From The Staff

The Latest Health Wonk Review


October 10th, 2014

At Managed Care Matters, Joe Paduda provides this week’s edition of the Health Wonk Review. Joe’s post is an interesting read and includes a Health Affairs Blog post on from Suzanne Delbanco on results from the National Scorecard on Payment Reform. Read the rest of this entry »

Health Affairs Web First: New Study Shows Low-Income Residents In Three States Support Medicaid Expansion


October 9th, 2014

Expansion of Medicaid under the Affordable Care Act (ACA) to millions of low-income adults has been controversial. However, little is known what these Americans themselves think about Medicaid. A new study, recently released as a Web First by Health Affairs, surveyed nearly 3,000 low-income adults in Arkansas, Kentucky, and Texas (states that have adopted different approaches for Medicaid expansion).

This telephone survey, conducted in late 2013, found that 83 percent of respondents in Arkansas and Kentucky and 79 percent of those in Texas were in favor of their state expanding Medicaid under the ACA. Roughly two-thirds of uninsured respondents planned to apply for coverage in 2014. The majority of adults surveyed viewed Medicaid as comparable to or better than private insurance in overall health care quality.

Authors Arnold Epstein, Benjamin Sommers, Yelena Kuznetsov, and Robert Blendon developed a thirty-eight-item survey and targeted citizens ages 19–64 with household incomes of less than 138 percent of the federal poverty level. Forty percent of Texas respondents were Latino. A significant number of respondents (40 percent in Arkansas and Kentucky and 32 percent in Texas) said they were in “fair” or “poor” health, with a substantial number of respondents reporting living with chronic health conditions. Read the rest of this entry »

Health Affairs October Issue: Specialty Drugs — Cost, Impact, And Value


October 6th, 2014

The October issue of Health Affairs, released today, includes a number of studies looking at the high costs associated with today’s increasingly prevalent specialty drugs. Other subjects covered in the issue: an assessment of whether some hospitals may be taking advantage of the 340B drug discount program; a review of how shortened residency shifts impact patient care; a study on the increasing costs associated with Hepatitis C and advanced liver disease; and more.

The new issue will be discussed at a Washington DC briefing tomorrow. This issue of Health Affairs was supported by CVS Health.

Do specialty drugs offer value that offsets their high costs?

James Chambers of Tufts Medical Center and coauthors conducted a cost-value review of specialty versus traditional drugs by analyzing incremental health gains associated with each. This first-of-its-kind analysis is timely because the majority of drugs now approved by the Food and Drug Administration are specialty drugs produced using advanced biotechnology and requiring special administration, monitoring, and handling — all of which result in higher costs. Read the rest of this entry »

Reminder: Health Affairs Briefing: Specialty Pharmaceuticals


October 3rd, 2014

We live in an era of specialty pharmaceuticals — drugs typically used to treat chronic, serious or life threatening conditions such as cancer, rheumatoid arthritis, growth hormone deficiency, and multiple sclerosis.  Their cost is often much higher than traditional drugs, and they are set to account for more than half of all drug spending by the end of this decade.

The October 2014 edition of Health Affairs, “Specialty Pharmaceutical Spending and Policy,” contains a cluster of articles examining the host of issues related to specialty pharmaceuticals: from the promise they hold for curing or managing chronic diseases, to the risk they pose for exacerbating health care costs and disparities, and the challenges they present for policymakers striving to balance both.

Please join us on Tuesday, October 7, for a briefing on the issue moderated by Health Affairs Editor-in-Chief Alan Weil.

WHEN: 
Tuesday, October 7, 2014
9:00 a.m. – 11:30 a.m.

WHERE: 
Hyatt Regency Capitol Hill
400 New Jersey Avenue, NW
Washington, DC, Lower Level

REGISTER NOW!

Follow Live Tweets from the briefing @Health_Affairs, and join in the conversation with #HA_SpecialtyDrugs.

Health Affairs is grateful to CVS Health for its financial support of the issue and event. Read the rest of this entry »

New Health Policy Brief: The Physician Payments Sunshine Act


October 3rd, 2014

A new Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at a section of the Affordable Care Act (ACA), known as the Physician Payments Sunshine Act (PPSA). The PPSA spells out how medical product manufacturers are required to disclose to the Centers for Medicare and Medicaid Services (CMS) any payments or other transfers of value made to physicians or teaching hospitals as well as physician ownership or investment interests in certain manufacturers or group-purchasing organizations.

