Unbiased Analysis of Today's Healthcare Issues
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…
On Wednesday, Marketplace on NPR ran a story on how providing eye care to individuals in the developing world can not only improve their well-being, but increase economic productivity. Fortunately, low cost solutions are available. To view the story, click here. Some excerpts are below: “153 million people around the world live with poor vision…
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…
In modern medicine, doctors are agents for two distinct groups. The physician is an agent for the patient, but also an agent for insurance companies-especially in the managed care settings. In balancing both relationships, the doctor must juggle the conflicting principal-agent problems of information asymmetry and third party payment. Ake Blomqvist develops an interesting theoretical model to…
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…
If you are sick and tired of reading health care blogs, you may want to look at a blog which looks at the health of the environment. Natural Capital is an environment economics blog by Robert Metcalfe, a PhD student at Imperial College London’s Tanaka Business School. A visitor will even find an entertaining cartoon…
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…
David Cutler and Richard Zeckhauser review “The anatomy of health insurance” in chapter 11 of the Handbook of Health Economics. The chapter provides an overview of the economics field’s insight regarding health insurance. The authors summarize the literature’s findings into 5 main lessons listed below: Risk spreading versus incentives: Health insurance involves a fundamental tradeoff…
This morning it was announced that Edmund Phelps was the 2006 winner of the Nobel Prize in Economics. Mr. Phelps is a macro-economist best known for his work explaining the trade-off between unemployment and inflation in the economy. A biography of Mr. Phelps can be found on the Columbia University website.
In Sunday’s L.A. Times I found two articles regarding population growth. The first (“America at 300 million“) notes that although the U.S. is nearing 300 million people, there is plenty of space available for these newcomers. Although the birth rate is still not at replacement, the recent increase in immigration has allowed the U.S. to…