s forthcoming book on health care reform, Grace-Marie Turner identifies four principles that should serve as pillars of health care reform.

  • Consumers should have security and freedom through health insurance choices, including refundable credit for those not offered health insurance through an employer.
  • States, not the federal government, must have control over the regulation health insurance.
  • Consumers, particularly those eligible for Medicare, must have more choice among coverage options with Medicare Advantage and Part D programs serving as guides.
  • Allowing for greater innovation in improving the quality of health care must be central to conservative reform of America’s health care system. Streamlining the FDA drug-approval process is one example of promoting innovation.

Health care reform must move away from the centralized approach that Obamacare has imposed. Conservatives are wise to continue offering much-needed alternatives.

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Are Certificate-of-Need Laws Barriers to Entry? How They Affect Access to MRI, CT, and PET Scans January 12, 2016

By Thomas Stratmann and Matthew C. Baker.

Mercatus Center, January 2016 

Abstract Certificate of need (CON) laws in 21 states restrict acquisition of imaging equipment, including magnetic resonance imaging (MRI), computed tomography (CT), and positron emission tomography (PET) scans. We compare the effect of CON regulations for imaging services provided by hospitals and other providers to determine whether CON laws affect use of imaging services across provider types. We find that services by nonhospital providers, but not by hospital providers, are negatively associated with CON laws. We also find that CON laws reduce the overall number of medical providers, suggesting less availability of imaging services in CON states. We provide evidence consistent with this result showing that residents of CON states are more likely to travel out of state to obtain imaging services than are residents of non-CON states. These results imply that the effect of CON is heterogeneous on hospitals and nonhospitals, affecting the market structure for imaging services.

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The Folly of Targeting Big Pharma December 11, 2015

By Michael Mandel.

The Wall Street Journal, 12/10/15

An unfortunate refrain among Democratic presidential hopefuls is that rapacious pharmaceutical and biotech companies are driving up the cost of essential medications, bankrupting the health-care system, and depriving sick Americans of treatment. Hillary Clintonhas honed her message to a nice sound bite: Drug companies that charge excessively high prices “are making a fortune off of people’s misfortune.”

A report released Dec. 2 by the Centers for Medicare and Medicaid Services shows a 12.2% increase in spending on prescription drugs in 2014 after an average 2% increase for the previous six years. As the CMS report clearly states, “the rapid growth in 2014 was due to increased spending for new medications (particularly for specialty drugs such as hepatitis C).” Yet the increase, combined with reports of drug companies attempting to jack up prices on existing drugs, has some calling for full-blown government price controls.

The way we pay for innovative drugs can certainly be improved. But the anger directed at the pharmaceutical and biotech industries overall is misdirected. The single biggest driving force for increased health-care spending in the U.S. is the rising cost of labor, not drugs. According to data from the Bureau of Economic Analysis and estimates by the Progressive Policy Institute, total labor compensation at hospitals, doctors’ offices, ambulatory care facilities and nursing homes has risen by roughly $270 billion since 2007, including the amount paid to doctors and dentists who own their own practices.

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Top CMS Official Questioned on Lack of Oversight of State ObamaCare Exchanges December 9, 2015

By Kara Jones

ObamaCare Watch, 12/9/15

“Woefully sloppy and willfully ignorant” is how Chairman Tim Murphy (R-PA) described the oversight of the state-run health insurance exchanges at an Energy & Commerce oversight hearing Tuesday.

Andy Slavitt, Acting Administrator for the Centers for Medicare & Medicaid Services (CMS), testified before the subcommittee on the use of federal funds provided to establish state-based marketplaces under the Affordable Care Act.

CMS doled out more than $5.5 billion in grant money to construct exchanges in 17 states, but lawmakers now question whether this money has been used properly. Chairman Murphy noted that every single state exchange faces significant budget shortfalls. For example, $733 million was given to establish state exchanges in Hawaii, Nevada, New Mexico, and Oregon. All four exchanges failed to become self-sustaining and were forced to transition consumers to the federal marketplace. It is increasingly unclear whether or not the money will be recouped.

Congresswoman Marsha Blackburn (R-TN) questioned Slavitt about a recent report from the Government Accountability Office which revealed that some state exchanges’ information technology systems were still functioning improperly. The report found that CMS “did not always clearly document, define, or communicate its oversight roles and responsibilities to states as called for by best practices for project management.” State administrators say communication with CMS has been poor, which “adversely affected states’ deadlines, increased uncertainty, and required additional work.”

CMS is charged with reviewing states’ funding requests and conducting audits to ensure all money is being spent legally. After January 1, 2015, states were not allowed to spend grant money on operation expenses such as rent, utilities, telecommunications, or software maintenance. Chairman Murphy cited a report from the Office of Inspector General revealing that Washington state may have used its grant money for operational costs, contrary to law.

Slavitt contended all current state marketplaces are sustainable despite these compelling challenges. When asked by Congressman David McKinley (R-WV) whether anyone has lost their job for giving erroneous advice to the state exchanges, Slavitt was unable to provide a single name.

Tuesday’s hearing was the second Energy & Commerce oversight hearing to address the tumultuous problems within the state marketplaces in an effort to ensure that taxpayer dollars are being spent wisely and in accordance with the law.

Read the article on ObamaCare Watch here.