• Reading list

    What Do We Really Know About Consumer-Driven Health Plans? by Paul Fronstin.

    Generally, premiums for CDHPs were lower than premiums for non-CDHPs. A number of studies have tried to explain the differences in premiums. One found savings ranged from 15.5 percent to a low of –4.7 percent, with average savings of 4.8 percent. However, the study found that most of the savings was due to younger, healthier workers choosing CDHPs and concluded that once typical risk- and benefit-adjustment factors were taken into account, CDHPs saved only 1.5 percent. There is strong evidence that initially CDHP enrollees will be healthier than non-CDHP enrollees, but that over time the CDHP population has a significantly higher illness burden.

    The American Hospital Association’s Trendwatch Chartbook 2010: Trends Affecting Hospitals and Health Systems. Chock full of useful graphs.

    Accountable Care Organizations: Will They Deliver? by Marsha Gold. To illustrate the historical challenges in changing providers’ incentives, this Policy Brief includes a nice summary of the 1932 “Report of the Committee on the Costs of Medical Care,” the 1973 federal HMO Act, and the late-1990s managed care backlash. Here’s the abstract:

    The health reform debate has focused on rewarding providers more for delivering quality care to their patients than for increasing the volume of services they provide (Gold and Felt-Lisk 2008). Accountable care organizations (ACOs) are one proposed way of changing payment systems to achieve this goal by creating incentives to increase clinical integration and care coordination (Rittenhouse et al. 2009; Fisher et al. 2006).

    This brief examines the ACO concept broadly. We define the concept and rationale for interest in it, review what has been learned from previous initiatives, and place ACOs in the context of the broader health care system. From this context, we draw insights for policymakers in the public and private sectors.

    [book] The Economics of Health Reconsidered, by Thomas Rice.

    [book] Your Money or Your Life: Strong Medicine for America’s Health Care System, by David Cutler.

    [book] The Political Life of Medicare, by Jonathan Oberlander.

    Insurers’ Negotiating Leverage and the External Effects of Medicare Part D, by Darius N. Lakdawalla, Wesley Yin.

    Public financing of private health insurance may generate external effects beyond the subsidized population, by influencing the size and bargaining power of health insurers. We test for this external effect in the context of Medicare Part D. We analyze how Part D-related insurer size increases impacted retail drug prices negotiated by insurers for their non-Part D commercial market. On average, Part D lowered retail prices for commercial insureds by 5.8% to 8.5%. The cost-savings to the commercial market amount to $3bn per year, which approximates the total annual savings experienced by Part D beneficiaries who previously lacked drug coverage.

    Taxes, Permits, and Climate Change, by Louis Kaplow

    This essay revisits the question of instrument choice for the regulation of externalities in the context of climate change. The central point is that the Pigouvian prescription to equate marginal control costs with the expected marginal benefits of damage reduction should guide the design of both carbon taxes and permit schemes. Because expected marginal damage rises nonlinearly, a corresponding nonlinear tax – or an equivalent price implemented through a quantity-adjusted permit scheme – is second best. Also considered are political factors, distinctive features of regulating a stock pollutant, and ex ante distortions due to the anticipation of transition relief (such as by receiving more free permits for greater emissions). Finally, distributive concerns are examined, with emphasis on the conceptual and practical benefits of addressing distributive issues with the tax and transfer system rather through adjustments to regulatory schemes that usually render them less effective.

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