The class meets at 6:00pm-8:45pm on Thursdays in Swearengen 2A07. Class meetings are available live over the internet to registered students. The class meetings are recorded as well. Students can view the recordings at their convenience.

Office hours: Thursdays 1:30pm to 4:30pm in the HSPM computer lab.

Goals

• to provide an economics perspective for management decision-making
• to provide theoretical groundwork for the study of finance, accounting, marketing, and planning
• to enable you as future health care managers to anticipate policy changes and their effects
• to enable you as future health care managers to play positive roles in the reform of health care

Competencies

1. that you understand and can use basic economics concepts, such as supply, demand, marginal analysis, the theory of capital, and cost-benefit analysis,
2. that you can analyze the economic institutions of the United States health care system,
3. that you can discuss controversies surrounding the development of health insurance and the government's role in providing, financing, and regulating health services.

What you need to have to take this course

Prerequisite courses: None. No prior study of economics is required for this course.

Interactive instruction: A group of interactive instructional tutorials is at https://sambaker.com/econ/. The interactive tutorials introduce basic economics concepts, and assume no economics background. Your work with the interactive tutorials is not monitored or graded. These tutorials are integrated into the Class Schedule and Readings, as shown below. All of the interactive tutorials are available all semester, so you can use or reuse them at any time.

Course Work for Credit

There will be two take-home exams, due Oct. 24 and Dec. 12.

Each exam counts for one-half of the grade.

The questions will be available well in advance at a link here on this web page.

Class Schedule and Readings

Advice for the overwhelmed: If the reading for this course seems like a lot, see How 2 Read an Article.

August 22 Introduction to the Course

How the course will operate, and the general shape of the US health care economic sector.

• What is economics Introduces economics and "the economic problem."
• Stocks and flows A basic distinction in economics. It will help you understand the GDP concept. It also helps with understanding monetary policy, such as why the Federal Reserve can push a lot of money out to banks ("print money") during a recession and not spark price inflation.
• The Gross Domestic Product Go through for a general discussion of how this important economic statistic is conceived.
• U.S. National Health Spending in 2011:
• Lecture notes I talk you through the most recent numbers for the size and shape of the U.S. health care system.
  
• Data source: The U.S. Centers for Medicare and Medicaid Services economic statistics. Go here if you want to get more technical explanations or want to see how to find the numbers yourself.
• Pie charts from the government web site showing where health care money comes from and where it goes.
• In class, I'll show these diagrams, that are based on an international comparisons article that we'll read later: Health spending and infant mortality, health spending and nurses, health spending and CT scanners.
• The U.S. spends far more than other countries on health care in relation to national income. For now, you can just look at the chart. Later, we may pick up the other articles in the series that this article introduces.
• Are we spending so much because we're sicker? More bad habits? Maybe for 1¼% of our health care spending.

August 29 Markets, Supply and Demand

What economists mean by markets, supply and demand, elasticity, and risk and risk aversion. These are building block concepts towards assessing having a free market in health care.

• The Context of Studying Supply and Demand, a segue from cost-benefit analysis to market analysis. Like a class lecture, but without the talking head.
• Markets, supply, and demand
• Supply and demand
• Demand tutorial
• Notes on need and demand, and on elasticity
Elasticity notes in large type
• Elasticity concept interactive tutorial
• Elasticity calculation interactive tutorial

Health Care Demand -- How We Buy Health Care

• Blackboard Bodenheimer, T., Grumbach, K., "Paying for Health Care," JAMA, August 24/31, 1994, 272(8), pp. 634-639.
• Elisabeth Rosenthal, The $2.7 Trillion Medical Bill: Colonoscopies Explain Why U.S. Leads the World in Health Expenditures, New York Times, June 2, 2013.
Colonoscopy price is the example. You provide the explanation. What is driving this, supply or demand?
8/28/13: Having trouble accessing New York Times web site. May put off discussing this article.

September 5

No class this week.

September 12 Health Insurance

Building-block ideas relating to the economic theory of insurance

• Risk
• Risk Aversion
• Insurance concepts

Types of insurance in the U.S.

• Uwe Reinhardt has a succinct explanation of different insurance payment methods in his New York Times Economix blog post for December 7, 2012.

