Reading list

The Federal Employees Health Benefits Program: What Lessons Can It Offer Policymakers? a National Health Policy Forum Issue Brief.

Inside the Refrigerator: Immigration Enforcement and Chilling Effects in Medicaid Participation, by Tara Watson.

Economists have puzzled over why eligible individuals fail to enroll in social safety net programs. “Chilling effects” arising from an icy policy climate are a popular explanation for low program take-up rates among immigrants, but such effects are inherently hard to measure. This paper investigates a concrete determinant of chilling, Federal immigration enforcement, and finds robust evidence that heightened enforcement reduces Medicaid participation among children of non-citizens. This is the case even when children are themselves citizens and face no eligibility barriers to Medicaid enrollment. Immigrants from countries with more undocumented U.S. residents, those living in cities with a high fraction of other immigrants, and those with healthy children are most sensitive to enforcement efforts. Up to seventy-five percent of the relative decline in non-citizen Medicaid participation around the time of welfare reform, which has been attributed to the chilling effects of the reform itself, is explained by a contemporaneous spike in immigration enforcement activity. The results imply that safety net participation is influenced not only by program design, but also by a broader set of seemingly unrelated policy choices.

Pricing and Reimbursement in U.S. Pharmaceutical Markets, by Ernst R. Berndt, Joseph P. Newhouse.

In this survey chapter on pricing and reimbursement in U.S. pharmaceutical markets, we first provide background information on important federal legislation, institutional details regarding distribution channel logistics, definitions of alternative price measures, related historical developments, and reasons why price discrimination is highly prevalent among branded pharmaceuticals. We then present a theoretical framework for the pricing of branded pharmaceuticals, without and then in the presence of prescription drug insurance, noting factors affecting the relative impacts of drug insurance on prices and on utilization. With this as background, we summarize major long-term trends in copayments and coinsurance rates for retail and mail order purchases, average percentage discounts off Average Whole Price paid by third party payers to pharmacy benefit managers as well as average dispensing fees, and generic penetration rates. We conclude with a summary of the evidence regarding the impact of the 2006 implementation of the Medicare Part D benefits on pharmaceutical prices and utilization, and comment on very recent developments concerning the entry of large retailers such as Wal-Mart into domains traditionally dominated by large retail chains and the “commoditization” of generic drugs.

[book] Parentonomics: An Economist Dad Looks at Parenting, by Joshua Gans. From the book’s website:

In Parentonomics: An Economist Dad Looks at Parenting, Professor Joshua Gans wonders what it would be like to apply key economic principles to raising his own three children. Can incentives and rewards prompt them to do things like sleep through the night, eat healthy meals, clean up their rooms, do their homework? Can economics help the smart, caring, well-adjusted, high-achieving little person that we know is in there to emerge?

Parentonomics shows that bringing together the hard questions of economics with the chaos, mess and love that children inspire makes a wonderful combination.

Antitrust and competition in health care markets, by Martin Gaynor and William Vogt. It’s long. But the first three sections are less than ten pages and beautifully document how health care markets are different than those of other goods and services.

In this chapter we review issues relating to antitrust and competition in health care markets. The chapter begins with a brief review of antitrust legislation. We then discuss whether and how health care is different from other industries in ways that might affect the optimality of competition. The chapter then focuses on the main areas in which antitrust has been applied to health care: hospital mergers, monopsony, and foreclosure. In each of these sections we review the relevant antitrust cases, discuss the issues that have arisen in those cases, and then review the relevant economics literature and suggest some new methods for analyzing these issues.

Hospital-insurer bargaining: an empirical investigation of appendectomy pricing, by Brooks, Dor, and Wong.

Employers’ increased sensitivity to health care costs has forced insurers to seek ways to lower costs through effective bargaining with providers. What factors determine the prices negotiated between hospitals and insurers? The hospital-insurer interaction is captured in the context of a bargaining model, in which the gains from bargaining are explicitly defined. Appendectomy was chosen because it is a well-defined procedure with little clinical variation. Our results show that certain hospital institutional arrangements (e.g. hospital affiliations), HMO penetration, and greater hospital concentration improve hospitals’ bargaining position. Furthermore, hospitals’ bargaining effectiveness has diminished over time and varies across states.

[book] The Heart of Power: Health and Politics in the Oval Office, by David Blumenthal. Here’s a bit from the NY Times review by Robert Reich:

This timely and insightful book puts Barack Obama’s current quest for universal health insurance in historical context and gives new meaning to the audacity of hope. Universal health care has bedeviled, eluded or defeated every president for the last 75 years. …

David Blumenthal, a professor at Harvard Medical School and an adviser to Barack Obama, and James A. Morone, a professor of political science at Brown University, skillfully show how the ideal of universal care has revolved around two poles. In the 1930s, liberals imagined a universal right to health care tied to compulsory insurance, like Social Security. Johnson based Medicare on this idea, and it survives today as the “single-payer model” of universal health care, or “Medicare for all.”

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