US health spending and global burden of disease

I want to thank Veronica Vargas for sending me the following link from the Institute for Health Metrics and Evaluation (IHME) , which features innovative ways of displaying different cuts of US and international data from a massive data files. Viewing this site will perhaps take you fifteen minutes or more to get a feel. It is staffed by the University of Washington, but appears to be funded largely by the Gates Foundation. It has been around for a while, but they are making a big push on its features this fall.

The first link decomposes spending in the US by  disease, by broad type of service (pharmacy, IP, OP, Dentist, ER).

They document the well-known result that about half of the US increase is due to price increases, not intensity or illness, although aging and pop growth contribute.US costs are higher than the rest of the world largely because our prices paid for all types of care are much higher than elsewhere. And increasingly so.

 

Here is a direct link to the interesting interactive figures. Try the four different tabs across the top if you are curious. (Is a little slow on my wireless laptop.)

https://vizhub.healthdata.org/dex/

It allows you to drill down to questions such as how much was spent on individual disease for certain ages, on emergency department.

If you click on “visualizations“ in the upper right, you get different views that can be plotted, which are very extensive.

Or start here http://www.healthdata.org/results/data-visualizations

 

Below is a link to the article originally posted, along with a sample figure.

 

Factors associated with increases in US health care spending, 1996–2013

Here is one that lets you choose one or compare two or more countries disease burdens along multiple dimensions.

https://vizhub.healthdata.org/gbd-compare/

The say that their mission includes sharing data for researchers. Here is a link to various data that they support and document with a nice search tool.

http://ghdx.healthdata.org/data-by-type

 

Global Burden of Disease module lets you answer questions as specific as how many people die of air pollution in India in 2013.

Here is how they describe it.

September 14, 2017

GBD Compare

Data Visualization

Learn more

Analyze updated data about the world’s health levels and trends from 1990 to 2016 in this interactive tool. Use treemaps, maps, arrow diagrams, and other charts to compare causes and risks within a country, compare countries with regions or the world, and explore patterns and trends by country, age, and gender. Drill from a global view into specific details. Compare expected and observed trends. Watch how disease patterns have changed over time. See which causes of death and disability are having more impact and which are waning.

This is not a site oriented toward hypothesis testing, although it does include confidence intervals on many estimates (which seem to only reflect sampling precision, not other sources of uncertainty such as the quality of the underlying data.) For me, the main use will be in writing in the introduction of a paper so as to summarize how large a problem is, or how many people have a given condition, or how it is growing etc. The international breadth is stunning. At a different level, it is a good example of how big data can be manipulated using “cubes” and different cuts of the data to show fascinating patterns (girls less than 1 year cost $11,000 each on average, which drops to $1,600 age 5-9, and it is not until age 65 in the US that female mean cost is again over $11,000. It peaks at $31,000 per year over age 85.)

 

Be forewarned: you can spend a lot of time playing around…

 

 

The quintessential challenge of our time

“…the quintessential challenge of our time: the ascendance of belief over fact, outrage over thoughtful debate, and the accessibility of an endless supply of “information” that confirms our preexisting beliefs, whatever they may be. In a sociopolitical climate in which disgust often substitutes for disagreement, many people recognize the futility of using evidence to establish common ground, but few seem to know what to do about it.”

 

From Lisa Rosenbaum, M.D. Understanding the Planned Parenthood Divide — Albert Lasker and Women’s Health

New England Journal of Medicine, November 1, 2017DOI: 10.1056/NEJMp1713518

BU to be well represented at the ASSA 2018 annual meetings

Dear BU colleagues, students, alumni, and friends,

Even though I am just beginning my sabbatical, I thought I would do this tabulation from the preliminary program of the ASSA (Allied Social Science Association) annual meetings which will be in Philadelphia January 5-7, which is linked here.  .

I apologize for any names that I have inadvertently missed, but creating this list requires looking through 11,000 names of authors, chairs and discussants for familiar names, and sometimes checking their affiliations. If you send corrections to me, I will correct them on my blog which is linked here.

BU will not quite set a record for presence at the 2018 ASSA (commonly called simply the AEA American Economics Association) meetings with BU faculty, students or alumni names appearing 71 times.  The last time I counted was for the 2015 ASSA meetings, which were held in Boston, and BU had 83 appearances, but with a home field  advantage.

 

Of those 71 appearances there are

43 presenters or coauthors (ASSA does not differentiate them in the program)

18 discussants

10 session chairs.

 

Of those 71 appearances,

34 are by CAS Economics Department faculty (20 distinct names – two more than the Boston ASSA!)

14 are by Questrom School of Business faculty (6 distinct names)

22 are by current or former BU students. (20 distinct names)

 

The busiest participant this year will be our new associate professor Tarek Hassan, with four papers presented and one session chaired. This impressive activity spearheads the remarkable ten appearances from the five new BU faculty joining us in Economics this fall. Others who will be busy with three appearances each include Kevin Lang, Robert Margo, Pascual Restrepo.

Join me in congratulating our busiest scholars who are presenting (or coauthored a presentation), chairing and discussing at the ASSA in January. There will be a BU reception on Saturday evening as usual – look for announcements in the fall for the time and room.

A detailed list of papers and names that may help with planning your travel, learning what your colleagues are up to or making corrections are below. They are sorted chronologically by time.

It is not too early to begin planning which paper you want to present at the ASSA 2019 (Atlanta).

 

Here are the details

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Liberty Ballroom Salon A

Forecasting Economic Activity With Yelp Data

Michael Luca, Harvard Business School View Abstract

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Grand Ballroom Salon C

The Role of Countercyclical Fiscal Policy in a Low r* World

Alisdair Mckay, Boston University View Abstract

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 104-A

Trade in Unhealthy Foods and Obesity: Evidence From Mexico

Osea Giuntella, University of Pittsburgh View Abstract

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 306

Issues in Development 

Discussant(s) Silvia Prina, Case Western Reserve University

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 112-A

Surviving the Great Depression: Firms, Workers, and Banks

Discussant(s) Robert Margo, Boston University

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Grand Ballroom Salon J

Discussant(s) James Rebitzer, Boston University

How Important Is Price Variation Between Health Insurers?

Keith Ericson, Boston University, View Abstract

How Does Hospital-physician Integration Affect Hospital Prices?

