Healthcare markets

FTC Microeconomics Conference Features Paper by Daniel Arnold

Daniel Arnold and Christopher Whaley’s paper, “Who Pays for Health Care Costs? The Effects of Health Care Prices on Wages“, was presented at the Thirteenth Annual FTC Microeconomics Conference. It explores the relationship between rising health care costs and slower wage growth for employer-sponsored insurance.

Using hospital market structure and price assessed for Metropolitan Statistical Areas, they find hospital mergers lead to a $521 increase in hospital prices, a $579 increase in mean hospital spending, and a $638 reduction in wages. The results support that hospital mergers affect consumers through lower wages. Both the direct cost of medical care and the indirect cost to wages and should be considered in health care reforms.

Hear Chris Whaley present the paper on Day 1 (PM) of the conference.

Milbank Quarterly Opinion Publishes Article “Why the Biden Administration Should Help States Develop Capitated Public Options”

Richard Scheffler and Thomas Price examine The Biden Administration’s path for implementing public option and states’ successes in using “quasi-public options”. Given potential political difficulty in passing national legislation, they identify key states that may enact public option programs. Risk-based capitation may product higher quality outcomes as a payment model.