PPS and Competition

Prospective Payment Systems (PPS) and competition go hand in hand.  Without competition, a PPS gives hospitals and physicians the incentive to minimize health care outlays.  A competitive fee-for-service (FFS) system-to which most Americans were accustomed to in the 1980s-can lead to severe cost increases due to the problem of moral hazard.  Combining PPS and competition…

Amy Finkelstein in BusinessWeek

Amy Finkelstein is one of my favorite healthcare economists and recently BusinessWeek ran an article (“So that’s why it’s so expensive“) profiling her and her work.  I have profiled Ms. Finkelstein before in my June 15th post describing her 2005 paper with McGarry.  She also has a new NBER working paper (“The aggregate effects of health…

Bikini Blues

While advances by physicians and new medical technologies often make for front page news, public health interventions have likely been the major cause of the significant health improvements throughout history.  For instance, creating a system of waste disposal and maintaining clean water has greatly increased the expected longevity of urban residents.  The 14th century Black…

Avian Flu: What should be done

Economist Tyler Cowen of George Mason University has an interesting paper (“Avian Flu: What should be done“) on the optimal policy to combat avian flu.  Below, I cite a few of the more interesting points from his executive summary: Prepare social norms and emergency procedures which would limit or delay the spread of a pandemic. Regular hand…