These data, which have been collected since August 2013, were published for the first time earlier this week in a publicly searchable database and will be updated annually. There is a long history of financial relationships between physicians and medical product manufacturers, which can include anything from free meals to consulting, speaker fees, and direct research funding. This health policy brief looks at the PPSA and its impact on physician-manufacturer relationships. Read the rest of this entry »

Exhibit Of The Month: Mental Health Spending On A Global Scale


September 29th, 2014

Editor’s note: This post is part of an ongoing “Exhibit of the Monthseries. Readers who’d like to highlight other noteworthy exhibits from the same issue are encouraged to make their pitch in the comments section below.

This month’s exhibit, published in the September global health issue of Health Affairs, looks at budget allocation for mental health services by country income level.

In the article, “Policy Actions To Achieve Integrated Community-Based Mental Health Services,” authors Mary DeSilva, Chiara Samele, Shekhar Saxena, Vikram Patel, and Ara Darzi write that “most low-income countries allocate about 0.5 percent of their already small health budgets to the treatment and prevention of mental health problems.” Read the rest of this entry »

The Latest Health Wonk Review


September 26th, 2014

At Healthcare Lighthouse, Billy Wynne provides this week’s “Thank God It’s Recess” edition of the Health Wonk Review. Billy gives us a nice collection of posts, including a Health Affairs Blog post on health insurance reform proposals by Ari Friedman and Siyabonga Ndwandwe. Read the rest of this entry »

Health Affairs Web First: CHIP Eligibility Finds Decrease In Uninsurance In Some States


September 24th, 2014

As part of the 2009 reauthorization of the Children’s Health Insurance Program (CHIP), states were provided with new resources and options to help reduce uninsurance rates among children. These included: expanded eligibility guidelines; simplified enrollment and renewal procedures; and funding for outreach campaigns. Fifteen states chose to raise their CHIP income eligibility thresholds.

In one of the first studies to analyze the impact of these recent CHIP expansions on the program’s enrollment, published today as a Web First by Health Affairs, authors Ian Goldstein, Deliana Kostova, Jennifer Foltz, and Genevieve Kenney found that “expansion states” saw a 1.1-percentage-point reduction in uninsurance among newly eligible children, cutting this group’s uninsurance rate by nearly 15 percent. The study also discovered that public coverage increased by 2.9 percentage points, revealing a shift among some of these families away from private insurance, and found variable effects across states. Read the rest of this entry »

Global Health Update: High Bed Occupancy Rates And Increased Mortality In Denmark


September 24th, 2014

High levels of bed occupancy are associated with increased inpatient and thirty-day hospital mortality in Denmark, according to research published in the July issue of Health Affairs.

Authors Flemming Madsen, Steen Ladelund, and Allan Linneberg received considerable media attention in Denmark for their research findings. For one major Television channel, it topped Germany’s victory in the World Cup finals.

In another story from the Danish newspaper, Information, Councillor Ulla Astman, Chairman of the North Denmark Regional Council and second highest ranking politician, who runs all of the Danish public hospitals, reportly stated that “we have to live with it [the increased mortality],” since Denmark cannot afford to reduce bed occupancy.

“Or die with it,” said lead author Madsen, a pulmonary physician and director of the Allergy and Lung Clinic in Helsingør, Denmark, at the July 9 Health Affairs briefing, “Using Big Data To Transform Care.” Madsen, who left his position as director of the Department of Internal Medicine at Frederiksberg Hospital in Copenhagen to pursue this research, believes that Astman’s statement explains why Denmark has a bed shortage problem and supports his argument that bed shortage is a result of planning.

“It is dangerous to focus on productivity without looking at the consequences,” says Madsen. Read the rest of this entry »

Health Affairs Briefing: Specialty Pharmaceuticals Spending And Policy


September 23rd, 2014

We live in an era of specialty pharmaceuticals — drugs typically used to treat chronic, serious or life threatening conditions such as cancer, rheumatoid arthritis, growth hormone deficiency, and multiple sclerosis.  Their cost is often much higher than traditional drugs, and they are set to account for more than half of all drug spending by the end of this decade.

The October 2014 edition of Health Affairs, “Specialty Pharmaceutical Spending and Policy,” contains a cluster of articles examining the host of issues related to specialty pharmaceuticals: from the promise they hold for curing or managing chronic diseases, to the risk they pose for exacerbating health care costs and disparities, and the challenges they present for policymakers striving to balance both.

