January 24, 2016
The Manhattan Institute’s HEALTH CARE 2.0: USHERING IN MEDICINE’S DIGITAL REVOLUTION series delves into the details of how government policy stifles innovation in the delivery of health care. This paper, Part 1, surveys the key economic principles that drive innovative, dynamic sectors of the economy—and explains why American health care does not live up to those principles.
- Health care-market distortions have considerably worsened since Kenneth Arrow famously described them in 1963; but in other industries less dominated by misguided government intervention, similar distortions have gradually eroded, thanks to technology, especially the rise of the Internet.
- The tech world is full of stories of individuals who dropped out of college to design software and hardware that changed the world; but such innovation is far less common in health care—for reasons largely determined by public policy.
- Each current barrier to a more innovative, competitive, affordable health care system was created for a reason; but the cumulative weight of these policies has been to make U.S. health care less innovative, less patient-centered, and less affordable.
Source: HEALTH CARE 2.0, Part 1: How to Think About Market Forces in Health Care | Manhattan Institute
November 11, 2015
Five years after the Mental Health Parity and Addiction Equity Act took effect, access to equal benefits and qualified providers remains elusive for many insured Americans.
Source: Health Policy Briefs
November 2, 2015
In the years since the passage of the Patient Protection and Affordable Care Act (PPACA, or, colloquially, Obamacare), most of the discussion about it has been political. But as the politics fade and the law’s many complex provisions take effect, a much more interesting question begins to emerge: How will the law affect the American health care regime in the coming years and decades?
This book brings together fourteen leading scholars from the fields of law, economics, medicine, and public health to answer that question. Taking discipline-specific views, they offer their analyses and predictions for the future of health care reform. By turns thought-provoking, counterintuitive, and even contradictory, the essays together cover the landscape of positions on the PPACA’s prospects. Some see efficiency growth and moderating prices; others fear a strangling bureaucracy and spiraling costs. The result is a deeply informed, richly substantive discussion that will trouble settled positions and lay the groundwork for analysis and assessment as the law’s effects begin to become clear.
Source: The Future of Healthcare Reform in the United States, Malani, Schill
October 24, 2015
The fundamental hindrance to achieving the goal of pooling comes down to the following policy conundrum: How can policymakers get younger, healthy adults to essentially cross-subsidize older adults with pre-existing chronic conditions? There are ultimately two separate methods policymakers could adopt to tackle this problem: a set of regulation-oriented arrangements that would compel cross subsidies, and a market-oriented arrangement that would establish voluntary cross subsidies.
This market-oriented arrangement of voluntary cross subsidies would be based on guaranteed renewability of insurance and would require a modification of the tax code to extend the tax break for health insurance beyond the employment-based market into the individual market. If that tax inequity were removed, people would obtain guaranteed-renewable insurance while young and healthy, and the pre-existing condition problem would eventually barely exist. This market-oriented arrangement could be superior to the set of regulatory arrangements that have been either tried or suggested to help people with pre-existing conditions.
Source: Guaranteed Renewability and Equitable Tax Treatment of Health Insurance | Economics21
March 31, 2015
Prior to the ACA most states had little or no restrictions on insurance rates taking account of enrollees’ health risks. In the 1990s a small number of states imposed community rating and guaranteed issue in their health insurance markets, as the ACA has done, but without any subsidies, exactly the same situation that will result on the federal exchanges from a plaintiffs’ victory in King v. Burwell. It was widely predicted these states would experience an adverse selection death spiral. A 1999 National Bureau of Economic Research (NBER) paper by Thomas Buchmueller and John Dinardo compared New York, which had imposed community rating and guaranteed issue, with neighboring states. They “found no evidence for the conventional wisdom that the imposition of pure community rating tends to an adverse selection death spiral.” Similarly, another 2006 NBER paper by Bradley Herring and Mark V. Pauly compared states with community rating and guaranteed issue to states with no such regulations. They found a small increase in the number of uninsured, but did “not observe a strong positive relationship between risk status and the likelihood of being covered, that would be consistent with so-called death spirals.”
via A King v. Burwell ruling for the plaintiffs may not equal death spirals – AEI.
January 13, 2015
There’s a fascinating story out of North Carolina about that state’s largest insurer unexpectedly publishing information on how much it pays healthcare providers for a wide range of elective, non-emergency services.
Providers were not pleased. More surprisingly, consumer advocates were sharply critical. But more such efforts are on the way and providers should stop complaining and get prepared.
Blue Cross and Blue Shield of North Carolina suddenly released its all-inclusive payment rates for services including kidney transplants, knee replacements, coronary bypass procedures, screening colonoscopies and other services. The insurer’s online look-up tool includes all payments for a service, including facility fees, doctor fees and pathology.
via North Carolina Blues plan unloads price transparency surprise – Modern HealthcareVital Signs | The healthcare business blog from Modern Healthcare.
January 3, 2015
The Affordable Care Act protects people from being charged more for insurance based on factors like medical history or gender and establishes new limits on how insurers can adjust premiums for age, tobacco use, and geography.
This brief examines how states have implemented these federal reforms in their individual health insurance markets. We identify state rating standards for the first year of full implementation of reform and explore critical considerations weighed by policymakers as they determined how to adopt the law’s requirements. Most states took the opportunity to customize at least some aspect of their rating standards. Interviews with state regulators reveal that many states pursued implementation strategies intended primarily to minimize market disruption and premium shock and therefore established standards as consistent as possible with existing rules or market practice. Meanwhile, some states used the transition period to strengthen consumer protections, particularly with respect to tobacco rating.