Ownership and rent-seeking behavior in specialty health care practices

Specialty health care practices are unique in that they exhibit a wide range of ownership types, from large corporations controlled by third parties to those directly owned by practitioners (physicians, therapists, etc.). Many of these practices also employ licensed assistants whose labor is partially substitutable with those of the practitioners. This paper presents a theoretical model that examines the impact that different levels of ownership have on rent-seeking behavior and efficiency within specialty practices. Our primary focus is on whether lower levels of ownership induce practitioners to extract larger economic rents by substituting their services for those of their assistants. We find that if the practitioners are not required to be technically efficient then they unambiguously respond to lower ownership with rent-seeking. However, requiring the firm to be technically (but not allocatively) efficient, may be sufficient to mitigate this incentive.efficiency

Using Game Theory To Teach Principles Of Microeconomics

The use of game theory to illustrate decision-making and competition in oligopolistic industries has become commonplace in economics. However, little attention has been focused on using game theory to teach other areas of economic theory. For example, game theory can be used to teach the economic principles of marginal analysis and opportunity cost, utility maximization, supply and demand analysis, and industry analysis. This paper provides a case study demonstrating how game theory can be used to teach an entire introductory microeconomics course. While one can certainly adapt the mathematical rigor of game theory to meet virtually any educational level, we believe that principles courses are most in need of a new paradigm since this is where most students receive their first (and often their only) exposure to economics.&nbsp

Integrating Institutional and Neoclassical Economics Using Game Theory

We contend that economics is in need of a new paradigm. When taught in the traditional neoclassical construct, economics is not appealing to many students, particularly those taking economics to satisfy general education requirements. This, in turn, may explain why economic literacy in the U.S. is trending downward. Our approach uses game theory to teach economics by juxtaposing neoclassical and institutional economic paradigms so that students not only better understand the neoclassical model, but also are exposed to alternative approaches in economics. To better understand neoclassical models, we incorporate three institutional criticisms of neoclassical economics: (1) the assumption that all individuals are perfectly rational, (2) the propensity to create theories using static models that take as given (and usually ignore) important, exogenous factors influencing decision-making processes, and (3) an emphasis on modeling techniques and less of an emphasis on what is actually being modeled and how it is being modeled. We also integrate institutional and neoclassical economics by illustrating how history, culture, and emotion interact with the traditional neoclassical principles to inform economic decision-making via simple (evolutionary) games that can be used in the classroom

The Effects of Government Reimbursement on Hospital Costs:Some Empirical Evidence from Washington State

We use a panel of hospitals from Washington state to examine the impact of government reimbursement on a provider’s costs. We find that providers change their relative patient mix when Medicare and Medicaid lower reimbursement rates. On a percentage change basis, the magnitudes of these changes are small; however, the overall economic impacts are quite large. Additionally, our findings indicate that a number of other factors significantly influence a provider’s costs, including patient demographics, initial illness severity and input market conditions facing the firm. We thank two anonymous reviewers for their helpful comments. We also thank William Greene for valuable econometric advice when making revisions to this manuscript. Remaining errors are our own

Is NY's Supply-side Experiment Working? A Preliminary Analysis using County Unemployment Rates

The State of New York recently enacted business tax reforms. The first legislative act launched the START-UP NY program in 2014. It created tax free enterprise zones throughout the state to incentivize business incubation within, or relocation of existing firms to, the State of New York. In that same year, the state lowered its corporate tax rate state-wide from 7.1% to 6.5% in 2016. We use a difference-in-differences (DID) methodology, evaluated using county-level data, to empirically test whether New York’s recent business tax reforms significantly reduce unemployment, beyond what would exist in the absence of the reforms. We fail to find significant evidence that START-UP NY affects unemployment during the period studied, 2014-2017.  We do, however, find evidence suggesting that New York lowering its corporate tax rates in 2016 is associated with a large reduction in unemployment (by approximately 90,000 jobs) in 2016 and a smaller reduction (by approximately 25,000 jobs) in 2017

Turning a Problem into a Solution: Instructional Benefits of Using ExamSoft to Map Multiple-Choice Responses