WHEN: 
Tuesday, October 7, 2014
9:00 a.m. – 11:30 a.m.

WHERE: 
Hyatt Regency Capitol Hill
400 New Jersey Avenue, NW
Washington, DC, Lower Level

REGISTER NOW!

Follow Live Tweets from the briefing @Health_Affairs, and join in the conversation with #HA_SpecialtyDrugs.

Health Affairs is grateful to CVS Health for its financial support of the issue and event. Read the rest of this entry »

Contributing Voices

Tax-Exempt Status For Nonprofit Hospitals Under The ACA: Where Are The Final Treasury/IRS Rules?


October 23rd, 2014

Months have now stretched into years, and there still remains no sign of final Treasury/IRS regulations interpreting the Affordable Care Act (ACA)’s provisions covering the expanded obligations of nonprofit hospitals that seek tax-exempt status under §501(c)(3) of the Internal Revenue Code.

The ACA amendments do not depend on formal agency policy to take effect. Nonetheless, Congress directed the Treasury Secretary to issue regulations and guidance necessary to carry out the reforms (26 U.S.C. §501(r)(7)). To this end, two important sets of proposed rules were issued: the first in June, 2012; and the second, in April 2013. While an informative IRS website lists various proposed rules and guidelines important to nonprofit hospitals, final rules seem to have performed a disappearing act.

Apparently recognizing the problems created by its delays, the agency has gone so far as to issue a special Notice letting nonprofit hospitals (and presumably the public) know that they can rely on its proposed rules. But this assurance overlooks the fact that the proposed rules themselves contained crucial areas in which final agency policy has not yet been adopted. Read the rest of this entry »

Implementing Health Reform: The Qualified Health Plan Federal Exchange Participation Agreement And More


October 21st, 2014

October 30 update: On October 24, 2014, CMS released a Guidance for Issuers on the Termination of a Consumer’s Enrollment in the Federally-facilitated Marketplace due to death.  When a individual enrolled in a qualified health plan through the FFM dies, coverage terminates effective on the date of death.  The FFM and insurer must learn of the death, however, to terminate coverage.

A death can be reported by the individual who filed the application for marketplace coverage covering the deceased or any member of the deceased’s coverage household who is at least 18 years of age.  The death can be reported through Healthcare.gov or through the call center, but if it is reported online, it should also be reported through the call center to establish the date of death and terminate coverage retroactively to the date of death.  Alternatively, someone who was not a member of the coverage household or the application filer can report the death, but then it must be documented with, for example, a death certificate, obituary, power of attorney, proof of executor, or proof of estate. The documentation must be mailed to the FFM’s London, Kentucky center

If the death is reported to the insurer rather than the FFM, the insurer should direct the person who reports the death to the FFM.  The remaining qualified individuals or enrollees may need to update their information with the FFM.  The FFM will then conduct a redetermination of eligibility of the remaining members of the household.  These changes may qualify the remaining enrollees for an special enrollment period if they result in loss of minimum essential coverage.

When coverage is terminated due to death, the FFM will instruct the insurer to terminate coverage prospectively through an 834 transaction.  The call center will then open a case through the Health Insurance Casework System to terminate coverage retroactively to the date of death.  It will also re-enroll qualified individuals in the household in coverage where appropriate.  Insurers should process premium refunds or adjustments in accordance with state law and industry practice.

CMS also announced on October 27, 2014 that it is making access to the FF-SHOP exchange early in Delaware, Illinois, Missouri, New Jersey and Ohio.  Small businesses in those states can establish a Marketplace SHOP account, assign a SHOP agent/broker to their account, complete an employer SHOP eligibility application, obtain an eligibility determination from the FF-SHOP, and upload an employee roster.  They will be able also to see information on available plans in the near future.  The early release will give CMS a further opportunity to ensure that the SHOP exchange website is working properly prior to its formal launch on November 15, 2014.

October 24 update: The Affordable Care Act requires HHS to establish a federal process for hearing and deciding appeals from marketplace determinations regarding eligibility to enroll in a qualified health plan through the marketplace, eligibility for advance premium tax credits and cost-sharing reduction payment, and exemptions from the individual responsibility requirement.  An appeal process is also supposed to be available to employers who are notified that they may be liable for employer responsibility payments.  HHS has promulgated a final regulation establishing standards governing these appeals, as well as eligibility appeals for employers and employees for determinations involving the SHOP program.  This regulation provides state-operated exchanges flexibility to establish their own appeal procedures in accordance with federal requirements.

