• Reading list

    Health Affairs. Moving Forward On Health Reform. June 2010, 29(6). An entire issue on health reform.

    Geographic Variation in Medicare Drug Spending, by Yuting Zhang, Katherine Baicker, and Joseph P. Newhouse.

    [D]o Medicare patients who spend more on pharmaceuticals to control their chronic conditions have fewer physician visits, reducing total variation — or do more physician visits lead to more prescriptions, amplifying variation? …

    We have brought data on the Medicare drug benefit (Part D) to bear on these questions, to provide a more complete picture of the patterns of utilization and spending in different regions. …

    [A]reas with high medical spending do not have offsetting lower pharmaceutical spending; in fact, if the coding practices in different regions are not too dissimilar, the substantial variation in pharmaceutical spending does not seem to be strongly associated with variations in medical spending at all. Spending on pharmaceuticals itself is variable and thus warrants scrutiny similar to that given to medical spending, in order to glean lessons about optimal prescribing, insurance characteristics, and resource allocation.

    Optimal Pricing of a Duopoly Platform with Two-Sided Congestion Effect, by Chokri Aloui and Khaïreddine Jebsi. Strangely, this article cites one of my blog posts (very unusual for an academic publication).

    We study, in this paper, the impact of two-sided congestion effect on the pricing policy of a two-sided duopoly platform. Relative to Armstrong (2006), we show that, with congestion effect, (i) competition for submarket share is softened, (ii) the divide-and-conquer pricing strategy is modified insofar as it depends upon the differential of the marginal congestion costs and (iii) each platform charges any agent of one side a price that covers not only the marginal congestion cost that he imposes on agents of his own side having joined its platform, as the traditional principle of the textbook congestion pricing, but also it covers the marginal congestion cost that he indirectly imposes on the of-his-type agents having chosen to join the rival platform. This issue matters despite there is no technical link between the two platforms.

    [Book] Libertarianism, from A to Z, by Jeffrey Miron. The following summary is from Miron’s website.

    Libertarian principles seem basic enough—keep government out of boardrooms, bedrooms, and wallets, and let markets work the way they should. But what reasoning justifies these stances, and how can they be elucidated clearly and applied consistently? …

    Tackling subjects as diverse as prostitution and drugs, financial crises and government bailouts, the legality of abortion, and the War on Terror, Miron takes the reader on a tour of how libertarians think. Miron’s libertarianism draws on consequentialist principles that balance the costs and benefits of government intervention, emphasizing personal liberty and free markets. Miron never flinches from following those principles to their logical and sometimes controversial end, teaching the reader how to think like a libertarian along the way.

    Missing Productivity Gains in the Medicare Physician Fee Schedule: Where Are They? by Jerry Cromwell, Nancy McCall, Kathleen Dalton, and Peter Braun

    The Medicare Fee Schedule with payments for thousands of visits and procedures is updated periodically for the work component of changes in physician relative work. Three 5-year reviews of physician work by Medicare have been biased against finding productivity gains and reductions in physician work relative values. The authors present four studies showing shorter physician times with patients in their offices and in the operating room, increases in surgeons’ self-reported total work in spite of declining operating room times, and growing numbers of costly handoffs to nonsurgeons, while surgeons receive full payment for postoperative follow-up with patients. Substantial savings exist in the fee schedule if productivity gains from greater delegation to ancillary staff and specialists, reengineering of services, and rapid learning by experience with new technologies were integrated into the periodic reviews.

    Electronic Medical Records and the Efficiency of Hospital Emergency Departments, by Michael F. Furukawa

    This study examined the relationship between electronic medical records (EMR) sophistication and the efficiency of U.S. hospital emergency departments (EDs). Using data from the 2006 National Hospital Ambulatory Medical Care Survey, survey-weighted ordinary least squares regressions were used to estimate the association of EMR sophistication with ED throughput and probability a patient left without treatment. Instrumental variables were used to test for the presence of endogeneity and reverse causality. Greater EMR sophistication had a mixed association with ED efficiency. Relative to EDs with minimal or no EMR, fully functional EMR was associated with 22.4% lower ED length of stay and 13.1% lower diagnosis/treatment time. However, the relationships varied by patient acuity level and diagnostic services provided. Surprisingly, EDs with basic EMR were not more efficient on average, and basic EMR had a nonlinear relationship with efficiency that varied with the number of EMR functions used.

    Estimating Heterogeneous Treatment Effects of Medicaid Expansions on Take-up and Crowd-out, by John C. Ham, I. Serkan Ozbeklik, Lara Shore-Sheppard

    Economists have devoted considerable resources to estimating local average treatment effects of expansions in Medicaid eligibility for children. In this paper we use random coefficients linear probability models and switching probit models to estimate a more complete range of effects of Medicaid expansion on Medicaid take-up and crowd-out of private insurance. We demonstrate how to estimate, for Medicaid expansions, the average effect among all of those eligible, the average effect for a randomly chosen person, the effect for a marginally eligible child, and the average effect for those affected by a nonmarginal counterfactual policy change. We then estimate the average effect of Medicaid expansions among all eligible children and the average effect for those affected by a nonmarginal counterfactual Medicaid expansion since these are likely to be the most useful for policy analysis. Estimated take-up rates among average eligible children are substantially larger than take-up rates for those made eligible by a counterfactual Medicaid expansion, moreover both of these effects vary widely across demographic groups. In terms of crowd-out, we find statistically significant, though small, effects for all eligible children, but not for those affected by a counterfactual policy change.

    Comments closed
    • Libertarians love it when you remind them that absent a strong central government, their ideas cannot work. They also love it when you ask them for a working model anywhere.


    • Do you buy the instrumental variable in the Furukawa paper? It seems like a really unusual approach. Care to comment, Frakt?