Every year, the International Federation of Health Plans — a global insurance trade association that includes more than 100 insurers in 25 countries — releases survey data showing the prices that insurers are actually paying for different drugs, devices, and medical services in different countries. And every year, the data is shocking.

The IFHP just released the data for 2012. And yes, once again, the numbers are shocking.

This is the fundamental fact of American health care: We pay much, much more than other countries do for the exact same things. For a detailed explanation of why, see this article. But this post isn’t about the why. It’s about the prices, and the graphs.

One note: Prices in the United States are expressed as a range. There’s a reason for that. In other countries, prices are set centrally and most everyone, no matter their region or insurance arrangement, pays pretty close to the same amount. In the United States, each insurer negotiates its own prices, and different insurers end up paying wildly different amounts. That’s what Steven Brill’s explosive article was about, and it’s why you see U.S. prices expressed as a range rather than a single number.





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Obama’s Patient Protection and Affordable Care Act celebrated its third birthday last weekend. This particular anniversary was a big deal, because it was often unclear whether the law would reach it. In the first place, it was imperiled by the Supreme Court; in the second, by the Republican Party’s promise to kill it if Republicans won the White House in 2012. Over the past year, Obamacare survived both challenges, and next year it will begin its core mission of insuring tens of millions of Americans.

Republicans, however, haven’t quite given up. Their slogan, “repeal and replace,” has given way to “resist and annoy.” Unable to get rid of Obamacare, many have settled on a strategy of making it function as poorly as possible. At the national level, House Republicans have refused to appropriate funds for implementation. At the state level, most Republican governors have refused to set up insurance exchanges, and many have refused to expand Medicaid.

The question, though, is whether governors who purposefully do a very bad job implementing Obamacare will hurt the law, or just themselves and their states. Call it the California v. Texas question.

In 2010, Governor Arnold Schwarzenegger of California signed into law two bills to establish the online insurance marketplace — “exchanges” — that are at the center of President Obama’s health-care reform. In addition to being the first state to pass legislation implementing Obamacare, California promptly accepted the law’s Medicaid expansion. By this time next year, when the expansion is fully underway, it’s possible that the portion of the state’s uninsured population will have declined from 20 percent to less than five percent.
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As income inequality in the United States has soared and median wages have flatlined since 1980, economists have spent a lot of time debating why the top 1 percent have done so much better than everyone else. Is policy to blame? The decline of labor? Technology?

An equally pressing question, though, is what those increasingly hefty incomes at the very top mean for the lives of everyone else. And a big, newly revised paper (pdf) by the University of Chicago’s Marianne Bertrand and Adair Morse finds that there is a connection, but not a happy one: The gains of the rich have come alongside losses for the middle class.

As the wealthy have gotten wealthier, the economists find, that’s created an economic arms race in which the middle class has been spending beyond their means in order to keep up. The authors call this “trickle-down consumption.” The result? Americans are saving less, bankruptcies are becoming more common, and politicians are pushing for policies to make it easier to take on debt.

If that argument sounds familiar, it’s because Cornell economist Robert H. Frank has been making this case for years. Those at the top are spending more on fancy goods and bidding up the price of homes. In response, the slightly-less-rich have been spending more to keep pace. That pressure, in turn, eventually ripples down to the middle class — where incomes have stagnated of late — in what Frank calls “expenditure cascades.”
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Senator Boxer is leading a bipartisan group urging the Deptartment of Defense to work more effectively with the VA to give our disabled veterans the care worthy of their sacrifice.

In a letter, the Senators pointed out how long some of our veterans wait for care, writing, “We represent states with some of the largest populations of veterans in the country. Tragically, these men and women are also waiting years to access the benefits they need and deserve—449 days on average in New York, 506 days in Los Angeles, and 439 days in Waco, according to VA. This is simply unacceptable.”

According to testimony given on March 13, 2013 before the Committee on Veterans’ Affairs in the Senate, the average wait time for a claim to be processed was 260 days in fiscal year 2012.

U.S. Senators Barbara Boxer (D-CA), John Cornyn (R-TX), Bill Nelson (D-FL), Kirsten Gillibrand (D-NY), Chuck Schumer (D-NY) and Dianne Feinstein (D-CA) sent a letter Thursday to Secretary of Defense Chuck Hagel urging greater cooperation between the Department of Defense and the Department of Veterans Affairs (VA) to help address the severe backlog of veterans’ disability claims.
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On Tuesday, the Associated Press (AP) published an article recounting a Society of Actuaries (SOA) study that finds health insurance premiums “will jump an average 32 percent for Americans’ individual policies under President Obama’s overhaul.” That titillating claim formed the basis of multiple news agencies’ headlines Wednesday morning, including NBC News, Fox News, and U.S. News and World. But as several other analyses show — and the report’s own authors admit — these assertions are based on an extremely narrow interpretation of the health care law that assumes rising costs in perpetuity while ignoring its very real cost-cutting measures.

In essence, SOA argues that Obamacare provisions extending health coverage to all Americans regardless of their pre-existing medical conditions will dramatically raise costs in the individual insurance market — especially since sicker, older Americans will have guaranteed access to insurance and cannot be charged more than three times the premiums of younger people. The Society’s projections are quite dramatic, finding that premium rate increases by 2017 “would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland.”

Corporate insurance giants have used many of these same arguments to dishonestly justify double-digit rate hikes on their customers, despite soaring profits. But these claims are founded on a baseline that assumes current health care cost trends to be set in stone, and ignore — even by the SOA’s own admission — almost all of Obamacare’s most important consumer protections and market regulations aimed at lowering overall costs. Rick Foster, a retired Medicare actuary, admitted that, although the study’s projections are consistent with certain health care trends, they don’t necessarily reflect the bigger picture:

“Having said that,” Foster added, “actuaries tend to be financially conservative, so the various assumptions might be more inclined to consider what might go wrong than to anticipate that everything will work beautifully.” Actuaries use statistics and economic theory to make long-range cost projections for insurance and pension programs sponsored by businesses and government. [...]

