Unbiased Analysis of Today's Healthcare Issues
QuantEcon is an interesting site from some high profile economists advocating for open-source tools for quantitative economic analysis. The organization describes itself on their website as follows: QuantEcon is a nonprofit organization dedicated to improving economic modeling by enhancing computational tools for economists. Our activities include developing and facilitating the development of open source software…
In health care, decisions are always made with imperfect information. How ambiguity affects stakeholder decisionmaking and in particular how ambiguity interacts with risk preferences to affect decisions is unknown. A paper by Attema, Bleichrodt and L’Haridon (2018) aims to answer this question using a general ambiguity model. They find that: For health gains, ambiguity preferences…
In 2010, Premera Blue Cross (Premera), a large nonprofit health plan in the Pacific Northwest implemented a value-based formulary design for its beneficiaries. In essence, enrollees could purchase high-value treatments for low copayments and low-value treatments for higher copayments. Can we use this change from more standard to value-base formulary designs to estimate the price elasticity…
The Nobel Prize in Economics (formally the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) was awarded to William Nordhaus and Paul Romer. For Romer, the Nobel Prize committee cited his work on endogenous growth theory, that models “how economic decisions and market conditions determine the creation of new technologies. Paul Romer solved…
Darius Lakdawalla has an very interesting review article in the Journal of Economic Literature on the Economics of the pharmacuetical industry. Do read the whole thing, but below I have listed some highlights. A model of firm R&D decisions Lakdawalla uses a simple model based on Nordhaus (1969) to derive some important implications about pharmaceutical…
In econ-speak, we are looking to measure the elasticity of plan switching with respect to premium increases. This elasticity is in essence how much would a 10% change in premium affect the likelihood of plan choice change. If the answer is 10%, the elasticity is -1. If the answer is a 5% increase in plan…
Economist and N.Y. Times columnist Paul Krugman provided a tribute to the late Uwe Reinhardt. Although I won’t get into any of Krugman’s comments of Reinhardt as a person, I did find Krugman’s comments about his perception of the field of health economics interesting. For instance: In case you don’t know this, health economics is…
Many studies use data on health care costs from multiple time periods. To make costs comparable over time, researchers often use an inflation index to translate previous years costs to current dollars. The first question is, what inflation indices are available to make this adjustment. A paper by Dunn et al. (2018) reviews the potential…
That is the title of my latest blog post in Health Affairs with co-author Mark Linthicum. The premise is as follows: CVS recently announced its new Transform Rheumatoid Arthritis Care initiative, which aims to reshape coverage of rheumatoid arthritis care through “value-based management strategies including outcomes based contracts and a new indication-based formulary for autoimmune…
Today we are going to figure out the key to happiness. As our guide, we won’t use the Dalai Lama or self-help guru. Instead, we will look at the research of economists Richard Easterlin and Onnicha Sawangfa (what did you expect…this is an economics blog after all). Their study is unique as it not only measures…