issues every plan to reform health care financing must confront this paper focuses on three main issues of fundamental health care reform first should experience rating the linkage of premiums to actual loss experience be retained despite widespread support for experience rating among economists the paper argues that it should be abandoned for reasons of efficiency and equity second would abandonment of experience rating cause much redistribution the paper shows that redistribution among industries could require significant transitional adjustments third should companies or individuals be subject to an insurance mandate the paper calls for combining individual mandates which have long term advantages with employer mandates which have short run pluses

financing and funding health care optimal policy and political implementability health care financing and funding are usually analyzed in isolation this paper combines the corresponding strands of the literature and thereby advances our understanding of the important interaction between them we investigate the impact of three modes of health care financing namely optimal income taxation proportional income taxation and insurance premiums on optimal provider payment and on the political implementability of optimal policies under majority voting considering a standard multi task agency framework we show that optimal health care policies will generally differ across financing regimes when the health authority has redistributive concerns we show that health care financing also has a bearing on the political implementability of optimal health care policies our results demonstrate that an isolated analysis of optimal provider payment rests on very strong assumptions regarding both the financing of health care and the redistributive preferences of the health authority

claim timing and ex post adverse selection many health care treatments are not urgent and may be delayed if patients so choose because insurance coverage is typically determined by the treatment date individuals may have incentives to strategically delay treatments to minimize out of pocket costs the strategic delay of treatment a particular form of moral hazard can be an important source of subsequent adverse selection in which ex ante identical individuals select insurance coverage based on their differing accumulation of previously delayed treatments this article investigates these forces empirically in the context of the missing market for dental insurance using rich claim level data my analysis reveals that approximately 40 of individuals strategically delay dental treatments when incentivized to do so and this flexibility in delaying treatment can explain why the market for dental insurance has largely unraveled more generally the counterfactual analysis suggests features such as open enrolment periods and contracting on pre existing conditions may be helpful tools in overcoming adverse selection in insurance contexts where the timing of uncertainty is not contractible

combining cartel penalties and private damage actions the impact on cartel prices abstract in many countries antitrust enforcement by competition authorities through prosecution and the imposition of penalties is complemented in price fixing cases by private damage actions which should affect both cartel deterrence and the prices set by those cartels that do form we show that the impact of combining penalties and damages on cartel prices is not clearcut and depends on both the nature of the penalty regime and the way that damages are calculated we demonstrate this by focusing on two ways of calculating damages that have been advocated in practice and two different forms of the widely used revenue based penalty regime when the simple form of revenue based penalties is in force the standard method of calculating damages worsens its harmful pricing effects whereas the proposed alternative method of calculating damages can overturn them when a more sophisticated form of revenue based penalties is in operation imposing damages will improve its beneficial pricing effects under both methods of damage calculation but the alternative method is more effective in all cases combining penalties and damages improves deterrence

public finance principles and national health care reform public finance principles though usually treated as a minor consideration lie at the heart of effective national health care reform four principles are discussed charge for a service where its cost is created distinguish rents resources and transfers know what services cost and pay accordingly balance distributional and equity concerns the principles implications include since employment does not much affect health costs financing particularly of incremental insureds need not be employer based health resources being immobile many cutbacks in expenditure will not reflect real resource savings and health care financing should mesh with an overall program of taxation and expenditure

taxes redistribution and the minimum wage a theoretical analysis this paper considers a simple general equilibrium model that contains two types of workers with differing levels of ability and a social welfare maximizing government the paper shows that social welfare can sometimes be increased by supplementing an optimal linear income tax with a minimum wage but that social welfare can never be increased by supplementing an optimal nonlinear income tax with a minimum wage

legal principles in antitrust enforcement we study antitrust enforcement to channel price fixing incentives of cartels through setting fine schedules and detection levels fines obey legal principles punishments fit the crime proportionality bankruptcy considerations and minimum fines bankruptcy considerations limit maximum fines ensure abnormal cartel profits and impose a challenge for optimal antitrust enforcement we derive the fine schedule and detection level that are constrained optimal under legal principles and sustainability of cartel prices this fine schedule lies below the maximum fine makes collusion on lower prices more attractive than on higher prices and hence relates to marginal deterrence literature this article is protected by copyright all rights reserved

