Unbiased Analysis of Today's Healthcare Issues
That is the title of a Journal of Economic Perspectives article by Martin Gaynor and Amanda Starc (2026). The article provides an overview of the current levels of competition in US health insurance markets, considers theoretic issues in what levels of competition are optimal, what empirical studies have found of the impact of competition and…
When health economics emerged as a distinct discipline in the late 1960s, mainstream academic and policy paradigms widely presumed that competitive market mechanisms were structurally incompatible with medical delivery. Influenced by foundational ideas like Kenneth Arrow’s 1963 landmark paper emphasizing the pervasive friction of clinical uncertainty, early experts argued that society had to look almost…
That is the question posted by a recent paper by Li and Dor (2024). However, they define competition not just by the number of community health center (CHC) competitors or market concentration (e.g., Herfindahl-Hirschman Index, HHI) but also the quality of care provided by their competitors. A key methodological question is how this should be…
As of 2007, about half of physicians had noncompete clauses (“noncompetes” for short) in their contracts. However, a recent FTC rule severely limits when they could be used. What specifically did the new FTC rule say about non-competes? Fuse Brown et al. (2024) provide a helpful summary. The final FTC rule declares all new noncompete clauses or…
There is even less competition then we may have thought according to a paper out this month by Socal et al. (2023): We identified a total of 565 facilities producing 1,379 unique generic APIs across forty-two countries. India, China, and Italy were the top producers; 14 percent of APIs were manufactured in the US. About a…
HHS has a policy paper titled “Reforming America’s Healthcare System Through Choice and Competition“. In the paper, HHS describes four broad areas of reform. I describe each in term, some of the key policy recommendation under each of the four headings, and my thoughts on each reform. Here goes: Health care workforce and labor markets.…
Yesterday, I discussed the idea of managed competition in California. One of the original tenets of managed competition was insurers having integrated, mutually exclusive provider networks. This would mean much more consolidation on the provider side. While this could improve quality, there is also a risk that prices could rise. In fact, this is what…
Competition matters for markets…even health care markets. A paper by Van Parys (2018) relies on a database of plan premium and market characteristics among states with federally-facilitated health insurance exchange Marketplaces. In this analysis, she finds that: In 2018, Marketplace premiums were 50 percent ($180) higher, on average, in rating areas with monopolist insurers, compared…
Likely not. At least according to some research by William Vogt. In an NIHCM Issue Brief, Dr. Vogt states: The inpatient hospital market in the United States was transformed by a wave of hospital consolidation during the 1990s, which witnessed more than 900 mergers and acquisitions. Many cities came to be dominated by two or three large hospital systems, and…
For the most part, the answer is “Yes” according to a recent study by Jung and Polsky. The authors use a Herfindahl index to measure competition and examine how outcomes for home health patients vary based on the level of competition. The (unadjusted) figures–based on data from OASIS— show that quality increases as competitions increases…