Haizhen Lin, Indiana University View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 105-A

Automation

Chair: Pascual Restrepo, Boston University

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 111-A

Household Diversification: The Vehicle Portfolio Effect

David Rapson, University of California-Davis View Abstract

Mind the Gap! Tax Incentives and Incentives for Manipulating Fuel Efficiency in the Automobile Industry

Shinsuke Tanaka, Tufts University View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 104-B

The Demise of the Treaty of Detroit and (Dis)inflation Dynamics

Jae Sim, Federal Reserve Board View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 104-A

Sectoral Wage Gaps and the Returns to Migration

Discussant(s) Samuel Bazzi, Boston University

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 109-A

Migrants, Ancestors, and Foreign Investments

Tarek A. Hassan, Boston University, NBER, and CEPR View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Loews Philadelphia, Commonwealth Hall D

Misvaluation of Investment Options

Evgeny Lyandres, Boston University View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Grand Ballroom Salon J

Screening in Contract Design: Evidence From the ACA Health Insurance Exchanges

Timothy Layton, Harvard University View Abstract

 

Friday, Jan. 5, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 202-B

Domestic Outsourcing of Labor Services in the United States: 1996-2015

Johannes F. Schmieder, Boston University View Abstract

 

Friday, Jan. 5, 2018 2:30 PM – 4:30 PM Marriott Philadelphia Downtown, Grand Ballroom Salon F

Automation and Jobs: When Technology Boosts Employment

James Bessen, Boston University View Abstract

 

Friday, Jan. 5, 2018 2:30 PM – 4:30 PM Pennsylvania Convention Center, 104-A

The Provision and Valuation of Non-wage Job Attributes

Chair: Kevin Lang, Boston University

Discussant(s) Kevin Lang, Boston University

 

Friday, Jan. 5, 2018 2:30 PM – 4:30 PM Loews Philadelphia, Regency Ballroom C1

Macro Finance

Discussant(s)  Simon Gilchrist, Boston University (now NYU!)

 

Friday, Jan. 5, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 202-B

Right to Work and Small “d” Democracy

James Feigenbaum, Princeton University (now at BU) View Abstract

 

Friday, Jan. 5, 2018 2:30 PM – 4:30 PM Pennsylvania Convention Center, 203-A

Missing Bids

Juan Ortner, Boston University View Abstract

The Competitive Effects of Information Sharing

Jihye Jeon, Boston University  View Abstract

 

Friday, Jan. 5, 2018 2:30 PM – 4:30 PM Loews Philadelphia, Adams

The Importance of Deposit Insurance Credibility

Joao Santos, Federal Reserve Bank of New York View Abstract

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 201-A

Housing Wealth Effects: The Long View

Alisdair McKay, Boston University View Abstract

Adam Guren, Boston University View Abstract

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 112-A

Monetary Policy and Financial Intermediation

Chair: Simon Gilchrist, Boston University

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Grand Ballroom Salon A

Noncompete Agreements

Chair: Michael Lipsitz, Boston University

Restricting Mobility to Extract Surplus: Why Low-wage Workers are Signing Noncompete Agreements

Michael Lipsitz, Boston University View Abstract

Matthew S. Johnson, Duke University View Abstract

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 308

Whither the Future of Economic History?

Chair: Robert Margo, Boston University

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 405

Firm Responses to Incentives and Regulation

Discussant(s) Marc Rysman, Boston University

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 409

Trade, Multinationals, and Firm Dynamics

Chair: Stefania Garetto, Boston University

Becoming a Multinational: An Analysis of Market Access and Risk Through Mergers

Stefania Garetto, Boston University View Abstract

 

Saturday, Jan. 6, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Grand Ballroom Salon J

Coordination Within Teams and The Cost of Health Care

Keith Ericson, Boston University View Abstract

Benjamin Lupin, Boston University  View Abstract

James Rebitzer, Boston University View Abstract

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Pennsylvania Convention Center, 202-A

Economics of Voting

Chair: Steven Sprick Schuster, Colgate University

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Grand Ballroom Salon J

Gender in the Workplace

Discussant(s) Kevin Lang, Boston University

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Loews Philadelphia, Regency Ballroom C1

Currency Manipulation

Tarek A. Hassan, Boston University, NBER, and CEPR View Abstract

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Loews Philadelphia, Commonwealth Hall A2

Sex, Race and Finance

Discussants(s) Shulamit Kahn, Boston University

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Meeting Room 414

Network and Panel Quantile Effects Via Distribution Regression

Ivan Fernandez-Val, Boston University View Abstract

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Meeting Room 415

Local Labor Markets and Human Capital Investments

Russell Weinstein, Rensselaer Polytechnic Institute View Abstract

 

Saturday, Jan. 6, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Meeting Room 305

Technology and Jobs in the Long Run

James Bessen, Boston University View Abstract

 

Saturday, Jan. 6, 2018 12:30 PM – 2:15 PM Pennsylvania Convention Center, 203-B

Economic Growth and Banking Credit in India

Subhash Pemmaraju, Boston University View Abstract

 

 

Saturday, Jan. 6, 2018 12:30 PM – 2:15 PM Marriott Philadelphia Downtown, Grand Ballroom Salon C

Recent Studies in Applied Microeconomics

Discussant(s) Jihye Jeon, Boston University

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Marriott Philadelphia Downtown, Meeting Room 308

CSMGEP Dissertation Session

Discussant(s) Robert Margo, Boston University

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Marriott Philadelphia Downtown, Grand Ballroom Salon E

Demographics and Robots

Pascual Restrepo, Massachusetts Institute of Technology (now at BU) View Abstract

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Pennsylvania Convention Center, 202-B

Foreign STEM Students and Immigration Policy

Chair: Shulamit Kahn, Boston University

Explaining the Place Premium in STEM Careers

Shulamit Kahn, Boston University View Abstract

Megan MacGarvie, Boston University and NBER View Abstract

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Pennsylvania Convention Center, 107-B

Childhood Exposure to Armed Conflict and Attitudes Toward Domestic Violence

Giulia La Mattina, University of South Florida View Abstract

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Pennsylvania Convention Center, 105-A

Policy Implications of Suboptimal Choice: Theory and Evidence

Discussant(s) Keith Ericson, Boston University

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Marriott Philadelphia Downtown, Meeting Room 414

