In a recent article in Health Affairs, health economist James Robinson reveals that in areas where hospitals consolidate and enjoy a larger market share, providers are more likely to charge higher prices, as low competition gives them a monopoly in delivering patient care in the region. The lack of competition allows hospitals and other providers to raise the sticker price for the privately insured as reimbursements from Medicare and Medicaid fall. Economists call this “cost shifting,” when a lower payment from one group is made up for by a higher …
A new report from Cornell economist Richard Burkhauser and his colleagues has once again called into question the claims of the Congressional Budget Office (CBO) and White House that Obamacare would have only a minimal impact on employers’ decisions to offer their employees health care. The report warns that Obamacare could cost at least $50 billion more per year than originally thought. The controversy centers on the “firewall” provision in the health law, which applies to employer plans with premiums equaling more than 9.5 percent of a worker’s income. If a …
The recent McKinsey survey showing that 30 percent of employers would drop coverage shouldn’t be controversial. Economists have consistently shown how an employer mandate will negatively affect employment and wages. In fact, even the Congressional Budget Office (CBO) concede such affects. Answering critics’ calls, McKinsey released the details of its survey three weeks ago, showing that their survey methodology was sound. The survey included a large sample size, representative industries, respondents directly involved in the decision-making process regarding health benefits, and questions/information presented in a neutral manner. Nonetheless, critics—including the …