• Kaiser Family Foundation, 2012 survey of employment-based private health insurance news release. The root KFF web page for private insurance is http://kff.org/private-insurance/ The web page for the employer survey, with a link to the chartpak, is http://kff.org/private-insurance/report/2013-employer-health-benefits/
• Kaiser Family Foundation, The Story of Medicare: A Timeline YouTube introduction to Medicare. Medicare covers the elderly, some disabled, and people with kidney failure. It is run by the Federal government, with Federal tax money plus some premium payments and copayments by the beneficiaries.
  http://kff.org/medicare/ is their page with lots of information about Medicare.
• Kaiser Family Foundation, Medicaid: A Primer. Medicaid is the Federal-state program that covers lower-income persons in certain categories, mainly children, pregnant women, and disabled people. Obamacare extends Medicaid eligibility to all poor persons. In the states that cooperate, half of the uninsured who become insured will get their insurance through Medicaid.

Obamacare and health insurance coverage

• Kaiser Family Foundation, Health reform narrated slideshow, 2010. Especially slides 5 and 6.
• Supplemental: Kaiser Family Foundation, Summary of the Affordable Care Act, April 2013. Lots of details. KKF's parent page for Obamacare is http://kff.org/health-reform/.

September 19 Health Care and the Theory of the Free Market's Optimality

September 26

Slides for class

What things have to be true for the free market to give a good result? Are those things true for health care?

Information and uncertainty in health care choice, implications for letting the free market rule

• Blackboard Arrow, K., "Uncertainty and the Welfare Economics of Medical Care," American Economic Review, December 1963, 53(5), pp. 941-973. Important. But difficult. Don't get bogged down. The blog posts below by Reinhardt will help, as will my notes below.
• Detailed notes on the Arrow reading with page references.
• Uwe Reinhardt's August 2010 comment on Arrow's ideas, part 1.
• Uwe Reinhardt's August 2010 comment on Arrow's ideas, part 2.
• Uwe Reinhardt's August 2010 follow-up about how economists use the term "efficiency" differently from the common understanding of that term.
• What makes health care special Summarizes the main ideas.

Supplemental:

• An audio clip from Car Talk (9/10/05) about letting people choose anyone they want to be their doctor. Is this a great idea?

Medical practice variation

• Blackboard Wennberg, J.E., McPherson, K., Caper, P., "Will Payment Based on Diagnosis-Related Groups Control Hospital Costs?" N Engl J Med, August 2, 1984, 311, pp. 295-300. People living in different areas get very different care. This article created a whole area of health services research.
• Blackboard Hillman, B.J., Joseph, C.A., Mabry, M.R., Sunshine, J.H., Kennedy, S.D., Noether, M., "Frequency and Costs of Diagnostic Imaging in Office Practice -- A Comparison of Self-Referring and Radiologist-Referring Physicians," N Engl J Med, Dec. 6, 1990, 323(23), pp. 1604-1608. A notorious example of the abuse of supply-sensitive care (see the Dartmouth Atlas readings below for what "supply-sensitive care" is)
• A 2009 article from Wennberg's Dartmouth Medical School team about Medicare geographic cost variation.
• The Dartmouth Atlas, http://www.dartmouthatlas.org/, has extensive data and analysis on medical practice variation. They argue that there are three categories of medical care. Here they are, with links to reports:
  1. Effective care, which is clearly indicated for the diagnosis
  2. Preference-sensitive care, for which different patients may evaluate the risks and benefits differently
  3. Supply-sensitive care, determined by the economic benefit to the providers, more than by the needs and preferences of the patients
• Atul Gawande, The Cost Conundrum: What a Texas Town Can Teach Us about Health Care, The New Yorker, June 1, 2009. President Obama had all his policy people read this.

Quality?

• Read the first paragraph of http://iom.edu/~/media/Files/Report%20Files/1999/To-Err-is-Human/To%20Err%20is%20Human%201999%20%20report%20brief.pdf
• "Temporal Trends in Rates of Patient Harm Resulting from Medical Care," Christopher P. Landrigan, et al, N Engl J Med 2010; 363:2124-2134, November 25, 2010. Ten years after the IOM report, 20% of patients were harmed. Half of those harms were preventable. Read the abstract and glance at the rest.
• The Sept. 23, 2007, New York Times featured an article about quality falling dramatically at some nursing homes after they were bought by investment companies. What happened to the market? Why didn't the patients all switch to competing nursing homes that offered better quality for the money?