In this paper, we propose a simple method to minimize the effects of each of the previously mentioned issues associated with the design and administration of assessments that use multiple-choice items. We analyzed multiple-choice questions with possible responses to express fundamentally different thought processes and/or knowledge. A case study built around an introductory health care course shows how a specialized assessment software platform helped map assessment questions back to curricular outcomes identifying where the curriculum was effective, and where needed improvement. Our results indicate that incorrect responses were more informative in identifying and addressing curricular gaps than the correct responses

Determinants of Demand for HIV Testing: Evidence from California Outpatients Clinics

This paper provides an initial empirical analysis of the impact of changing epidemiological, economic and sociological conditions on the amount of HIV testing in primary care, outpatient clinics. Particular attention is paid to examining whether changes in HIV/AIDS prevalence impact the amount of testing these clinics perform, and also how financial constraints impact this relationship. Using a sample of California clinics, we find that changing epidemiological conditions do impact the demand for HIV testing. Additionally, certain clinic characteristics, such as the type of practitioners providing care and the socio-economic characteristics of patients treated at each clinic also affect the demand for testing. However, we find little evidence supporting increased government or private grants, contracts and donations as a means of enhancing the demand for HIV testing

Teaching consumer theory to business students: an integrative approach

Economists teaching principles of microeconomics courses in business schools face a difficult pedagogical dilemma. Because the vast majority of students in these courses are business majors or minors who will not study economics beyond the principles level, these students need a different set of skills than what is taught in a traditional (liberal arts) setting, which is focused primarily towards economics majors and/or minors. In particular, business students need relatively less emphasis on the mechanics of neoclassical economic theory and relatively more emphasis on how economic tools and concepts form the basis for (and are subsequently integrated into) other business fields, including (but not limited to) marketing, management and finance. This paper presents a case study illustrating how instructors can more effectively teach principles of microeconomics when the majority of students in the course are business majors and/or minors. We use consumer theory as an example. Our goal is to not only describe why principles of microeconomics courses fail to adequately introduce and explain utility and demand theory to this cohort of students, but also to demonstrate how course content can be altered such that learning outcomes are enhanced

Teaching consumer theory to business students: an integrative approach

Economists teaching principles of microeconomics courses in business schools face a difficult pedagogical dilemma. Because the vast majority of students in these courses are business majors or minors who will not study economics beyond the principles level, these students need a different set of skills than what is taught in a traditional (liberal arts) setting, which is focused primarily towards economics majors and/or minors. In particular, business students need relatively less emphasis on the mechanics of neoclassical economic theory and relatively more emphasis on how economic tools and concepts form the basis for (and are subsequently integrated into) other business fields, including (but not limited to) marketing, management and finance. This paper presents a case study illustrating how instructors can more effectively teach principles of microeconomics when the majority of students in the course are business majors and/or minors. We use consumer theory as an example. Our goal is to not only describe why principles of microeconomics courses fail to adequately introduce and explain utility and demand theory to this cohort of students, but also to demonstrate how course content can be altered such that learning outcomes are enhanced

Academic Success and Initial Labor Market Outcomes for Pharmacy Graduates

Purpose: This study examines the relationship between academic success and labor market outcomes among graduating pharmacy students. Unlike previous studies, this paper characterizes labor market outcome not only as an individual's starting salary, but also whether or not the student had a position secured at the time of graduation, whether or not a signing bonus was received, and the setting in which (s)he will practice. Methods: A standard exit survey was administered to graduating Doctor of Pharmacy students at a Midwestern, public university within two weeks of graduation. The relationship between academic success and initial labor market outcome was assessed using cross-tabulations, chi-square and Fisher exact tests. Results: There were no significant relationships between grade point averages and signing bonuses, starting salaries or employment offers. Students with higher grade point averages were less likely to work in chain community pharmacies, and more likely to work in a hospital or other health-system setting. Conclusions: The relationships between academic and direct measures of labor market outcomes (salary and bonuses) were not necessarily positive, as standard economic theory predicts. Rather, the relationship is indirect, as it appears that students with greater academic success obtained employment in more clinical settings, which carry a different mix of pecuniary and non-pecuniary benefits. Type: Original Researc