Unbiased Analysis of Today's Healthcare Issues
Why don’t people eligible for health insurance exchange plans (i.e., Obamacare plans) enroll? One reason could be that they value the health insurance benefit at less than the cost. Another reason could be behavioral frictions; informational search costs and psychological frictions are costly and may preclude enrollment even when benefits are more than cost. For…
Getting sick creates risk over two dimensions. First, you risk getting sick which of course decreases your utility. Second, getting sick impacts you financially as (i) medical procedures are often expensive and (ii) if you can’t work due to your illness your income may fall. With respect to financial risk, health insurance may provide a…
University of Virginia Health System (UVA Health) has gone after patients’ homes to pay for medical bills. Kaiser Health News reports: UVA Health and other medical systems rarely force the sale of a home to claim money. Instead, they wait for families to refinance or sell, taking their cut at the settlement table. But with…
Prior authorization is a requirement that health plans require physicians to obtain plan approval in order to prescribe a patient a given medication. Prior authorizations may be put in place to insure medications are not used inappropriately or for payers to try to reduce cost. While prior authorization may help save money, delays in the…
Health insurance companies are not spending as much money as expected. While COVID-19-related costs are up, the cost savings from people foregoing or delaying elective care has more than offset the COVID costs. Health insurers are refunding much of that savings to their enrollees. However, this is due to a provision of the ACA that…
Pharmacists are typically paid for dispensing drugs. They receive a fee to cover the price for acquiring a given drug and a dispensing fee. In general, however, pharmacists are not paid based on patient outcomes. Will that change? Troy Trygstad (2020) argues that value-based reimbursement for pharmacists through accountable pharmacy organizations (APOs) may be the…
The answer should be ‘yes’. From an economist’s perspective, prices for goods and services should generally be set at marginal cost unless there are externalities. In the case of COVID-19, there are clear externalities. By finding out that someone is COVID-19 positive, one could not only treat the patient (not an externality) but also the…
Precision medicine is the future…at least that is what we have been told. But to treat patients based on genetic biomarkers, one first has to test for these biomarkers. What factors to payers consider when evaluating whether or not they should provide coverage for these genetic tests? This is the exact question that Dhanda et…
Treating serious cases of COVID-19 is expensive. Treatment may require ICU beds, ventilators and lots of specialized staff time. So clearly, COVID-19 is destroying health insurers bottom lines…isn’t it? Not according to a recent article by Kaiser Health News. Because of the quarantine, many individuals are delaying or foregoing elective surgeries. Of course, the costs…
Reference-based pricing seems like an attractive option. Basically, health insurers pay some amount (e.g., the lowest price, median price, average of lowest X prices) for a given service. If patients want a higher priced option, they must pay the difference. The approach assures patients have access to care but makes patients responsible if they don’t…