October 3 Copayments for controlling health care demand

Slideshows: For this week. .

The trendy way to control health care spending is to have a big deductible and copayments. (Obamacare does exempt some "preventive" services.) People do get less health care when they have to pay more. To use the jargon, the demand for health care has some elasticity. The elasticity is pretty low, especially for people seeking care for serious symptoms, but it's not 0.

The articles go on to investigate whether people who buy less care are worse off as a result. If they are not worse off, then it is wasteful to let people get care without paying out of pocket. Are all the costs being considered? How good are people at determining what care they can do without?

• Blackboard Brook, R.H., et al, "Does Free Care Improve Adults' Health? Results from a Controlled Trial of Cost Sharing in Health Insurance," N Engl J Med, December 8, 1983, 309, pp. 1426-1434.
• Video explaining the RAND experiment and moral hazard
• Supplemental: Blackboard Himmelstein, D.U., Woolhandler, S., "Free Care, Cholestyramine, and Health Policy," N Engl J Med, December 6, 1984, 311, pp. 1511-1514.
Read quickly for the main ideas.
• Blackboard Shapiro, M.F., Ware, J.F., Sherbourne, C.D., "Effects of Cost Sharing on Seeking Care for Serious and Minor Symptoms," Annals of Internal Medicine, February 1986, 104, pp. 246-251.
Read quickly for the main ideas.
• Blackboard Rasell, M.E., "Cost Sharing in Health Insurance -- A Reexamination," N Engl J Med, April 27, 1995, 332(17), pp. 1164-1168.
• The Moral-Hazard Myth, by Malcolm Gladwell, The New Yorker, August 29, 2005.
• Malcolm Gladwell, interviewed about "The Moral-Hazard Myth" on the Al Franken Show (radio), August 25, 2005: A 19-minute mp3. The ideas in the article, with more implications drawn out. For those who like to hear, as well as read.
• Gladwell said that the reason we don't have universal health insurance is that our leaders think that we're better off without it. Listen carefully to then-President Bush's "objective" for our health care system, from July 2007. It's in the first 20 seconds of the clip.
• Supplemental: Mark Pauly, "The Truth about Moral Hazard and Adverse Selection," Maxwell School of Syracuse University Policy Brief No. 36/2007. Mr. Moral Hazard replies.
• Himmelstein DU, Warren E, Thorne D, Woolhandler S., "Illness and Injury as Contributors to Bankruptcy," Health Affairs, 2005 Jan-Jun, 2005, Supplement Web Exclusives, pp. W5-73.
-- or --
• David U. Himmelstein, Deborah Thorne, Elizabeth Warren, Steffie Woolhandler, Medical Bankruptcy in the United States, 2007: Results of a National Study, American Journal of Medicine, Vol 122, No 8, August 2009, pp. 741-746.

October 10 Managed Care to control health care demand

HMO slides

Learning objectives:  The history and results managed care.

Managed care development

• Blackboard Mayer, T.R., and Mayer, G.G., "HMOs: Origins and Development" N Engl J Med, February 28, 1985, 312, pp. 590-594.
When HMOs were cool
• BlackboardWare, J.E., et al, "Comparison of Health Outcomes at a Health Maintenance Organisation with Those of Fee-for-Service Care," Lancet, May 3, 1986, pp. 1017-1022.
• Blackboard Siu, A.L., Leibowitz, L., Brook, R.H., Goldman, N.S., Lurie, N., Newhouse, J.P., "Use of the Hospital in a Randomized Trial of Prepaid Care," JAMA, March 4, 1988, 259, pp. 1343-1346.
• Blackboard Ware, J.E., Bayliss, M.S., Rogers, W.H., Kosinski, M., Tarlov A.R., "Differences in 4-year Health Outcomes for Elderly and Poor, Chronically Ill Patients Treated in HMO and Fee-for-Service Systems: Results from the Medical Outcomes Study," JAMA, October 2, 1996, 276(13), pp. 1039-1047.
• Blackboard Bodenheimer, T.S., and Grumbach, K., "Capitation or Decapitation," JAMA, October 2, 1996, 276(13), pp. 1025-1031. How the money flows in IPA HMOs
• Blackboard Kuttner, R., "Must Good HMOs Go Bad? First of Two Parts: The Commercialization of Prepaid Group Health Care," N Engl J Med May 21, 1998, 338(21), pp. 1558-1563.
• Blackboard Himmelstein, D.U., Woolhandler, S., Hellander, I., Wolfe, S.M., "Quality of Care in Investor-Owned vs Not-for-Profit HMOs," JAMA. July 14, 1999, 282:159-163

Did HMOs have an incentive to M your H?

