Wasted Health Spending: Who’s Picking Up The Tab?

June 1, 2018

The Institute of Medicine estimated that waste consumed 30 percent of US health dollars in 2009. Donald M. Berwick and Andrew D. Hackbarth, working from a 2011 baseline, pegged the midpoint of reasonable waste estimates even higher, at 34 percent. A crude extrapolation of these figures, given the steady rise in overall health expenditures, implies that wasted spending now comfortably exceeds $1 trillion annually (see Exhibit 1), a sum that could fund the entire Medicaid program twice over.

via Wasted Health Spending: Who’s Picking Up The Tab?


New state-level estimates of the economic burden of the opioid epidemic

January 17, 2018

Opioid abuse rates and deaths vary considerably from state to state, as do the costs associated with this epidemic. But researchers have generally focused on the economic impact of the crisis in the aggregate, at the US level. In a new analysis, I estimate the cost at the state level and find substantial variation across the country. Here, I offer a preview of my findings, which will be released in full next month.

via New state-level estimates of the economic burden of the opioid epidemic – AEI


A comprehensive guide to the new science of treating lower back pain

December 18, 2017

Lower back pain is one of the top reasons people go to the doctor in the US, and it affects 29 percent of adult Americans, according to surveys. It’s also the leading reason for missing work anywhere in the world. The US spends approximately $90 billion a year on back pain — more than the annual expenditures on high blood pressure, pregnancy and postpartum care, and depression — and that doesn’t include the estimated $10 to $20 billion in lost productivity related to back pain.

via A comprehensive guide to the new science of treating lower back pain – Vox


Average American’s Risk of Needing Nursing Home Care Is Higher Than Previously Estimated | RAND

August 30, 2017

The average American’s lifetime risk of using a nursing home is substantially greater than previous research has suggested, according to a new RAND Corporation study.

Among persons age 57 to 61, 56 percent will stay in a nursing home at least one night during their lifetime, according findings published online by the journal Proceedings of the National Academy of Sciences.

Previous studies have generally corroborated the U.S. Department of Health and Human Services’ estimate that only 35 percent of older Americans are likely to use a nursing home in their later years.

Source: Average American’s Risk of Needing Nursing Home Care Is Higher Than Previously Estimated | RAND


Longer lifespans largely not to blame for rising health care spending | The Incidental Economist

January 25, 2017

In other words, living longer doesn’t increase health care spending so much as it delays the large amount spent near death. Some health care spending is associated with those intervening, relatively healthy years, just not much compared with that spent in one’s final years.Living longer offers many benefits. That it isn’t, by itself, a major contributor to health care spending is a nice bonus.

Source: Longer lifespans largely not to blame for rising health care spending | The Incidental Economist


Looking at History to Reduce Current Healthcare Costs by James D. Byrd, Douglas L. Smith, Marilyn M. Helms :: SSRN

January 18, 2017

When the history of healthcare and insurance in the US is examined, it is clear the patient has become more and more removed from the payment process. Insurers including Medicare moved to pay providers more quickly and eliminated pre-payment by the insured customer beyond a typical small co-payment. The patient is not clear regarding costs and lacks incentives to control spending. The payment process has deviated so far from the traditional accounting three-way payment match that fraud and other issues have surfaced in billing and payment error. This article presents suggestions from accounting’s three-way match process used in purchasing to carefully outline problems and challenges in US healthcare. Discussion and ways to adapt the popular accounting framework for healthcare are presented within the historical context of the changing healthcare reimbursement and payment process. Areas for future research are also included.

Source: Looking at History to Reduce Current Healthcare Costs by James D. Byrd, Douglas L. Smith, Marilyn M. Helms :: SSRN


The Economic Contribution of Unauthorized Workers: An Industry Analysis by Ryan D. Edwards, Francesc Ortega :: SSRN

December 6, 2016

This paper provides a quantitative assessment of the economic contribution of unauthorized workers to the U.S. economy, and the potential gains from legalization. We employ a theoretical framework that allows for multiple industries and a heterogeneous workforce in terms of skills and productivity. Capital and labor are the inputs in production and the different types of labor are combined in a multi-nest CES framework that builds on Borjas (2003) and Ottaviano and Peri (2012). The model is calibrated using data on the characteristics of the workforce, including an indicator for imputed unauthorized status (Center for Migration Studies, 2014), and industry output from the Bureau of Economic Analysis.

Our results show that the economic contribution of unauthorized workers to the U.S. economy is substantial, at approximately 3% of private-sector GDP annually, which amounts to close to $5 trillion over a 10-year period. These effects on production are smaller than the share of unauthorized workers in employment, which is close to 5%. The reason is that unauthorized workers are less skilled and appear to be less productive, on average, than natives and legal immigrants with the same observable skills. We also find that legalization of unauthorized workers would increase their contribution to 3.6% of private-sector GDP. The source of these gains stems from the productivity increase arising from the expanded labor market opportunities for these workers which, in turn, would lead to an increase in capital investment by employers.

Source: The Economic Contribution of Unauthorized Workers: An Industry Analysis by Ryan D. Edwards, Francesc Ortega :: SSRN