China and Inflation

China has raised its rates again. This is the fourth time in a year and it is a clear indication of strong inflationary pressure. As China Daily states:

After the hikes, the one-year deposit interest rate will climb to 3.25 percent while that of the one-year loan interest rate will reach 6.31 percent. Analysts said the move indicated that the central bank was enhancing efforts to ease stubborn consumer price increases. The consumer price index (CPI), a main gauge of China's inflation, jumped 4.9 percent in February from a year earlier, exceeding the government's full-year target of 4 percent. Food prices, which account for about one-third in the basket of goods used to calculate China's CPI, surged by 11 percent in February from a year ago.

There is clearly strong upward pressure in China and this will most likely get reflected in US prices, having the effect of a strong inflationary trend.

This is worth watching closely.

The Ryan Replacement for Medicare

Now I have been spending the greater part of the past two years plus commenting one way or another on the health care policy mess that Washington has created. As of today Rep Ryan has provided a succinct summary of what he proposes in the WSJ.

He states in part:

This starts with saving Medicare. The open-ended, blank-check nature of the Medicare subsidy threatens the solvency of this critical program and creates inexcusable levels of waste.... its reforms will not affect those in or near retirement in any way....Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health-care program that members of Congress enjoy. Future Medicare recipients will be able to choose a plan that works best for them from a list of guaranteed coverage options. This is not a voucher program but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost....In addition, Medicare will provide increased assistance for lower- income beneficiaries and those with greater health risks. Reform that empowers individuals—with more help for the poor and the sick—will guarantee that Medicare can fulfill the promise of health security for America's seniors.

 Now there are a few problems:

1. If you are say near 50, as my children are, you have been paying into this Medicare fund for almost 30 years. Does that mean you will stop, or that you will not see an increase but will see a different benefit.

2. What happens to the pre-existing condition concern. By the time a person reaches 65-70 there may very well be a few pre-existing conditions making the cost for this group quite high. How does he deal with this issue?

3. What about all the restructuring underway under the new health care plans such as ACOs and the like.

4. What price private insurance and what coverage. What is the out of pocket. The new health care plan and the old Medicare drove carriers for retired people out of the market. Who will drive them back in.

The Congressman should be aware of the real issues here:

1. Many people have life style diseases, developed over many years of drinking, smoking, poor health care of their own choice.

2. Yet there are many with just a bad hand of genes. They get prostate, breast, colon, cancers at 60+, not their fault. How do we balance that risk?

3. We always need the 800 pound gorilla, and Medicare was that, at times a bit too heavy and getting worse. Yet we all remember HMOs. They were universally despised.

4. An increase in Medicare tax would cover everything if combined with a life style tax. We worked out the numbers well over a year ago. It would always be better for marginal changes for when there is a massive realignment many fall through the cracks.

5. Catastrophic coverage is essential, and waiting till you are 65+ is not the time to get that. Would the Government do that function, as say they do for flood insurance?

Ryan makes an interesting proposal but it really needs socializing. At least some one is doing something. Now if he can keep it below 2,000+ pages we are possibly moving forward.

Looking at the Employment Data

First we look at change from 2005, April specifically. Note that we have an increase in percent of Government workers and a dramatic increase in Education and Health Care. The latter being the greatest increase. Key sectors such as construction and manufacturing are still down. This represents a negative shift from production to Government operated employment. This means we are taking from our long term growth potential and putting an ever growing burden on future generations.

This is the month by month change by major sector. Despite what the press seems to say the Government supported sectors rose significantly as did manufacturing.

The percent change from 2005 is shown above and this rearticulates our concern. Just look at the above sectors and those are the value producing sectors.

Now for actual unemployment we use what we have been using namely total population and actual growth. Above is the total population growth and the total non farm seasonally adjusted employment. It is upticking but the employment base is still growing at a faster rate!

This is the unemployment numbers and what is would be if we kept the 2008 rate of employment as a percent of the population. Note we are still peaking at 12.2% unemployment based on the 2008 base numbers. There is a slight trending downward but not as provided by DoL.

The above is the detailed data we use for this analysis.

In summary unemployment is fundamentally stuck at over 12% per 2008 base numbers. DoL manages to reduce the base by assuming that those who have not found work are considered no longer looking. It is a nice trick but baseless.

An Interesting Technique for Cancer Cell Characterization

One of the major problems in determining the aggressive behavior of cancer cells is the genetic makeup of each separate cell. Perhaps this is a way to determine what the cancer stem cell is. A team from Cold Spring Harbor Labs has published a paper in Nature doing this for breast cancer cells.

