GE HealthCare plots 2023 growth in first solo earnings report

In its first earnings report as an independent company, GE HealthCare said it expected to see between 5% and 7% growth during 2023, driven in part by a strong order backlog and investments in high-growth segments.

That would be largely in line with the 7% organic growth the company saw in the past year when compared to 2021 and excluding foreign currency fluctuations. For 2022, GE HealthCare collected $18.3 billion in revenue, compared to about $17.6 billion the year before, with gains centered in its digital imaging and ultrasound segments—while the company’s acquisitions contributed about 1% growth to the total.

In a release, President and CEO Peter Arduini cited easing supply chain pressures and high market demand as growth drivers. However, the company’s annual net income dropped from $2.24 billion to $1.91 billion, following increases in R&D and administrative expenses. 

Those expenses include, for one example, an $80 million investment late last year to increase capacity at a Norwegian facility for producing X-ray and CT scan contrast media. With more than 100 million doses currently being used annually, GE HealthCare expects that number to double in the next decade. The plant upgrade aims to deliver 30 million more doses per year by 2025.

“Looking ahead, we're confident that our accelerated investment in innovation, as well as standardization across platforms, will drive revenue and margin growth,” Arduini said. “We're seeing customers continue to invest along with macroeconomic tailwinds, such as increasing healthcare digitization, expanding access to care, and an aging population globally.” 

GE HealthCare’s imaging division revenue broke 11 figures, with a 10% jump to about $10.4 billion, up from 2021’s $9.4 billion. The fourth quarter of 2022, meanwhile, saw an 18% gain in sales, to about $2.9 billion. 

At the same time, ultrasound hardware brought in $3.4 billion during the full year of 2022. That amounts to 6% over 2021’s $3.2 billion; while 2022’s fourth quarter saw $960 million in sales for 7% growth.

According to the company, ultrasound sales were led by placements within radiology and primary care offices, as well as in obstetrics, women’s health and cardiovascular clinics. Meanwhile, imaging’s gains were driven by molecular imaging and CT scanner placements, as well as MRI and guided surgery hardware. 

The company previously described technologies such as photon-counting imaging, artificial intelligence and handheld or remote ultrasound devices as high-priority areas for future growth, as well as wearable monitors for patients in hospitals.

GE HealthCare completed its long-awaited spinout from the eponymous conglomerate earlier this month, making its Nasdaq debut Jan. 4. The elder GE first announced a three-way company split in late 2021, with its renewable energy, power and digital divisions set to become another standalone company dubbed GE Vernova in early 2024. Its remaining aviation businesses will be renamed GE Aerospace.

https://www.fiercebiotech.com/medtech/ge-healthcare-plots-2023-growth-first-solo-earnings-report

New student loan repayment plan would cost billions more than White House projected

 A key part of President Biden's student loan debt plan that would cut the monthly bill for certain borrowers could cost up to $361 billion over the next decade, according to new findings from the Penn Wharton Budget Model.   

The proposed rule from the Education Department would overhaul one of the income-driven repayment plans – known as REPAYE – by further reducing borrowers' payments to a certain percentage of their discretionary income. 

"We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed," Education Secretary Miguel Cardona said in a statement.

The plan would reduce monthly obligations for undergraduate borrowers by as much as half, according to the White House; a typical graduate from a four-year university could save as much as $2,000 annually under the plan. 

But that relief comes with a hefty price tag: The Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania's Wharton School, projected the proposal could cost between $333 billion to $361 billion.

That is more than double the net federal budget impact of $137.9 billion provided by the Department of Education. 

The discrepancy is because the government assumed that enrollment in the income-driven plans would remain constant, while Penn Wharton projected the more generous plan would cause the take-up rate to jump from 33% to 75% of eligible loan volume. 

"Taking this factor into account, our estimates provide a range of potential budgetary cost for the government over the 10-year budget window starting in 2023," the analysis said. "Higher costs emerge at higher take-up rates."

The Department of Education did not immediately respond to FOX Business' request for comment about the difference in estimates.

