Weekend update

It will be a busy week on Capitol Hill with four days of confirmation hearing for Supreme Court justice nominee Neil Gorsuch before the Senate Judiciary Committee beginning tomorrow and a House of Representatives vote on the American Health Care Act scheduled for Thursday.   Here is a link to the Week in Congress’s one pager on last week’s activities on the Hill.

The American Enterprise Institute features an article on the economic lessons that can be drawn from pricing trends in cosmetic surgery over the past 20 years.  Of course, as we all know, the cost curve for health care services has been up over the period. According to the article health care inflation rivals college education inflation.  Cosmetic or plastic surgery is paid out of pocket by the patient with no health benefits coverage and no income tax deduction, except in limited circumstances.  The author compared average cost increases in general health care to cost increases in cosmetic surgery.

The average price increase between 1998 and 2016 for the [top] 20 cosmetic procedures displayed above was 32%, which is less than the 47.2% increase in consumer prices in general. Of the 20 procedures above, 14 increased in price by less than overall inflation (and therefore decreased in real terms) and only six increased in price by more than inflation. And most importantly, none of the 20 cosmetic procedures in the table above have increased in price by anywhere close to the 100.5% increase in the price of medical care services or the 176.7% increase in hospital services since 1998. 

The Affordable Care Act exacerbated this trend by mandating the coverage of a multitude of low priced services and items.  Hopefully, the American Health Care Act and HHS will allow health insurers and consumers more flexibility going forward.

The FEHBlog is anxiously awaiting the annual FEHBP carrier conference sponsored by OPM and AHIP. The conference will be held on Thursday and Friday of this week in beautiful Crystal City, Virginia.

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