April 2008

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Absenteeism and Presenteeism

April 30, 2008 in Academic Articles, Labor Economics | 1 comment

Should employers provide health insurance to their employees? There are many reasons why they should. One is that employees are attracted to firms that offer health insurance, especially since their are tax and cost advantages to group health insurance purchased through an employer. Another reason is that if a worker becomes sick, that reduces productivity. But how much does it cost a firm when either 1) a worker is absent from work (absenteeism) or 2) the worker shows up for work but their productivity is impaired (presenteeism)?

A paper by Pauly et al. (2008) attempts to quantify these costs. Unlike most studies, they use manager estimates of lost productivity. While workers may have better information regarding how much productivity is lost during an illness, workers may have an incentive to answer strategically and further, managers will be the ones ultimately deciding how much health care preventing employee illness is truly worth.

The authors hypothesize that jobs with the following three characteristics will be more affected when a worker becomes ill:

  • jobs with high values of team production,
  • jobs with high requirements for timely output, and
  • jobs with high difficulties of substitution for absent or impaired workers.

A firm of course, can invest in protection measures in the case of illness. For instance, it could cross-train workers, it could accumulate inventory to smooth out periods of down time, or might pay workers to work harder if an employee is missing. Nevertheless, the authors estimate the costs of absenteeism as follows:

Job Type Absence multipliers
Auto Service technician 1.05
Hotel maids 1.05
Customer Service Reps 1.10
Waiters 1.10
Automobile Sales 1.10
MD office receptionists 1.10
Medical Assistants 1.20
Team Assemblers 1.25
Hotel Desk Clerks 1.25
Legal Secretaries 1.27
Construction Workers 1.35
Cooks 1.36
Truck Drivers 1.50
RNs 1.52
Retail Sales 1.60
Paralegals 2.00
Carpenters 2.00
Engineers 2.04

The authors assume that the cost of being absent must be at least the employees wage if the labor market is competitive. We see that the cost of an illness is significantly higher than the wage. Also, jobs that were found to involve more teamwork, had times sensitive products, and for which workers were not substitutable had larger absentee multipliers.

For workers who are sick, but come to work, here is the cost to the firm as a percentage of the employees wage.

Job Type Acute % Chronic %
Auto Service technician 12.5% 12.5%
Hotel maids 12.5% 12.5%
Customer Service Reps 25.0% 15.8%
Waiters 25.0% 20.1%
Automobile Sales 16.1% 12.5%
MD office receptionists 25.0% 25.0%
Medical Assistants 25.0% 25.0%
Team Assemblers 30.0% 38.8%
Hotel Desk Clerks 25.0% 25.0%
Legal Secretaries 25.0% 35.7%
Construction Workers 25.0% 25.0%
Cooks 25.0% 25.0%
Truck Drivers 25.0% 25.0%
RNs 37.5% 37.5%
Retail Sales 37.5% 37.5%
Paralegals 56.4% 75.0%
Carpenters 50.0% 55.1%
Engineers 75.0% 75.0%

One problem with this analysis is that it assumes that this is a one-time illness. If these are long term illnesses, it may be more cost effective for the firm to fire the employee because their sickness is either 1) driving up insurance premiums or 2) causing them to miss too much work. Offering a generous health insurance benefit may help to prevent illness, but may also attract sicker people to the firm. Thus, despite the article’s demonstration that the cost of employees missing work is significantly higher than their wage and that there are large costs when workers come to work when they are sick, it still does not mean that employers will want to offer generous health plans.

  • MV Pauly, S Nicholson, D Polsky, ML Berger, C Sharda (2008). “Valuing Reductions in On-the-job Illness: ‘Presenteeism’ from Managerial and Economic Perspectives.” Health Economics, vol. 17(4): 469-485.

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Falling Immunization Rates

April 29, 2008 in Vaccinations | Permalink

ABC News reports that immunization rates are falling.  Who’s fault is this?

“Traditionally, the government has measured immunization noncompliance by tallying up only missed doses of a vaccine. In this new research, the CDC recalculated immunization compliance to include vaccine lapses in addition to missed doses. Based on these new criteria, the CDC found that immunization compliance was actually 9 percentage points lower than previous estimates, dropping the compliance rate from 81 percent to 72 percent.”