alternative health insurance schemes a welfare comparison in this paper we present a simple model of health insurance with asymmetric information where we compare two alternative ways of organizing the insurance market either as a competitive insurance market where some risks remain uninsured or as a compulsory scheme where however the level of reimbursement of loss is to be determined by majority decision in a simple welfare comparison the compulsory scheme may in certain environments yield a solution which is inferior to that obtained in the market we further consider the situation where the compulsory scheme may be supplemented by voluntary competitive insurance this situation turns out to be at least as good as either of the alternatives

strategic judgment proofing a liquidity constrained entrepreneur raises capital to finance a business activity that may harm bystanders the entrepreneur raises senior secured debt to shield assets from the tort victims in bankruptcy for a fixed level of borrowing senior debt creates better incentives for precaution taking than either junior debt or outside equity the entrepreneur s level of borrowing is however socially excessive giving tort victims priority over senior debtholders in bankruptcy prevents overleveraging but leads to suboptimal incentives lender liability exacerbates the incentive problem even further a limited seniority rule dominates these alternatives shareholder liability mandatory liability insurance and punitive damages are also discussed

the distortive effects of antitrust fines based on revenue in most jurisdictions antitrust fines are based on affected commerce rather than on collusive profits and in some others caps on fines are introduced based on total firm sales rather than on affected commerce we uncover a number of distortions that these policies generate propose simple models to characterise their comparative static properties and quantify them with simulations based on market data we conclude by discussing the obvious need to depart from these distortive rules of thumb that appear to have the potential to substantially reduce social welfare how competition authorities cas should set fines and how they actually do so in practice is a highly debated issue among antitrust practitioners in europe where fines are often set directly by the cas appeal courts have often slashed cas decisions precisely on the grounds of how they set the fines an illuminating example is the uk competition appeal tribunal cat decision in 2011 to cut the fines set by the office of fair trading oft for members of the construction recruitment cartel substantially on the grounds that the wrong measure of affected commerce was used

adverse selection repeated insurance contracts and announcement strategy in this note we present a strategy which relies on multi period contracts and on a self selection mechanism which induces the insured to announce his true risk in the first period thus eliminating inefficiency due to adverse selection

the politics of redistributive social insurance this paper analyses the political support for a social insurance that includes elements of redistribution when there exists an imperfect private insurance alternative individuals differ both in their income and risk the social insurance is compulsory and charges an income related contribution with pooling of risks the private insurance is voluntary and charges a contribution based on individual risks however due to the adverse selection problem private insurance companies provide only partial insurance adopting a non expected utility model we show that there is a general majority support for social insurance and that this support is increasing with risk aversion we also show that a mixed insurance is politically impossible regardless of the degree of redistribution of social insurance and the joint distribution of risk and income in the population lastly we analyse how the political support for social insurance is affected by any change in its redistributive component and the possibility of using genetic tests

social insurance and redistribution with moral hazard and adverse selection rochet 1991 showed that with distortionary income taxes social insurance is a desirable redistributive device when risk and ability are negatively correlated this finding is re examined when ex post moral hazard and adverse selection are included and under different informational assumptions individuals can take actions influencing the size of the loss in the event of accident or ill health social insurance can be supplemented by private insurance but private insurance markets are affected by both adverse selection and moral hazard we study how equity and efficiency considerations should be traded off in choosing the optimal coverage of social insurance when those features are introduced the case for social insurance is strongest when the government is well informed about household productivity

comment defining health insurance affordability unobserved heterogeneity matters affordability is a vague concept bundorf and pauly bundorf m k pauly m v 2006 is health insurance affordable for the uninsured journal of health economics 25 4 650 673 address this problem by establishing clear working definitions of affordability and they use these definitions to estimate the percent of the uninsured who can afford insurance when they establish their definitions of affordability they use a microeconomic model that omits essential characteristics of the health insurance market this comment suggests alternative definitions that better incorporate the structure of the health insurance market discusses both endogeneity and specification problems that might occur when implementing their econometric model to estimate the fraction of uninsured afforders and then recommends ways to reduce omitted variable bias and endogeneity bias

optimal cartel pricing in the presence of an antitrust authority the dynamic behavior of a price fixing cartel is explored when it is concerned about creating suspicions that a cartel has formed consistent with preceding static theories the cartel s steady state price is decreasing in the damage multiple and the probability of detection however contrary to those theories it is independent of the level of fixed fines it is also shown that the cartel prices higher when a more competitive benchmark price is used in calculating damages