The analysis is likely to fuel further criticism of the plan by budget hawks and Republican lawmakers, who have already condemned Biden's executive order earlier this year canceling at least $10,000 and up to $20,000 in student loan debt for tens of millions of borrowers. Wharton estimates that broad forgiveness could cost as much as $469 billion. 

The debt cancelation plan, however, has attracted an onslaught of lawsuits since it was announced at the end of August. 

The Supreme Court is set to hear oral arguments in February in two cases challenging the debt relief program, a stalwart of Biden's domestic agenda. 

In the meantime, the Biden team extended a pause on federal student loan payments and interest while the forgiveness plan remains in legal limbo. Payments on student loan debt will not be required until June 30 or until 60 days after court challenges to the forgiveness plan are litigated and settled. 

Erasing debt, and reducing borrowers' payments until the REPAYE system, will also add to the nation's already ballooning national debt, which is currently at a record-high of $31.5 trillion.

https://www.foxbusiness.com/politics/bidens-new-student-loan-repayment-plan-would-cost-billions-white-house-projected

Why Do We Have Reduced Participation in a Labor Shortage Environment?

Participation Rate Notes

• The Labor Force Participation Rate is the calculated as the labor force divided by the working-age population.
• The Labor force is the number of people working or actively looking for work. Unemployed persons are in the labor force.
• Participation rates have generally been declining except for age group 60-64 and 65+ (the latter declining since 2019).
• In December 2019, the LFPR for those aged 25-54 was 82.9% and is 82.4% as of December 2022.
• That 0.5 percent drop represents 636,000 people. 

Eight Reasons for Labor Shortage and Shrinking Participation

• Rent moratoriums
• Expanded Medicaid
• Increase in food stamps allocations
• Some Pandemic free money shotgun blast still not spent 
• Cancelled or postponed student debt
• Abandoned plans for American dream of owning a home
• Fentanyl and an opioid crisis
• Lingering emotional scars from a Covid lockdown

All of the above reasons reduced the marginal propensity to work. And it's very inflationary. 

In addition, skilled baby boomers and Gen-X are retiring or working fewer hours. They are increasingly replaced with Zoomers who have lower skills and do not want to work as many hours.

The skill replacement issue shows up in the memes of the day.

Work-Related Memes 

• Act Your Wage is the New Meme as Career Ambitions Plunge
• Quiet Quitting, Are You Doing Only What's Necessary at Work and No More?

Q: So why is job growth so strong?
A: Is it?

Huge Temporary Growth in Gig Work to Make Ends Meet

A prudential survey shows a Huge Temporary Growth in Gig Work to Make Ends Meet

Q: Where does one find time to take on an extra part-time job? 

A: By working fewer hours at their regular job

December Jobs: Employment Rises by 717,000 All of Them Part Time

Payroll and employment data from the BLS, chart by Mish

On January 6, I noted December Jobs: Employment Rises by 717,000 All of Them Part Time

Payrolls vs Employment Since March 2022

• Nonfarm Payrolls: +2,887,000
• Employment Level: +916,000
• Full Time Employment: -288,000

Full time employment is down 288,000 since March and down by 444,000 since May!

Some people call this discrepancy "noise" but it ties in with other BLS data.

Employment in the Second Quarter Fell By 287 Thousand

BLS Business Employment Dynamics Summary (BEDS) by the BLS

On January 25, I noted The BLS Reports Employment in the Second Quarter Fell By 287 Thousand

The monthly BLS payroll survey headline jobs number is based on 6% of the data. It's timely but inaccurate. 

The BEDS report is based off the Quarterly Census of Employment and Wages (QCEW) which has 95 percent of all employers. BEDS lags the monthly report by over six months but it has most of the data. 

Tie This All Together

The anecdotal data, household survey, and BEDS all say one thing. The monthly Jobs says another. 

So, are jobs really strong? 

The data suggests that's likely only if most of it is part-time or gig work. 