When we measure compliance as missed vaccines, given that the child goes to the doctor, then we would believe that most of the fault of decreasing immunization rates is the doctors fault.  On the other hand, if we measure immunization rates as whether the child is “up to date” with their vaccines, then it could also be the fault of the parents who may not be bringing their child in for necessary check-ups.

Further, with an increasing number of vaccines required, it may be difficult for physicians to give all these vaccines.  Kids will only tolerate so many shots at a doctors visit before they start crying uncontrollably.  Elizabeth Luman of the National Center for Immunization and Respiratory Diseases says “It’s a complicated schedule … and there are also a lot of vaccines and figuring out when to time them can be a bit complicated.”

Vaccine shortages may also be to blame.  Dr. David Freedman, professor of medicine and epidemiology at the University of Alabama at Birmingham, says that “In many cases when there is a shortage, physicians can’t get any, stop giving it and are not rapidly informed when it is available again. In some cases shortages or nonavailability can last a year or more.”

Some doctors propose that an immunization registry, one that would store all an individuals immunization records, could be a solution.  This way, doctors and patients would be able to know which vaccines they have received and which ones they need to get.

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Science 2.0

April 29, 2008 in Academic Articles, Blogging, Information | Permalink

The Scientific American magazine has an interesting article (“Science 2.0“) about the web, open-access, blogging and research. Should researchers post their results online? Should scientists blog about their methodology?

Pros

It seems like academic research is the perfect forum for social networking and blogging. The sharing of ideas is a key means towards scientific invention/innovation. Posting raw data is a great way for other researchers to verify results, or utilize the same data for different purposes. One cancer researcher noted:

  • “To me, opening up my lab notebook means giving people a window into what I’m doing every day,” Hooker says. “That’s an immense leap forward in clarity. In a paper, I can see what you’ve done. But I don’t know how many things you tried that didn’t work. It’s those little details that become clear with an open [online] notebook but are obscured by every other communication mechanism we have. It makes science more efficient.”

The site OpenWetWare let’s laboratories share their daily experiences online. Further, researchers who are traveling can access their lab notebooks from anywhere in the world with OpenWetWare.

Further, social networking can allow easier collaboration between colleagues working in different parts of the country or different parts of the world.

It seems like researchers would be some of the first people to utilize Web 2.0, but…

Cons

  • “It’s so antithetical to the way scientists are trained,” Duke University geneticist Huntington F. Willard said at the January 2007 North Carolina Science Blogging Conference, one of the first big gatherings devoted to this topic. The whole point of blogging is getting ideas out there quickly, even at the risk of being wrong or incomplete. “But to a scientist, that’s a tough jump to make,” Willard says. “When we publish things, by and large, we’ve gone through a very long process of drafting a paper and getting it peer-reviewed. Every word is carefully chosen, because it’s going to stay there for all time. No one wants to read, ‘Contrary to the result of Willard and his colleagues….’”

Beside the fact that writing about unfinished results is not the way scientists are usually trained, most individuals worry about having their ideas stolen. Having your idea “stolen” by another individual means you will not get the recognition you deserve for coming up with an idea, and your career path can be adversely affected. Doling out credit for work accomplished is an important component of the “old school” journal system.

Other worries include the fact that when junior faculty post critical comments of the work of senior faculty, they may fear some sort of reprisal. This has lead some individuals to use pseudonyms.

Summing up

There are some serious drawback to Science 2.0, but as Timo Hannay, head of Web publishing at the Nature Publishing Group, states, “Our real mission isn’t to publish journals but to facilitate scientific communication.”

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Did California’s Medicaid HMO contracts save the state money?

April 28, 2008 in Managed Care, Medicaid/Medicare, Public Policy | Permalink

Throughout its history, Medicaid provided health insurance for the nation’s poor. It did this by reimbursing providers on a fee-for-service basis. In the 1990s, however, California and other states decided to let private insurance companies bid for the right to provide services for Medicaid patients. These HMOs would receive a fixed per patient per month payment and the private insurer would be responsible for providing health care to Medicaid enrollees.

HMOs may be more efficient than the government since 1) they have an incentive to keep enrollees healthy to save cost, 2) they can negotiate lower input prices, and 3) competition may lead to higher quality, lower priced medical care. On the other hand, keeping the government run fee-for-service program may have been more efficient if 1) the government’s size and negotiating power could decrease input costs, 2) there may be increasing returns to scale, 3) the HMOs may include significant markups in their bids, and 4) HMOs may offer medical services which do not appeal to unhealthy enrollees (i.e., adverse selection).