Prevention and savings slides

• Blackboard Fries, J.F., Koop, E., et al, "Reducing Health Care Costs by Reducing the Need and Demand for Medical Services," N Engl J Med, July 29, 1993, 329(5), pp. 321-325. The authors are renowned public health leaders. This is conventional wisdom. But is it right?
• Blackboard Russell, L.B., "The Role of Prevention in Health Care Reform," N Engl J Med, July 29, 1993, 329(5), pp. 352-354. Worth a fairly careful read. What is the basis of Russell's disagreement with the conventional wisdom?
• Blackboard Huntington, J., Connell, F.A., "For Every Dollar Spent -- The Cost-Savings Argument for Prenatal Care," N Engl J Med, Nov. 10, 1994, 331(19), pp. 1303-1307.
• Jane J. Kim, and Sue J. Goldie, "Health and Economic Implications of HPV Vaccination in the United States," New England J Med Aug 21 2008;359:821-32. Just read the abstract, if you are short of time.
• Chicken pox immunizations save $100 million in annual hospital cost. Is that enough to make immunizations a net saver of health care cost? Look for Varicella on this vaccine price list, then multiply by how many babies are born per year in the U.S..
• "For the Want of a Dentist", Washington Post, 2/27/2007.
• Blackboard Morgan, R.O., Virnig, B.A., DeVito, C.A., Persily, N.A., "The Medicare-HMO Revolving Door -- The Healthy Go In and the Sick Go Out," N Engl J Med, July 17, 1997, 337(3), pp. 169-175. Glance through for the main idea, which is that early Medicare HMOs encouraged high-cost patients to leave, until their costs were back to normal.
• Hellander I, Woolhandler S, Himmelstein D, Medicare Overpayments to Private Plans, 1985-2012, International Journal of Health Services, October 2012.

October 24 Mid-term exam due No Class

October 31 The Supply Side -- Cost Theory

• Cost, opportunity cost; total, fixed, variable, and marginal cost For those new to economics or needing a review.
  Cost slideshow:
  Cost.pptx
• Interactive tutorial on fixed, variable, and marginal cost Also for those who are new to economics or needing a review. Simpler math than the above.

Price and cost, in theory

• Price and output under competition "Competition" is another word that economists use differently from the usual.
• Supplemental: Price and output under monopoly

Price and cost, in practice

• Blackboard Reinhardt, U.E., "Perspective: Spending More Through 'Cost Control': Our Obsessive Quest to Gut the Hospital," Health Affairs, Summer 1996, 15(2), pp. 145-154. You see how a top-notch economist thinks. Relevant for this week is how the author uses the "incremental cost" (marginal cost) concept.
• Blackboard Brown, M.L., Kessler, L.G., Reuter, F.G., "Is the Supply of Mammography Machines Outstripping Need and Demand?" Annals of Internal Medicine, October, 1, 1990, 113(7), pp. 547-552. Excess capacity did not lead to falling prices for mammogram screenings.

External Cost and Public Goods

• External cost and benefit Read this brief run-down of these concepts.
  External cost slides
• Supplemental: The Center for Disease Control's Morbidity and Mortality Weekly Report, August 22, 2008, said that measles outbreaks in the U.S. were spreading more than they used to because fewer children are getting vaccinated.
• Supplemental: Anti-vaccine megachurch hit with measles, Daily Kos, August 26, 2013.

Future Cost and Income

• Discounting the future This tutorial and the next are valuable for this course and for courses in finance.
  Present value slides
• Internal Rate of Return
• Supplemental: Perils of the Internal Rate of Return

November 7 Pricing in health care

Perspective

• Blackboard Reinhardt, U.E., "Resource Allocation in Health Care: The Allocation of Lifestyles to Providers," The Milbank Quarterly, 1987, 65(2), pp. 153-176.

