Unbiased Analysis of Today's Healthcare Issues
Conventional wisdom holds that economists advocate for reducing regulation on most policy arenas. Regulation imposes costs and businesses and is often ineffective. Further, as technology and market conditions change, regulations which were originally welfare enhancing can now become archane. The public generally views the FDA’s pre-approval as a worthwhile endeavor. The goal of FDA pre-approval…
With healthcare reform having passed, how will the health insurance market look a few years from now? Although Mitt Romney may (or may not) deny it, Massachusetts has been a model for President Obama’s health reform bill. In 2006, Massachusetts passed its own health reform and when the share of uninsured residents was at 14%. …
Before a drug can come to market, it must receive FDA approval. This involves 3 phases of testing with Phase I having 20-80 volunteers and Phase III often testing more than 1,000 people. Despite the FDA approval, patients can sue drug companies if they are injured by a drug. Patients can generally sue manufacturers under…
The USA Today writes that “the IRS has proposed a broad initiative that would require hundreds of thousands of tax preparers to register with the government, pass a competency exam and adhere to ethical standards.” This sounds like a good idea as it will safeguard individuals from unscrupulous tax preparers. But who will this truly…
A paper by Kowalski, Congdon and Showalter (2009) examines how state health insurance regulations affect the price of health insurance. The four regulations are the following: Community rating regulations limit premium differences across policies. The most stringent form requires insurers to offer the same premium to every individual, regardless of age, gender, or health status.…
“Despite the spectacular failure of Fannie Mae and Freddie Mac, some economists insist that Fannie and Freddie need to be kept in place but somehow, just made safer. This optimistic advocacy—which assumes that Fannie and Freddie are like airplanes that need better landing gear—is in spite of the fact that between 1992 and 2008 Fannie…
Today we will discuss how the tax code affects health care. Tax exemption of employer-provided health insurance. “In 1943, the Internal Revenue Service (ruled) that employees could exclude the value of employer-paid health insurance premiums from their taxable income. In 1954, Congress excluded by statute the value of employer-purchase health insurance from gross income.” To…
Marketplace reports that the FDA has blocked sales from one of India’s largest drug producers, Ranbaxy Pharmaceuticals. “It prevented sales of Ranbaxy’s generic versions of the antibiotic Cipro and the cholesterol pill Zocor.” This begs the question: should the FDA put office in foreign countries? On the one hand, it is important to ensure that imported…
A recent paper by Kitchener et al. (HSR 2008) investigates the actions of one nursing home chain to find how they maximized their profits. The authors find that Sun Healthcare Inc. employed three strategies to maximize shareholder value: rapid growth through debt-financed mergers; labor cost constraint through low nurse staffing levels; and a model of…
The N.Y. Times reports (“Concerned about costs…“) that Congress is trying to impose new restrictions on physician-owned, for-profit hospitals. The legislators fear that these hospitals 1) drive up costs and 2) provide poor quality. Legislators worry that when physicians own the hospital, they may have more of an incentive to order more procedures to increase…