CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Thursday, August 27, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
Previous Posts
- Peak-Oil and Biofuels: Both Running On Empty
- Turf War Smackdown: The AMA and MDs vs. DNPs
- Markets In Everything: Creative Poodle Grooming
- Spending on Lobbying Doubled From 2000 to 2008
- It's A Sweet Deal for Sugar Growers, But A Sour De...
- Markets In Everything: Kaiser Microclinics At 50% ...
- New Homes For Sale At 16 Year Low
- Housing Market Emerges From Slump
- Markets In Everything: Domestic Medical Tourism
- HSAs: Putting Patients In Charge of the Rationing
5 Comments:
So, using Dr Perry's information, the U.S. may reduce its health care costs 75% through the free market:
1. Limit medical lawsuits and awards, to lower malpractice insurance premiums and unnecessary medical tests.
2. Lower standards to practice medicine (to increase labor)
3. Allow insurance companies to sell health-care policies across state lines (currently, average health care insurance ranges from a low of $1,254 in Wisconsin to a high of $8,537 in Massachusetts).
4. Allow innovation (example below);
Kaiser Microclinics At 50% of the Cost of a Full-Service Hospital
Two doctors working out of a microclinic at a mall could meet 80% of a typical patient's needs. With a hi-def video conferencing add-on, members could even link to a nearby hospital for a quick consult with a specialist. Patients would still need to travel to a full-size facility for major trauma, surgery, or access to expensive diagnostic equipment, but those are situations that arise infrequently. The per-member cost at a microclinic is roughly half that of a full Kaiser hospital.
The alternative would be a health care system similar to Cuba, which the WHO rated higher than the U.S., although the WHO admitted the U.S. is ranked #1 in the world in both labor (e.g. doctors and nurses) and capital (e.g. hospitals and medical equipment).
Cost of malpractice insurance premiums:
Diagnosis: Premium Shock Rx Strike When New Jersey M.D.s walked off the job we learned just how sick the health-care system really is. Can it be cured?
CNNMoney
By Peter Carbonara
May 1, 2003
Most M.D.s in New Jersey have seen their malpractice rates go up. A few have had their rates go up a lot--notably specialists in areas like obstetrics and neurology. This is a problem for the rest of us, because soaring insurance premiums, on top of rising costs for rent, labor, equipment and everything else, have made it uneconomic for some doctors to practice certain kinds of medicine. Some obstetricians, for instance, particularly those who specialize in high-risk pregnancies, have given up delivering babies. In Pennsylvania, several hospitals have recently closed their trauma clinics or maternity wards because the doctors who practice there couldn't afford insurance.
New Jersey, though, is not the worst place in America to be an obstetrician as far as malpractice insurance is concerned. According to Medical Liability Monitor, a Chicago publication that tracks malpractice rates, an obstetrician in Miami may pay $210,000 a year, the highest rate in the country. In Alabama, an obstetrician can get the same coverage for $36,000. New Jersey is somewhere in the middle, with base rates for obstetricians of about $70,000.
Dr. Hux says he gets about $1,800 for each delivery. "Most of the time, you're just about breaking even," he says. When one patient had triplets following a risky pregnancy, Hux says, "I think I walked out of there with about 50 bucks."
Diet may be a most significant factor on health, more than exercise, stress, or sleep deprivation (when Americans are compared to the Japanese and Europeans, and when women are compared to men). Americans, particularly Blacks (which have a lower longevity rate than Whites or Asians), eat a lot of fast food, junk food, and processed foods.
So, preventative health programs may also reduce costs, at least in the long-run.
Also, someone stated economics cannot be tested in a controlled experiment in the way of the hard sciences. Of course, there are hundreds of major forces pushing and pulling a large economy, in dynamic ways. However, smaller economies can be tested similar to the hard sciences. An example is:
The Economic Organisation of a P.O.W. Camp
R. A. Radford, Economica, vol. 12, 1945
Peak,
Diet is only one factor in disease. There are also tremendous variations in propensity toward disease based upon race and genetic propensity.
Take prostate cancer for example. I recently attended a seminar at Sunnybrook Hospital which has the longest tracking program on prostate cancer patients in North America. One of the factors is the western diet. One can lower risk by adopting a heart smart diet. Asians have far lower incidence of prostate cancer (about 1 in 100 vs. 1 in 7 for N.A. caucasians). Even if Asians adopt a western diet, their risk of cancer rises but does not come close to the North American caucasian.
Preventive care programs still cost money.
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