health and mortality delta assessing the welfare cost of household insurance choice we develop a pair of risk measures health and mortality delta for the universe of life and health insurance products a life cycle model of insurance choice simplifies to replicating the optimal health and mortality delta through a portfolio of insurance products we estimate the model to explain the observed variation in health and mortality delta implied by the ownership of life insurance annuities including private pensions and long term care insurance in the health and retirement study for the median household aged 51 to 57 the lifetime welfare cost of market incompleteness and suboptimal choice is 3 2 of total wealth

nonmonotonic demand for income redistribution benefits the case of afdc two different motives are often advanced to explain taxpayer nonrecipient support for income redistribution programs the first motive is the result of interdependent utilities between nonrecipients and the recipients of redistribution program benefits the source of this interdependence could be taxpayer altruism alternatively redistribution might be seen as one way to alleviate the potential for crime or social unrest recent theoretical analyses have suggested a second motiveincome redistribution programs act as protection against the possibility of unforseen loss in personal income 5 6 21 32 researchers using panel data find widespread random and temporary movements in individual income poverty and welfare program use that would seem to suggest a potentially significant insurance demand for redistribution programs 2 the results from one study for example indicate that while four to five percent of the total u s population could be classified as persistent recipients of welfare program benefits between 1969 and 1978 receiving program benefits in at least five of those years over one quarter of the u s population participated in welfare programs at least once over this same ten year period 9 74 in the past researchers estimating nonrecipient support for income transfer programs have considered only one of these two motives while ignoring the other 3 this paper extends the examination of the demand for income redistribution by integrating the public good and social insurance demand motives into one model the first part of the paper sets up the individual s decision model for income redistribution one consequence of interacting the public good and social insurance motives into one model is that support for higher benefit payments is expected to come from the tails of the income distribution low income individuals both recipients and nonrecipients benefit directly from the reduced risk of income randomness while high income

two improvements on the clinton framework i t is wonderful that the clinton administration has created the possibility of major reform of health insurance and medical care while the clinton proposal has many good features this comment will suggest two improvements in its present form the clinton proposal allows states to set up a single payer system or to organize the insurance market making heavy use of large regional alliances i will suggest that states should be allowed a third alternative to organize the insurance market with small alliances an advantage of small alliances comes from the distinction between group and individual purchase of insurance as developed below the second suggested improvement involves the question of rationing which is present now and is inevitable in any system for allocating resources the question is who does it and how the clinton plan chooses to offer relatively comprehensive health insurance coverage to all a more efficient form of rationing might offer basic coverage to all making more use of individually purchased supplemental policies as part of the rationing mechanism

penalizing cartels the case for basing penalties on price overcharge yannis katsoulacos acknowledges that this research has been co financed by the european union european social fund esf and greek national funds through the operational program education and lifelong learning of the national strategic reference framework nsrf research funding program aristeia coleg

cost function estimation and quality bias the regulated automobile insurance industry this article explores the implications of endogenous product quality and therefore endogenous output in the empirical estimation of cost functions for regulated automobile collision insurance firms it contains a structural model of such a firm and provides an illustration of the types of biases that can result if data on quality of service are unavailable or otherwise omitted the analysis shows how the directions of biases depend on the nature of the variations in the observed nonquality data a new test suggests that such bias is present in insurance cost functions

medical care costs how much welfare loss hardly a week goes by without a front page newspaper article on rising health care costs and the uninsured in this article i focus mainly on costs arguing that the issue has been somewhat misconceived while the level of medical care spending in the u s is a cause for concern the welfare losses associated with rises in that level of spending may not be as large as the public rhetoric can make them seem in fact cost containment may not be as urgent as is widely supposed and some proposed cost containment policies may result in welfare losses for the insured and even increase the number of uninsured

penalties and the deterrence of unlawful collusion this paper investigates the size of penalties required to deter cartel formation allowing the penalty to be increasing in duration within the infinitely repeated game framework penalties do not need to be as severe as previous research would suggest

incentive compatible guaranteed renewable health insurance premiums theoretical models of guaranteed renewable insurance display front loaded premium schedules such schedules both cover lifetime total claims of low risk and high risk individuals and provide an incentive for those who remain low risk to continue to purchase the policy questions have been raised of whether actual individual insurance markets in the us approximate the behavior predicted by these models both because young consumers may not be able to afford front loading and because insurers may behave strategically in ways that erode the value of protection against risk reclassification in this paper the optimal competitive age based premium schedule for a benchmark guaranteed renewable health insurance policy is estimated using medical expenditure data several factors are shown to reduce the amount of front loading necessary indeed the resulting optimal premium path increases with age actual premium paths exhibited by purchasers of individual insurance are close to the optimal renewable schedule we estimate finally consumer utility associated with the feature is examined

