Insurer Competition in Health Care Markets

The impact of insurer competition on welfare, negotiated provider prices, and premiums in the U.S. private health care industry is theoretically ambiguous. Reduced competition may increase the premiums charged by insurers and their payments made to hospitals. However, it may also strengthen insurers' bargaining leverage when negotiating with hospitals, thereby generating offsetting cost decreases. To understand and measure this trade‐off, we estimate a model of employer‐insurer and hospital‐insurer bargaining over premiums and reimbursements, household demand for insurance, and individual demand for hospitals using detailed California admissions, claims, and enrollment data. We simulate the removal of both large and small insurers from consumers' choice sets. Although consumer welfare decreases and premiums typically increase, we find that premiums can fall upon the removal of a small insurer if an employer imposes effective premium constraints through negotiations with the remaining insurers. We also document substantial heterogeneity in hospital price adjustments upon the removal of an insurer, with renegotiated price increases and decreases of as much as 10% across markets.     

Health‐Care Reform and ESI: Reconsidering the Relationship Between Employment and Health Insurance

The health‐care reform promised by the Patient Protection and Affordable Care Act of March 2010 continues our dependence on a central feature of the American health‐care system: employer‐sponsored insurance (ESI). In this article I will criticize the assumptions regarding market and welfare concerns on which this dependence is based and argue that efforts to mandate ESI ignore both the dynamics of the employment relation and the nature of health‐care needs. A comparison between investing in employee education and investing in employee health will reveal the pragmatic challenges to ESI and the covert appeal to employer beneficence on which ESI rests. This paper argues that relying on ESI to guarantee appropriate care for a significant segment of the population is undesirable and unsustainable from both market and moral perspectives.     

Utilization management, case management, and you

Historically, most monitoring functions have been carried out by insurance companies. Monitoring costs was considered their fiduciary obligation to their customers. The exercise of this fiduciary obligation kept premiums low, while increasing or maintaining the benefit levels. Risk (the assumption of losses generated by services costing more than the income received from premiums) was assumed by the insurance company and eventually passed to the customer or the payer. Today, risk is being transferred more and more to the provider. This transfer was started by the creation of DRGs, the main purpose of which was to transfer risk from payers (insurance companies, employers, state and federal government, etc.) to provider health care organizations (physician groups, individual practitioners, hospitals, clinics, etc.).     

The Role of Automatic Stabilizers in the U.S. Business Cycle

Most countries have automatic rules in their tax‐and‐transfer systems that are partly intended to stabilize economic fluctuations. This paper measures their effect on the dynamics of the business cycle. We put forward a model that merges the standard incomplete‐markets model of consumption and inequality with the new Keynesian model of nominal rigidities and business cycles, and that includes most of the main potential stabilizers in the U.S. data and the theoretical channels by which they may work. We find that the conventional argument that stabilizing disposable income will stabilize aggregate demand plays a negligible role in the dynamics of the business cycle, whereas tax‐and‐transfer programs that affect inequality and social insurance can have a larger effect on aggregate volatility. However, as currently designed, the set of stabilizers in place in the United States has had little effect on the volatility of aggregate output fluctuations or on their welfare costs despite stabilizing aggregate consumption. The stabilizers have a more important role when monetary policy is constrained by the zero lower bound, and they affect welfare significantly through the provision of social insurance.     

An Equilibrium Model of Health Insurance Provision and Wage Determination

We investigate the effect of employer‐provided health insurance on job mobility rates and economic welfare using a search, matching, and bargaining framework. In our model, health insurance coverage decisions are made in a cooperative manner that recognizes the productivity effects of health insurance as well as its nonpecuniary value to the employee. The resulting equilibrium is one in which not all employment matches are covered by health insurance, wages at jobs providing health insurance are larger (in a stochastic sense) than those at jobs without health insurance, and workers at jobs with health insurance are less likely to leave those jobs, even after conditioning on the wage rate. We estimate the model using the 1996 panel of the Survey of Income and Program Participation, and find that the employer‐provided health insurance system does not lead to any serious inefficiencies in mobility decisions.     

