Research Briefing

Americans Continue To Reject ObamaCare

AMERICANS STILL DON’T LIKE OBAMA’S GOVERNMENT-RUN HEALTH CARE EXPERIMENT …

Democracy Corps: “Health Care’s Passage Did Not Produce Even A Point Rise In The President’s Approval Rating Or Affection For The Democratic Congress.” (“Is This The Final Chapter Or A New Chapter?” Democracy Corps, 4/27/10)

Despite ObamaCare, The Thomson Reuters Consumer Healthcare Sentiment Index Finds “Americans Are Steadily Losing Confidence In Their Ability To Get Healthcare And Pay For It.” “Americans are steadily losing confidence in their ability to get healthcare and pay for it, despite the passage of healthcare reform legislation, according to a survey published on Wednesday. The Thomson Reuters Consumer Healthcare Sentiment Index found that confidence lost three percentage points from a baseline of 100 in December to 97 in March.” (Maggie Fox, “Americans Losing Confidence In Healthcare,” Reuters, 4/28/10)

•  Reuters Chief Research Officer, Gary Pickens: “Strikingly, Americans Expect The Situation To Worsen Significantly In The Next Three Months…” (Maggie Fox, “Americans Losing Confidence In Healthcare,” Reuters, 4/28/10)
•  Pickens: “I Think It May Have Something To Do With The Reform Legislation… Getting Legislation Through Hasn't Reassured Americans…” (Maggie Fox, “Americans Losing Confidence In Healthcare,” Reuters, 4/28/10)

BECAUSE IT’S BAD FOR ECONOMIC GROWTH …

The Columbus Dispatch: “Almost Daily, The Ill Effects Of The Health-Care Overhaul Passed By Congress Last Month Are Becoming Apparent. As Employers And Government Bureaucrats Analyze The Law's Effect On Bottom Lines For The Private Sector And For Government, The Alarm Bells Are Ringing.” (Editorial, “Malpractice,” The Columbus Dispatch, 4/28/10)

Mercer Finds “62% Of Retailers Face Problems With At Least One Of Three Big Requirements” In ObamaCare. “[A] report by Mercer finds that retailers may be in the not-so-sweet spot when it comes to complying with some of the new employer requirements. The consultancy analyzed data from its annual survey of employer health plans and found that 62% of retailers face problems with at least one of three big requirements of the new law: to provide ‘affordable’ coverage, to offer coverage for part-time employees working at least 30 hours per week, and to go above and beyond the limited benefit plans sometimes offered to part-timers.” (Katherine Hobson, “Study: Retailers Likely To Face Big Health Overhaul Challenges,” The Wall Street Journal’s “Health Care Blog,” 4/27/10)

• “Those Provisions Take Effect In 2014, Which ‘Is Going To Come Really Fast For A Lot Of These Companies,’ Says Beth Umland, A Principal And Head Of Health And Benefits Research At Mercer.” (Katherine Hobson, “Study: Retailers Likely To Face Big Health Overhaul Challenges,” The Wall Street Journal’s “Health Care Blog,” 4/27/10)

Pittsburgh, PA-Based Allegheny Technologies Took A $5.3 Million Hit Because Of ObamaCare. “Allegheny Technologies Incorporated reported net income for the first quarter 2010 of $18.2 million, or $0.18 per share. Results included a non-recurring tax charge of $5.3 million related to the recently-enacted Patient Protection and Affordable Care Act. Excluding this non-recurring tax charge, net income was $23.5 million, or $0.24 per share, on sales of $899.4 million.” (Allegheny Technologies Inc., “Allegheny Technologies Announces First Quarter 2010 Results,” Press Release, 4/28/10)

“The Drugmaker Merck & Co. Said Friday The Federal Health Care Overhaul Will Reduce Its Revenue By About $170 Million This Year And By Roughly Double That Amount Next Year… Merck said new rebates to the Medicaid program, required in the federal health care legislation passed last month, and other changes will reduce its revenue by about $35 million in the first quarter and $170 million for all of 2010. In 2011, the company said it expects unfavorable sales impact of about $300 million to $350 million.” (Linda A. Johnson, “Merck: Health Overhaul To Cost Roughly $320M,” The Associated Press, 4/24/10)

• “Merck Also Expects To Take A Non-Cash Charge Of About $150 Million In The First Quarter, Due To Elimination Of The Tax Benefit For Providing Prescription Drug Coverage To Company Retirees.” (Linda A. Johnson, “Merck: Health Overhaul To Cost Roughly $320M,” The Associated Press, 4/24/10)