DRG payment for hospitals

• Blackboard Roe, B.B., "The UCR Boondoggle: A Death Knell for Private Practice?" N Engl J Med, July 2, 1981, 305(1), pp. 41-45. Before Medicare introduced DRG-based payment, in 1983, fee-for-service was how most doctors and hospitals got paid. Providers charged for each service rendered, setting prices according to what they thought they could or should get. By the 1980s, prices had gotten seriously out of whack with costs.
• DRG and RBRVS Lecture notes Pricing in health care didn't follow the competitive market model, so the Federal government stepped in. Private insurers followed the government's lead.

• DRG and RBRVS slide show

• Blackboard Qian X, Russell LB, Valiyeva E, Miller JE. "'Quicker and sicker' under Medicare's prospective payment system for hospitals: new evidence on an old issue from a national longitudinal survey." Bulletin of Economic Research, 2011, 63(1):1-27.
• Blackboard Simborg, D.W., "DRG Creep: A New Hospital-Acquired Disease," N Engl J Med, June 25, 1981, 304(26), pp. 1602-1604.
• Blackboard Baker, S.L., Kronenfeld, J.J., "Medicaid Prospective Payment: Case-Mix Increase," Health Care Financing Review, Fall 1990, 12(1), pp. 63-70.

RBRVS payment for doctors -- A tool for controlling physician fees

• Blackboard Hsiao, W.C., Braun, P., Dunn, D., Becker, E.R., DeNicola, M., Ketcham, T.R., "Results and Policy Implications of the Resource-Based Relative-Value Study," N Engl J Med, September 29, 1988, 319(13), pp. 881-888.
• Blackboard Hsiao, W.C., Braun, P., Yntema, D., Becker, E.R., "Estimating Physicians' Work for a Resource-Based Relative Value Scale," N Engl J Med, September 29, 1988, 319(13), pp. 835-841.

Where we are with pricing

• Blackboard Reinhardt, Uwe E., "The Pricing Of U.S. Hospital Services: Chaos Behind A Veil Of Secrecy," Health Affairs, January/February 2006; 25(1): 57-69.
• Blackboard Pattison, R.V., and Katz, H.M., "Investor-Owned and Not-for-Profit Hospitals: A Comparison Based on California Data," N Engl J Med, August 11, 1983, 309, pp. 347-353. A classic. For-profit hospitals charged more and collected more.
• A Giant Hospital Chain Is Blazing a Profit Trail, New York Times, August 15, 2012.
• Reinhardt, Uwe E., Is Medicare Raising Prices for the Privately Insured? Oct. 16, 2009.

  If this interests you enough to want to write a page about it for 10 points credit, read these:

  • http://www.gnyha.org/8845/File.aspx , which argues that there is such cost-shifting
  • http://theincidentaleconomist.com/the-health-care-cost-shifting-myth/ and
  • http://theincidentaleconomist.com/price-differentials-are-not-evidence-of-cost-shifting/ which reinforce Reinhardt's point.

November 14 Transactions (administrative) cost, in the U.S. and elsewhere.

Waste?

Uwe Reinardt, Waste vs. Value in American Health Care, New York Times Economix Blog, Sept. 13, 2013.

Administrative cost in U.S. health care

• Blackboard Himmelstein, D.U., Woolhandler, S., "Cost Without Benefit: Administrative Waste in U.S. Health Care," N Engl J Med, February 13, 1986, 314, pp. 441-445. Letters and authors' rejoinder, N Engl J Med, October 16, 1986, 315, pp. 1033-1035.
• Supplemental (but cute): Blackboard Grumet, G.W., "Health Care Rationing Through Inconvenience: The Third Party's Secret Weapon," N Engl J Med, August 31, 1989, 321(9), pp. 607-611.
• Blackboard Woolhandler, S., Himmelstein, D.U., "The Deteriorating Administrative Efficiency of the U.S. Health Care System," N Engl J Med, May 2, 1991, 324(18), pp. 1253-1258.
• Woolhandler, Campbell, and Himmelstein, Administrative cost update 2003.
• Link fixed: California HMOs rejected one-fifth of submitted bills during 2002-2009.
• Uwe Reinhardt, New York Times Economix, Oct. 14, 2011. Work to comply with insurance rules is GDP without real benefit.