Market Microstructure

Discussant(s) Juan Ortner, Boston University

 

Saturday, Jan. 6, 2018 2:30 PM – 4:30 PM Marriott Philadelphia Downtown, Meeting Room 406

Predicting Outcomes in Games: New Directions

Discussant(s) Bart Lipman, Boston University

 

Sunday, Jan. 7, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Grand Ballroom Salon E

The Race between Machine and Man: Implications of Technology for Employment, Factor Shares and Growth

Pascual Restrepo, Massachusetts Institute of Technology View Abstract

 

Sunday, Jan. 7, 2018 8:00 AM – 10:00 AM Pennsylvania Convention Center, 204-C

Political Risk: Origins, Measurement, and Effects

Chair: Tarek A. Hassan, Boston University, NBER, and CEPR

Discussant(s) Stephen Terry, Boston University

Firm-level Political Risk: Measurement and Effects

Tarek A. Hassan, Boston University, NBER, and CEPR View Abstract

 

Sunday, Jan. 7, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 309

Changes in Marriage and Divorce as Drivers of Employment and Retirement of Older Women

Dana Rotz, Mathematica View Abstract

 

Sunday, Jan. 7, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 410

Estimation and Inference with a (Nearly) Singular Jacobian

Adam McCloskey, Brown University View Abstract

 

Sunday, Jan. 7, 2018 8:00 AM – 10:00 AM Marriott Philadelphia Downtown, Meeting Room 415

Top Income Inequality

Discussant(s) Johannes F. Schmieder, Boston University

 

Sunday, Jan. 7, 2018 10:15 AM – 12:15 PM Marriott Philadelphia Downtown, Meeting Room 309

Sovereign Default

Discussant(s)Tamon Asonuma, International Monetary Fund

Sovereign Bond Prices, Haircuts and Maturity

Tamon Asonuma, International Monetary Fund View Abstract

 

Sunday, Jan. 7, 2018 10:15 AM – 12:15 PM Loews Philadelphia, Commonwealth Hall C

Firm Selection and Corporate Cash Holdings

Berardino Palazzo, Boston University View Abstract

 

Sunday, Jan. 7, 2018 10:15 AM – 12:15 PM Loews Philadelphia, Commonwealth Hall A2

What Do Insiders Know? Evidence From Insider Trading Around Share Repurchases and SEOs

Evgeny Lyandres, Boston University View Abstract

 

Sunday, Jan. 7, 2018 1:00 PM – 3:00 PM Pennsylvania Convention Center, 104-B

African Leaders, Longevity, Policies, and Impacts

Discussant(s) Kehinde Ajayi, Boston University

 

Sunday, Jan. 7, 2018 1:00 PM – 3:00 PM Pennsylvania Convention Center, 104-A

Vertical Integration in the Health Care Market

Chair: Haizhen Lin, Indiana University

What Came First – Loyalty or Integration? A Look at the Motivation for Hospital-physician Alignment

Haizhen Lin, Indiana University and NBER View Abstract

 

Sunday, Jan. 7, 2018 1:00 PM – 3:00 PM Marriott Philadelphia Downtown, Meeting Room 410

Robust Likelihood-ratio Tests for Incomplete Economic Models

Hiroaki Kaido, Boston University View Abstract

Yi Zhang, Boston University View Abstract

 

 

ACA premiums are reasonable, grew modestly in 2016, and risk scores are stable.

Here are the results from CMS reports from June 30, 2017 and 2016:

2016 National average premium in the ACA Marketplace: $414.54 (CMS, 2017, page 9.)

This is less than the (employee plus employer) premiums offered where I work. This number includes the cost of the subsidies that are not paid by the enrollee.

2015 to 2016 Percentage changes in enrollment weighted monthly premium for ACA Marketplace plans:

  • 7.4% change in Individual market
  • 2.0 % small group market
  • 0.9 % change in catastrophic plans
  • 5.8 % change in national average ACA premiums

(Sources:  CMS, 2017, Table 3 and CMS 2016, Table 3.

The high growth rates that have been featured in the media are not representative of changes in the averages, or are distorted by calculations using only the consumer share of premiums, which are often heavily subsidized.

“Risk scores were stable in the individual market and decreased by 4 percent in the small group market.“  CMS, 2017, page 5.

There was no evidence of a death spiral nationally, or that the exchanges are unsustainable nationwide, even if some states are in trouble because they did not allow the Medicaid expansion or promote the exchange.

Sources:

Summary Report on Transitional Reinsurance Payments – CMS.gov

https://www.cms.gov/CCIIO/…/Summary-Reinsurance-Payments-Risk-2016.pdf

https://www.cms.gov/…/June-30-2016-RA-and-RI-Summary-Report-5CR-063016.pdf

Instead of the national averages, the media has generally been discussing outliers. Plus this data shows that the average health status in the plans was stable, not exploding last year. There is no evidence nationally of a death spiral.

These national average monthly premiums ($414) are lower than the total premiums for single coverage plans offered at Boston Unviersity (currently $636 and $599 for employer+employee contributions).

The following July 21 2017 report from the Wakely Consulting Group ( a consulting firm) is the most up to date analysis  I have seen.

A Preliminary Analysis of the 2016 Summary of ACA Risk Adjustment Transfers and Reinsurance Payments

ACA versus GOP plans side-by-side

This article from the LA Times by columnist Noam Levey links an update on earlier postings online that does a side-by-side comparison of ACA versus the GOP’s replacement AHCA plan. That posting provides the best concise overview I have seen of the latest GOP AHCA proposal. It will take 10 minutes to review/read. Randy

Here is the comparison

http://www.latimes.com/projects/la-na-pol-obamacare-repeal/

 

Here is the new article, which features specific effects.

http://www.latimes.com/la-na-pol-obamacare-repeal-chaos-20170625-story.html

 

From: Levey, Noam [mailto:Noam.Levey@latimes.com]
Sent: Sunday, June 25, 2017 9:44 PM
To: Levey, Noam
Subject: ICYMI: New article on the disruptive impact of the Senate repeal bill

Good day,

In case you missed it, I wanted to share my latest piece examining the potentially devastating impact of the recently released Senate legislation to roll back the Affordable Care Act.