Sallie Mae Will Cut 1,200 Jobs In Killeen, TX And Panama City, FL This Year Because Of Obama’s Government Takeover Of The Student Loan Industry. “Sallie Mae says a new law that cuts banks out of the federal student-loan business is costing 2,500 workers their jobs, but the job eliminations will spare workers in Indiana—at least for the rest of the year. The nation's largest student lender has told 1,200 staffers in service centers in Killeen, Texas, and Panama City, Fla., they will lose their jobs by the year's end.” (“Sallie Mae's Job Cuts Spare Indiana, At Least For Now,” Indianapolis Business Journal, 4/28/10)

• More Jobs Will Be Cut In 2011. “The remaining cuts will follow in 2011, resulting in nearly a third of the company's total work force of 8,000 losing their jobs. The company did not specify where the job cuts will be made in 2011.” (“Sallie Mae's Job Cuts Spare Indiana, At Least For Now,” Indianapolis Business Journal, 4/28/10)

Kansas Tanning Salon Owner Says ObamaCare’s Tanning Tax Will “Be A Bookkeeping Headache” That’ll Hurt Small Businesses More Than “Large National Chains.” “Sharon Ward, owner of Bronze Age Tanning at 3833 W. 13th St., said she expects the new tanning tax to be a bookkeeping headache. She expects the tanning tax to have more effect on small operations such as hers than on large national chains.” (Karen Shideler, “Tanning Salons Prepare For 10% Tax,” The Wichita Eagle, 4/29/10)

New York-Based Bristol-Myers Says ObamaCare Cost About 3 Cents Per Share In Q1. “Bristol also became the latest drug maker to lower its 2010 financial forecast to reflect new costs stemming from the recently enacted U.S. health-care overhaul. … Bristol said the health overhaul reduced first-quarter earnings by about 3 cents a share. This reflected the law's requirement that drug makers pay higher rebates to the government Medicaid program for the poor, retroactive to Jan. 1, as well as Bristol's accounting for the pending elimination of the tax deductibility of government subsidies for Bristol's retiree prescription-drug benefits.” (Peter Loftus, “Update: Bristol-Myers 1q Net Rises 16%; Outlook Lowered,” Dow Jones Newswires, 4/29/10)

• Analysts Predict ObamaCare’s Impact On Bristol-Myers “Could Be Significant” In 2011. “Bristol didn't quantify the potential impact of the overhaul on 2011 results.... Analysts said they think the impact for Bristol in 2011 could be significant because the company derives a relatively high portion of its sales from the U.S., as well as from Medicaid.” (Peter Loftus, “Update: Bristol-Myers 1q Net Rises 16%; Outlook Lowered,” Dow Jones Newswires, 4/29/10)

Columbus, OH-Based American Electric Power Took A $21 Million Hit From ObamaCare. “American Electric Power said Thursday its first-quarter profit dropped 4 percent as the lingering effects of the recession continue to hurt power demand. … AEP recorded a $21 million charge because of the recently enacted federal health care overhaul. AEP and other companies currently receive a government subsidy to keep prescription drug benefits for retirees. They have been able to deduct their expenses, but that ends in 2013 under the recently passed legislation.” (Mark Williams, “AEP 1Q Earnings Drop 4 Percent,” The Associated Press, 4/29/10)

Memphis -Based International Paper Took A $32 Million Hit From ObamaCare. “International Paper  today reported a preliminary first-quarter 2010 net loss attributable to common shareholders totaling $162 million ($0.38 per share) compared with a loss of $101 million ($0.24 per share) in the fourth quarter of 2009 and net earnings of $257 million ($0.61 per share) in the first quarter of 2009. Amounts in all periods include special items. … Special items in the first quarter of 2010 included… post-retirement prescription drug coverage (Medicare Part D reimbursements) ($32 million).” (International Paper, “International Paper Reports First-Quarter Earnings,” Press Release, 4/29/10)

Minneapolis -Based Xcel Energy Took A $17 Million Hit From ObamaCare. “of these provisions reduces the deductibility of retiree health care costs to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D coverage, beginning in 2013. … Xcel Energy expensed approximately $17 million, or $0.04 per share, of previously recognized tax benefits relating to Medicare Part D subsidies during the first quarter of 2010. Xcel Energy does not expect the $17 million of additional tax expense to recur in future periods.” (Xcel Energy, “Xcel Energy First Quarter 2010 Earnings,” Press Release, 4/29/10)