Under the final regulation, appeals entities were allowed to conduct a paper-based appeals process through December 31, 2014, after which they were to use an electronic process.  Under a guidance released October 23, 2014, HHS has extended the permissibility of paper-based appeals through December 31, 2015 because of difficulties in implementing the electronic process.  HHS has also stated that the federally-facilitated marketplace will continue to use a paper-based process for the 2015 benefit year.  State-operated marketplaces may choose whether to use paper or electronic processes.  The flexibility extends to all electronic requirements included within the final regulation, including appeal requests, transfer of records, and notifications.

Original post: CMS continues to put the pieces into place that are needed for the launch of the 2015 coverage year.  On October 16, 2014, the Centers for Medicare and Medicaid Services released at its REGTAP.info website the certification agreement and privacy and security agreement that qualified health plan (QHP) insurers must sign with CMS to access the federally facilitated exchange (FFE), the federally facilitated SHOP (FF-SHOP), and CMS Data Services Hub.  The agreement focuses primarily on obligations that the QHP insurer undertakes to protect personally identifiable information and to ensure secure communications with CMS, although it also addresses the effective date and termination of the agreement and a few other issues.  Most of the terms of the agreement are unremarkable, and this post will only comment on a few.

QHP insurers undertake under the agreement to protect personally identifiable information and to ensure secure communications with CMS in conformity with applicable laws, regulations, and standards.  They must also ensure that their contractors and downstream entities comply with these requirements.  QHP insurers agree to report any personally identifiable information incidents or breaches to CMS within 72 to 96 hours.  This is a far cry from the one-hour breach reporting requirement proposed by CMS last year but never finalized, but perhaps recognizes the difficult of identifying and assessing a security breach.

The agreement expressly recognizes that QHP insurers have developed their products based on the assumption that advance premium tax credits and cost-sharing reduction payments will be available through the marketplace and that QHP insurers could have cause to terminate the agreement if this assumption ceases to be valid.  This could be interpreted as a reference to the Halbig/King litigation which currently threatens the availability of tax credits and cost-sharing reduction payments through the FFE, but could also have been included in recognition of the likely Republican takeover of the Senate and the possibility that the Republicans may accomplish through budget reconciliation or otherwise their longstanding goal of repealing the ACA.  As the agreement is renewable from year to year, this clause may contemplate contingencies in the indefinite as well as the near future. Read the rest of this entry »

Enrolling College Students In Health Insurance: Lessons From California (Part 2)


October 21st, 2014

Editor’s note: As we approach the beginning of the second open enrollment period under the Affordable Care Act, Walter Zelman describes an effort he led during last year’s initial open enrollment period to enroll students in the California State University (CSU) system in coverage. Part 1 of this post provided background on the CSU system and the enrollment effort, the CSU Health Insurance Education Project, as well as a discussion of what worked well. Part 2, below, addresses what worked less well, as well as project results, lessons and policy implications, and next steps.

In addition to Zelman, authors of this post include Wendy Lee, now in a Masters of Public Health Program at Johns Hopkins; Natasha Buransombati, now in a graduate program in Nursing and Public Health at the University of Seattle in Washington; and Carla Bracamonte, now in an MPH program at California State University, Fullerton. As CSU students, Lee and Buransombati served as regional coordinators for HIEP and Bracamonte served as a coordinator, CSU Los Angeles.

IV.  What Worked Less Well

Assessments as to what did not work must be rendered with caution. In most cases lack of success may have been due to lack of emphasis or time, to the relative inexperience of student educators, or the failure of project leaders to follow-up aggressively with CSU or administrative personnel.

Campus groups, social media, and web pages

Most striking and disappointing, was the difficulty in engaging campus groups. Many seemed supportive of the mission. But, in the end, most were unable to commit time and resources to the project, even after repeated engagement by project representatives. Most campus groups had specific goals and agendas, and promoting insurance coverage to students was not one of them. More time or resources might have produced more campus organization support, but these were not available. Read the rest of this entry »

The $500 Billion Medicare Slowdown: A Story About Part D


October 21st, 2014

A great deal of analysis has been published on the causes of the health care spending slowdown system-wide — including in the pages of Health Affairs. Much attention in particular has focused on the remarkable slowdown in Medicare spending over the past few years, and rightfully so: Spending per beneficiary actually shrank (!) by one percent this year (or grew only one percent if one removes the effects of temporary policy changes).