The Republican architects of the bill, like their House counterparts, hail their legislation as a remedy for ills caused by the current law. But across the country, in physicians’ offices and medical centers, in state capitols and corporate offices, there is widespread fear the unprecedented cuts in the GOP bills would create even larger problems in the U.S. healthcare system, threatening to not only strip health coverage from millions, but also upend insurance markets, cripple state budgets and drive medical clinics and hospitals to the breaking point. As Tom Tom Priselac, chief executive of Cedars Sinai Health System in Los Angeles, told me: “These reductions are going to wreak havoc.”

Here is the link: http://www.latimes.com/la-na-pol-obamacare-repeal-chaos-20170625-story.html

I hope you find the piece interesting. Thank you, as always, for reading. All best,

-N

Noam N. Levey

National healthcare reporter

Los Angeles Times Washington Bureau

Tel: 202-824-8317

Cell: 202-247-0811

noam.levey@latimes.com

twitter: @NoamLevey

Performance Timer is excellent App

I was at a conference last week and learned about a terrific timer for my iPhone called Performance Timer. It counts down your specified time, and then changes from green to red as you go over.

What makes it superior to the default iPhone timer is its large font, there is no alarm when time is up, and your screen never goes blank, so you can read it for your entire talk. Really easy interface for the stressful time that you are setting it up. Or, if you are the timekeeper for someone else, they will be able to read it from 20 feet.

It is free in the Apple App store.  I looked but did not find the Android version.

Here is a review from the web.

Performance Timer on the App Store – iTunes – Apple

https://itunes.apple.com/us/app/performance-timer/id957648886?mt=8

Rating: 5 – ‎9 reviews – ‎Free – ‎iOS – ‎Utilities/Tools

Description

Performance Timer is a large-display countdown timer developed to be used to monitor the time remaining in a performance, presentation, etc. Performance Timer does not sound an alarm when the time runs out. Rather, when the timer reaches zero, the numbers turn red and the timer starts counting up so that you can see how long you’ve gone over your target time. The time can be set from 1 to 99 minutes.

Excellent articles about machine learning and replication

There is a wonderful article about Machine learning in the spring 2017 issue of the Journal of Economic Perspectives, and there is also a series of four fine articles in the AER May 2017. I decided to share as a BUHealth blog to all.

Whether you are curious, newly interested or an expert working in the area, I recommend the JEP one to you. The AER series is for more serious work. Here are the links (They should all be free to access, since they are all at the AEA.) Also see below for links on replication.

Machine Learning: An Applied Econometric Approach

Download Full Text PDF
(Complimentary)

 

Machine Learning in Econometrics (May, 2017)

Double/Debiased/Neyman Machine Learning of Treatment Effects

Victor Chernozhukov, Denis Chetverikov, Mert Demirer, Esther Duflo, Christian Hansen and Whitney Newey

(pp. 261-65)

Testing-Based Forward Model Selection

Damian Kozbur

(pp. 266-69)

Core Determining Class and Inequality Selection

Ye Luo and Hai Wang

(pp. 274-77)

Estimating Average Treatment Effects: Supplementary Analyses and Remaining Challenges

Susan Athey, Guido Imbens, Thai Pham and Stefan Wager

(pp. 278-81)

 

The series in the AER on Replication in microeconomics will also be of interest.  This article title speaks for itself.

A Preanalysis Plan to Replicate Sixty Economics Research Papers That Worked Half of the Time

Replication in Microeconomics

Assessing the Rate of Replication in Economics

James Berry, Lucas C. Coffman, Douglas Hanley, Rania Gihleb and Alistair J. Wilson

(pp. 27-31)

Replications in Development Economics

Sandip Sukhtankar

(pp. 32-36)

Replication in Labor Economics: Evidence from Data, and What It Suggests

Daniel S. Hamermesh

(pp. 37-40)

A Proposal to Organize and Promote Replications

Lucas C. Coffman, Muriel Niederle and Alistair J. Wilson

(pp. 41-45)

Replication and Ethics in Economics: Thirty Years after Dewald, Thursby, and Anderson

What Is Meant by “Replication” and Why Does It Encounter Resistance in Economics?

Maren Duvendack, Richard Palmer-Jones and W. Robert Reed

(pp. 46-51)

Replication and Economics Journal Policies

Jan H. Höffler

(pp. 52-55)

Replication, Meta-analysis, and Research Synthesis in Economics

Richard G. Anderson and Areerat Kichkha

(pp. 56-59)

A Preanalysis Plan to Replicate Sixty Economics Research Papers That Worked Half of the Time

Andrew C. Chang and Phillip Li

(pp. 60-64)

 

 

Congratulations to BU’s Class of 2017 Economics graduates!

Please celebrate the students who earned 556 degrees in Economics at Commencement this May!

This year the program honors:

14 Ph.D. recipients

215 Master’s degree recipients (MA, MAPE, MAEP, MAGDE MA/MBA, BA/MA)

327 BA recipients (including BA/MA)

This total of 556 degrees is up from 498  (12%) since 2016.

These numbers may undercount the total for the year since they may exclude some students who graduated in January.

In 2017 there were 14 PhDs, 215 Master’s degree recipients, and 327 BA recipients

In 2016 there were 22 PhDs, 203 Master’s degree recipients, and 273 BA recipients

In 2015 there were 22 PhDs, 155 Master’s degree recipients, and 305 BA recipients.

In 2014 there were 17 PhDs, 207 Master’s degree recipients, and 256 BA recipients.

Altogether 13 Ph.D. students obtained jobs this year (versus 24 last year).

To see the Ph.D. placements visit the web site linked here.

http://www.bu.edu/econ/gradprgms/phd/placements/

The department’s  website now lists 39 regular faculty (up one from last year) with titles of assistant, associate or full professors, a number which is one below the number of professors in 2012 (five years ago) listed on the commencement programs. Here are the recent counts of faculty.

2017: 39 tenured or tenure-track faculty, of which 3 are women (8%); 12 non-TT faculty, of which 3 are women (25%); 51 total faculty, of which 6 are women (12%)

2016: 38 tenured or tenure-track faculty, of which 5 are women (8%);  7 non-TT faculty, of which 1 are women (14%); 47 total faculty, of which 6 are women (12%)

2015: 40 tenured or tenure-track faculty, of which 5 are women (12%); 7 non-TT faculty, of which 2 are women (29%); 47 total faculty, of which 7 are women (15%)

2014: 41 tenured or tenure-track faculty, of which 6 are women (15%); 4 non-TT faculty, of which 1 is a woman (25%); 45 total faculty, of which 7 are women (16%)

http://www.bu.edu/econ/faculty-staff/faculty-profiles/

Congratulations to all!