Demographically Sobering Thoughts on US Employment in the Next Five Years

Looking  ahead, here's some Demographically Sobering Thoughts on US Employment in the Next Five Years

Based off demographics, I forecast very weak employment growth through 2030 and that assumes no significant employment losses due to recession.

For the full year 2023, demographics suggest a gain in employment of only 300,000 and that assumes no recession.

See the above link for more details.

On top of it all, how the Fed can untangle this mess is a mystery. The negative impacts of QE cannot be easily undone.  

https://mishtalk.com/economics/why-do-we-have-reduced-participation-in-a-labor-shortage-environment

U.S. court dismisses bankruptcy petition by J&J's talc unit

 Johnson & Johnson's strategy to use bankruptcy to resolve multibillion-dollar litigation over claims its talc products cause cancer was rejected by a federal appeals court on Monday, which dismissed a bankruptcy petition by its talc subsidiary.

The ruling by the U.S. 3rd Circuit Court of Appeals in Philadelphia removed from bankruptcy the company's LTL Management unit, which was facing more than 38,000 legal claims tied to products such as its Johnson's baby powder.

J&J, which maintains its talc products are safe, created and spun off LTL and assigned its talc liabilities to the unit and placed it in bankruptcy in 2021.

J&J had argued that bankruptcy provided a way to resolve tens of thousands of legal claims more efficiently and fairly than taking the cases to trial individually. The company pledged a funding "backstop" to ensure LTL could pay talc claimants.

The appeals court said it dismissed the LTL Chapter 11 petition because the unit was created solely to access the bankruptcy system, not because it was financially distressed.

"Applied here, while LTL faces substantial future talc liability, its funding backstop plainly mitigates any financial distress foreseen on its petition date," said the 56-page opinion by the three-judge panel.

https://finance.yahoo.com/news/j-js-ltl-units-bankruptcy-165612851.html

Americans delay retirement, looking to gig work to make ends meet

 Rising prices are taking a bite out of Americans' budgets and market volatility is hammering their portfolios, leading many to reassess their plans for retirement.

A majority now plan to remain in the workforce longer than they originally planned or have abandoned the idea of leaving it altogether. But with the added threat of further layoffs, older Americans are increasingly looking to gig work to make ends meet, according to new data from AARP.

"With inflation and the cost of living weighing on people’s minds, many older adults are choosing to delay retirement," says Carly Roszkowski, vice president of financial resilience programming at AARP. A recent survey the organization conducted shows that of adults who are still working, more than half expect either to work in retirement or to never retire.

The organization's latest study of workers age 40 and older found more than a quarter (27%) are now doing freelance or gig work. Of those, 89% said their primary motivation for taking on independent work was to make extra money. But nearly as many, 87%, said flexible work hours were another major driver for their decision.

"For those that retired during the pandemic and have returned or are considering returning to the workforce, gig or freelance jobs are often appealing because they provide people the opportunity to set their own hours and be their own boss," Roszkowski explained.

Gig work is also viewed as a backup plan in an unstable labor market. In the same survey, older workers expressed worries about job security. Thirty percent of respondents said they think it is likely they could lose their job within a year, primarily because of a weak economy.

"The world of work changed with the pandemic," Roszkowski told FOX Business. "Many older workers were laid off or had to quit their jobs to take care of family members, and as they return they want more work-life balance."

That makes gig work an attractive option.

"While gig and freelance work give older workers the opportunity to earn extra money, it’s also a way to make ends meet while having flexibility to care for parents, a partner, or children," Roszkowski added.

https://www.foxbusiness.com/economy/americans-delay-retireming-looking-gig-work-make-ends-meet

Health-Related Provisions of the December 2022 Omnibus Bill

 The December 2022 omnibus spending bill is a sprawling and lengthy measure covering a wide array of important matters, including many within healthcare. With control of the House set to switch to the GOP in the 118th Congress, leaders in both parties decided to close out the 117^th by attaching as much bipartisan legislation to the year-end megadeal as was possible. One consequence of this collective decision is that more significant health-related provisions were attached to the final bill than might have been expected a few months ago.