Flood Risk Management: Exploring the Impacts of the Community Rating System Program on Poverty and Income Inequality

Flooding remains a major problem for the United States, causing numerous deaths and damaging countless properties. To reduce the impact of flooding on communities, the U.S. government established the Community Rating System (CRS) in 1990 to reduce flood damages by incentivizing communities to engage in flood risk management initiatives that surpass those required by the National Flood Insurance Program. In return, communities enjoy discounted flood insurance premiums. Despite the fact that the CRS raises concerns about the potential for unevenly distributed impacts across different income groups, no study has examined the equity implications of the CRS. This study thus investigates the possibility of unintended consequences of the CRS by answering the question: What is the effect of the CRS on poverty and income inequality? Understanding the impacts of the CRS on poverty and income inequality is useful in fully assessing the unintended consequences of the CRS. The study estimates four fixed‐effects regression models using a panel data set of neighborhood‐level observations from 1970 to 2010. The results indicate that median incomes are lower in CRS communities, but rise in floodplains. Also, the CRS attracts poor residents, but relocates them away from floodplains. Additionally, the CRS attracts top earners, including in floodplains. Finally, the CRS encourages income inequality, but discourages income inequality in floodplains. A better understanding of these unintended consequences of the CRS on poverty and income inequality can help to improve the design and performance of the CRS and, ultimately, increase community resilience to flood disasters.     

The Impact of Mega‐Catastrophes on Insurers: An Exposure‐Based Analysis of the U.S. Homeowners’ Insurance Market

Insurance is a key risk‐sharing mechanism that protects citizens and governments from the losses caused by natural catastrophes. Given the increase in the frequency and intensity of natural catastrophes over recent years, this article analyzes the performance effects of mega‐catastrophes for U.S. insurance firms using a measure of market expectations. Specifically, we analyze the share price losses of insurance firms in response to catastrophe events to ascertain whether mega‐catastrophes significantly damage the performance of insurers and whether different types of mega‐catastrophes have different impacts. The main message from our analysis is that the impact of mega‐catastrophes on insurers has not been too damaging. While the exact impact of catastrophes depends on the nature of the event and the degree of competition within the relevant insurance market (less competition allows insurers to recoup catastrophe losses through adjustments to premiums), our overall results suggest that U.S. insurance firms can adequately manage the risks and costs of mega‐catastrophes. From a public policy perspective, our results show that insurance provides a robust means of sharing catastrophe losses to help reduce the financial consequences of a catastrophe event.     

开放经济中跨国公司的最优所得税模型

通过对不同避免双重征税方法下最优所得税模型的建立,解析了政府最优政策的收入函数,得到税收竞争均衡中的公司所得课税政策.对小型开放经济而言,在扣除法和抵免法,以及免税法与抵免法的不对称体系下,对跨国公司从源征收公司所得税都是最优选择.由此,得到不同于国际税收经典理论的结论.     

Residential Mortgages and Public Policy: What to do with Fannie and Freddie?

The current debate on U.S. housing policy focuses on the role of the government in supporting the mortgage market. Existing organizations (Fannie Mae/Freddie Mac) are in conservatorship status, and Congress is considering alternative structures and guarantees including the Johnson‐Crapo bill, to provide catastrophic insurance in support of the coverage from private companies. The resolution of this issue is complicated by the various activities involved in the issue—investment securities, public policy, macroeconomics, accounting, and insurance. This article reviews the impact of these activities on U.S. housing, with a discussion of the feasibility of creating a catastrophic insurance program similar to that of the Federal Deposit Insurance Corporation. The federal government has successfully operated catastrophic insurance programs in support of private sector initiatives, and this experience—while certainly not perfect—may be a reasonable approach to the current Fannie/Freddie dilemma.     

