• Reading list

    Ensuring the Fiscal Sustainability of Health Care Reform, by Michael E. Chernew, Lindsay Sabik, Amitabh Chandra, and Joseph P. Newhouse

    Health, United States, 2009, by the CDC. The chartbook is terrific.

    Negative Equity Does Not Reduce Homeowners’ Mobility, by Sam Schulhofer-Wohl

    Some commentators have argued that the housing crisis may harm labor markets because homeowners who owe more than their homes are worth are less likely to move to places that have productive job opportunities. I show that, in the available data, negative equity does not make homeowners less mobile. In fact, homeowners who have negative equity are slightly more likely to move than homeowners who have positive equity. Ferreira, Gyourko and Tracy’s (2010) contrasting result that negative equity reduces mobility arises because they systematically drop some negative-equity homeowners’ moves from the data.

    Employer-Sponsored Insurance under Health Reform: Reports of Its Demise Are Premature, by Bowen Garrett and Matthew Buettgens

    Eliminating drug price differentials across government programmes in the USA, by Kalipso Chalkidoua, Gerard F Andersona, and Ruth Fadena

    Federal agencies in the USA pay significantly different prices for the same prescription drugs because each agency uses a different approach to derive the payment rate. Because we do not identify any economic rationale or socially accepted moral reasoning that would justify the current level of price variation, we suggest that the federal government should pay a uniform price for each drug. Laws and regulations that give certain federal agencies the ability to earn rebates, use formularies, or permit other special arrangements would need to be eliminated in order to have a single payment rate. This could make some government agencies worse off than others; however, a uniform payment rate would not need to affect beneficiaries’ current financial contributions, access to drugs, benefits or overall public expenditures. At the same time, having a single rate would permit the government to adopt a more effective approach to purchasing drugs and send a consistent message to pharmaceutical companies concerning which types of drugs the government wants them to develop for government beneficiaries. How this single price would be derived and how it would compare with the lowest or highest prices currently achieved by government agencies would depend on a variety of policy issues including the government’s desire to encourage pharmaceutical research and development and the need to control health care spending.

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    • Employer-Sponsored Insurance under Health Reform: Reports of Its Demise Are Premature,

      That will be too bad if true.

    • Addendum:

      It made sense for employers to provide health insurance when health care under 5% of the economy. With health care spending approaching 20% of the economy more consumer involvement is needed and so for people need to pay more directly. The market was moving in this direction and though it would have been a painful transition it seems necessary.

      I think that as medical spending rises even the socialized medical systems in other countries will have to get more consumers involved in the spending decisions through copay or deductibles.