Common Efficiency Measures

Measuring efficiency is a difficult business. As AHRQ,  “In most cases, individuals and firms will define efficiency as a relationship between what it costs them and what service or outcome they receive, rather than as a trait inherent in the provider.” Further, efficiency can be measured as either production efficiency or allocative efficiency.  “For example,…

Should Generic Industry Payoffs be Outlawed?

GoozNews reports that “the Senate Judiciary Committee…passed legislation prohibiting brand name drug manufacturers from paying off generic manufacturers in patent disputes.  They get the money in exchange for not bringing the cheaper drug to market.” Is this a wise move for Congress? The main question one should ask is why brand name manufacturers pay off generic…

Measuring Hospital Efficiency

Efficiency in the field of economics increases when either 1) outputs are increased for a given level of inputs, or 2) inputs are decreased for a given level of output. Estimating efficiency in the medical field is more difficult, however, since the output (marginal health improvement) is difficult to measure. In the area of hospitals,…

Friday Links

Here’s some fun reading to take you into the weekend: Employer-provided family health insurance premiums reach $13,375, a 131% increase over the 1999 levels.  Contracting out medical care in prisons increases mortality. Long wait times in Europe? Not for the highly educated. Optimal level of market power for health insurers. Best and worst state healthcare…

Almost Ideal Demand System (AIDS)

How does one model a demand system? In general, researchers only observe the equilibrium prices and quantities of goods over time. Changing prices or quantities could be due to shifts in either the demand or supply curve. Thus, modeling demand systems is difficult. Deaton and Muellbauer (1980) propose one method: the Almost Ideal Demand System…

AHIP claims health reform will increase premiums. Will it really?

The lobbying group America’s Health Insurance Plans (AHIP) is touting a study by PriceWaterhouseCoopers showing that health reform would increase premiums significantly.  The findings claim that insurance premiums would rise between “26 percent between 2009 and 2013 under the current system and by 40 percent during this same period” if these four health reform provisions…