Female Labor Supply,Human Capital,and Welfare Reform

We estimate a dynamic model of employment, human capital accumulation—including education, and savings for women in the United Kingdom, exploiting tax and benefit reforms, and use it to analyze the effects of welfare policy. We find substantial elasticities for labor supply and particularly for lone mothers. Returns to experience, which are important in determining the longer‐term effects of policy, increase with education, but experience mainly accumulates when in full‐time employment. Tax credits are welfare improving in the U.K., increase lone‐mother labor supply and marginally reduce educational attainment, but the employment effects do not extend beyond the period of eligibility. Marginal increases in tax credits improve welfare more than equally costly increases in income support or tax cuts.     

Is the American health care delivery system ready for change?

In October 1992, the American College of Physician Executives sponsored a study tour to Berlin, Germany, and Amsterdam, Holland. Meetings were held with government officials, third-party payers, and providers, and on-site visits were made at hospitals, clinics, and academic centers. The purpose was to study the health care delivery system in those countries and to share some insights with the countries' hosts on the U.S. system. In a series of reports that began in the July issue of the journal, 5 of the 10 study tour participants describe their impressions of the tour and of the health care systems in the countries that were visited. In this final report, the implications of the German and Dutch systems for reform of the U.S. health care system are discussed.     

Paying More than Necessary? The Wage Cushion in Germany

In Germany, more than 40 per cent of plants covered by collective agreements pay wages above the level stipulated in the agreement, giving rise to a wage cushion between actual and contractual wages. Cross‐sectional and fixed‐effects estimations indicate that the wage cushion mainly varies with the profit situation of the plant and with indicators of labour shortage and the business cycle. Whereas plants bound by multi‐employer agreements seem to pay wage premiums in order to overcome the restrictions imposed by the rather centralized bargaining system in (western) Germany, plants that use single‐employer agreements are significantly less likely to have wage cushions.     

Rolling back third-party intrusions in the practice of medicine

Formerly vaunted projections about the triumph of managed care over the provider-controlled health services industry now appear overly optimistic as consumer and provider opposition stiffens. Popular dislike of managed care and purchaser disenchantment over its failure to deliver on promises to control health insurance spending have created a strategic opening for rolling back third-party interference in medical practice. Employer frustration over rising premiums, compounded by workers' antagonism toward benefits restrictions and worry over the loss of government protection against managed care litigation, signals a radical overhaul in the way health insurance is offered. For many employers, substituting defined contribution for defined benefit plans and transferring ownership rights and responsibilities to employees is an attractive solution. Along with the growth of consumer-friendly health plans and a relaxation of onerous managed care practices, physicians can look forward to a restored doctor-patient relationship. This article identifies the forces pushing health care purchasers to adopt defined contribution plans and discusses the implications of such a movement on the physician-patient relationship.     

OPTIMAL TAXATION WITH IMPERFECT COMPETITION AND AGGREGATE RETURNS TO SPECIALIZATION

In this article we explore the proposition that, in economies with imperfect competitive markets, the optimal capital income tax is negative and the optimal tax on firms' profits is confiscatory. We show that if the total factor productivity as well as the number of firms or varieties are endogenous instead of fixed, then the optimal fiscal policy can lead to different results. The government faces a trade‐off between the fixed costs that society pays for the introduction of a new firm and the productivity gains associated to the introduction of a new variety. We find that the optimal fiscal policy depends on the relationship between the index of market power, the returns to specialization, and the government's ability to control entry. (JEL: H21, H30, E62)     

Financial Health Economics

We provide a theoretical and empirical analysis of the link between financial and real health care markets. This link is important as financial returns drive investment in medical research and development (R&D), which, in turn, affects real spending growth. We document a “medical innovation premium” of 4–6% annually for equity returns of firms in the health care sector. We interpret this premium as compensating investors for government‐induced profit risk, and we provide supportive evidence for this hypothesis through company filings and abnormal return patterns surrounding threats of government intervention. We quantify the implications of the premium for the growth in real health care spending by calibrating our model to match historical trends, predicting the share of gross domestic product (GDP) devoted to health care to be 32% in the long run. Policies that had removed government risk would have led to more than a doubling of medical R&D and would have increased the current share of health care spending by more than 3% of GDP.     

