Health Care Insurance Payment Policy when the Physician and Patient May Collude

This paper analyzes the three-party contracting problem among the payer, the patient and the physician when the patient and the physician may collude to exploit mutually beneficial opportunities. Under the hypothesis that side transfer is ruled out, we analyze the mechanism design problem when the physician and the patient submit the claim to the payer through a reporting game. To induce truth telling by the two agents, the weak collusion-proof insurance payment mechanism is such that it is sufficient that one of them tells the truth. Moreover, we identify trade-offs of a different nature faced by the payer according to whether incentives are placed on the patient or the physician. We also derive the optimal insurance scheme for the patient and the optimal payment for the physician. Moreover, we show that if the payer is able to ask the two parties to report the diagnosis sequentially, the advantage of the veto power of the second agent allows the payer to achieve the first-best outcome

Health Care Insurance Payment Policy when the Physician and Patient May Collude

This paper analyzes the three-party contracting problem among the payer, the patient and the physician when the patient and the physician may collude to exploit mutually beneficial opportunities. Under the hypothesis that side transfer is ruled out, we analyze the mechanism design problem when the physician and the patient submit the claim to the payer through a reporting game. To induce truth telling by the two agents, the weak collusion-proof insurance payment mechanism is such that it is sufficient that one of them tells the truth. Moreover, we identify trade-offs of a different nature faced by the payer according to whether incentives are placed on the patient or the physician. We also derive the optimal insurance scheme for the patient and the optimal payment for the physician. Moreover, we show that if the payer is able to ask the two parties to report the diagnosis sequentially, the advantage of the veto power of the second agent allows the payer to achieve the first-best outcome

Price Transparency in American Healthcare: Public Policies to Support Market-Based Solutions

The United States has the most expensive healthcare system in the world. We pay more money per capita for care than any other country – around three times the OECD average. Healthcare accounts for nearly a quarter of our federal budget, and the average family of four in America pays over $20,000 out-of-pocket each year for care. And yet, our health outcomes are no better than those of countries that spend far less money on care; we receive considerably less bang for our buck. As prices rise and we spend both more public and private dollars on healthcare, policy makers and other stakeholders must find ways to build more rational economic decision-making into the system. Unfortunately, the fee-for-service model makes this change difficult because it fundamentally misaligns incentives between patients, payers, and providers. Absent a complete overhaul of fee-for-service, several regulatory reforms and market innovations are essential to bending the healthcare cost curve. Health policy experts agree that lack of price transparency is a major part of the problem. Patients often do not know the amount they will pay for care until they receive a bill, weeks or even months later. As consumer-driven healthcare becomes more the norm and patients pay more out-of-pocket for care, their ability to make value-based decisions is severely limited by the absence of treatment cost information. Functional, competitive markets require that all participants have access to complete, correct information regarding their choices. The American healthcare market is far from this ideal. This paper reviews the price transparency problem in four parts. Part One explains the issue in more detail and provides a basic economic framework through which to understand the problem. Part Two presents an overview of government involvement in healthcare price transparency and includes policy initiatives at both the state and federal levels. Part Three covers private market involvement in the price transparency movement and shows how digital, cloud-based private market tools are making patients better healthcare consumers. Part Four looks ahead to future challenges in healthcare price transparency and outlines policy recommendations to ensure the movement’s success. The following chart summarizes these key policy recommendations. State governments may be better positioned to implement some of these changes, such as establishing all-payer claims databases, whereas federal policy makers should enact others, such as Medicare data disclosure guidelines. These policies can all support market-based healthcare price transparency reforms and effectively allow for public-private incentive alignment and collaboration. As long as fee-for-service payment remains in United States healthcare, these types of policies and partnerships are essential to creating more competitive markets and ultimately improving population health. Policy Recommendations to Support Healthcare Price Transparency: ➢ Mandate disclosure of physician quality and patient outcomes data alongside price information to illustrate value or cost-effectiveness ➢ Simplify payment models and offer clinical decision aids to help patients – particularly those with high deductible insurance plans – understand financial toxicity of treatment options and make decisions as savvy consumers ➢ Use value-based insurance design to better align payers’ and patients’ incentives and nudge patients towards higher value care ➢ Ban gag clauses in contractual agreements between insurers and providers ➢ Establish mandatory all-payer claims databases in every state ➢ Revise the Qualified Entity program under ACA Section 10332 to ensure all entities – public, private, or nonprofit – access to Medicare claims data ➢ Standardize public disclosure process and clarify data management guidelines to prevent abuse and misunderstanding of medical claims data ➢ Limit time period or scope of financial data released to prevent provider collusion around healthcare prices ➢ Provide additional resources to study the effects of price transparency on patients’ treatment and insurance purchasing decision

