Unbiased Analysis of Today's Healthcare Issues
Financial incentives matter. If one had to give economists (and health economists as well) a slogan, this would be it. In 2006, the Netherlands instituted a form of managed competition. According to Van Dijk et al (2012) “Before 2006, inhabitants had either compulsory social (sickness fund, 62%) or voluntarily private (36%) health insurance depending, among others, on income (below a gross…
This American Life has a two-part series on America’s healthcare system. Below are some highlights from the first part: More is Less. On supplier-induced demand My old partner that I joined here in 1971 was asked by a friend of his “…at what level of vision do you do a cataract operation?” And…
Why does Medicare spend $7,500 for patients in El Paso, Texas but spends $15,000 for patients in McAllen, Texas? It McAllen richer? Does McAllen receive better care? Are patients sicker in McAllen? “Come on” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here pure and simple.” Doctors, he said,…
Traditional economic theory suggests that when the price of a good falls, the amount supplied will fall as well. Most economists always assume that the supply curve is upward sloping. But that is not always the case in medical world. Because a physician serves both as the patient’s advisor and the supplier of medical treatment,…