Right now I’m stuck. I have five or six good posts either half written or at least competently outlined, and I can’t figure out how to finish any of them. So here are some good links instead:
The impact of patient cost-sharing on low-income populations: Evidence from Massachusetts
Overall, we find price elasticities of about −0.16 for this low-income population, which is similar to, but somewhat lower than, elasticities calculated for higher-income populations in other settings.
We also find lower price elasticities among individuals with chronic illness and with higher levels of prior spending, suggesting that copayments are less important in these subsamples. In addition, we find no evidence of offsetting increases in hospitalizations in response to the higher copayments, although there are some statistically insignificant impacts among the chronically ill population.
Plan designs matter, and at the margin, incentives matter a lot for most people. Individuals with chronic conditions are simply being made to pay more to manage their conditions in a higher co-pay world.
Uwe Reinhardt on Medicare pricing history:
Under this payment system, Medicare was required to reimburse each individual hospital (and other inpatient facilities) retrospectively for all the money that individual facility reported having spent on treating Medicare patients. These pro rata costs included operating costs, annual depreciation of the capital investments in the facility, interest of debt incurred to finance that capacity and, for investor-owned hospitals, a guaranteed rate of return to equity capital invested in the hospital…
For their part, organized medicine struck a deal under which each physician (and certain other professionals) was to be paid his or her “customary, prevailing and reasonable (C.P.R.)” fee for each service…
One need not have a Ph.D. in economics, of course, to appreciate that the deal was inherently inflationary.
Rob Cullen at What-if Post on paying for the Doc Fix:
The solution that really caught our eye is one you might remember from when Congress was working on passage of the Affordable Care Act. The public option is simply an insurance plan run by the government that would be sold on the Obamacare marketplaces, and unlike almost all the other options it saves money without simply passing the cost onto individuals. Instead it negotiates for low rates with doctors and hospitals, and it provides other insurers an incentive to keep their rates low in order to stay competitive.
Liberals obviously love the public option and conservatives should love it since it saves the government a bunch of money. Unfortunately, of all the options on the list, the public option is perhaps the least likely to pass… even though it might be the smartest.
If we were operating in a world where deficit concerns had a real constituency, several major medical payment changes that were progressive favorable would be immediately on the table (single payer as a long term goal would be the crown jewel). These include a public option, using competitive bidding for most Medicare supplies, and offering a Medicare Part D drug benefit buy-in to the Veteran’s Administration formulary. Instead, we create rentier interests to provide services after they take their cut.
The net effect of smoking on healthcare and welfare costs; a Cohort Study
Conclusions Smoking was associated with a moderate decrease in healthcare costs, and a marked decrease in pension costs due to increased mortality. However, when a monetary value for life years lost was taken into account, the beneficial net effect of non-smoking to society was about €70 000 per individual.
Prevention is a wonderful thing if the goal is to have people enjoy healthier and longer lives. In narrow accounting senses with very limited scope of cost-benefit accounting applied, prevention can be a net loser. Intangible value of quality added life years is what makes prevention a net social good in most cases, not immediate cost avoidance.