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Re: Paragon Making an Impact

President at Paragon Health Institute
Brian Blase, Ph.D., is the President of Paragon Health Institute. Brian was Special Assistant to the President for Economic Policy at the White House’s National Economic Council (NEC) from 2017-2019, where he coordinated the development and execution of numerous health policies and advised the President, NEC director, and senior officials. After leaving the White House, Brian founded Blase Policy Strategies and serves as its CEO.

This morning, I highlight two recent commentaries that build off Paragon’s research on the pandemic and the unsustainability of federal health programs.

Florida’s Strong COVID Performance
 
A Paragon research paper from February, Freedom Wins: States with Less Restrictive COVID Policies Outperformed States with More Restrictive COVID Policies, evaluated the stringency of state COVID policies and their impact on health, economic, education, and domestic migration outcomes. The paper was co-authored by Dr. Joel Zinberg, Dr. Eric Sun, economist Casey Mulligan, and me. In an April 17 Newsweek article, I highlighted one of the major findings: Florida’s exceptional performance.

The stringency of state COVID restrictions was not significantly correlated with health outcomes, as measured by age- and health-adjusted COVID mortality and all-cause excess mortality. For example, Florida had one of the nation’s least restrictive COVID responses, but its age-adjusted COVID mortality rate was 8% lower than the median state.

More severe state COVID restrictions were significantly related to worse economic outcomes—increases in state unemployment rates and decreases in state gross domestic products—and to worse education outcomes, as assessed by total days of in-person schooling.

Florida’s in-person schooling rate, which positively correlates with better test scores, was among the best in the country. Governor DeSantis’s insistence that schools remain open protected Florida youth from educational harm, as well as feelings of social isolation and depression, rising screen time, and higher levels of obesity experienced by so many children elsewhere during the pandemic

A powerful testament to Florida’s favorable COVID policies is the many families who flocked to the Sunshine State over the course of the pandemic. People were moving to Florida prior to the onset of COVID, but the pace significantly accelerated in the COVID era. From July 1, 2020 through June 30, 2022, 540,000 more people moved to Florida from other states than left Florida for other states. That pace was double the pre-pandemic trend.

In the Newsweek article, I also discuss my family’s decision to move to Florida during the pandemic and former President Trump’s inaccurate critiques of Florida’s response. Read the full Newsweek article here.

Looking Beyond the Medicare Trust Fund

Paragon’s policy analyst Joe Albanese did a deep dive into the recently released Medicare annual trustee report, writing a National Review op-ed and participating in a panel on the subject sponsored by the Committee for a Responsible Federal Budget. Joe’s main point is that policymakers should focus on the totality of the Medicare funding shortfall and not just the projected insolvency of the Hospital Insurance (Part A) trust fund. Payroll taxes and premiums are financing a shrinking part of Medicare over time, as the program is increasingly reliant on general revenue transfers and thus has become a major contributor to our large and soaring federal deficits. From Joe’s op-ed:

Medicare’s tens of trillions of dollars in unfunded liabilities represent a severe fiscal challenge. But it is important that policy-makers understand just how severe that challenge is, so that they can undertake the bold, wide-ranging reforms that the crisis calls for.

Medicare is financed by two “trust funds,” though in reality, it is largely funded in a pay-as-you-go manner. The Hospital Insurance Trust Fund (HI TF) provides payments for Part A’s inpatient hospital and post-acute-care benefits, while the Supplemental Medical Insurance Trust Fund (SMI TF) finances Part B’s physician and outpatient benefits and Part D’s prescription-drug benefits…

The SMI TF’s biggest expenses, and the main reason for the climb in the percentage of Medicare expenses covered by general revenues, are Part B services, which are expected to account for two-thirds of Medicare-spending growth in the next decade, according to the trustees. The trustees also estimate that SMI TF spending will rise from 13 percent of all federal income-tax revenue in 2022 to 22 percent in 2030. 

There was some good news in the trustees’ report as spending growth slowed and was below expectations. Joe highlights that part of this was caused by positive policies from the previous administration:

A positive takeaway from this year’s report is that increased flexibility and innovation in Medicare have helped control Part A’s spending growth. One example is the shift in hip and knee replacements from inpatient hospitals to cheaper outpatient and ambulatory settings as a result of regulatory changes made by the Trump administration.

For solutions to put Medicare and all of federal health spending on a more sustainable trajectory, see the Paragon report from March, Turning the Tide on Red Ink: Commonsense Policies to Make Federal Health Programs More Sustainable.

All the best,
 
Brian Blase
President
Paragon Health Institute

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