Unbiased Analysis of Today's Healthcare Issues
Politicians are faced with a serious dilemma in the near future: reauthorize the State Children’s Health Insurance Program (SCHIP) and spend billions of dollars on a single-payer government health program or fail to renew the program and leave many children uninsured and many constituents angry. The Kaiser Family Foundation reports (“Several Lawmakers…“) that the SCHIP…
In recent years, the federal government has attempted to increase access to government provided health insurance. Between 1984 and 2004, the percentage of non-elderly individual with government provided health insurance rose from 13.5% to 17.5%. Over the same time period, however, the percentage of American without health insurance also rose from 13.7% to 17.8%. In…
In 2005, approximately 114 million visits were made by Americans to the hospital emergency departments. Of these, more than eighty percent concluded with a discharge and a recommendation for follow-up care. Receiving prompt and adequate post-ER care is imperative for the resolution of many illnesses and temporary disabilities. Is timely care available for these patients?…
In a typical market, an increase in the consumers’ willingness to pay will increase price and increase quantity (see graph). On the other hand, a decrease in willingness to pay will decrease price and decrease quantity. This axiom of economics does not hold in the health care market; at least not according to a 1998…
Ever wonder what Newt Gingrich is up to? You may be surprised to learn that he’s working to change healthcare in the U.S. Mr. Gingrich has founded the Center for Health Transformation. On the Consumer Health World Blog, Gingrich proposes dividing Medicaid into 3 different programs. Capabilities Program – This program would help both Americans…
Jason has insurance and his brother Nosaj does not. Jason utilizes more medical services than Nosaj. Is this situation occuring because Jason is truly sicker than Nosaj (adverse selection), or is this because since Jason has insurance, medical services are cheaper for him than Nosaj (moral hazard)? Disentangling the problems of moral hazard and adverse selection…
Why is publicly provided health care so expensive? One reason is the the fraud which is bound to occur. The New York Times reports (“Hospital Grew…“) that New Jersey’s largest health care provider–St. Barnabas Health Care System–bilked $630 million from the federal government between 1995 to 2003. Medicare pays extra cash to hospitals for the…
Yesterday, I reviewed one paper claiming PPS along with competition reduced cost, but these cost reductions occurred mostly for the most expensive (read most sick) patients. Continuing the PPS theme, today we will look at a 1995 article in Econometrica in which David Cutler attempts to measure “The Incidence of Adverse Medical Outcomes under Prospective…
Prospective Payment Systems (PPS) and competition go hand in hand. Without competition, a PPS gives hospitals and physicians the incentive to minimize health care outlays. A competitive fee-for-service (FFS) system-to which most Americans were accustomed to in the 1980s-can lead to severe cost increases due to the problem of moral hazard. Combining PPS and competition…
A common justification for Medicare is that the public health insurance system has an overhead cost which is about 2% of claims, while the private sector has administrative costs between 20%-25% of claims. This tells us that Medicare is the best system for America…right? Merrill Mathew’s of the Council for Affordable Health Insurance (CAFI) summarizes…