They state:

Genomic analysis provides insights into the role of copy number variation in disease, but most methods are not designed to resolve mixed populations of cells. In tumours, where genetic heterogeneity is common^, very important information may be lost that would be useful for reconstructing evolutionary history. Here we show that with flow-sorted nuclei, whole genome amplification and next generation sequencing we can accurately quantify genomic copy number within an individual nucleus. We apply single-nucleus sequencing to investigate tumour population structure and evolution in two human breast cancer cases. Analysis of 100 single cells from a polygenomic tumour revealed three distinct clonal subpopulations that probably represent sequential clonal expansions. Additional analysis of 100 single cells from a monogenomic primary tumour and its liver metastasis indicated that a single clonal expansion formed the primary tumour and seeded the metastasis. In both primary tumours, we also identified an unexpectedly abundant subpopulation of genetically diverse ‘pseudodiploid’ cells that do not travel to the metastatic site. In contrast to gradual models of tumour progression, our data indicate that tumours grow by punctuated clonal expansions with few persistent intermediates.

We believe that this is worth following.

The issues we look at are:

1. Isolation of single cells.

2. Non destructive measurements and identification of cell surface markers, perhaps via NMR techniques.

3. Destructive marking of specific gene segments.

4. Non destructive temporal analyses.

5. Development and identification of pathway dynamics.

US Copyright Office: Slower Than a Snail!

If one wants to truly understand the gross sluggishness of the US Government the best place to look is the US Copyright Office. Now I decided to copyright something with these folks almost a half a year ago. This is all on line and you download a copy of what you want. Not as if it is necessary but it is a worthwhile experiment. Well almost 6 months and counting and nothing, zero, zip! What do they have to do, translate it to ancient Greek! These are the very same people we want to take over health care! By the by, we actually pay them to be slow! If anyone wants to see what the Government is really like try this out some time!

ACOs: The Last Move

Dr. Berwick, the interim appointee at CMS, has written about his accomplishment of issuing the rules for the ACOs, the Accountable Care Organizations. The NEJM article states:

Section 3022 of the Affordable Care Act (ACA) establishes the Medicare Shared Savings Program for accountable care organizations (ACOs) as a potential solution.1 The creation of ACOs is one of the first delivery-reform initiatives that will be implemented under the ACA. Its purpose is to foster change in patient care so as to accelerate progress toward a three-part aim: better care for individuals, better health for populations, and slower growth in costs through improvements in care. Under the law, an ACO will assume responsibility for the care of a clearly defined population of Medicare beneficiaries attributed to it on the basis of their patterns of use of primary care. If an ACO succeeds in both delivering high-quality care and reducing the cost of that care to a level below what would otherwise have been expected, it will share in the Medicare savings it achieves.

On March 31, 2011, the Department of Health and Human Services took a major step toward establishing ACOs by issuing a notice of proposed rule-making that will define how physicians, hospitals, and other key constituents can adopt this new organizational form. The issuing of the proposed rule follows months of obtaining informal and formal input from throughout the health care delivery system, but at this point the rule is only a proposal. The Centers for Medicare and Medicaid Services (CMS) will carefully review the comments we receive in response to the proposed rule before issuing a final rule later this year.

The ACOs are in effect hospital owned and controlled care organizations. For Berwick in my opinion, who allegedly was formerly related to one of the largest Massachusetts health care conglomerate this plan may be a God send. It drives the independent physician out of business while removing choice totally from the Medicare patient.

Let me explain why. First if a patient has say multiple problems, say prostate cancer, heart issues and say a tendency towards say melanoma, he will be "serviced" by a hospital based ACO. An all service vehicle. So if the melanoma can best be served by a regional cancer hospital, too bad, he is stuck with the ACO. The ACOs will in my opinion be the HMOs of the 1990s. CMS will in my opinion most likely use its heavy hand to drive those in Medicare into the ACOs.

The good doctor states:

Accountable care is not a panacea but rather one of a number of complementary initiatives chartered by the ACA to help achieve the three-part goal of lower costs, improved care, and better health. Other delivery-reform efforts such as expanded use of medical homes, bundled payments, value-based purchasing, adoption of information technology, and payment reforms are under way or under consideration. A critical success factor for ACOs will be their effective integration with these other efforts.

Yes it is not a panacea, it is in my opinion a way to recreate HMOs and even worse drive them into the hands of the mega hospitals! It is just one element of cost containment and rationing. Why rationing, because the ACO will become the gatekeeper. If the patient has the knowledge and wisdom to work their way through the system, the way will now in my opinion most likely be blocked with the developing Berwick rules.