Health Beat: U.S. healthcare spending up 4.8% over a year ago

Editor’s note: Each Wednesday, Talk Business & Politics provides “Health Beat,” a round-up of health-related topics. –––––––––––––––

U.S. HEALTHCARE SPENDING UP 4.8% OVER A YEAR AGO

National health spending in February 2016 was 4.8% higher than health spending in February 2015. While this rate is somewhat higher than the 4.5% growth observed in both December 2015 and January 2016, February is the fourth consecutive month in which it has been below 5%. The 4.5% growth rate in December and January was the lowest since March 2014. Health spending has held steady at 18% of gross domestic product for the four consecutive months from October 2015 through January 2016. These data come from the monthly Health Sector Economic IndicatorsSM briefs released by Altarum Institute’s Center for Sustainable Health Spending.

Health care prices in February 2016 were 1.7% higher than in February 2015, up from 1.6% in January and the highest rate since September 2014. The February 2016 12­-month moving average held at 1.2%. Year-over-year hospital price growth fell to 1.0% from 1.2% in January. Drug price growth rose to 3.4% from 3.0% in January, reclaiming the title as the fastest growing price component. Since June 2014, hospital prices for Medicare, Medicaid, and private pay patients have grown or shrunk -1.5%, -2.3%, and 4.3%, respectively.

IBM WATSON HEALTH CLOSES ON $2.6 BILLION ACQUISITION TO EXPAND HEALTHCARE ANALYTICS REACH

IBM’s Watson Health completed the $2.6 billion acquisition of Truven Health Analytics, a leading provider of cloud-based healthcare data, analytics and insights. Truven brings more than 8,500 clients to the Watson Health portfolio, including U.S. federal and state government agencies, employers, health plans, hospitals, clinicians and life sciences companies. Data and insights from Truven inform benefit decisions for one in three Americans.

With the completion of the acquisition, IBM and Truven data scientists will begin the process of using Watson Health’s cognitive capabilities to derive insights from Truven’s health data. This is IBM’s fourth major health data related acquisition since launching the Watson Health unit in April 2015. Truven will become part of IBM Watson Health and the acquisition bolsters the business unit’s global talent footprint to more than 5,000 employees, including hundreds of clinicians, epidemiologists, statisticians, healthcare administrators, policy experts and healthcare consultants.

FITCH: NEW TREASURY RULES SINK $160 BILLION PFIZER-ALLERGAN DEAL

The proposed U.S. Treasury Department rules that scuttled the $160 billion Pfizer-Allergan merger in the wake of the Panama Paper revelations could have broad implications for multinational corporations, including the spate of healthcare companies that re-domiciled in tax-advantaged overseas jurisdictions through inversions during the last several years, Fitch Ratings said in a recent report. The U.S. Treasury and the IRS have announced plans intended to target “serial inverters” – companies that seemingly reduce taxes by relocating headquarters overseas. Pfizer’s subsequent cancellation of its planned merger with Allergan makes this transaction the first high-profile victim of these rules, Fitch says.