A paper by Mark Duggan in the Journal of Public Economics in 2004 aims to see if contracting out Medicaid health care provision to private HMOs decreased costs. Duggan uses the fact that California enacted a mandate that all AFDC Medicaid enrollees must switch to a private HMO. For other individuals, such as those on SSI and those who were disabled, deaf or blind, the switch to the HMO was voluntary. This mandate was enacted between January 1993 and December 1999 depending on the county. The author uses variation in the county enactment date to find the effect of Medicaid HMOs on cost.

Background

The manner in which California instituted the transitioned individuals into private managed care plans can be categorized into 3 groupings:

  1. Geographic Managed Care. “the state government contracts with several commercial HMOs to coordinate care for Medicaid recipients. Plans initially applied by submitting a menu of prices at which they would be willing to insure each type of Medicaid recipient. The government then awarded contracts to the plans most likely to deliver high quality medical care at a low price, though the weight placed on quality and spending was not specified.”
  2. County Organized Health System (COHS). “Under this model, the not-for-profit, community-based HMO was reimbursed a fixed amount per recipient-month that varied by eligibility category.” Individuals did not have any plan choice and the state did not allow bids from for-profit firms.
  3. “Two plan” counties. In these counties, the Medicaid enrollees would be able to choose between one private, commercial plan and one not-for profit plan. “…the state solicited bids from private companies and awarded a contract to just one of the plans.”

The following chart gives the type and date of managed care mandate by county.

County Mandate Type Date of mandate Pre-mandate % MC
Santa Barbara COHS 9/83 –
San Mateo COHS 12/87 –
Sacramento GMC 4/94 8.5%
Solano COHS 5/94 1.4%
Orange COHS 10/95 22.3%
Alameda Two-plan 1/96 4.6%
Santa Cruz COHS 1/96 0.0%
San Joaquin Two-plan 2/96 0.9%
Kern Two-plan 7/96 0.0%
San Francisco Two-plan 7/96 14.1%
Riverside Two-plan 9/96 30.3%
San Bernardino Two-plan 9/96 30.2%
Santa Clara Two-plan 10/96 4.1%
Fresno Two-plan 11/96 4.3%
Contra Costa Two-plan 2/97 22.6%
Stanislaus Two-plan 2/97 0.0%
Los Angeles Two-plan 4/97 39.0%
Napa COHS 3/98 0.0%
San Diego GMC 7/98 58.3%
Tulare Two-plan 2/99 0.0%
Monterey COHS 10/99 0.0%

Methods

Duggan uses the following equations to estimate spending.

  • ManCarejkt = α1 + γ1Mandatekt + μ1Xjkt + θ1j + λ1t + t*ρ1k + ε1jkt
  • Spendingjkt = α2 + γ2Mandatekt + μ2Xjkt + θ2j + λ2t + t*ρ2k + ε2jkt

Subscripts j, k, and t index individuals, counties, and years respectively. The variable Mandate is equal to the fraction of individual j‘s Medicaid eligible months in which a mandate was in effect. ManCare is equal to the fraction of the j‘s eligible months in which he is actually enrolled in an HMO. Spending is equal to the Medicaid spending for person j at time t.

Results

Duggan finds that the managed care mandate increased Medicaid spending. Medicaid spending increased by between 17% and 23% for counties in which the mandate came into effect. These results, however, were less pronounced where there was competitive bidding between insurance companies (i.e., the Geographic Managed Care and “Two plan” counties).

Also, despite the increased spending, the author finds no evidence of increased quality in terms of better infant birth outcomes.

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Health Care Around the World: Canada

April 25, 2008 in Health Care Around the World, International Health Care Systems | 4 comments

Canada has a single payer system but the provinces have the bulk of the responsibility of running the health care system for their own residents. In order to qualify for federal funding, each province must meet the following criteria.

  1. Universality. Available to all provincial residents on uniform terms and conditions;
  2. Comprehensiveness. Covering all medically necessary hospital and physician services;
  3. Portability. Allowing residents to remain covered when moving from province to province;
  4. Accessibility. Having no financial barriers to access such as deductibles or copayments; and
  5. Public administration. Administered by a nonprofit authority accountable to the provincial government.

Nevertheless, the 2005 Canadian Supreme Court ruling striking down Quebec’s prohibition on private insurance contracting may foreshadow significant changes in Canada’s health care system. 

