Tag: Priceless: Curing the Healthcare Crisis
Why We Are on an Unsustainable Path
To people who subscribe to the health policy orthodoxy, the riddle of modern healthcare is: Why are health costs rising so fast? To me the riddle is: why isn’t health spending rising even faster? As I write in my recent book, Priceless: Curing the Healthcare Crisis, every time you and I spend a dollar at...
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Problem Solved, No Government Program Needed
In a classic article, Stanford University professor Kenneth Arrow argued that the market for medical care is inherently flawed because of asymmetric information. In what follows, I am going to embellish on the argument, making it even more forceful than it was in the original text. My book, Priceless: Curing the Healthcare Crisis, offers...
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HSAs Force Health Providers to Compete
Megan Johnson, a self-employed single mother in Dallas, had severe pains in her side and back, just below the ribs. Her doctor said it was possibly kidney stones, but a CT scan would be necessary to confirm the diagnosis. Megan’s doctor gave her the name of an outpatient radiology department near her home. A...
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Waste, Waste Everywhere and Not a Dime to Spare
The Institute of Medicine says we are wasting 30 cents of every dollar we spend on medical care. Originally I was going to pan the study, but I can’t resist a good read. Like this: If banking were like health care, automated teller machine (ATM) transactions would take not seconds but perhaps days or...
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Designing Ideal Health Insurance
The modern era has inherited two models of health insurance: the fee-for-service model and the HMO model. Both models create perverse incentives for patients and their doctors. As I wrote in my recent book, Priceless: Curing the Healthcare Crisis, virtually all recent variations on these two models are attempts to ameliorate and control those perverse incentives—usually...
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How Perverse Incentives Affect Healthcare Behavior
Imagine a system in which health plans offer networks of doctors and hospitals in return for fixed premiums. People who are seriously ill and need specific, expensive medical treatment will select in a very different way from other people. As I discuss in my book Priceless: Curing the Healthcare Crisis, take a heart patient in...
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How Much Does Health Insurance Affect Health? Some Surprising Answers
There have been a number of claims that lack of insurance is life threatening. The most recent and well known is an Institute of Medicine (IOM) study claiming that 18,000 people die every year because they do not have health insurance.[1] Using a similar methodology, a study for the Physicians for a National Health...
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The Problem of Unintended Consequences: How Good Intentions Often Lead to Perverse Effects
Ideal health insurance is often said to be health insurance with no deductible or co-payment, making medical care essentially free at the point of delivery. Yet, if patients have no out-of-pocket costs, their economic incentive will be to overuse the system, essentially consuming healthcare until the last amount obtained has a value that approaches...
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How Much Do You Trust the Government? Politics, Patients, and Perverse Incentives
Just as noneconomists think wages can be set at any level, some people think that any public policy is possible. If wages are judged to be too low, the noneconomist thinks that’s because the business owner is hardhearted. If a public policy is judged insufficiently generous, the person unfamiliar with public choice thinks that...
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