Showing papers by "Daniel McFadden published in 2009"

Toward a 21st-century health care system: Recommendations for health care reform

Abstract: The coverage, cost, and quality problems of the U.S. health care system are evident. Sustainable health care reform must go beyond financing expanded access to care to substantially changing the organization and delivery of care. The FRESH-Thinking Project (www.fresh-thinking.org) held a series of workshops during which physicians, health policy experts, health insurance executives, business leaders, hospital administrators, economists, and others who represent diverse perspectives came together. This group agreed that the following 8 recommendations are fundamental to successful reform: 1. Replace the current fee-for-service payment system with a payment system that encourages and rewards innovation in the efficient delivery of quality care. The new payment system should invest in the development of outcome measures to guide payment. 2. Establish a securely funded, independent agency to sponsor and evaluate research on the comparative effectiveness of drugs, devices, and other medical interventions. 3. Simplify and rationalize federal and state laws and regulations to facilitate organizational innovation, support care coordination, and streamline financial and administrative functions. 4. Develop a health information technology infrastructure with national standards of interoperability to promote data exchange. 5. Create a national health database with the participation of all payers, delivery systems, and others who own health care data. Agree on methods to make de-identified information from this database on clinical interventions, patient outcomes, and costs available to researchers. 6. Identify revenue sources, including a cap on the tax exclusion of employer-based health insurance, to subsidize health care coverage with the goal of insuring all Americans. 7. Create state or regional insurance exchanges to pool risk, so that Americans without access to employer-based or other group insurance could obtain a standard benefits package through these exchanges. Employers should also be allowed to participate in these exchanges for their employees' coverage. 8. Create a health coverage board with broad stakeholder representation to determine and periodically update the affordable standard benefit package available through state or regional insurance exchanges.

The human side of mechanism design: a tribute to Leo Hurwicz and Jean-Jacque Laffont

Abstract: This paper considers the human side of mechanism design, the behavior of economic agents in gathering and processing information and responding to incentives. I first give an overview of the subject of mechanism design, and then examine a pervasive premise in this field that economic agents are rational in their information processing and decisions. Examples from applied mechanism design identify the roles of perceptions and inference in agent behavior, and the influence of systematic irrationalities and sociality on agent responses. These examples suggest that tolerance of behavioral faults be added to the criteria for good mechanism design. In principle-agent problems for example, designers should consider using experimental treatments in contracts, and statistical post-processing of agent responses, to identify and mitigate the effects of agent non-compliance with contract incentives.

Regulation of private health insurance markets: lessons from enrollment, plan type choice, and adverse selection in medicare part d

Abstract: We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets that control adverse selection and assure adequate access and coverage. We model Part D enrollment and plan choice assuming a discrete dynamic decision process that maximizes life-cycle expected utility, and perform counterfactual policy simulations of the effect of market design on participation and plan viability. Our model correctly predicts high Part D enrollment rates among the currently healthy, but also strong adverse selection in choice of level of coverage. We analyze alternative designs that preserve plan variety.

Regulation of private health insurance markets: Lessons from enrollment, plan type choice, and adverse selection in Medicare Part D

Abstract: We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets that control adverse selection and assure adequate access and coverage. We model Part D enrollment and plan choice assuming a discrete dynamic decision process that maximizes life-cycle expected utility, and perform counterfactual policy simulations of the effect of market design on participation and plan viability. Our model correctly predicts high Part D enrollment rates among the currently healthy, but also strong adverse selection in choice of level of coverage. We analyze alternative designs that preserve plan variety.

Using Internet‐Based Vignette Methods to Understand Elder Residential Choices

Abstract: This paper illustrates an innovative method of administering fractional factorial surveys (vignettes) using the internet. The approach makes it possible to use video clips to deliver information. The method also provides subjects with interactive options before making judgments. A study to determine the views of older people regarding residential options is used to illustrate the method. The study found that the following characteristics of vignette persons affected subject recommendations: personal introduction, functional status, social network, and current housing characteristics. However, characteristics of retirement community features and personal financial status did not affect recommendations.

Sociality, Rationality, and the Ecology of Choice

Abstract: This paper discusses the influence of human sociality on choice behavior, through association with social networks and the influence of these networks on constraints, perceptions, preferences, and decision-making processes. The paper discusses ways to incorporate these factors into choice models, while retaining the aspects of the theory of individual rationality that are predictive. Finally, the paper outlines an econometric method for solving the “reflection problem” of determining whether social affiliations follow preferences, or preferences follow social affiliations, by distinguishing opportunity-based and preference-based motivations for association with social networks.