Yet the disproportionate role played by prescription drug spending (or Part D) has seemingly escaped notice. Despite constituting barely more than 10 percent of Medicare spending, our analysis shows that Part D has accounted for over 60 percent of the slowdown in Medicare benefits since 2011 (beyond the sequestration contained in the 2011 Budget Control Act).

Through April of this year, the last time the Congressional Budget Office (CBO) released detailed estimates of Medicare spending, CBO has lowered its projections of total spending on Medicare benefits from 2012 through 2021 by $370 billion, excluding sequestration savings. The $225 billion of that decline accounted for by Part D represents an astounding 24 percent of Part D spending. (By starting in 2011, this analysis excludes the direct impact of various spending reductions in the Affordable Care Act (ACA), although it could still reflect some ACA savings to the extent that the Medicare reforms have controlled costs better than originally anticipated.) Additionally, sequestration is responsible for $75 billion of reduced spending, and increased recoveries of improper payments amount to $85 billion, bringing the total ten-year Medicare savings to $530 billion. Read the rest of this entry »

Enrolling College Students In Health Insurance: Lessons From California (Part 1)


October 20th, 2014

Editor’s note: As we approach the beginning of the second open enrollment period under the Affordable Care Act, Walter Zelman describes an effort he led during last year’s initial open enrollment period to enroll students in the California State University (CSU) system in coverage. Part 1 below provides background on the CSU system and the enrollment effort, the CSU Health Insurance Education Project, as well as a discussion of what worked well. Part 2, which will appear tomorrow, addresses what worked less well, as well as project results, lessons and policy implications, and next steps.

In addition to Zelman, authors of this post include Wendy Lee, now in a Masters of Public Health Program at Johns Hopkins; Natasha Buransombati, now in a graduate program in Nursing and Public Health at the University of Seattle in Washington; and Carla Bracamonte, now in an MPH program at California State University, Fullerton. As CSU students, Lee and Buransombati served as regional coordinators for HIEP and Bracamonte served as a coordinator, CSU Los Angeles.

The California State University (CSU) system is the largest public university system in the nation, as well as one of the most diverse. The CSU Health Insurance Education Project (HIEP) received a $1.25 million grant to educate students in the CSU system about the Affordable Care Act and health coverage options through California’s new marketplace, Covered California. A pre-open enrollment, multi-campus poll found that approximately 25-30 percent of CSU students were uninsured, primarily because they could not afford insurance.

The project placed student educators on CSU’s 15 largest campuses. Over a seven-month period they gave approximately 1,500 classroom presentations, and conducted 70 forums and 300 enrollment events. University administrators sent out over 1 million emails to CSU students. Project strategy emphasized a focus on affordability, the need for insurance (accidents happen), and the simplicity of the enrollment process. Read the rest of this entry »

Thomas Frieden And The U.S. Ebola Response


October 20th, 2014

On Friday, October 17, the White House named Ron Klain the new Ebola czar. This move followed a storm of criticism in the media, on Capitol Hill, and elsewhere. The criticism focused on the multiple mistakes made by the U.S. agencies and Texas Health Presbyterian Hospital in Dallas in the weeks since Thomas Eric Duncan, infected with Ebola, arrived in the United States on September 19. Duncan set off a disturbing train of events that included secondary infections of two nurses, Nina Pham and Amber Vinson, along with the lingering threat of additional infections.

That threat widened rapidly over the course of this past week. Dozens of health workers in Dallas remain under some form of quarantine or very close monitoring. Contact tracing revealed 300 persons who had possibly come in contact with Vinson during her Columbus Day weekend travel from Dallas to Cleveland and back. Schools were subsequently shuttered in Ohio and Texas.

Most remarkable, within a month the controversy surrounding the threat of Ebola to Americans had mushroomed into a political emergency for the Obama presidency itself, only a few tense weeks before the November 4 elections. Calls escalated for the appointment of an Ebola czar and a travel ban on persons originating in Liberia, Sierra Leone, and Guinea, the root sources of the Ebola emergency. A special measure of criticism was reserved for the Obama administration’s lead face in the U.S. response, Dr. Thomas Frieden, head of the U.S. Centers for Disease Control and Prevention (CDC). In the words of one observer, this week became full of “recriminations, political showboating… and panicked overreactions.” Read the rest of this entry »

Will Employers Favor Private Exchanges Over Coverage Sponsorship?


