Unbiased Analysis of Today's Healthcare Issues
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…
Should hospitals with long waiting times have higher or lower budget transfers? Offering hospitals who have low wait times more money will increase a hospital’s incentives to decrease wait times. On the other hand, thus policy may hurt the busier hospitals and may not alleviate the wait times of those who are waiting the longest.…
What is the optimal way to pay physicians? If there were a singular variable ‘health’ that could be easily measured, patients could pay physicians for each unit of health they receive. Of course, this is not how the physician-patient relationship operates in the real world. Physicians are paid either a base rate per person per…
One session of the European Science Days summer school involved a presentation on long-term care (LTC) from Volker Meier. The main question is why is there so little demand for LTC insurance in the United States as well as in other countries? Below are some explanations as to why the LTC insurance market is so…
Dr. Richard N. Fogoros has a very interesting website named, the Grand Unification Theory of Healthcare, which relates his views about health care. His analysis is systematic. One is able to understand the health care system from the point of view of physicians, patients, health plans, the government, and employers. His “Pathway # 2 to…
Laurence Baker is a health economist at Stanford’s Center for Health Policy. Much of Mr. Baker’s work has dealt with how HMOs have affected care levels. Today I will briefly review three of Baker’s articles: HMO Penetration and the Cost of Health Care (AER 1996) In this paper, Baker and Corts look how HMO market…
Does health insurance increase utilization of medical services? Economic theory generally predicts that it will. Health insurance decreases the price individuals pay for medical care and thus the equilibrium quantity of medical care used will increase. A paper by Buchmueller, Grumbach, Kronick and Kahn (âEffect of Health Insurance on Medical Care Utilization…â?) examines this phenomenon…
The RAND health insurance experiment (HIE) demonstrated that increasing coinsurance rates decreases medical care utilization. The HIE also found that health outcomes did not vary between individuals with high, low and zero coinsurance rates. A working paper by Chandra, Gruber and McKnight (“Patient Cost Sharing…“) re-examines whether or not this is the case using a…