Percent Insured. ~100%

Funding. Funding is provided jointly by the federal and state governments. The federal government uses funds from general revenue to provide a block grant to each of the provinces. The block grant finances only about 16% of each province’s health care expenditures. The remainder is funded by provincial taxes: mostly personal and corporate income tax. Health care spending makes up between one-third to one-half of provincial social welfare spending. For the nation as a whole, health care costs only 9% of GDP.

Private Ins. “At one time, all provinces prohibited private insurance from covering any service or procedure provided under the government program. But in 2005, the Canadian Supreme Court struck down Quebec’s prohibition on private insurance contracting.” Private clinics are barred from offering medical services which are covered by the Canada Health Act, but many begun to offer services in the black market.

Physician Compensation. Physicians work in private practice and are paid on a fee-for-service basis. Since these fees are set by a centralized agency, wages are fairly low which has lead to a physician shortage. There are only 2.1 physicians per 1,000 people. This is far less than the OECD average of 3.0 physicians per 1,000. Hospitals are funded on a global budget basis. Capital expenditures are reviewed and approved on a case-by-case basis.

Physician Choice. Referrals are required for all specialist services except the ED.

Copayment/Deductibles. There are generally no copayments or deductibles for services. However, British Columbia, Alberta and Ontario charge insurance premiums (although health services cannot be denied because of inability to pay).

Technology. The U.S. has five times as many MRI machines per capita as Canada and three times as many CT scanners. However, because of Canada’s proximity to the U.S., many Canadians do have the option of coming to the U.S. for treatment.

Waiting Times. In a 2005 decision striking down part of Quebec’s universal care law, Canadian Supreme Court Chief Justice Beverly McLachlin wrote that it was undisputed that many Canadians waiting for treatment suffer chronic pain and that “patients die while on the waiting list.” For instance, the Fraser Institute finds that 800,000 Canadians are waiting for treatment at any given time. “According to [the Fraser] survey, treatment time from initial referral by a GP through consultation with a specialist, to final treatment, across all specialties and all procedures (emergency, nonurgent, and elective), averaged 17.7 weeks in 2005.”

If you are interested on more information about the Canadian health care system, see my October 2, 2007 post.

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Health Care Around the World: Germany

April 24, 2008 in Health Care Around the World, International Health Care Systems | 3 comments

The most significant difference between Germany’s health care system and that of other countries is its use of sickness funds. All Germans with incomes under €46,300 are required to enroll in one of the sickness funds. Those with higher incomes can either join a sickness fund themselves or opt out and instead buy private insurance.

The federal government decides the global budget and which procedures to include in the benefit package. The National Association of Sickness Funds and the National Association of Physicians also help to form which benefits are included in the sickness fund benefit package. The state government regulates physicians and sets physician reimbursement rates.

In 2006, Angela Merkel proposed reforming the health care system by creating a centralized health fund, shifting funding from payroll taxes to general revenues, trimming benefits, and increasing cost sharing. This plan was abandoned due to a lack of public support and political opposition.

Percent Insured. 99.6% (There are about 300,00 uninsured individuals)

Funding. Sickness funds are financed through a payroll tax which averages 15% (but varies depending on the fund chosen). The tax is split between the employer and employee. In 2006, Germany ran a €7 billion deficit and the government has proposed a 1% increase in the payroll tax.

Private Ins. Approximated 9% of Germans have supplemental insurance. The private, supplemental insurance covers items not paid for in the sickness fund benefit package. As mentioned above, only middle- and upper-class individuals can opt-out of the sickness funds. Of those eligible to opt out, only about 1/4 of individuals do decide to opt out.

Physician Compensation. Physician reimbursement is set through negotiation with the sickness funds. Most of the negotiating power, however, lies with the sickness funds. Thus, the purchasing power of German physician’s wages is about 20% of that of physicians in the U.S. In 2005, there were physician strikes over low wage compensation. Further, physicians have to deal with significant reimbursement caps and budget restrictions. According to Tanner, physicians only attempt to provide the minimum care necessary.

Copayment/Deductibles. Until recently, there have been almost no copays or deductibles. Recently, Germans have begun paying €10 copays for prescription drugs, doctors visits, and hospital stays.

Technology. The U.S. has four times as many MRI units per capita and twice as many CT scanners per capita. Tanner claims that the existence of a small private insurance market helps to supplement technology spending. For instance, CT scanners at one point were almost non-existent in the public sector, but competition with private insurance companies meant that the public system had to add more CT scanners.