October 17th, 2014

Over the past couple years, health care exchanges probably have consumed more of corporate benefits managers’ time and psychic energy than any other topic. An outstanding question is whether the rank and file of American businesses will drop the hassle that employer-sponsored coverage represents, or default to private exchanges.

Private exchange offerings typically move employees from their companies’ previous self-funded health plans to fully-insured individual arrangements, purporting to offer more flexibility and choice that can adapt to the wide-ranging needs of employees and employers, while creating a more competitive health plan marketplace.

Several recent surveys have reported that employers plan to move aggressively to private exchanges. In a survey last year of more than 700 businesses, the Private Exchange Evaluation Collaborative, a group of regional business health coalitions working with the consulting group PwC, found that 45 percent of employers have implemented or are considering using a private exchange for active employees before 2018. Similarly, a February Aon Plc survey found that, while 95 percent of employers say they expect to continue offering health care for the next 3-5 years, and 5 percent of employers currently use a private exchange, 33 percent say they may consider using one in the future. Read the rest of this entry »

Teaching Health Centers: An Attainable, Near-Term Pathway To Expand Graduate Medical Education


October 17th, 2014

Stakeholders in Graduate Medical Education (GME) and members of Congress eagerly anticipated the long delayed but recently released Institute of Medicine (IOM) GME report. While perceptively characterizing the defects in our GME system, recommendations of the report generated substantial controversy among participants at a recent GME forum hosted by Health Affairs. The IOM proposed limited and gradual changes in Medicare GME financing, but the lack of support for GME expansion was not well received by some.

At present there are multiple legislative GME proposals, but none has gained broad support among the various stakeholders. Congressional committees responsible for GME funding view this lack of consensus among GME stakeholders as a major obstacle.

We describe a near-term and attainable pathway to expand GME that could gain consensus among these stakeholders. This approach would sustain and expand Teaching Health Centers (THCs), a recent initiative that directly funds community-based GME sponsoring institutions to train residents in primary care specialties, dentistry and psychiatry. We further propose selectively expanding GME to meet primary care and other demonstrable specialty needs within communities, and building in evaluations to measure effectiveness of innovative training models. Read the rest of this entry »

Implementing Health Reform: Renewing Coverage For 2015


October 16th, 2014

On October 15, 2014, the Centers for Medicare and Medicaid Services (CMS) announced, with a month to go before the 2015 open enrollment begins on November 15, that it is beginning to send out notices to enrollees in the federally facilitated marketplace (FFM) explaining to them how to renew their coverage for 2015.

CMS is urging consumers to come back to the marketplace as it opens on November 15 to update their 2015 application and to make sure they are enrolled in the qualified health plan (QHP) that best meets their financial situation and health needs for 2015. The procedure outlined in the announcement is that set out in the FFM redetermination guidance issued in June. State-operated exchanges are also, presumably, beginning to inform their enrollees regarding their own 2015 redetermination processes.

Redetermination Notice

FFM Consumers will receive one of six notices. Consumers who visited the marketplace in 2014 and were determined eligible for coverage, but who did not enroll, are being sent a notice urging them to return to the marketplace and enroll when the open enrollment period begins. Consumers who enrolled for 2014 but have not been receiving tax credits — because they were not eligible, did not apply, or were determined eligible for tax credits but declined assistance — are urged to return to the marketplace and reenroll in coverage. Read the rest of this entry »

Slow Health Care Spending Growth Moderates GDP Growth In The Short Term And Policy Targets Should Reflect This


October 16th, 2014

Economic growth is most often measured by growth in gross domestic product (GDP), which is the value of all final goods and services produced in an economy. Recent revisions to the first quarter 2014 estimates of U.S. GDP growth have raised concerns over the extent to which the Affordable Care Act (ACA) might be impacting economic growth.

The Bureau of Economic Analysis (BEA) first estimated GDP growth for the first quarter of 2014 to be 0.1 percent on an annualized basis. Then a revised second estimate was made, which indicated a decline in GDP of 1.0 percent on an annualized basis. Finally, on June 25 a second and final revised estimate of a 2.9 percent decrease on an annualized basis was released.

While revisions to initial estimates of GDP growth are not uncommon, one aspect of this second revision was, indeed, uncommon. Nearly two-thirds of the second downward revision (1.2 of the 1.9 percent) was attributed to health care spending being substantially lower in the first quarter of 2014 than was originally forecasted by the BEA. Read the rest of this entry »

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