Let the Children and Grandchildren Pay (More)

This blog revisits a posting from four years ago, in a series on Time to Change the Tax Discussion.

Whenever Congress (federal or state) proposes legislation that cuts taxes or increases net spending so that our national debt will increase, they should have to end every statement about why they favor their proposal with …

Because I want our children and grandchildren to pay for it.

Even if congress or the executive branch won’t say this, that is what they are doing.

The US House yesterday passed the American Health Care Act (AHCA) bill by a narrow margin that dramatically cuts taxes on the wealthy and raises burdens on the poor without even waiting for the CBO or others to calculate the impact on our total budget of this new trillion dollar proposal. The earlier AHCA bill was scored by the CBO as reducing the federal deficit, but doing so in a very painful, unfair way.

Since I have also urged people to think of bills in terms of their cost per household, not just in terms of billions and trillions of dollars, I present the numbers here as costs per US household (all 125 million of them).

The March 13, 2017 CBO scoring of the previous, kinder, version of the AHCA projected that the bill would cut taxes in the amount of $900 billion over ten years, which is $7200 per US household. This is a huge wealth transfer, the majority of which go to the wealthy. The CBO cites Urban Institute researchers in their estimate that 70.6% of the tax cuts go to the 6% of households with incomes over $200,000. These cuts largely arise from eliminating the Medicare payroll tax rate for high-income taxpayers, the surtax on those taxpayers’ net investment income, and the annual fees imposed on health insurers. These tax cuts have virtually no effect on health care spending or the delivery system, but are a give-away to high income Americans, imposing burdens on our children and grandchildren. They are the preamble to the much larger tax cuts that president Trump proposed on April 26 in his one-page tax cut “proposal”, which is a simplified version of his campaign proposal in 2015. Both tax cuts greatly increase the national debt by tens of thousands of dollars per household, yet have arguably received less attention in the media than the $2 per household cut in the Planned Parenthood budget (CBO, 2017 AHCA report, Table 2).

Offsetting these large tax cuts, the March 13 CBO rating of the AHCA projects that it will cut direct spending by $1,219 billion ($9,752 per household) over ten years. Unlike the tax cuts, which favor the wealthy, the spending cuts impact disproportionately the poor, the sick, and the old. The Urban Institute estimates that almost 77 percent of the federal funding losses come from families learning less than $30,000. So the bottom 36 percent of households is sacrificing $1000 of health support so that the top 6 percent of households can save an average of roughly $6,000 each.

Unlike the tax cuts for the wealthy, which will mostly increase savings and wealth, spending cuts on the poor directly affects their consumption spending, debt, and spending. The AHCA spending cuts will directly affect children since nearly half of them are close to poverty. We are not talking about making future children pay, but today’s children.

The following figure, based on data in the CBO report on the AHCA, show how different the tax cuts are from the benefit decreases. the forecast was made by the Urban Institute for 2022, hence reflects the fully phased in impact of the changes.

The AHCA is being sold to the public as promoting growth (implausible when it comes out of current consumption), lowering premiums (the opposite of the CBO projections), and avoiding the “catastrophe of the ACA” (not the consensus view).  Cutting the ACA subsidies and protections will force many not to buy health insurance, or to pay much more for their health care if they do. How can this stimulate the economy?

Taxes will never be attractive, but why should we LET THE CHILDREN AND GRANDCHILDREN PAY?

Economist article about end of life planning

One of my students today just sent me this link to an article in this week’s Economist about end-of-life planning.

How to have a better death

http://www.economist.com/news/leaders/21721371-death-inevitable-bad-death-not-how-have-better-death

It led me to also view its link about conversations about serious illness by one of my favorite authors.

“Serious Illness Conversation Guide” drawn up by Atul Gawande

I also found these slides targeting providers informative as well.

Using the Serious Illness Conversation Guide – HealthInsight

I found it informative that CMS (Medicare) created two new Advance Care Planning (ACP) codes. It will be interesting to see how often they are used.

Two new codes created in 2015, allowed for payment by Medicare in 2016.

  • 99497 ACP 30 minutes $85.99
  • 99498 ACP additional 30 minutes $74.88

CPT describes eligible services as being performed by a physician or “other qualified health professional” which means a physician, NP or PA.

We could save a lot of money and improve happiness and quality of life if more doctors, nurses, families and patients talked about these issues.

 

#stupideconomics and Healthcare Triage on the AHCA

Two interesting links related to the recent Republican health care proposal called the AHCA.

The first is a serious but also humorous Forbes article by my BU colleague Larry Kotlikoff in his series about Stupid Economics, this one targeting Tom Price and the AHCA bill. (A 3-minute read.)

Tom Price’s Liver And ‘The Coverage They Want’

The second is an excellent Youtube summary of the CBO forecasts (called “scoring”) of the effects of the AHCA by pediatrician Aaron Carroll.

Healthcare Triage: Results Are In! Congressional Budget Office Scores the American Health Care Act

Posted: 17 Mar 2017 06:09 AM PDT  Text of the report here.

(Broadcast is eight minutes.)

$147 Billion: The Economic Cost of Trump Racism

Bottom line:

Trump’s racism predicted to cost US households $147 billion in extra payments to the rest of the world.

Like many people, I am appalled by president Trump’s recent executive order banning refugees – and even US legal immigrants  – from seven predominantly Muslim countries from entering the country. In the process, Trump has also angered most of the world’s 1.6 billion Muslims, comprising about 23% of the global population. Many of these countries (e.g,. OPEC members) hold major financial assets in the US. President Trump has also been active about insulting Mexico and China, two other huge financial partners with the US.

Since Trump is a businessman, I am going to focus on why this racism is a really bad idea for the US economy.

