Unbiased Analysis of Today's Healthcare Issues
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…
There is an interesting post at GoozNews (“Getting Doctors to Compete“) in which Merrill Goozner comments on Harvard Business School professor Michael Porter’s belief that competition and integrated care are the solutions to the nation’s health care woes. “Where we need to go is an integrated practice model,” he said. His model entails patient-focused practice…
Health savings accounts (HSAs) have been a major point of contention for health care reformers. Supporters claim that HSAs can reduce health care costs by decreasing the moral hazard problem inherent when third parties—such as insurance companies or the government—pay for medical services. Opponents claims that HSAs will attract rich and healthy individuals, leaving only…
I have recently been receiving some comments suggesting that one way to cut health care costs would be to reduce CEO pay. Would cutting CEO pay be beneficial to society? Ideologically, I believe that markets—and not the government—should determine wages of all workers. If the U.S. government were to put a cap on CEO pay,…