Author Archive

What Does the Business Cycle Look Like If Changes in Health Status Are Included?

This paper proposes new measures of the business cycle that incorporate monetized changes in health of the population. In particular, we incorporate in GDP the dollar value of mortality, treating it as depreciation in human capital analogous to how NDP measures treat depreciation of physical capital. We examine the macroeconomic fluctuations in the United States and globally during the past 50 years, taking into account how depreciation in health affects the cycle. Because mortality tends to be pro-cyclical, fluctuations in standard GDP measures are offset by monetized changes in health; booms are not as valuable as traditionally measured because of increased mortality, and recessions are not as bad because of reduced mortality. Consequently, we find that U.S. business cycle fluctuations appear milder than commonly measured and may even be reversed for the majority of “recessions” after accounting for the cyclicality of health. We find that adjusting for mortality reduces the measured U.S. business cycle volatility during the past 50 years by about 37% in the United States and 46% internationally.

NBER paper by Mark L. Egan, Casey B. Mulligan, Tomas J. Philipson.

May 21, 2013 | 14 comments | by

So This is How ObamaCare Insurance Works

Under a new policy issued by Kathleen Sebelius, the secretary of health and human services, “health care facilities and providers will get paid less” for providing the same services to patients in the federal program, known as the Pre-Existing Condition Insurance Plan.

In most cases, payments to health care providers will be capped at Medicare rates, which are substantially less than the commercial insurance rates they have been receiving. The new policy generally prohibits doctors and hospitals from increasing charges to consumers to make up the difference.

Remember: The enrollees have been paying premiums under the representation that this insurance is just like commercial insurance.

More at the NYT.

May 21, 2013 | 17 comments | by

Headlines I Wish I Hadn’t Seen

42,173 Canadians received medical treatment outside of the country in 2012.

The cost of government regulation: $14,768 per household.

A class action suit claims the IRS improperly seized 60 million medical records of 10 million people.

May 21, 2013 | 11 comments | by

ER: The Gateway to Hospitalization

A RAND Health study found that hospital emergency rooms are now the point of access for nearly half of all hospital admissions in the U.S. and account for almost all of the growth in admissions between 2003 and 2009. During that time, hospital admissions grew only 4% — not even keeping pace with population growth. But ER-related admissions jumped 17%. (ModernPhysician.com)

Why this is important: about half of the newly insured under ObamaCare will get insured by Medicaid, and Medicaid patients use the emergency room twice as often as privately insured patients. Also, hospitals are buying doctors, who will be pressured to admit patients once they get to the emergency room.

May 21, 2013 | 14 comments | by

IBM’s Dr. Watson

Source: The Washington Post.

May 21, 2013 | 12 comments | by

Immigrants Are Healthier until They Stay Here a While

As early as the 1970s, researchers found that immigrants lived several years longer than American-born whites even though they tended to have less education and lower income, factors usually associated with worse health. That gap has grown since 1980…Evidence is mounting that the second generation does worse. Exploratory estimates based on data from 2007 to 2009…show that Hispanic immigrants live 2.9 years longer than American-born Hispanics.

[One study] found that immigrants had at least a 20 percent lower overall cancer mortality rate than their American-born counterparts.

Mortality rates from heart disease were about 16 percent lower, for kidney disease 18 percent lower, and for liver cirrhosis 24 percent lower.

This is from The NYT.

May 20, 2013 | 12 comments | by

Should Popular People Get More Health Care?

This is from Tyler Cowen:

By now it is well known that hanging out with healthy peers predicts (causes?) good health, and unhealthy peers predict (cause?) bad health, for instance as it applies to weight and diet. So what might that mean?

Is it, therefore, socially optimal to invest scarce health care resources in the most popular people ― considering the external effects on the health of others? Tyler has references and links.

May 20, 2013 | 10 comments | by

Health IT to Raise Costs, and Other Links

73% of doctors: Health IT will raise quality; 71%: it will also raise costs.

Fidelity: A 65-year-old couple retiring this year will need $220,000 on average to cover medical expenses.

The highest paid public employee in your state is… [HT: Jason Shafrin]

May 20, 2013 | 12 comments | by

Insurance Matters

Medigap added to Medicare means more spending:

[E]mployer-sponsored and self-purchased supplemental coverage were associated with annual spending growth rates of 7.17 percent and 7.18 percent, respectively, compared to 6.08 percent for beneficiaries without supplemental coverage. In the first empirical study of the topic, the researchers found significantly higher rates of spending growth in all supplemental insurance categories compared to the category without supplemental insurance, even while controlling for sociodemographic, disease, disability, and health behavior characteristics. Golberstein and his colleagues suggest that policy efforts to restrict the generosity of Medicare supplemental insurance plans, and the anticipated lower levels and lower generosity of employer-sponsored supplemental Medicare coverage for future retirees, could slow the rate of spending growth for Medicare beneficiaries. (Health Affairs)

May 20, 2013 | 10 comments | by

Inequality

Why has the topic of “inequality” been getting so much attention in recent years? I have a theory, which I’ll advance in a future piece. But first things first.

What do the writers who are obsessing about it mean by “inequality”? They basically mean inequality of income. That would make sense if we all agree that the most important way in which people are unequal is differences in income. But what if that isn’t the case? Almost all of the people who are doing the complaining have chosen professions that earn less income than they could have had. That is, all these professors and editorial writers could have gone to law school or gotten an MBA or done something else that would have earned them more money. Obviously, money isn’t the most important thing in their lives.

The list below shows some other ways in which people are unequal. These things basically can’t be purchased. But if we were really concerned about life’s unfairness, we could compensate those who have less of these attributes and tax those who have more.

Intelligence

Physical health

Mental health

Happiness

Leisure time

Physical attractiveness

Athletic ability

Music ability

Life expectancy

Life is unfair.

May 20, 2013 | 14 comments | by
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