Study tour examines health care systems in Germany, Holland--Part I: A comparison of three health care systems

In October 1992, the American College of Physician Executives sponsored a study tour to Berlin, Germany, and Amsterdam, Holland. Meetings were held with government officials, third-party payers, and providers, and onsite visits were made at hospitals, clinics, and academic centers. The purpose was to study the health care delivery system in those countries and to share some insights with the countries' hosts on the U.S. system. Beginning in this issue of the journal, 5 of the 10 study tour participants describe their impressions of the tour and of the health care systems in the countries that were visited. This first report compares the health care delivery systems of the United States, Germany, and Holland. In subsequent reports, the German and Dutch health care systems will be described in greater detail and the ability of the United States to adopt European health care systems will be assessed.     

Study tour examines health care systems in Germany, Holland--Part II: The German system

In October 1992, the American College of Physician Executives sponsored a study tour to Berlin, Germany, and Amsterdam, Holland. Meetings were held with government officials, third-party payers, and providers, and on-site visits were made at hospitals, clinics, and academic centers. The purpose was to study the health care delivery system in those countries and to share some insights with the countries' hosts on the U.S. system. In a series of reports that began in the July issue of the journal, 5 of the 10 study tour participants describe their impressions of the tour and of the health care systems in the countries that were visited. In the first report, the health care delivery systems of the United States, Germany, and Holland were compared. In this report, the German system is analyzed in greater detail.     

Eliminating smoking from the workplace

Employers are more readily realizing that a nonsmoking policy in the workplace is a more effective way to run their businesses. They are recognizing costs such as productivity losses, increased health and life insurance costs, employer liability for diseases jointly linked to smoking and occupational exposures, absenteeism, passive smoking-induced health care costs among nonsmokers, workers' compensation, and fire losses. Concomitantly, employees are supporting policies that limit smoking to achieve a clean air environment. Former Surgeon General Koop's goal of "a smokefree society by the year 2000" is being recognized by more and more segments of society.     

政府碳税与补贴政策对外包再制造影响研究

为分析政府碳税与补贴政策对外包再制造影响,基于政府两种政策构建了外包再制造下制造/再制造博弈模型。基于博弈模型,对比分析政府两种对策对外包再制造下最优解的影响,研究主要得到：政府补贴政策可以有效提高废旧产品回收率,但只有当单位新产品碳税额度只有大于某一阈值时,政府碳税政策才会提高废旧产品回收率;政府采取补贴政策时,原始制造商通过降低单位再制造产品外包费用来获取政府补贴;政府采取碳税政策时,原始制造商通过提高单位新产品零售价格,把部分碳税转移给消费者;政府补贴政策可以同时增加原始制造商和再制造商收益;政府碳税政策可以增加再制造商收益,但只有单位新产品碳税额度大于某一阈值时,才可以增加原始制造商收益;当单位新产品对环境造成影响一定,并且单位再制造产品对环境造成影响与单位新产品对环境造成影响之比大于某一阈值时,政府补贴政策对环境造成影响最大、政府碳税政策对环境造成影响最小。     

基于低碳视角的政府监管与制造商生产的演化博弈研究

政府制定的监管政策对制造商生产策略的选择具有重要影响。本文基于低碳视角，引入政府碳税系数、补贴系数、低碳产品生产成本等参数，针对税收与补贴混合政策、单一税收政策和单一补贴政策三种模式，分别建立了政府与制造商之间决策行为的演化博弈模型，对比分析了不同监管政策下政府和制造商达到均衡所需条件的差异，并进一步探讨了影响政府、制造商决策的关键因素。研究结果表明，当初始生产低碳产品的制造商比例相同时，政府实施混合政策比单一税收政策或补贴政策对制造商生产低碳产品的激励作用更加明显。政府监管与政府低碳税收、高碳产品罚款和监管成本有关，制造商生产低碳产品受到产品成本、收益的影响。研究结论不仅为政府制定低碳产品政策提供了科学依据，也为制造商选择低碳产品策略给予了决策支撑。