Unbiased Analysis of Today's Healthcare Issues
It is often very difficult to determine price data for various medical procedures. With the exception of Medicare or Medicaid data, hospitals often do not publish their prices for each service and even when the prices are provided they rarely correspond to the true prices paid. Published prices often do not take into account different…
Health professionals are worried about the growing number of people with tuberculosis. The Health Protection Agency (HPA) website states that “in 1993 the World Health Organization (WHO) declared tuberculosis to be a global emergency.” The HPA reports the following TB statistics. TB cases (thousands) TB infection rate per 100,000 Africa 2573 356 The Americas 363…
 âEconomic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body â the producers and consumers themselvesâ? – Herbert Hoover When economists analyze any industry, their first step is to look at the incentives facing the producers and the consumers.…
There are two treatment options for patients with breast cancer. The first is a breast conserving surgery (BCS) which removes the cancerous lump (lumpectomy) followed by irradiation treatment. The second option is a mastectomy which removes the entire breast. Lecia Apantaku claims in the American Family Physician journal in 2002, that “survival rates following breast conservation…
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.…
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…
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…
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…
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…
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…