Other Good Ideas Nobody is Voting For/Against


Chris Dierkes

Chris Dierkes (aka CJ Smith). 29 years old, happily married, adroit purveyor and voracious student of all kinds of information, theories, methods of inquiry, and forms of practice. Studying to be a priest in the Anglican Church in Canada. Main interests: military theory, diplomacy, foreign affairs, medieval history, religion & politics (esp. Islam and Christianity), and political grand bargains of all shapes and sizes.

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8 Responses

  1. Avatar pain perdu says:

    To address the pricing power of the big hospital chains, the government could require that they offer the same set of prices to all private insurers.

    This is likely to be disastrous as policy.

    First, it will fail as a method of cost control. If you force providers to offer the same pricing to small insurers that bring them little in the way of economic benefit (predictable volumes) and lots of additional complexity costs, the lowest prices will tend to drift higher to cover the additional cost.

    But that’s the minor point. The major point is that you eliminate one of the two major incentives for the formation of larger risk pools (the other being scale benefits on admin costs). Under this proposal, any fly-by-night, extreme cherry-picker can free-ride on the negotiating strength of larger issuers.Report

    • Avatar Chris Dierkes says:

      good point. maybe I misread him but I thought in context he was describing more high-risk/high-cost kinds of treatments. Maybe I made that up in my mind to make it sound like a potentially better idea.Report

    • Avatar Chris Dierkes says:

      thinking about it so more, it’s part of the anti-trust theme of his piece. It’s anti-monopolistic. I don’t know if that changes the criticism. It would seem to achieve that goal (busting of trusts) but I wonder if something else would be needed to deal with the potential downsides of the idea.Report

      • Avatar pain perdu says:

        It’s anti-monopolistic.

        Right. I sympathize with where Pearlstein is coming from, and I credit him with being a good faith participant in the whole health care debate. But it think he’s barking up the wrong tree with his concerns about monopoly. The root of increasing per patient costs is not monopoly power per se, but the structural incentives in the way that care is provided and paid for. Just pushing the cost pressure down onto hospitals is unlikely to change that. In our current system of fee-for-service medicine and fragmented payers, there are very weak systematic incentives to manage patient care in ways that promote good outcomes at low costs. The insurer has such an incentive in theory, but in practice it’s easier to just try to avoid responsibility for payment or avoid issuing the policy in the first place. To be fair, there are examples of insurers in the large group market successfully improving the management of chronic conditions , but even then the incentives are weak because contracts for large group coverage turn over so often (and for that matter they are usually third-party administration contracts where the actual casualty risk is borne by the employer).Report

  2. Avatar Jaybird says:

    I’ve never understood the argument that other countries threaten pharma companies with stealing their intellectual property if they don’t agree to sell drugs at cost-plus. Would it not be possible for pharma companies to then say “fine, nobody respects anybody’s patents anymore, hurray” and then start making all sorts of stuff from the other countries’ IP?Report

    • Avatar Chris Dierkes says:

      i suppose although that doesn’t sound like good business practice and it would end up in WTO (and WTF for that matter) legislation.Report

  3. Avatar greginak says:

    Boy the post has far more then its share of The Stupid. Equating a false, slanderous lie with a hotly debated policy proposal. Brilliant. I may not survive this health care debate.Report

    • Avatar Chris Dierkes says:

      like i said that part was uber-stupid. someone could try to make a legitimate argument that public option is not the best policy or not sell-able politically in the Congress. But that it’s the same as the death panel stuff is quite ignorant.Report