Richmond, VA-Based Brink’s Took A $14 Million Hit From ObamaCare. “The Brink's Company, a global leader in security-related services, reported a first-quarter loss from continuing operations of $5 million ($.10 per share) versus income of $22 million last year ($.48 per share). Results include an income tax charge of $14 million ($.28 per share) related to recently enacted U.S. healthcare legislation.” (The Brink’s Company, “Brink's Reports First-Quarter Results,” Press Release, 4/29/10)

AND BAD FOR CARE PROVIDERS

Some Texas Doctors Worried ObamaCare Will Lead To Longer Wait Times For Low-Income Patients. “There’s already a growing primary care shortage in Texas. Health experts say if more doctors head into so-called ‘concierge’ care, low-income Medicare or Medicaid patients — some of Texas’ sickest — will face even longer waits for care from an ever-dwindling selection of physicians. And the doctors who continue to accept their insurance will be increasingly over-burdened.” (Emily Ramshaw, “Wealth Care Reform,” The Texas Tribune, 4/28/10)

• Louis Goodman, Texas Medical Association: “Frankly, The New Health Law Very Well May Force More Physicians To Consider Restricted Practice Models.” (Emily Ramshaw, “Wealth Care Reform,” The Texas Tribune, 4/28/10)

The Physicians Foundation’s Executive Director, Tim Norbeck, Says Physician Morale Is “Quite Low” And Warns Many Physicians Are “Overextended,” Which “May Impact ObamaCare Negatively” Because “Many Practices… Could Go Out Of Business.”  “Morale was quite low. In fact, 63% of doctors said increased paperwork is causing them to spend less time per patient. The number one complaint from physicians is that they have less and less time with patients. Seventy-six percent said they were either at full capacity or overextended. This overextension may impact Obamacare negatively, for many practices have very low margins and could go out of business.” (“Impact Of Health Reform Bill On Physicians,” Modern Medicine, 4/27/10)

• Norbeck: “The Idea That The Current Bill Will Save Money Is Ludicrous. Everybody Knows It Will Cost Far More Than They Project.” (“Impact Of Health Reform Bill On Physicians,” Modern Medicine, 4/27/10)
• Norbeck: “Well, The New Medicaid Load Will Break The Budgets In Many States. These States Will Have To Lower Medicaid Rates Even Further And Tax Anything And Everything. If Rates Are Lowered, More Doctors Will Not Accept Medicaid Patients.” (“Impact Of Health Reform Bill On Physicians,” Modern Medicine, 4/27/10)
• Norbeck: “The Lack Of Tort Reform In The Bill Is Outrageous. Medicare Has These Little Pilot Projects. Frankly, I Think These Projects Are A Plus For The Trial Lawyers.” (“Impact Of Health Reform Bill On Physicians,” Modern Medicine, 4/27/10)
• Norbeck: “The Creation Of An Unelected, Unaccountable, Independent Payment Advisory Board Is Ill-Advised. It Greatly Affects Physicians Who Have No Control Over The Decision Making. That Also Does Not Bode Well For Patients.” (“Impact Of Health Reform Bill On Physicians,” Modern Medicine, 4/27/10)

The Columbus Dispatch Says Some Hospitals Will “Become Unprofitable” And “Drop Medicare Patients” If ObamaCare’s Medicare Cuts Are Implemented. “$575 billion in Medicare reductions that are supposed to help pay for the overhaul are unrealistic. If the cuts are not implemented by Congress, then hundreds of billions of dollars will be added to the national debt. In the extremely unlikely event that Congress allows the Medicare cuts to occur, then 15 percent of hospitals and other care facilities that rely on Medicare reimbursements would become unprofitable, meaning that they might drop Medicare patients.” (Editorial, “Malpractice,” The Columbus Dispatch, 4/28/10)

• And ObamaCare May Not Achieve Its Goal Because Expanded Coverage “May Turn Out To Be An Empty Promise.” “Of the ostensible goals of the overhaul - to expand coverage, to curb costs and to pay for the program without adding to the deficit - only the first has any chance of being achieved under this law. And even the expansion of coverage may turn out to be an empty promise if there are too few doctors and hospitals willing to accept inadequate reimbursement for Medicare and Medicaid patients.” (Editorial, “Malpractice,” The Columbus Dispatch, 4/28/10)