Unbiased Analysis of Today's Healthcare Issues
“One of the quirks of the health care system is that health plans individually negotiate different prices with hospitals and doctors. The result is that two health plans can pay different prices for the same procedure at the same hospital. The contracts typically prevent a health plan from saying that it charges a certain amount…
The poor can not afford health care. Health care costs rise above inflation year after year. Serious errors committed by hospitals and physicians are reported by the news media on a daily basis. How can we fix these problems? Can we rely on Uncle Sam to do what’s needed? Will Wilkinson doubts that government intervention…
Economists typically assume that the majority of additional costs employers incur from hiring a worker are reflected in a lower compensation package for the employee. For instance, employees owe payroll taxes for Social Security and Medicare on 7.65% (Social Security taxes are limited to earnings below $94,000 in 2006, but Medicare taxes are applied on…
Malcolm Gladwell is the author of the best selling book The Tipping Point. In his August 2005 New Yorker article (“The Moral Hazard Myth“), he gives a wonderful description moral hazard, the major reason many economists oppose overly generous health insurance schemes. A few excerpts: “Moral hazard” is the term economists use to describe the…
On The Health Care Blog, Brian Klepper of the Center for Practical Health Reform weighs in on his opinion on HDHP (“Can Consumerism Save Healthcare?“). A few of his major points: Imperfect Information still a problem: HDHP’s force consumers to absorb a portion of the health care cost and thus these individuals should shop for…
Sunday’s San Diego Union Tribune (“Doctors object to ultimatum on health care: Sharp wants every senior on one plan“) had an interesting article on Sharp’s decision to issue its physicians an ultimatum: either provides services exclusively for our patients or find work elsewhere. Let us look at this from a variety of perspectives. Sharp: Sharp…
The following is a timeline which summarizes the genesis and evolution of government provided health insurance in the United States. Major Foreign Events: 1883: Otto von Bismark, then Chancellor of Germany passes a compulsory health insurance bill for factory and mine workers 1911: Germany extends compulsory insurance coverage to almost all employees 1911: David Lloyd…
Forbes magazine reports that William W. McGuire, CEO of UnitedHealth Group) received compensation of $124.8 million in 2005. Managed Care Magazine also says that the average executive compensation (excluding unexercised stock options) for an executive of a ‘top 10 for profit health plan’ was $11.7 million and that was back in 2000. Are these high…
One key parameter of interest to policymakers is the firms elasticity of offering health insurance with respect to price. This is an important question because the current tax exemption of employee compensation in the form health insurance in essence changes the price of health insurance. A large—in absolute value—elasticity would imply that the tax subsidy…
Large firms offer more generous health insurance to employees…right???? While it is true that large firms are much more likely to offer insurance to their employees, small firms are actually more likely to offer insurance in which they pay for 100% of the costs. A December 2005 paper by Zawacki and Taylor (“Contributions to health…