dynamic inefficiencies in an employment based health insurance system theory and evidence we investigate the effects of the institutional settings of the us health care system on individuals life cycle medical expenditures health is a form of general human capital labor turnover and labor market frictions prevent an employer employee pair from capturing the entire surplus from investment in an employee s health thus the pair underinvests in health during working years thereby increasing medical expenditures during retirement we provide empirical evidence consistent with the comparative statics predictions of our model using the medical expenditure panel survey meps and the health and retirement study hrs our estimates suggest significant inefficiencies in health investment in the united states

short term contracts and long term agency relationships abstract long term contracts are valuable only if optimal contracting requires commitment to a plan today that would not otherwise be adopted tomorrow we show that commitments are unnecessary and hence short term contracts are sufficient if 1 all public information can be used in contracting 2 the agent can acess a bank on equal terms with the principal 3 recontracting takes place with common knowledge about technology and preferences and 4 the frontier of expected utility payoffs generated by the set of incentive compatible contracts is downward sloping at all times

determination of optimal penalties for antitrust violations in a dynamic setting we analyze a differential game describing the interactions between a firm that might be violating competition law and the antitrust authority the objective of the authority is to minimize social costs loss in consumer surplus induced by an increase in prices above marginal costs it turns out that the penalty schemes which are used now in eu and us legislation appear not to be as efficient as desired from the point of view of minimization of consumer loss from price fixing activities of the firm in particular we prove that full compliance behavior is not sustainable as a nash equilibrium in markovian strategies over the whole planning period and moreover that it will never arise as the long run steady state equilibrium of the model we also investigate the question which penalty system enables us to completely deter cartel formation in a dynamic setting we found that this socially desirable outcome can be achieved in case the penalty is an increasing function of the degree of offence and is negatively related to the probability of law enforcement

persistence in medicare reimbursements and personal medical accounts this study uses the continuous medicare history sample cmhs a longitudinal sample of medicare beneficiaries from 1974 to 1997 to identify persistence in medicare reimbursements consistent estimates of medicare reimbursement persistence are obtained using a dynamic panel tobit model lagged reimbursements are statistically significant in explaining a beneficiary s current year reimbursements yet their effect is moderate in magnitude an additional dollar of medicare spending in the previous year gives rise to 0 19 in spending in the current year for those who have positive expenditures and the effect ranges between 0 16 and 0 25 past spending patterns for up to 5 years are also used to evaluate the out of sample prediction capabilities of a multi equation cross sectional model simulated spending patterns for several cohorts are derived and compared to actual spending the simulated spending distributions are used to study the feasibility of establishing retirement health accounts for medicare patients

price fixing the probability of getting caught the authors estimate the probability that a price fixing conspiracy will be indicated by federal authorities to be at most between 0 13 and 0 17 in a given year the authors estimate is based on conspiracy durations calculated from data reported for a large sample of department of justice cases and a statistical birth and death process model describing the onset and duration of conspiracies copyright 1991 by mit press

regulatory decision errors legal uncertainty and welfare a general treatment abstract we provide a general treatment of the implications for welfare of various sources of legal uncertainty facing agents about the decisions made by a regulatory authority we distinguish the legal uncertainty from the decision errors made by the authority while an increase in decision errors will always reduce welfare for any given level of decision errors information structures involving more legal uncertainty can improve welfare this holds always when sanctions are set at their optimal level this transforms radically one s perception about the costs of legal uncertainty we also provide general proofs for two results previously established under restrictive assumptions

time consistent health insurance currently available health insurance contracts often fail to insure long term illnesses sick people can suffer large increases in premiums or denial of coverage i describe insurance contracts that solve this problem their key feature is a severance payment a person who is diagnosed with a long term illness and whose premiums are increased receives a lump sum equal to the increased present value of premiums this lump sum allows him or her to pay the higher premiums required by any insurer people are not tied to a particular insurer or a group and the improvement is free insurance companies can operate at zero economic profits and consumers can pay exactly the same premium they do with standard contracts

