How Health Reform will affect Hospital’s Business Strategy

For many years, fee for service payment was the status quo. FFS model encourages hospitals to adopt the following strategies to maximize market share and profits: Centered on short-term acute care Focused on specialist alignment Driven by a volume-based service-line strategy Using expensive medical equipment purchases to encourage physician referrals Attracting patients with new construction…

Malpractice Insurance Caps

Many people support malpractice insurance caps.  They believe that malpractice insurance award caps will reduce medical costs in two ways: i) by decreasing malpractice premiums and ii) by decreasing the amount of defensive medicine physicians practice to avoid lawsuits.  An article by Shirley Svorny, however, argues that malpractice awards are bad medicine.  Physicians who are…

At the AEA

I am currently attending the American Economic Association (AEA) Annual Meeting in Chicago.  The Presidential Address was given by Bengt Holmstrom (Massachusetts Institute of Technology) on “The Nature of Liquidity Provision: When Ignorance is Bliss.” Although there are numerous presentations on health care, such as the Health Insurance and Health Care Practice seminar lead by…