According to US Treasury, US national debt held by the public as of last Friday, Jan 26, 2017 was 14.4 trillion dollars.  That is over $42,000 borrowed on your behalf per US resident. Last year (2016), the interest paid on that debt was $432 billion, or over $3,456 per American household  per year. (US census numbers estimate 125 million households currently). Of that total debt, about 34% is owned by international Investors, and we are paying them the interest on their holdings. So that is $1,175 per US household being paid out to foreigners last year before Trump became president.

Although my good colleague Larry Kotlikoff worries that this level of debt, particularly to foreigners, is not sustainable, that is not what I want to focus on here. I want to focus instead on the CHANGE in these debt payments to foreigners that can be attributed to scary Trump’s racism. According to the current US Treasury documents, the long term interest rate has increased by more than a half percentage point since Trump was elected. Look at the figure yourself. The increase when Trump was elected was immediate. Even faster than the stock market advance.

https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/Historic-LongTerm-Rate-Data-Visualization.aspx

Increasing the interest rate on the national debt from 2 percent to 2.5 percent costs Americans an extra $294 per household EVERY YEAR until our debt is paid off, which will probably be never.

Now imagine that OPEC, or the Chinese, or the Mexicans decide that they are not so happy with the US anymore and decide to start dumping their $6.8 trillion of US debt. We should all expect that  Trumps racist policies will cause federal interest rates to increase to 4% per year, up another 2% above its rates before Trump. This doubling of US debt interest rates will result in an additional $1,175 per US household per year being paid out to foreigners. Or another $147 billion in total interest paid out to the rest of the world for our debts.

That is my prediction of what will happen if Trump does not change his racist policies.

Notice that I did not have to do any calculations based on the effects of Trump’s racism on foreign tourism in the US ($168 billion in 2012), spending on US universities by foreigners ($30 billion in 2015), or US exports to China  ($113 billion in 2015) or Mexico ($267 billion in2015).  Trump’s tax cuts and deficit spending policies are also likely to increase interest rates. It would be easy for much larger estimates to be generated.

Take home lessons:

  • Racist policies are bad ethically and bad for our economy.
  • There is a real danger of serious interest rate increases that will cost everyone a lot of money.
  • Bond prices are likely to fall and long term bonds seem like a poor investment choice.
  • It helps with your arguments if you use facts and citations instead of making things up.
  • So far, instead of having Mexico pay for Trump’s Stupid Wall, Trump’s racist policies are making Americans pay more to Mexico and China and Iran and Saudi Arabia, and….

us-treasure-long-ten-year-interest-rates-2017-01-29

 

 

Read this posting on Stupid Economics

I invite you to read this Forbes posting on Stupid Economics by Laurence Kotlikoff.

 

I don’t always agree with my dear colleague, Larry Kotlikoff, but this posting at Forbes is one that I can really get behind.

Our president needs to start listening to serious economists instead of acting solo as an autocrat.

 

This article is a two minute read that will make you smile regardless of whether you agree with all of the sentiments.

 

Larry is a serious scholar, of course, and his credentials include not only nineteen books, but also a stint on the Council of Economic Advisors under president Reagan.

 

From: owner-faculty-econ-list@bu.edu [mailto:owner-faculty-econ-list@bu.edu] On Behalf Of Laurence Kotlikoff
Sent: Thursday, January 26, 2017 1:10 PM
To: faculty-econ-list; phd-econstudents-list
Subject: This may be of interest.

https://www.forbes.com/sites/kotlikoff/2017/01/26/stupid-economics/#61453f38e94f

 

 

Let me know if I’m being unfair. But I think it’s time to call this for what it is.

 

best, Larry

 

Laurence J. Kotlikoff

A William Fairfield Warren Professor, Boston University
Professor of Economics, Boston University
270 Bay State Rd.
Boston, MA 02215
www.kotlikoff.net

President, Economic Security Planning, Inc.

www.maximizemysocialsecurity.com

www.esplanner.com

www.economicsecurityplanning.com

kotlikoff@gmail.com
cell  617 834-2148
work 617 353-4002

The Ellis-Huber Christmas Poem 2016

The Raven                      The Ellis-Huber Christmas Poem 2016

Once upon a year so dreary, politics so wild and weary,
Arguments so quaint and curious, unfamiliar use of lore—
While I nodded, sometimes napping, suddenly there came a yapping,
As of candidates gently snapping, snapping as if t’were a war.
“’Tis only a primary,” I muttered, “yapping I have heard before—
Only this and nothing more.”

But the yapping became more noisy, as the prospects grew less rosy
Scared me—filled me with fantastic terrors never felt before;
So that now, to still the beating of my heart, I stood repeating
“’Tis only a primary entreating entrance at the White House door—
Some strange visitor entreating entrance at the mansion door;—
This it is and nothing more.”

Presently concern grew stronger; hesitating then no longer,
Words like “Sir” and “Madam”, scarce-used civil words appeared no more;
Soon the facts no longer mattered as emotions became more shattered,
Soon opinions grew more scattered, chattered just outside my door,
Not quite sure that I had heard it—here I opened wide the door;—
Darkness there and nothing more.

Ah, distinctly I remember it was in the bleak September;
And each separate dying ember wrought its ghost upon the floor.
Eagerly I tried to ignore it, even though I still deplored it
All my thoughts were filled with sorrow—sorrow for the lost true core—
Came the thought so sad and evil, worse time since the Wizard war—
Trump is our Lord Voldemort.

November came as we were fearing, long we stood there wondering, tearing,
Wishing undone, dreaming dreams no liberal dared to dream before;
But the silence was unbroken, and the election gave no token,
And the words e’er spoken were whispered words, “Lord Voldemort?”
This I whispered, and an echo murmured back, “Lord Voldemort.”—
Merely this and nothing more.

Now December, feeling bitter, as the trees begin to glitter,
Soon again I hear a twitter somewhat louder than before.
“Surely,” said I, “surely that is something at my window lattice;
Let me see, then, what the threat is, and this mystery explore—
I let my mind stop just a moment and this mystery explore;—
’Tis only Santa, nothing more!”

Santa saved us from our ruing, distracted us from all our stewing
Christmas tree our nightly viewing, ‘minding us of days of yore;
Now we pray for all united, keeping spirits undivided;
Wishing peace and love re-invited, mistletoe above your door—
Christmas prayers we do implore for elves and wizards, Dumbledore—
And Harry Potter, ever more!

