Unbiased Analysis of Today's Healthcare Issues
The adverse selection death spiral has reared its ugly head again. PacAdvantage, an insurance pooling company for 6000 small and medium sized businesses in California has closed its doors. The Sacramento Business Journal reports (“Backer pulls plug on PacAdvantage health purchasing pool“) that the three remaining insurers underwriting the plan have pulled out. Michael Holt of The…
Healthcare Economist. Why not Health Care Economist? Or Health-care Economist? Which one is correct? The Chicago Manual of Style webpage offers a discussion of the issue. The site claims that ‘health care’ is the correct spelling according to Webster’s Collegiate Dictionary, eleventh edition. One individual, however, writes to the website saying: “I find in my American…
Many papers on health insurance worry about the problem of adverse selection. Critics of HMOs claim that the fact that HMOs have lower costs is not due to more efficient provision of services nor the limitation of the provision of services, but instead largely caused by the fact that the people who choose to enroll…
On August 29th, 2006 there will be a book forum discussing The Crisis of Abundance by Arnold Kling. While I have not yet read this book, I do respect Mr. Kling’s work and am anxious to see him discuss his views in this type of setting. The book made the top 10 list of the…
If one does not include Social Security and defined benefit assets, households with heads aged 65-74 have net assets of $190,100. Households with heads aged 75 and above have net assets of $163,100. How do the elderly allocate their assets? Does their portfolio choice change over time? Does it change in response to health shocks? These are the…
In this week’s Economist magazine, one article (“The invisible hand on the keyboard“) asks why economists spend valuable time blogging. Some of the more popular blogs receive thousands of visitors daily, yet why would an economist supply their output (knowledge) for free when they can receive payment from a university, the government, or private business for their work? …
The latest edition of the Health Wonk Review has been posted at Matthew Holt’s The Health Care Blog.
The Health Care Blog has a very interesting post (“Healthcare and the Long Tail“) by Jim Walker. Mr. Walker is a lifelong Philadelphia resident who is the Director of Business Development for the social networking site called MyMedwork. He uses concepts developed in Chris Anderson’s book The Long Tail and applies them to the healthcare field. …
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…