The effect of financial incentives on gatekeeping doctors

In 1991 in the UK, the British began allowing general practitioners (GPs) to participate in a fundholding scheme. The fundholding program would reimburse GPs if the amount of chargeable elective secondary care procedures was below their budget and financially penalize the GPs if the amount of secondary care which their patients received exceeded their budget.…

HMO quality: Separating perception from reality

It has been shown in various studies and opinion polls that consumers generally believe that HMOs provide an inferior level of care than non-HMO plans. This is true even when more objective measures of medical service quality are taken into account. Why is HMO satisfaction so low? A study by Reschovsky, et al. (2002) claims…

Hausman Endogeneity Test

Ordinary Least Squares  If you have studied basic statistics, its likely that you have come across the ordinary least squares (OLS) estimation technique.  OLS attempts to minimize the squared distance between dependent variables (‘y‘) and the a linear prediction of y (y_hat=xβ).  The parameter vector ‘β_ols‘ minimizes this distance.  The most important assumption in order for β to reflect to true…

Decrease price…increase supply?

In a typical market, an increase in the consumers’ willingness to pay will increase price and increase quantity (see graph).  On the other hand, a decrease in willingness to pay will decrease price and decrease quantity.  This axiom of economics does not hold in the health care market; at least not according to a 1998…

Academic Integrity

In order to prevent fraud, such as in the case of Eric Poehlman, economists use a peer-review system consisting of referee reports.  The referee reports evaluate the merit of a paper and offer suggestions of how to improve the article.  Tyler Cowen of Marginal Revolution gives some good tips on the best way to write referee…

Those annoying HMO patients…

Why do HMO patients receive less care than fee-for-service patients?  Could it be that HMO patients are healthier (adverse selection) or that FFS compensation leads to increased demand for medical services (moral hazard)?  A paper by Shen, et al. (2004) finds that one reason could be that physician compensation could affect a doctor’s desire to perform…

I love my doctor

People love their doctors.  Study after study has shown this to be true.  Typically 75%-95% of patients surveyed claim that they completely or mostly trust their physician.  Does this finding hold even when doctors are compensated through a capitation method and have a financial incentive to withhold care?  A study by Kao, et al. (1998) shows…

An Unwelcome Discovery

While I was reading the The New York Times Magazine, I came across a very interesting article regarding scientific integrity.  The article (“An unwelcome discovery“) documents how a Eric Poehlman, a faculty member at the University of Vermont, had fabricated ten years worth of data.  This is a serious problem .  Sally Jean Rockey of the…

Diagnose your disease

Are you feeling ill or experiencing worrying symptoms?  Interested in looking for information regarding a disease?  If so, you can find answers to these and other medical questions at Wrong Diagnosis.  This site uses reliable sources to create it medical database.  These sources include: the Center for Disease Control and Prevention (CDC), the National Institute…

Media that Matters – Women in the Democratic Republic of Congo

Media that Matters is an organization dedicated to producing films portraying controversial issues relevant to today’s society and encouraging viewers to work towards social change.  While the organization is heavily left leaning politically, they do have a wide variety of health-related films (see health/health advocacy section).   I did come across an interesting short film regarding…