Unbiased Analysis of Today's Healthcare Issues
In the early- and mid- 1990s, hospitals were under pressure. Managed care was taking off and forcing hospitals to reduce prices. These managed care plans had the upper hand because: Competition between hospitals was intense. Each hospital had to fight to secure contracts from managed plans in order to direct large chunks of patients to their…
Jason has insurance and his brother Nosaj does not. Jason utilizes more medical services than Nosaj. Is this situation occuring because Jason is truly sicker than Nosaj (adverse selection), or is this because since Jason has insurance, medical services are cheaper for him than Nosaj (moral hazard)? Disentangling the problems of moral hazard and adverse selection…
Daniel Polsky and Sean Nicholson have two papers which aim to look at employer health insurance offerings. The first [Polsky, Nicholson (2004)] tries to estimate the factors driving the cost differences between HMO plans and non-HMO (eg: PPO, indemnity) plans. The authors deconstruct the cost differences into three factors: Utilization Effect: this occurs if individuals…
How do you measure the level of corruption in a nation? Transparency International uses a Perceptions Index to rank the corruption of each nation. The problem with this index is that it does not give the true corruption of officials, but the resulting corruption from a mix of personal corruption and the effective enforcement of…
On Thursday I mentioned the Treasury Department’s plan to turn over some of the collection of delinquent taxes to private companies. In most modern societies of the Western world, tax collectors are salaried employees of the state. This was not always the case. A 2006 paper by Cosgel and Miceli aims to create a model…
According to the Kaiser Family Foundation, 160 million Americans receive their health insurance from their employers. That figure represents three out of five non-elderly individuals. Many experts argue that using employer provided health insurance eliminates the problem of adverse selection by forming an insurance pool around a non-medical issue (employment). Jayanta Bahattacharya and William Vogt…
By 2050, almost 1/3 of the Japanese population will be composed of individuals over the age of 65. While this will certainly affect Japanese old-age pension schemes, it will also lead to large increases in the Japanese government’s outlay’s for health and long-term care costs. Fukui and Iwamoto (2006) estimate the size of this increase in…
Many papers on health insurance worry about the problem of adverse selection. Critics of HMOs claim that the fact that HMOs have lower costs is not due to more efficient provision of services nor the limitation of the provision of services, but instead largely caused by the fact that the people who choose to enroll…
If one does not include Social Security and defined benefit assets, households with heads aged 65-74 have net assets of $190,100. Households with heads aged 75 and above have net assets of $163,100. How do the elderly allocate their assets? Does their portfolio choice change over time? Does it change in response to health shocks? These are the…
Amy Finkelstein is one of my favorite healthcare economists and recently BusinessWeek ran an article (“So that’s why it’s so expensive“) profiling her and her work. I have profiled Ms. Finkelstein before in my June 15th post describing her 2005 paper with McGarry. She also has a new NBER working paper (“The aggregate effects of health…