Arnold Kling  

CoA Alert

Economists on Immigration... Immigration: Seeing is Underst...

As long as I'm creating an alert for Bryan's book, I might as well create one for Crisis of Abundance, which is an essential resource for anyone interested in health care policy and, with birthdays and graduations coming up, makes a great gift.

In today's CoA alert, Joe Kristan, who is about to read the book, sets high expectations.

I will write down my current views of the U.S. healthcare system before I start. As I read I will try to note items that confirm or contradict my current opinions, and whether and how my views change...

I am perplexed by the rising cost of health insurance and health care, yet I am aware that the health care we get is better than it ever has been. I see several big, related issues...

Many smart people know a lot more about health economics than I do, and I'm sure Arnold Kling is one of them. I look forward to seeing what he has to say.

Actually, don't let his modesty deceive you. A lot of his prior beliefs on the topic are quite sound.

My views in CoA were influenced by the work of John Wennberg and his colleagues at Dartmouth. Recently, they struck again.

Staggering variations in how hospitals care for chronically ill elderly patients indicate serious problems with quality of care and point toward unnecessary spending by Medicare. Lower utilization of acute care hospitals and physician visits could actually lead to better results for patients and prolong the solvency of the Medicare program, according to a new study by the Center for the Evaluative Clinical Sciences (CECS) at Dartmouth Medical School.

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COMMENTS (2 to date)
spencer writes:

thanks for the link, it is a very interesting report.

The part I found interesting is that more than 75% of all US health care expenditures is on people with cronic illness.

It goes on to say that the system as a whole has not developed effective ways of caring for people with cronic illnesses.

I am told the price elasticity of demand for medical care is high and that if we raised the prices individuals pay it would lead to less overuse of medical care.

Do you know of anyone who has studied this point in relation to people with cronic illnesses? Is there evidence that patients with cronic illness have a high elasticity of demand for medical services?

Arnold Kling writes:

The elasticity of demand will be higher if
(a) people pay with their own money and
(b) they are given information about the cost-effectiveness of treatment

At least, that's the hypothesis of my book. We'd have to try such a policy in order to see.

The famous RAND study did find significant elasticity of demand, but it may not have broken it down by type of illness.

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