Code Red: Two Economists Examine the U.S. Healthcare System

January 3, 2012

New Year Predictions

Filed under: Uncategorized — David Dranove and Craig Garthwaite (from Oct 11, 2013) @ 4:05 pm

As the New Year begins, I look forward to reading and commenting on the latest developments in health economics. I thought I would start by making a few predictions:

1) With the economy on a slow but steady road to recovery, Republicans will resurrect health reform as a key issue in the fall election. They run a controversial ad showing a patient named Debbie getting diagnosed by her iPhone’s Siri. In response, Democrats show Debbie filing for bankruptcy because her insurance refused to pay for Siri’s consultation fee.

2) The Supreme Court will uphold the purchase mandate in the Affordable Care Act. Lobbyists for every major industry flood Congress with requests for more purchase mandates.

3) Healthcare continues to be a bright spot in a sluggish labor market. As a way to simultaneously address persistent unemployment and the growing needs of the elderly, Nancy Pelosi proposes a new law mandating that all baby boomers purchase a caregiver for their parents.

4) CMS will release new revised rules for ACOs. The new rules discourage ACOs from only covering patients in good health by reducing reimbursements for patients who are able to lift the new 1200 page ACO rulebook.

5) After eight seasons, Hugh Laurie announces that he is leaving House. Princeton-Plansboro Hospital’s malpractice premiums fall by 50 percent.

6) In the latest deficit reduction agreement, Congress proposes to cut Medicare payments to physicians by 20 percent. Interim CMS director Hugh Laurie announces that unlike the previous seven announced reductions, this one will not be rescinded.

7) CMS introduces 60 new quality guidelines for the treatment of ear infections. The guidelines are so simple that young children are almost able to treat themselves. But few are willing to do so, because the reimbursement rates are so low.

8) Healthcare spending will slow down to a rate of inflation not seen since the 1990s. Republicans will claim that this proves that competitive health care markets can reduce costs. Democrats will point out that per capita spending in the U.S. is still double that in Canada and Europe. Health economists will search in vain to find competitive health care markets.

Happy New Year!

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