The following is an overview of the approved health-related policies that are expected to have the most significant effects on providers and program beneficiaries:

• Suspension of the Pay-As-You-Go Sequester. Federal budget law requires Congress to pay for tax cuts or mandatory spending increases with offsetting tax hikes or spending cuts (so-called “statutory pay-as-you-go,” or paygo). Failure to do so leads to across-the-board spending reductions (called “sequesters”), including within Medicare. Congressional approval of an expensive and debt-financed COVID response bill in March 2021 pushed the paygo scorecard into deficit, which would have led to a planned 4.0% cut in Medicare provider payments starting in January 2023. In the omnibus bill, Congress suspended the paygo cuts through 2024.
• Budget Control Act Sequester Extension. The Budget Control Act of 2011 created a separate sequester process to hit budget targets, with cuts to Medicare’s payments of 2%. Originally, this sequester was scheduled to run for a decade but Congress has extended it several times since 2011 to help pay for other bills. The December 2022 omnibus extended it again, though part of 2032.
• Medicare Physician Fees. If Congress had not intervened, Medicare fees for physician services were scheduled to be cut by 4.5% starting in January. In real terms, the cut would have been even deeper because inflation has been elevated throughout 2022. The omnibus legislation partially rolled back the expected cuts over the next two years, to 2% in 2023 and around 3.5% in 2024. However, this relief is not expected to fully satisfy the physician community. Physician associations are expected to pressure Congress this year to approve further relief for 2024.
  The omnibus bill also extended bonus payments for physicians participating in alternative payment models (APMs) through 2025. The bonus will be 3.5% during the extension.
• The omnibus extended through 2024 the pandemic-related policies which allowed Medicare to provide reimbursement for clinician services provided through audio or video communications with patients.
• Unwinding the Pandemic-Related Enhanced Medicaid Matching Rate. To help states through the pandemic, Congress increased the Medicaid matching rate by 6.2 percentage points through the duration of the federal public health emergency (PHE). In return, states were required to suspend eligibility redeterminations. The omnibus deal includes a framework for unwinding these pandemic-era policies. States can begin redeterminations of eligibility in April 2023 without losing access to the enhanced federal matching rate. However, the additional federal funding is now scheduled to phase out gradually from April to December 2023. Beginning in January 2024, the pre-pandemic federal matching rules will apply. States are expected to work through the redetermination process gradually over a full year, and to have processes in place to determine whether households losing Medicaid coverage are eligible for subsidization through the Affordable Care Act exchanges.
  The Congressional Budget Office (CBO) estimated this provision would reduce Medicaid costs by $22.1 billion over ten years because, in its baseline projection, the PHE was not expected to end until July 2023, at which point states would have been allowed to begin redeterminations. The savings assigned by CBO to moving forward the redetermination process was instrumental in allowing many other health-related changes that will increase federal costs to be included in the final deal.
• Continuous 12-Month Coverage of Children. Beginning in 2024, states will be required to provide a minimum of 12 months of continuous coverage for children determined to be eligible for either Medicaid or the Children’s Health Insurance Program (CHIP).
• Pandemic Preparedness. A series of bipartisan measures to improve the government’s planning for future pandemics were attached to the omnibus. The most important of these provisions is the creation of a permanent office within the Executive Office of the President dedicated solely to planning and preparing for the possibility of future pandemics. The law makes several other changes to improve the capacity of federal agencies to implement readiness measures and harden the nation’s defenses, including through investments in better data collection and analysis.

In addition to these provisions, the omnibus includes expanded authorizations and funding for various mental health and substance abuse prevention and treatment efforts. Among the many provisions is the authorization of Medicare payments for counseling and other mental health services.

The wide range of health-related matters addressed in the December omnibus deal will lessen the pressure for immediate action in the current Congress. However, it will not be possible for the federal government to run on autopilot for a full two years. Congress must increase the debt ceiling needs by mid-year to allow the government to meet its obligations, and it must approve appropriations, or at least a continuing resolution, to keep federal agencies open for business after September 30. Therefore, even in an environment of sharp partisan division, some bipartisan cooperation will be required this year to prevent these “must-do” items from becoming triggers for protracted crises.