Other countries

Canada-US comparison slides

• It's The Prices, Stupid: Why The United States Is So Different From Other Countries by Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey, and Varduhi Petrosyan, Health Affairs, 2003. Higher health spending but lower use of health services adds up to much higher prices in the United States than in any other OECD country. The title refers to James Carville's slogan ("It's the economy, stupid!") from Bill Clinton's run for President in 1992.
• Health Spending in the United States and the Rest of the Industrialized World, by Gerard F. Anderson, Peter S. Hussey, Bianca K. Frogner, and Hugh R. Waters, Health Affairs, 2005, Vol 24, Issue 4, 903-914. A USC campus computer may be required to download this. This article shows how much more the U.S. spends on health care than other countries. The article debunks some myths that are dear to the anti-reform crowd, particularly (1) that people in other countries wait longer and get less service than Americans do, and (2) that big malpractice tort awards are why U.S. health care costs so much.
• Are we spending so much because we're sicker? More bad habits? Maybe for 1¼% of our health care spending.
• Supplemental: David Blumenthal and William Hsiao, Privatization and Its Discontents — The Evolving Chinese Health Care System, New Engl J Med, Sept. 15, 2005.
• Bill Hsiao interviewed about the Taiwan health insurance system, which he helped design.
• In Canada, lower income people access primary care doctors just as much as higher income people. Education is positively related to utilization of specialists. There is no relationship between income and use of specialists in Canada, separate from education.
• "T.R. Reid: Looking Overseas For 'Healing Of America'". Well worth listening to. Reid's book, The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care gives even more insight into health care system alternatives around the world, and is fun to read.
• Paul Krugman gives the 700-word version in "The Swiss Menace," New York Times, August 16, 2009.

November 21 Pharmaceuticals

Learning objectives: Pharmaceutical prices, research, and sales promotion. The dilemma of how to finance and promote technological advance.

Slides

• Marcia Angell, "The Truth About the Drug Companies," New York Review of Books, Volume 51, Number 12, July 15, 2004 Read for the main ideas.
• Marcia Angell, "Your Dangerous Drugstore," New York Review of Books, Volume 53, Number 10, June 8, 2006 Read for the main ideas. What is Dr. Angell's complaint? Price? Quality? Lack of innovation? More than one of the above?
• Marcia Angell, "Drug Companies and Doctors: A Story of Corruption," New York Review of Books, January 15, 2009.
• Malcom Gladwell, "High Prices How to think about prescription drugs," The New Yorker, October 25, 2004. Answers Angell. Does he blame consumers for high drug spending?
• National Institute for Health Care Management Research and Educational Foundation, Prescription Drugs and Intellectual Property Protection Finding the Right Balance Between Access and Innovation, July 24, 2000. Available at: http://www.nihcm.org/pdf/prescription.pdf Read quickly for the main idea, which is illustrated in Figure 1.
• NPR report on Parke-Davis allegedly promoted Neurontin for uses not approved by the FDA, from June 2002. Follow-up reports: Oct. 2002, Nov. 2002, Dec. 2002, Jan. 2003. May 2004: Pfizer (which had acquired Parke-Davis) pled guilty and agreed to pay fines totalling $430 million. The report includes details of the marketing effort by a participating doctor. Worth a listen.
• NPR All Things Considered report on conflict of interest in pharmaceutical benefits management, August 22, 2003. Worth a listen.
• Pharmaceuticals' political contributions Before you glance at this, guess which party gets the most from the drug industry. You can also get the contributions breakdown for others industries and groups. Check out nurses' contributions.
• Obamacare fixes this. Riding The Rollercoaster: The Ups And Downs In Out-Of-Pocket Spending Under The Standard Medicare Drug Benefit, by Bruce Stuart, Becky A. Briesacher, Dennis G. Shea, Barbara Cooper, Fatima S. Baysac and M. Rhona Limcangco, in Health Affairs, 2005, Vol 24, Issue 4, 1022-1031.
• A 2005 British Medical Journal article argued that countries (like Britain) that negotiate lower drug prices are not free riders benefitting from U.S.-consumer-financed industry research without paying for it. Advanced countries that control drug prices create just as many new drugs, relative to the sizes of their economies, as the U.S does.
• Pfizer and Abbott Labs earned all of their 2010 profit outside the U.S., according to Bruce Bartlett. How American companies dodge taxes.
• Colbert makes fun of drug companies that create new drug combinations just so they can get a new patent. Skip to 3:09 if you want to avoid some tasteless jokes.