Waiting Times. It is a matter of some debate whether or not there are long waits for medical care in Germany. A WHO report says that “Waiting lists and explicit rationing decisions are virtually unknown.” On the other hand, another study finds that care is frequently rationed. For instance, the elderly and those with terminal illnesses are often denied care. Since hospitals are run through a global budget, this can reduce their incentive to treat those with serious, expensive-to-treat medical conditions.

Benefits covered. There is an extensive benefit package which even includes sick pay (70% to 90% of pay) for up to 78 weeks.

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Health Care Around the World: Switzerland

April 23, 2008 in Health Care Around the World, International Health Care Systems | 9 comments

I have already written about Switzerland in previous posts (see Swiss Healthcare Sytem: Part I, and Part II). Still of all the countries with universal health care, Switzerland’s is the most market-oriented and merits discussion. Switzerland’s health care spending as a percentage of GDP is second only behind the U.S. (11.6% of GDP for Switzerland, 15.3% for the U.S. according to Frontline), yet the government pays for very little of this funding. The Swiss system is similar to the “managed competition” health care plan proposed by the Clintons in the early 1990s.

Percent Insured. 99.5%. Does this mean a mandated system system would lead to universal coverage in the U.S?  This is unlikely.  In Switzerland, a mandate for auto insurance has nearly 100% compliance, but in the U.S. the auto insurance mandate’s compliance rate is only around 83%.

Funding.  Insurance is purchased by individuals.  Individuals generally must pay the full cost of premiums, but the government helps to finance insurance purchases for the poor.  “These subsidies are designed to prevent any individual from having to pay more than 10 percent of income on insurance,” and one third of Swiss citizens receive this type of subsidy.    Thus, the Swiss government only pays for 24.9% of health care costs (compared with 44.7% in the U.S.).

Private Insurance.  All insurance is private insurance.  However, insurance companies are mandated to offer the same “basic benefits package.”  Some physicians operate outside the negotiated schedules and individuals are beginning to purchase supplemental insurance to cover the cost of these higher cost physicians.  Some estimates claim that 40% of Swiss citizens have purchased supplemental insurance.

Physician Compensation.  Physician compensation is negotiated between the insurance companies and doctors on a canton by canton basis.  Balance-billing is not allowed.  Switzerland has strong regulation with respect to nonphysician health care professionals (e.g., nurses, PAs, NPs,) and thus patients are often compelled to use expensive physicians even when this may not be medically necessary.

Physician Choice.  According to a WHO study, Switzerland ranks second only to the U.S. in terms of the ability of patients to choose their provider.

Copayment/Deductibles.  Premiums are community rated and only adjusted for sex and age.  Employers do not pay for workers insurance and thus many Swiss have opted for less expensive plans with higher deductibles.  This has lead to the Swiss paying for 31.5% through out of pocket expenses.

Waiting Times.  According to a WHO study, Switzerland ranks second only to the U.S. in terms of timely care.

Benefits Covered.  All insurers cover the “basic benefits package” so most competition between insurers is based on price and service.  A politically defined benefit package is susceptible to influence from special interest groups.  Thus, Uwe Reinhardt notes that “over time, the growth in compulsory benefits has absorbed an increasing fraction of the consumers’ payment, thus compromising the consumer-driven aspects of the Swiss system.”

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Cavalcade of Risk #50

April 23, 2008 in Carnivals | Permalink

The latest edition of the Cavalcade of Risk is up at Workers Comp Insider.

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Health Care Around the World: Great Britain

April 23, 2008 in Health Care Around the World, International Health Care Systems | 9 comments

Great Britain represents all that is good and bad with centralized, single-payer health care systems. Health care spending is fairly low (7.5% of GDP) and very equitable. Long wait lists for treatment, however are endemic and rationing pervades the system. Patients have little choice of provider and little access to specialists.

Percent Insured. ~100%

Funding. Great Britain has a single payer system funded by general revenues. With any centralized system, avoiding deficits is difficult. In 2006, Great Britain had a £700 million deficit despite the fact that health care spending increased by £43 billion over five years.

Private Insurance. 10% of Britons have private health insurance. Private health insurance replicates the coverage provided by the NHS, but gives patients access to higher quality care, and reduced waiting times.