(c) 2016 Randall P Ellis

Facts about Tom Price, HHS nominee

Health economists and every concerned citizen should disseminate the facts in this NEJM article about Donald Trump’s nominee of Tom Price to be the next secretary of HHS.
Coauthor Richard Frank is also a BU Ph.D. alum!

Randy Ellis

 

Care for the Vulnerable vs. Cash for the Powerful — Trump’s Pick for HHS

Sherry A. Glied, Ph.D., and Richard G. Frank, Ph.D.

New England Journal of Medicine

December 21, 2016DOI: 10.1056/NEJMp1615714

http://www.nejm.org/doi/full/10.1056/NEJMp1615714#t=article

 

Since there is no abstract, here are the first two paragraphs.

Representative Tom Price of Georgia, an orthopedic surgeon, will be President-elect Donald Trump’s nominee for secretary of health and human services (HHS). In the 63-year history of the HHS Department and its predecessor, the Department of Health, Education, and Welfare, only two previous secretaries have been physicians. Otis Bowen, President Ronald Reagan’s second HHS secretary, engineered the first major expansion of Medicare, championed comparative effectiveness research and, with Surgeon General C. Everett Koop, led the fight against HIV–AIDS.1 Louis Sullivan, HHS secretary under President George H.W. Bush, focused his attention on care for vulnerable populations, campaigned against tobacco use, led the development of federally sponsored clinical guidelines,2 and introduced President Bush’s health insurance plan, which incorporated income-related tax credits3 and a system of risk adjustment. In their work at HHS, both men, serving in Republican administrations, drew on a long tradition of physicians as advocates for the most vulnerable, defenders of public health, and enthusiastic proponents of scientific approaches to clinical care.

Tom Price represents a different tradition. Ostensibly, he emphasizes the importance of making our health care system “more responsive and affordable to meet the needs of America’s patients and those who care for them.”4 But as compared with his predecessors’ actions, Price’s record demonstrates less concern for the sick, the poor, and the health of the public and much greater concern for the economic well-being of their physician caregivers.

Since the NEJM full article  requires a subscription, here is a summary what they document:

Price has sponsored legislation that

  • supports making armor-piercing bullets more accessible
  • opposes regulations on cigars
  • Repeals and replaces the ACA (see details below)

Voted  

  • Against the Affordable Care Act (ACA)
  • Against regulating tobacco as a drug
  • Against the Domenici–Wellstone Mental Health Parity and Addiction Equity Act
  • Against funding for combating AIDS, malaria, and tuberculosis
  • Against expansion of the State Children’s Health Insurance Program
  • In favor of allowing hospitals to turn away Medicaid and Medicare patients seeking nonemergency care if they could not afford copayments
  • Against reauthorization of the Violence Against Women Act
  • Against legislation prohibiting job discrimination against lesbian, gay, bisexual, and transgender (LGBT) people
  • Against enforcement of laws against anti-LGBT hate crimes.
  • Against expanding the NIH budget
  • Against the recently enacted 21st Century Cures Act

Price stated views:

  • Favors converting Medicare to a premium-support system
  • Favors changing the structure of Medicaid to a block grant program
  • Favors amending the Constitution to outlaw same-sex marriage
  • Opposes stem-cell research
  • Inconsistent in supporting investments in biomedical science.

His proposal for repealing and replacing the ACA is H.R. 2300, the Empowering Patients First Act,5 which would

  • Eliminate the ACA’s Medicaid expansion and
  • Replace ACA subsidies with flat tax credits based on age, not income
  • Be regressive, with larger subsidies for high than low incomes.
  • Credits would pay only about one third of the premium of a low-cost plan
  • Credits proposed are smaller than those proposed by President Bush in 1992, and will not be sufficient to get most people to buy health insurance
  • Eliminate the guaranteed-issue and community-rating requirements in the ACA, with ineffective substitutes.
  • Withdraw almost all the ACA’s federal consumer-protection regulations, including limits on insurer profits and requirements that plans cover essential health benefits.
  • Allow the sale of health insurance across state lines, effectively eliminating all state regulation of health insurance plans
  • Fund his plan by capping the tax exclusion for employer-sponsored health insurance at $8,000 per individual or $20,000 per family, caps that are lower than the unpopular Cadillac tax in the ACA, which Price himself has voted to repeal, and hence is unlikely to ever be approved
  • Directly advance physicians’ economic interests by permitting them to bill Medicare patients for amounts above those covered by the Medicare fee schedule and allowing them to join together and negotiate with insurance carriers without violating antitrust statutes.
  • Oppose strategies for value-based purchasing and guideline development,
  • Oppose the use of bundled payments for lower-extremity joint replacements and
  • Propose that physician specialty societies hold veto power over the release of comparative effectiveness findings.

Consider what you can do to make sure that these facts are widely known. Perhaps ask your legislators which of these views they support.

BU Grads Ranked among the World’s Most Employable

One more ranking in which BU rates very highly in the world.

BU Grads Ranked among the World’s Most Employable
11th worldwide, 7th in the nation in international survey

The employability of BU graduates was recently ranked 11th in the world and 7th in the nation in a report published in Times Higher Education. The Global University Employability Ranking 2016 was designed by French human resources company Emerging, which sent an online survey asking the opinions of thousands of recruiters at a management level and of managing directors of international companies.

The California Institute of Technology was ranked number one on the list, followed by the Massachusetts Institute of Technology, Harvard University, the University of Cambridge, and Stanford University.

“It’s very heartening that so many employers recognize that our graduates are very well-prepared in their fields and have the skills and habits to perform at a high level,” says President Robert A. Brown. “Helping to successfully launch the careers of our graduates is a focus of the University.”

Except is from Bostonia Magazine.

Wondering about 2.5%

I can’t help wondering how the election outcome would have been different if the headline that was prominently featured in the news for the last month had been the one we just received in the email message from the Boston University Human Resources Department that said:

  • Contribution rates for 2017 – we are pleased to inform you that the health plan rates are increasing by only 2.5% for 2017

This sure paints a different picture of the ACA than “it’s a disaster” and rates are going to increase at double digit rates.

And this is more typical of premium increases for the past four years.

Fact: The average real increase in per enrollee spending in the private sector from 2010 to 2014 was 1%, and it was negative for Medicare and Medicaid. (Obama, JAMA, 2016)

(This is my last blog on politics and health policy for a while. Too distracting.)

