Unbiased Analysis of Today's Healthcare Issues
Typically, economists when economists look at the health insurance market, they focus on the insurance side of it. By this I mean to define insurance as the purchase of a product which will reimburse the buyer in the case of an adverse event. However, one must also look at the concept of protection. Protection is…
According to the San Diego Union Tribune, yesterday PacifiCare was fined $3.5 million and the California Department of Managed Health Care is seeking up to $1.3 billion in additional penalties for “130,000 alleged claims-processing violations…in California between July 1, 2005, and May 31, 2007.” PacifiCare is the second largest HMO in San Diego and the…
Adverse selection is often seen as a major impediment to the efficient functioning of insurance markets. Rothschild and Stiglitz (1976) create a model where high risk people buy full insurance while low risk individuals buy partial insurance. Yet empirically, one finds that in some insurance markets, low risk individuals purchase more insurance than high risk…
Many of the Democratic candidates support having employers provide insurance for their employees with the threat of a fine or tax if an employer decides not to comply. This of course will increase the cost of an employee for firms. If employees truly value the health insurance, then the cost of insurance can be passed…
According to the N.Y. Times (“…Benefit Cut at 65 in Retiree Plans“) in 2001it is estimated that one-third of large employers and fewer than one-tenth of small employers offered health benefits to retirees. These numbers may trend towards zero in the near future after an Equal Employment Opportunity Commission (EEOC) ruling. NPR’s Marketplace reports (“Employers…
Recently, there has been much controversy regarding whether or not the RAND Health Insurance Experiment (HIE) results are truly robust. Many blogs have been questioning the results (see here, here and here). One of the major conclusions of the HIE are that higher co-insurance rates lead to lower levels of medical utilization and lower medical…
When I pay for health insurance, is most of my monthly premium going for medical care? Or does most of the money go towards administrative expenses and insurance company profit? John Aloysius Cogan Jr. of the Regulating Health Insurance blog finds that most of the money spent on insurance premiums in fact goes towards providing…
Wal-mart recently released the details of its new health plan for 2008 (see company press release or the Houston Chronicle article). Here are some highlights of the plan. Employees now have “50 ways of customizing their health care coverage options…a substantial increase from last year, when most associates had only nine choices.” However, it seems…
Despite much public rhetoric, why is preventative and chronic care so poor in the U.S.? The easy answer is that patients switch plans so frequently that insurance companies who invest in preventative care will incur the cost, but not reap the benefits. The harder question is why patients are switching health plans. According to a…
In a blog post (“Sicko Sticko Shock“), Marc Cooper discusses his recent hospital bill for a heart procedure of “moderate complexity.” He finds that the amount billed was $116,749. However, the procedure was much cheaper for Mr. Cooper since he had Blue Cross insurance. “In a column lateral to the “amount billed” I then find…