Kristi Bohn, an actuary who worked on the study, acknowledged it did not attempt to estimate the effect of subsidies, insurer competition and other factors that could mitigate cost increases. She said the goal was to look at the underlying cost of medical care.

In fact, more comprehensive studies of the health reform law that incorporate all of its provisions — rather than just the potentially negative ones — have found that “[m]ost young adults and families will be largely shielded from the full effects of the narrower age rating bands thanks to the ACA’s increased eligibility for Medicaid and tax credits offered through state health insurance exchanges or through access to employer-sponsored insurance,” and that Americans between the ages of 21 and 27 purchasing insurance through the individual market “will be protected by Medicaid/CHIP or exchange-based subsidies under reform.”
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Chief Justice John Roberts took a swipe at President Obama during oral arguments Wednesday, arguing that the president should stop executing the parts of the Defense of Marriage Act he deems unconstitutional rather than relying on the courts to pave the way.

“If he has made a determination that executing the law by enforcing the terms is unconstitutional, I don’t see why he doesn’t have the courage of his convictions,” Roberts said of Obama, “and execute not only the statute, but do it consistent with his view of the Constitution, rather than saying, oh, we’ll wait till the Supreme Court tells us we have no choice.”

In response, Vicki Jackson, the lawyer appointed by the Supreme Court to argue that the court lacks standing to hear the case, responded that it’s “a hard question” given that the constitutional questions turn on what relief the injured parties are seeking.
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As large American companies continue to lobby Congress for tax reform that would lower their tax rates, a study of historical corporate tax rates found that they are in fact paying at rates roughly half of those they paid decades ago.

The Washington Post analyzed 30 large companies listed on the Dow Jones Industrial Average — companies like McDonalds, Microsoft, and Exxon Mobil — and found that their tax rates have fallen even as profits have risen, thanks in large part to tax laws that provide incentives to store overseas profits in offshore tax havens. Many of the companies, the Post found, are paying rates less than half what they paid in the 1960s and 1970s, and most of the 30 have vastly reduced their rates in that time:

A Washington Post analysis of data from S&P Capital IQ, a research firm, found that in the late 1960s and early 1970s, companies listed on the current Dow 30 routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits. Now, most are reporting less than half that share. [...]

Out of all the firms in the Dow 30, 22 have seen a drop of more than 10 percentage points between the oldest year for which data are available and the most recent year.

American tax law allows companies to shield foreign profits from taxation until they are brought back to the United States, and corporations have happily obliged. The largest 83 corporations moved $166 billion overseas in 2012 alone, bringing their total to $1.46 trillion, and most of it, according to a Congressional Research Service study, was kept in tax havens like Bermuda, the Cayman Islands, Luxembourg, and Ireland. As a result, they have seen huge reductions in tax rates: McDonald’s, for example, saw its tax rate plunge from 37 percent in 1973 to 14 percent in 2012.

Corporate profits hit a 60-year high in 2011, right as the effective corporate tax rate hit a 40-year low. America’s largest companies, in fact, haven’t paid the full corporate tax rate in 45 years, and 26 have avoided taxation altogether for the past four years. At the same time, business leaders have lobbied Congress to reform the corporate tax code by adopting a territorial tax system that would exempt most foreign profits from American taxation, making it even easier for the companies to shift profits, investments, and jobs overseas.

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Scientists at Ecole Polytechnique Fédérale de Lausanne (EPFL) in Switzerland have developed a minuscule implant that measures various blood chemicals and sends the results, via Bluetooth, to your smart phone. The upside? Your smartphone knows when you’re about to have a heart attack. And it can call someone on your behalf. It is, after all ,a smartphone.

This particular device might prove, for one reason or another, to be bunk. Many seemingly magical inventions do. But it’s not alone. The founder of Blackberry is launching a $99 million fund to “to support entrepreneurs developing real-life ‘Star Trek’-style blood-test scanning devices.” And every major health device company knows there’s billions and billions to be made here.

I’ve asked experts in health technology whether they believe devices along these lines will be commonplace in 25 years. They invariably do. And they’re almost certainly right.

Consider how dramatically these devices will change medicine. Right now, the medical industry is fundamentally reactive. Something goes wrong, and we go to them to fix it. This will make medicine fundamentally proactive. They will see something going wrong, and they will intervene to stop it. It’s like “Minority Report” for health care.

This is why I don’t put much stock in projections of health-care spending that run 30 or 50 or 75 years into the future. Will biometric devices in constant communication with the cloud make medicine more or less expensive? Will driverless cars prolong life in a way that saves money or costs it? Will the advances in preventive technology make medicine so effective that we’re glad to devote 40 percent of gross domestic product to it? Who knows?

The Coskata project always had a natural gas component, so in dropping the biomass component there is a lot of cost that just falls away. Material handling, chipping, sizing, drying, gasification, gas clean up – all those unit costs come out.

The impact for Coskata? A 130 million gallon natural gas project costs the same as a 65 million gallon woody biomass project.

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The company has plans on the drawing board, for example, for a 270 million gallon project, although economies of scale are reached with natural gas in the 130 million gallon range.

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Others in the queue that may switch to natural gas

...in recent months, there’s been Sundrop Fuels, and Primus Green Energy – with Coskata we now have three, and that makes a trend.

Who’s next? Siluria has been focused on natural gas for quite some time. Accelergy has been pursuing a combination of coal and biomass in China within an overall XTL focus, and let’s see how their project opportunities change.



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