 

 

Did BU economics students vote in the 2016 general election?

In order to better understand what happened in last week’s US election, and perhaps also to encourage more students to both register and vote in the NEXT election, I created a very simple one-question survey using SurveyMonkey and arranged for it to be sent to all Economics students at Boston University. I first polled graduate (Ph.D. and MA) students, and then undergraduate majors and students in principles of economics courses. Among the first 515 respondents (which happened in four days) I found that among people eligible to vote, 76% of undergraduates and 81% of graduate students in the economics program voted. Reflecting the high fraction of people who are foreigners in our programs, 33% of undergraduates and 65% of graduate student respondents were not eligible to vote. Among those potentially eligible to vote, 4% of BU undergraduates reported that they had made some effort to try to register or vote, but were unable to. For example, their request for an absentee ballot was ignored or the ballot arrived too late, or they could not vote absentee the first time they were voting, or  some other specified reason.

This is of course not a random sample of all voters, but reflects those who replied to my request.

If you would like to implement the same poll at your university or college, please send me an email privately and I will send you a customized poll for your university that you can use at no cost.  The email I used to invite people to respond is below.

Surveymonkey will let you conduct a free poll with up to 50 responses, or get up to 1000 responses for only $26 for the first month. I would be happy to collaborate for free for the first ten collaborators at other universities or colleges.

Detailed BU Economics Poll results

BU Voting results 20161114

 

 

Hello,

 

 

 

Full text of inviting email:

Hello

I am a professor in the Economics Department at Boston University who is trying to better understand the recent election results.

I would appreciate it if you would answer this ONE QUESTION survey about the election which I am sending only to BU students.

Please answer it only once and do not forward it.

 

Once you respond, you will see the responses of other students at Boston University who have already replied. You do not need to be a US citizen or be eligible to vote to answer this survey. I do not ask you who you voted for.

 

The survey results are confidential: I am not tracking  the URLs of those who have responded.

 

https://www.surveymonkey.com/r/FFPWCZM

 

Thank you in advance for your participation.

 

In  a few days I will post a summary of the results on my blog which is linked here.

http://blogs.bu.edu/ellisrp/blogs/

 

Randy Ellis

 

Randall P. Ellis, Ph.D.

Professor, Department of Economics, Boston University

ellisrp@bu.edu     Off: +1 617-353-2741       http://blogs.bu.edu/ellisrp/

 

I am sorry

Dear BUHealth friends, alumni, students and colleagues.

Like most of the people I know, I am immensely saddened by the results of the US presidential elections, which have elected Donald Trump as president and elected republicans to run both houses of congress.

My view is that hate and party loyalty won out in the end over any reasoned comparisons of the two presidential candidates.

I hope to try harder to understand the views of the those who voted for Donald Trump and why they fell for such a clever salesman.

A good place to start is to reread the blogs I posted by and about Scott Adams who alone was consistently supporting and predicting the victory of Donald Trump for over a year. Sadly, Adams was right and the rest of us, driven by incorrect polling predictions, were wrong.

http://blogs.bu.edu/ellisrp/2016/09/why-trump-is-going-to-win-the-us-presidency/

Austin Frakt (at TheIncidentalEconomist.com) has already posted a very useful blog on what health reforms and directions are mostly likely under Donald Trump.  It is linked here if you are interested or if you are asked to discuss this with your family or colleagues..

The next health reform

http://theincidentaleconomist.com/wordpress/the-next-health-reform/

I am lucky that I live and work in a state and occupation that hopefully will not experience the brunt of the pain that I predict is ahead.

Some people may take solace in the fact that Marijuana was legalized for possession, home growing, and recreational use in Massachusetts starting this December 15 2016 (although not to be legally sold in dispensaries for another year).

I for one plan to try to add to our sadly lacking civility by calling him Donald Trump, or president-elect Trump, rather than simply Trump.

Randy

Recent Marketplace Premium Increases are No Big Deal

By Randall P. Ellis, Boston University, Department of Economics October 28, 2016

A great deal has been made recently about the large increases in certain Health Insurance Marketplace premiums  announced for 2017. I present here five arguments for why these increases are no big deal, and are not the right thing to focus on when evaluating the success of the 2010 Affordable Care Act (ACA).

Argument 1: The Marketplace exchanges in which premiums are increasing are very small part of the US Health Care Market. 97% of Americans are not in them. And 80% of the enrollees who are in the Marketplace get government subsidies for their premiums. (Thomas G. McGuire, unpublished figure).

TM US Market Composition 2014

Argument #2: When the ACA Marketplace was started in 2014, its premiums were unexpectedly low, not high, in most markets. Everyone commented on this. The same thing happened when Medicare Part D was introduced. Many economists believe this was because health plans were trying to capture market share by offering low premiums. Such low premiums were not sustainable. Two years into the Marketplace, plans are trying to catch up with the much higher employer sponsored premiums. This should not be treated as a failure of Obamacare.

Argument #3: Many health insurance markets in the US are already highly concentrated. For example Blue Cross Blue Shield of Alabama has a 90 percent market share. (kff.org, 2014)  We cannot expect competitive premium pricing with such market power. As I discuss in Ellis (2012): Leemore Dafny, Mark Duggan, and Subramaniam Ramanarayanan in the American Economic Review 2012, using data from the American Medical Association (AMA), show that 94% of 314 US market areas have “highly concentrated” insurance markets. This concentration cannot be blamed on the ACA, since it predated it.

Argument #4: The main goal and achievement of the ACA has been that it has reduced the number of uninsured. The data clearly show this, and the largest percentage increase has been in private insurance, not government insurance programs.

Recent Health Insurance coverage

Argument 5: The unexpected wonderful cost impact of the ACA has been favorable: lowering the average rate of increase in health care spending throughout the country. (Barack Obama, JAMA, 2016)

obamatrend2

This has been particularly true for the Medicare program. US government statistics (CBO and OMB) show enormous savings in Medicare since 2010.

2016_EllisMcGuire_UpdateonUS_RA_20161005_Page_09

While the ACA has not eliminated uninsurance or solved the US cost containment problem, it has made important improvements in both directions. Recent large premium increases in the Health Insurance Marketplace, which happen all the time in the employer sector without much attention, are part of a bigger problem still in need of solutions.