James C. Capretta

https://www.aei.org/articles/the-health-related-provisions-of-the-december-2022-omnibus-bill/

Drinking and Excess Deaths in lockdown

 Christmas is a time for family, rest and reflection: when few people hit the web, read reports, and look at what is happening around them. This is why the timing of the UK’s Office for National Statistics (ONS) Alcohol-specific deaths in the UK: registered in 2021 probably meant little pick-up from mainstream media. However, the report contains disturbing facts which should be highlighted to all – it makes for a sobering read. 

First, the analysis of deaths related to alcohol is based on internationally assigned codes, so there is little wriggle room for what follows: “Alcohol-specific deaths only include those health conditions where each death is a direct consequence of alcohol.”

Second, as the report’s authors note repeatedly, the figures are likely to be underestimated as they are specifically and directly related to alcohol consumption and do not consider the broader spectrum of alcohol-related pathologies. For example, in which, excessive alcohol consumption did take place, but the cause of death was ischaemic heart disease. But here comes the bad news.

While alcoholic deaths were relatively stable in the decade before 2020; in 2019, there were 7,565 deaths (11.8 per 100,000 inhabitants), there has been a sudden increase in 2020; 8,974 deaths (14.0 per 100,000) and 2021; 9,641 deaths (or 14.8 per 100,000) making the 2021 tally 27.4 percent higher than in 2019. 

The authors attribute the increase to the higher use of alcohol during the time restrictions that were applied, and the timing is highly suggestive. However, what concerns us is the speed (two years) with which the incidence has picked up. 

These are deaths wholly attributable to alcohol, which means that at least 27.4 percent more of our fellow citizens have drunk themselves to death thanks to the imposition of curtailment of individual freedom. Males die more frequently – twice that of females. Mental disorders and accidental poisoning events were present but played a small part in adding to the tally. Most of the deaths will have been habitual heavy drinkers who found refuge by increasing their daily intake. 

No other explanation is possible for the speed of such an increase because alcoholic disease is the result of years of abuse and an abnormal lifestyle. Alcohol-related liver cirrhosis does not develop overnight – it typically develops after heavy drinking for ten or more years.

The ONS statisticians also issue a stark warning: the consequences of increased exposure to alcohol and lifestyle changes will take some time to manifest themselves fully. This is what they report:

The survey ‘Wider Impacts of COVID-19 on Health (WICH) monitoring tool…showed that, as of March 2022, “increasing and higher risk drinking” had remained at heightened levels. Research commissioned by the National Institute for Health Research suggested that if these consumption patterns persist, there could be hundreds of thousands of additional cases of alcohol-related diseases and thousands of extra deaths as a result.’

So here we have another documented consequence of the social and democratic catastrophe of lockdowns. There’s plenty of evidence indicating increased consumption of alcohol during lockdowns that were associated with a host of factors, including a deterioration in psychological well-being and one’s finances.

Moreover, the problem is not limited to the UK: in an online survey of US adults from May 2020, one-third reported binge drinking, and 7 percent extreme binge drinking. Similar increases in alcohol use are observed in France and Germany; however, a systematic review shows consumption varied depending on the country. 

Any reader suspicious of the timing of the release of the ONS report can be reassured: December is the expected release date of the annual alcohol report on deaths.

Tom Jefferson is a Senior Associate Tutor at the University of Oxford, a former researcher at the Nordic Cochrane Centre and a former scientific coordinator for the production of HTA reports on non-pharmaceuticals for Agenas, the Italian National Agency for Regional Healthcare. Here is his website.

Carl Heneghan is Director of the Centre for Evidence-Based Medicine and a practising GP. A clinical epidemiologist, he studies patients receiving care from clinicians, especially those with common problems, with the aim of improving the evidence base used in clinical practice.

https://brownstone.org/articles/drinking-excess-deaths-lockdown/