Unbiased Analysis of Today's Healthcare Issues
As insurance markets began to develop in the U.S., we observed two types of insurance emerging: indemnity plans and health maintenance organizations (HMOs). Indemnity plans compensated providers on a fee-for-service basis and HMOs used a capitation scheme. Typically, HMOs used gatekeepers to restrict services while indemnity plan restrictions were few and far between. Typical analysis…
The dealings of William McGuire, CEO of UnitedHealth Group, have been topic occasionally touched on by the Healthcare Economist (see May 19th and February 14th posts). Today, Yahoo! News reported that Mr. McGuire will step down as chairman and CEO after questions arose regarding Mr. McGuire’s possibly illicit stock option compensation. More from the Yahoo!…
Muhammad Yunus, founder of the Grameen Bank, won the Nobel Peace prize today (New York Times – “Microloan Pioneer“). I report on Mr. Yunus in an earlier blog post (“Father of Microcredit“). If you are interested in contributing to a microcredit organization, the following organizations are two good choices. Grameen Bank: Microcredit pioneer focusing mostly…
An October 6th Wall Street Journal article asks “If we must ration vaccines for a flu, who gets the shots?” Currently, the U.S. gives children, the elderly, and the sick priority in obtaining flu shots. Journalist Sharon Begley of the WSJ wonders if this is the best policy: “In May, scientists at the National Institutes of…
Can Pay for Performance (P4P) improve care and slow spending growth in the U.S.? Joe Paduda is doubtful. So is John Wennberg of the Dartmouth Medical School. In his report (“Variation…“) for The Commonwealth Fund, Wennberg says that P4P initiatives can be very effective in creating incentives for physicians to operate under best practices. For instance, practice guidelines…
Supplier induced demand has become a common phrase for health policy wonks. Yet this phenomenon was first discovered by Milton Roemer when he investigated how the number of hospital beds per capita affected hospitalization rates. According to the Dartmouth Atlas Project, Roemer’s law can be stated as follows: “Supply may induce its own demand where…
On Wednesday, Marketplace on NPR ran a story on how providing eye care to individuals in the developing world can not only improve their well-being, but increase economic productivity. Fortunately, low cost solutions are available. To view the story, click here. Some excerpts are below: “153 million people around the world live with poor vision…
If my October 10th post did not satiate your desire for knowledge regarding referrals, today I give you even more information. Franks, Zwanziger, Mooney and Sorbero examine a large Rochester, NY Independent Practitioner Association (IPA). The authors find a mean patient referred/patients seen/year of 0.37. The data show that referral rates remain very stable by physician over time, likely…
In modern medicine, doctors are agents for two distinct groups. The physician is an agent for the patient, but also an agent for insurance companies-especially in the managed care settings. In balancing both relationships, the doctor must juggle the conflicting principal-agent problems of information asymmetry and third party payment. Ake Blomqvist develops an interesting theoretical model to…
Health economists frequently examine the effect of physician payment method on the provision of medical services. It is often found that patients whose doctors are compensated via capitation or salaried schemes receive fewer services than patients whose doctors are compensated through a fee for service mechanism. This finding is robust to a variety of medical settings…