Thomas P. Miller | AEI eventOn Thursday, AEI welcomed Charles Phelps, provost emeritus at the University of Rochester, to discuss his new book, “The Economics of US Health Care Policy” (Routledge, 2017). Thomas Miller began by surveying the nature of health policymaking in Washington, noting that economics often takes a back seat to path-dependent policy additions. Phelps then provided a survey of the book’s contents, focusing on the book’s three major parts: the private insurance market, Medicare and Medicaid, and issues facing the entire health system. Mark Hall from Wake Forest University provided comments, stressing that the book not only describes how health policy deviates from economic theory and practice but also provides substantive prescriptions for improvements.
Improving innovation in health services through better payment reforms
James C. Capretta | Regulatory Transparency ProjectJames Capretta reviews the basics surrounding the health care debate. He identifies several areas of agreement that often get overshadowed by the areas of disagreement. He argues that both sides see Medicare’s dominant fee-for-service payment systems as contributing to the fragmentation and inefficiency of current arrangements. He argues that to make changes to Medicare to improve the efficiency of service provision, an alternative approach could be to harness the power of economic incentives to drive higher productivity in the health sector.
Implications of Medicaid financing reform for state government budgets
Jeffrey Clemens and Benedic N. Ippolito | National Bureau of Economic ResearchIn their most recent working paper, Jeffrey Clemens and Benedic Ippolito analyze the potential reforms to Medicaid financing through the lens of fiscal federalism. They argue that because Medicaid plays a prominent role in state government finances, Medicaid financing reforms have significant fiscal implications. Their paper assesses the implications of alternative Medicaid financing structures along several dimensions. The authors’ analysis helps illustrate how the design of federal transfers shapes states’ incentives and therefore helps determine the generosity of the redistribution that occurs through states’ Medicaid programs.