Shortages of medicines The older articles may be available only to Times subscribers

• www.nytimes.com 8/20/11 U.S. Scrambling to Ease Shortage of Vital Medicine
• www.nytimes.com 10/31/11 Obama Tries to Speed Response to Shortages in Vital Medicines
• www.nytimes.com 11/17/12 Drug Shortages Persist in U.S., Harming Care

December 5 Quality Affordable Health Care for the U.S.

Malpractice torts -- not much help or hurt

• Blackboard Brennan, T.A., Sox, C.M., Burstin, H.R., "Relation Between Negligent Adverse Events and the Outcomes of Medical-Malpractice Litigation," N Engl J Med, December 26, 1996, 335(26), pp. 1963-1967. The skinny: There is not much relationship.
• Blackboard Studdert, D.M., Mello, M.M., Gawande, A.A., Gandhi, T.K., Kachalia, A., Yoon, C., Puopolo, A.L., Brennan, T.A., "Claims, Errors, and Compensation payments in Medical Malpractice Litigation," N Engl J Med, May 11, 2006, Vol. 354, No. 18, pp. 2024-2033.
• Supplemental:
  • Frivolous malpractice suits are a small portion of all suits. This is a press release for the Studdert article above.
  • Public Citizen's Congress Watch, The 0.6 Percent Boogeyman, July 1, 2009. Medical malpractice tort costs have been falling (inflation-adjusted), and are down to 6/1000th of national health spending.

Quality without Insurance?

• Rosen H, Fady Saleh F, Lipsitz S, Rogers SO, Gawande AA, Downwardly Mobile The Accidental Cost of Being Uninsured, Arch Surg. 2009;144(11):1006-1011. Students have asked about the Emergency Medical Treatment and Active Labor Act.

Socialized Medicine! In America!

• Arnst, C., "The Best Medical Care In The U.S., How Veterans Affairs transformed itself -- and what it means for the rest of us," Business Week, July 16, 2006. To find this article, go to www.businessweek.com and type "Arnst" in the search box. Order the search by Newest first, then go to page 13.
• For a more academic treatment, see Jonathan B. Perlin, Robert M. Kolodner, and Robert H. Roswell, "The Veterans Health Administration: Quality, Value, Accountability, and Information as Transforming Strategies for Patient-Centered Care," The American Journal of Managed Care, November 2004, pp. 828-836.
• A Time magazine article about the V.A.
• Lately, the VHA has been stretched.
• Successful socialized medicine? Can't have that!
• The above is the blog entry. Here is the column.

Accountable Care Organizations and Health Care Reform

• Atul Gawande, "The Hot Spotters," The New Yorker, January 24, 2011. Another Gawande gem. A few patients incur much of health care cost. Well-organized primary care can achieve big savings.
• Elliott S. Fisher, Douglas O. Staiger, Julie P.W. Bynum and Daniel J. Gottlieb, "Creating Accountable Care Organizations: The Extended Hospital Medical Staff," Health Affairs, 26, no. 1 (2007): w44-w57 online. The original idea
• More medical practices are owned by hospitals than by doctors, according to one survey. I'll show the diagrams in class, so don't worry if you can't access this.
• Blackboard Fisher ES et al, A Framework For Evaluating The Formation, Implementation, And Performance Of Accountable Care Organizations, Health Aff November 2012 31:2368-2378. These first two are from the Dartmouth group that invented the ACO concept.
• Blackboard Larson BK et al, Insights From Transformations Under Way At Four Brookings-Dartmouth Accountable Care Organization Pilot Sites, Health Aff November 2012 31:2395-2406.
• Blackboard Burns LR, Pauly MV, ANALYSIS & COMMENTARY: Accountable Care Organizations May Have Difficulty Avoiding The Failures Of Integrated Delivery Networks Of The 1990s, Health Aff November 2012 31:2407-2416.
• Atul Gawande again!, Big Med, The New Yorker, August 13, 2012. Managing health care as a production system, like a Chesscake Factory restaurant. Applied to to replacement knees.

Dec. 12 All assignments due by the end of this day.

Supplemental articles (Read them if you're interested):