I was in sunny Edmonton last week, giving a paper at the University of Alberta on the ethics of physician billing. (I always enjoy being back in any part of the country where the sky occupies what I consider to be the correct proportion of one’s visual field, i.e., approximately 2/3rds.) The paper can be found here, for those who are interested. In it, I basically complain about the failure of the medical profession to treat billing as an “ethics” issue. Instead, the profession tolerates, and in some case encourages, a “compliance-based” culture, where any strategy that falls short of outright fraud is essentially considered acceptable.

There is a bunch of subtle argumentation in the paper about why billing should rightly be regarded as an issue of professional ethics, and not merely personal integrity. There are also a bunch of great examples of gamesmanship – a topic that is of perennial interest to me.… Continue reading

So everyone’s been making fun of Steven Levitt and Stephen Dubner lately, thanks to a story they recount in their new book Think like a Freak (sequel to Superfreakonomics, sequel to Freakonomics). It concerns a meeting they had with David Cameron, sometime before he became the British Prime Minister. They offered him some advice on how to deal with the problem of expanding health care costs in the U.K.. The problem, they said, was that government was giving it away for free:

What’s wrong with that? When people don’t pay the true cost of something, they tend to consume it inefficiently. Think of the last time you sat down at an all-you-can-eat restaurant. How likely were you to eat a bit more than normal? The same thing happens if health care is distributed in a similar fashion: people consume more of it than if they were charged the sticker price…

We tried to make our point with a thought experiment.

My boss, Mark Stabile, has an op-ed in the Globe and Mail today, arguing against two-tier health care in Canada. He’s the kind of economist who is interested in facts, and he cites a few. For example, with an added tier of private medicine:

there is little evidence that wait times in the public system go down. And there is little evidence that a private system reduces the costs of public systems. In fact, in some jurisdictions, overall costs in the public system actually went up in those cases where the tax system subsidizes people who purchase private insurance (as Canada does). Over all, those systems that have private insurance have had to continue to grapple with issues of costs and access, much as we do here in Canada.

Now I’m the kind of non-economist who is quite interested in incentives, so I find it interesting to speculate about why allowing people to opt out of the public system and purchase health care privately would not free up resources in the public system.… Continue reading