Health Care Reform in the United States

The author presents a brief description of the design features and objectives of the health care reform package, together with the reasons to support reform of the health care system in the United States

Managed Care

By 1993, over 70% of all Americans with health insurance were enrolled in some form of managed care plan. The term managed care encompasses a diverse array of institutional arrangements, which combine various sets of mechanisms, that, in turn, have changed over time. The chapter reviews these mechanims, which, in addition to the methods employed by traditional insurance plans, include the selection and organization of providers, the choice of payment methods (including capitation and salary payment), and the monitoring of service utilization. Managed care has a long history. For an extended period, this form of organization was discouraged by a hostile regulatory environment. Since the early 1980s, however, managed care has grown dramatically. Neither theoretical nor empirical research have yet provided an explanation for this pattern of growth. The growth of managed care may be due to this organizational form's relative success in responding to underlying market failures in the health care system - asymmetric information about health risks, moral hazard, limited information on quality, and limited industry competitiveness. The chapter next explores managed care's response to each of these problems. The chapter then turns to empirical research on managed care. Managed care plans appear to attract a population that is somewhat lower cost than that enrolled in conventional insurance. This complicates analysis of the effect of managed care on utilization. Nonetheless, many studies suggest that managed care plans reduce the rate of health care utilization somewhat. Less evidence exists on their effect on overall health care costs and cost growth.

Optimality of no-fault medical liability systems

This paper considers a model of defensive medicine where doctors are imperfect agents of insured patients. A national insurer subsidises both curative and preventive medical care consumed by risk averse patients. We show that in such an environment, the optimal liability regime is similar to the no-fault systems of Sweden and New Zealand where the doctor faces zero liability. The reason is that the subsidy on preventive medicine is a better instrument to induce the optimal level of care than the malpractice regime.no-fault liability systems, malpractice liability, defensive medicine, copayment ratio

Reforma del sector social en América Latina y el papel de los sindicatos

(Disponible en idioma inglés únicamente) En este trabajo se analiza la reacción de los sindicatos magisteriales y los gremios médicos a una serie de reformas del sector social en la región, incluidos la descentralización, mecanismos de pago a los prestadores de servicios y la introducción de mecanismos de evaluación del desempeño y de prestación privada de servicios. Combina la obra publicada sobre Economía y Politología para comprender las condiciones que moldean diversos patrones de comportamiento de los sindicatos y sus efectos en la aplicación de las políticas. El trabajo sugiere que las principales condiciones que influyen en el comportamiento de los sindicatos en el sector de la salud tienen que ver con la estructura del mercado (tamaño y nivel de competencia), debido a la participación combinada del sector privado y el público en el empleo. En la educación, donde el sector público es la principal fuente de empleo, los alineamientos políticos y las características organizacionales de las asociaciones magisteriales también desempeñan un papel importante para explicar el comportamiento de las organizaciones prestadoras de esos servicios. Se concluye, tomando en cuenta la naturaleza exógena de la mayoría de estas variables, presentando algunas sugerencias de políticas para alinear los objetivos de los sindicatos y los de los diseñadores de políticas mediante reformas de la normativa.