Arnold Kling  

New Working Papers of Interest

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Cass Sunstein and Ed Glaeser:


we suggest that social learning is often best characterized by what we call Credulous Bayesianism. Unlike perfect Bayesians, Credulous Bayesians treat offered opinions as unbiased and independent and fail to adjust for the information sources and incentives of the opinions that they hear. There are four problems here. First, Credulous Bayesians will not adequately correct for the common sources of their neighbors’ opinions, even though common sources ensure that those opinions add little new information. Second, Credulous Bayesians will not adequately correct for the fact that their correspondents may not be a random sample of the population as a whole, even though a non-random sample may have significant biases. Third, Credulous Bayesians will not adequately correct for any tendency that individuals might have to skew their statements towards an expected social norm, even though peer pressure might be affecting public statements of view. Fourth, Credulous Bayesians will not fully compensate for the incentives that will cause some speakers to mislead, even though some speakers will offer biased statements in order to persuade people to engage in action that promotes the speakers’ interests. Our chief goal in Sections V-VIII is to show the nature and effects of these mistakes, which can make groups error-prone and anything but wise, especially if they lack sufficient diversity.

David Card, Carlos Dobkin and Nicole Maestas:

using death records matched to our sample of hospital admissions, we find a clearly discernable drop in mortality once people become eligible for Medicare. Relative to people who are just under 65 when admitted, those who are just over 65 have about a 1 percentage point lower likelihood of death within a week of admission, or roughly a 20 percent reduction in 7-day mortality. A similar absolute reduction in mortality is registered at 28 days and 90 days, and persists for at least two years after admission, suggesting that the differential treatment afforded to those with Medicare coverage has an important long-run impact on patient survival.

...We argue that this pattern is consistent with an “insurance generosity” channel, reflecting increased services (or the more timely delivery of services) for patients who are covered by Medicare and supplemental insurance, rather than the typical insurance package among the near-elderly population.

Finally, it is worth noting that the reduction in mortality is achieved with only a modest rise in hospital list charges (around 4%). This is an incomplete measure of the total cost increase associated with Medicare eligibility because it excludes doctor bills and charges for other non-hospital personnel. If these unobserved costs also rose by 4% we suspect that the implied cost-benefit analysis for making Medicare available to people admitted for non-deferrable conditions would be very favorable. However, Medicare eligibility also leads to large increases in the use of services by other, less sick, patients for whom the effects on mortality are very small, or even zero. Whether the overall cost of the system is justified by the gains in health therefore remains an important issue for further research.


They attempted to limit their sample to people with true emergency needs for care, trying to avoid including people seeking discretionary medical services.



COMMENTS (1 to date)
Gary Rogers writes:

The study by Card, Dobkin and Maestas is fascinating, though I think it says more about insurance patterns than the effects of Medicare on mortality rates. I think it is far fetched to say that someone under 65 with fee for service insurance would receive significantly less care than someone with Medicare fee for service coverage. The study did not have any data on which patients had managed care insurance, though this did have data that showed a large drop in the number of patients with managed care coverage after they went on Medicare. I would love to see some followup on the difference between managed care and fee for service. I also found it interesting that the difference in admissions appeared to be limited to non emergency admissions. I only scanned the report, so there may be more explanation, but I found it curious. I suspect this too relates to something other than Medicare. The last thing that I think is a premature conclusion is the 4% increase in cost. The study mentioned the possibility that Medicare might encourage increased treatment in other non life threatening situations that are not included in the study, but it did not discuss the segmented medical care market where Medicare prices are fixed while paying customers rates are not. This can lead to hidden subsidies should be accounted for.

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