Physician Compensation. Unlike in the case of other single payer systems such as Norway, most physicians and nurses are mostly government employees. In 2004, the NHS negotiated lower salaries for doctors in exchange for reduced work hours. Few physicians are available at night or on weekends. Because of low compensation, there is a significant shortage of specialists.

Physician Choice. Patients have very little physician choice. However, under the experimental London Patient Choice Project, patients waiting more than six months for treatment will be offered a choice of four different treatment providers.

Copayment/Deductibles. There are no deductibles and almost no copayments except for small copayments for prescription drugs, as well as for optical and dental care.

Waiting Times. Waiting lists are a huge problem in Great Britain. Some examples: 750,000 are on waiting lists for hospital admission; 40% of cancer patients are never able to see an oncologist; there is explicit rationing for services such as kidney dialysis, open heart surgery and care for the terminally ill. Further, minimum waiting times have been instituted to reduce costs. “A top-flight hospital like Suffolk Est PCT was ordered to impose a minimum waiting time of at least 122 days before patients could be treated or the hospital would lose a portion of its funding.”

Benefits Covered. The NHS system offers comprehensive coverage. Because of rationing, care might not be as easy to get as advertised. Terminally ill patients may be denied treatment. David Cameron has proposed that the NHS refuse treatment to smokers or the obese (see 7 Sept 2007 post).

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Health Care Around the World: Greece

April 22, 2008 in Health Care Around the World, International Health Care Systems | Permalink

Greece has an employer-based health insurance system in which all Greek employers enroll their employees in one of the “social insurance funds.” Due to strict regulation by the Greek Ministry of Social Health and Cohesion, Greece in essence has a single payer system. For instance, the Ministry controls employee contribution rates, insurance benefit packages, and the types of doctors a social insurance fund can employee. Also, employers can not choose among competing sickness funds as they can in Germany, they must choose an their industry-specific social insurance fund.

The National Health Service (NHS) also operates its own health care services. For instance the NHS operates hospitals and employs some physicians. One can see the NHS as a backup for the social insurance funds, but in some rural areas, the NHS is the principal provider of care.

Percent Insured. Similar to the U.S., only 83% of Greeks have health insurance covering primary care. Most Greeks (97%) do have health insurance for hospital care.

Funding. In Tanner’s opinion, “the Greek health care system is funded through payroll taxes, general tax revenue and bribery.” (see below)

Private Insurance. About 8% of Greeks have private health insurance but this number has been growing rapidly in recent years.

Physician Compensation. About half of physicians are employed directly by the social insurance fund. The other half are in private practice, but are contracted on a fee-for-service basis by the insurance funds. Unlike in France, no balance billing is allowed. Despite this fact, many physicians demand under the table payments in exchange for treatment. Further, physicians often “actively attempt to persuade patients to move from a doctor’s sickness fund contract to the doctor’s private practice. Patients who switch pay out of pocket but receive faster and better care.”

Physician Choice. Greeks must have a referral from a GP in order to receive care at a public or NHS hospital.

Copayment/Deductibles. In theory, there are no deductible or copayments. In reality, the need to make informal payments to providers means that most patients incur significant out of pocket expenses. In fact, one estimate claimed that informal out-of-pocket payments make up 42% of healthcare expenditures.

Technology/Quality. Hospital administrators are appointed not based on merit, but instead based on their political affiliation. Because of this, many hospitals suffer from poor quality. Pay for doctors and nurses is fairly low and thus there are severe staffing shortages. In NHS hospitals, “it has been estimated that less than half of authorized medical positions are actually filled.” The U.S. has twice as many MRI units per capita and 20% more CT units per capita.

Waiting Times. Wait times for medical care are very long in Greece. This is likely due to the provider shortages caused by low reimbursement rates. The wait for treatment at both public and NHS hospitals can be very long. There is a six month wait for some surgeries and the wait for appointments with specialists can be as long as 150 days. Simple blood tests often take a month.

Corruption and Inequality. There is significant corruption and inequality in the Greek system. For instance, some funds, known as “noble funds” have more extensive benefits and lower worker contributions. The reason for this is that strong worker unions are able to use their political clout to get a better deal for their workers at the expense of workers in other industries. Also, most doctors demand under the table payments in order to see patients or if patients want higher quality care. Further, many doctors receive kickbacks for referrals to private hospitals and diagnostic centers.

We can see that the centralized system of Greece is breaking down. Individuals are demanding higher quality care, but due to government rationing, significant corruption is occurring.

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