Unbiased Analysis of Today's Healthcare Issues
In 1991 in the UK, the British began allowing general practitioners (GPs) to participate in a fundholding scheme. The fundholding program would reimburse GPs if the amount of chargeable elective secondary care procedures was below their budget and financially penalize the GPs if the amount of secondary care which their patients received exceeded their budget.…
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…
Why do HMO patients receive less care than fee-for-service patients? Could it be that HMO patients are healthier (adverse selection) or that FFS compensation leads to increased demand for medical services (moral hazard)? A paper by Shen, et al. (2004) finds that one reason could be that physician compensation could affect a doctor’s desire to perform…
The University of California San Diego (UCSD) is where I currently attend graduate school. The UCSD Medical Center has been in some hot water lately. The Office of the Inspector General (OIG) of the Department of Health and Human Services has alleged that UCSD has overcharged Medicare $48 million for pension costs. According to a UCSD Guardian…
Supplier induced demand has become a common phrase for health policy wonks. Yet this phenomenon was first discovered by Milton Roemer when he investigated how the number of hospital beds per capita affected hospitalization rates. According to the Dartmouth Atlas Project, Roemer’s law can be stated as follows: “Supply may induce its own demand where…
If my October 10th post did not satiate your desire for knowledge regarding referrals, today I give you even more information. Franks, Zwanziger, Mooney and Sorbero examine a large Rochester, NY Independent Practitioner Association (IPA). The authors find a mean patient referred/patients seen/year of 0.37. The data show that referral rates remain very stable by physician over time, likely…
Health economists frequently examine the effect of physician payment method on the provision of medical services. It is often found that patients whose doctors are compensated via capitation or salaried schemes receive fewer services than patients whose doctors are compensated through a fee for service mechanism. This finding is robust to a variety of medical settings…
Years ago, when someone needed care from a doctor they visited the physician directly whether they were a general practitioner or a specialist. Nowadays, it is rarer for patients to visit a specialist without a referral. The typical referral comes from a primary care physician, but it is also common for a specialist to refer…
In one 1998 survey, 52% of patients preferred a female gynecologist while only 4% preferred a male gynecologist (44% expressed no preference). If the healthcare market were competitive, the high demand for female gynecologists would lead to higher fees for female doctors (in the short term) and more female physicians entering the gynecology specialty (in the long…
Medicaid currently accounts for roughly 50% of all nursing home expenditures and 70% of all bed days. The government mandates that nursing homes provide a uniform level of quality to all residents, regardless of the payer type. Yet one may ask: does this mandate hold in reality? Nursing homes may have an incentive to segregate private insurance…