The Centers for Disease Control and Prevention made it official on Friday: This year’s severe flu season is an epidemic . It passed the threshold last week, with 7.3 percent of deaths from influenza or pneumonia. Forty-seven states are now reporting widespread activity after the season got to an especially early start.

Vaccination remains the “best tool we have to prevent the flu,” and the best time to receive a vaccine is before the season even starts. Even so, well over half of Americans neglect to get their flu shots. With the season well underway, some areas are reporting vaccine shortages.

One interesting measurement of flu season trends is Google search data for flu-related terms, which has skyrocketed in recent weeks. But this chart from the CDC, showing hospital visitors with flu-like symptoms, might provide a more appropriate context:

Small businesses and individual health policy holders could face dramatic premium spikes this year, as some insurers file double digit increases and attribute the changes to the Affordable Care Act. The sticker shock is mostly the result of rising health care costs — and the prevalence of sicker beneficiaries in health insurance risk pools. The media, however, is blaming health care reform.

For instance, Friday’s Politico reported that premiums are increasing across the country as “All those new consumer benefits packed into the health reform law — birth control without a co-pay, free preventive care and limits on when insurers can turn down a customer — had to be paid for somehow.” Policy holders may experience 10 to 20 percent rate hikes, it warns, as insurers are “working the health reform law’s 2014 fees into their 2013 bills.”

So how much is Obamacare responsible for? Five, maybe eight percent? The answer is less than two.

Insurers are arguing that the costs of Obamacare’s annual fee on the industry, its requirement that companies contribute to a reinsurance program, and new benefits and regulations have to be passed down to consumers. “There’s a massive new health insurance tax that starts in 2014,” Robert Zirkelbach, the spokesman for America’s Health Insurance Plans told Politico. “For policies that are sold in 2013 and extend into next year, there’s going to be taxes imposed. … As a result, like all taxes, they will be reflected in premiums charged.”

There are new costs in 2014, but they have little to do with reform. Consider the insurers’ own rate justification filings, in which companies have to substantiate the raises. Aetna in Pennsylvania, for instance, seeks to increase rates by an average of 16.49 percent, but as it explains in its filing, 63.18 percent of the increase is attributed to the “cost of providing healthcare services to policyholders.” The Affordable Care Act is responsible for a tiny portion of the increase:

Impact of New Taxes and Fees

The Affordable Care Act (ACA) includes several new taxes and fees payable in 2014, including two that specifically apply to insured products — the health insurer fee and the reinsurance contribution. These new fees result in additional costs and are reflected in our updated rates for policies that extend into 2014. The overall impact of these costs on this filing is as follows:
* Health Insurer Fee: 1.0%
* Reinsurance Contribution: 0.5%

Washington & Lee Law School professor Timothy Jost predicted that “insurers in the individual market will benefit substantially from reinsurance payments” and will be “spared some administrative costs-notably the cost of underwriting which should be quite substantial.” ” The cost of new benefits should not be a big deal,” he continued, since “most of the costs of health insurance are for inpatient, outpatient, physician, lab, radiology, and pharmaceuticals, which virtually all insurers now cover.”

“I suspect that what is going on is a combination of legitimate concern about new costs, overestimation of what those costs will be and underestimation of offsetting savings, taking a chance to attack the ACA, and grabbing the opportunity to make some profit,” Jost added.
Read more

Over the last several decades, U.S. national health expenditures have skyrocketed, increasing everything from the cost of treatment to the cost of coverage and the federal government’s entitlement obligations.

Experts have long held that anywhere from 30 to 50 percent of America’s $2.7 trillion annual health care spending is wasteful, either due to ineffective treatments, excess medical tests, hospital re-admissions, and medical billing fraud.

But there has been some debate over exactly how much each of these factors contributes to wasteful health expenditures. On Thursday, the nonprofit group New England Health Institute (NEHI) held a round table in which they explored exactly that, and their findings are striking: of the seven biggest factors contributing to waste, the largest by far is patients not adhering to their medication regimens. NEHI estimates that a staggering 50 percent of the 187 million Americans taking prescription drugs every year do not take them properly:

When Americans neglect to stick to their prescribed treatment regimens, they risk increasing the frequency of hospitalizations and preventable diseases and deaths. Other major factors in medical waste include the overuse of antibiotics leading to super resistant pathogen forms, as well as Americans’ woefully low rates of vaccinations.

Most of the policy solutions that NEHI explored to these problems are fairly standard for health reform advocates, including measures such as greater care coordination and case management, an emphasis on primary and preventative care, patient education, pay-for-performance for hospitals and doctors, and prospective rather than retrospective payments for patients’ care. Several of these measures — including extending access to preventative and primary care and pay-for-performance — are already slated to be implemented under Obamacare.

But another event speaker, Institute of Medicine scholar Dr. Michael McGinnis, emphasized that cost controls and expansions of access to care alone would not solve the underlying problem of wasteful spending — as evidenced by the study’s findings. Doctors and patients alike have to find incentives for effectively tracking and treating diseases, and get a handle on illnesses before they become more complex and expensive to treat. “We need to have a multi-faceted approach,” Dr. McGinnis said. “We need a change in prices, a change in culture, a change in health care delivery.”