what can the duration of discovered cartels tell us about the duration of all cartels estimates of average cartel duration and the annual probability of cartel death are based on data for discovered cartels it is recognised that these estimates could be biased because the population of discovered cartels may not be a representative sample of the latent population of cartels this article constructs a birth death discovery process to investigate the source and direction of possible biases bayesian inference is used to provide bounds on the extent of the bias and deliver an improved set of beliefs on the probability of cartel death

premium subsidies and social health insurance substitutes or complements premium subsidies have been advocated as an alternative to social health insurance these subsidies are paid if expenditure on health insurance exceeds a given share of income in this paper we examine whether this approach is superior to social health insurance from a welfare perspective we show that the results crucially depend on the correlation of health and productivity for a positive correlation we find that combining premium subsidies with social health insurance is the optimal policy

cartel pricing dynamics in the presence of an antitrust authority cartel pricing is characterized when firms are concerned about creating suspicions that a cartel has formed balancing concerns about maintaining the stability of the cartel with those of avoiding detection the cartel may either i gradually raise price to its steady state level or ii gradually raise price and then have it decline to its steady state level antitrust laws may have a perverse effect as they make cartel stability easier and thus allow for higher cartel prices

budget effects of health care vouchers abstract several proposals aim at developing private insurance markets as a substitute for government financing of health care spending reform proposals typically include the use of the fiscal system we look at the effects of vouchers as an instrument for inducing individuals to opt out from public health insurance plans we show that vouchers do lead individuals mainly good health risks to opt out from the social program this is accompanied by an overall increase in government spending due to transfers to be made unless significant savings due to moral hazard control are available this may run against the government s objective of public spending containment the result is fairly general and does not depend on the existence of a solidarity component as it has been commonly argued

public health insurance and optimal income taxation abstract if individuals differ not only in their inherent capacity to earn income but also in the probability that they will fall ill can subsidized public health insurance be justified on the grounds that it serves as an efficient tool to redistribute welfare this question is analyzed in a model where the social welfare function is a weighted average of individual expected utilities and where taxation is by a linear income tax the answer is yes except in certain special cases

optimal social health insurance with supplementary private insurance abstract this paper investigates the structure of a national health service in which there is compulsory social insurance covering a package of essentials a given part of individuals health expenditure and supplementary private policy topping up the remaining services the latter insurance contract provides for a co payment by patients limiting the so called third party payer effect thus an individual s health expenditure is divided into three parts the first covered by social insurance the second by a private policy and the third out of pocket such mixed system design has received increasing attention in recent years and has been adopted by several industrialized countries the conditions for optimal rates of social insurance coverage and of private coinsurance are analysed and discussed the optimality requirements refer to efficiency as well as equity concerns

long term short term and renegotiation on the value of commitment in contracting spot contracting generally involves efficiency losses relative to long term contracting it is proved here that short term contracting and renegotiation allow to achieve long run efficiency when transfers are not limited objectives are conflicting and no relevant asymmetric information appears at recontracting dates this last assumption excludes adverse selection but not moral hazard when technologies and preferences are time separable copyright 1990 by the econometric society

majority rule and the public provision of a private good this paper extends the literature on the socialization of commodities by developing a model of voting over the public provision of a private good health care

antitrust penalties and the implications of empirical evidence on cartel overcharges research for this paper was supported by a grant from the economic and social research council res 062 23 2211

optimal risk adjustment in markets with adverse selection an application to managed care it is well known that adverse selection causes distortions in contracts in markets with asymmetric information taxing inefficient contracts and subsidizing the efficient ones can improve market outcomes bruce c greenwald and joseph e stiglitz 1986 although regulators rarely seem to implement tax and subsidy schemes with adverse selection motives in mind contracts are often complex and incomplete and it is the inefficient elements of the contract that are difficult to verify and hence tax or subsidize this is precisely the reason that in health insurance markets rather than subsidizing contracts regulators and payers contend with adverse selection by taxing and subsidizing the price paid to insuring health plans on the basis of observable characteristics of the persons joining the plan a practice known as risk adjustment risk adjusted premiums are paid to managed care plans plans that ration care by management rather than by conventional approaches like coinsurance and deductibles and offer a bundle of characteristics quality access for many services that is fundamentally outside the scope of direct regulation selection related incentives threaten the efficiency and fairness of this organization of health insurance markets by inducing plans to distort the quality of the services they offer to discourage high cost persons from joining the plan as managed care becomes the predominant source of health care for residents of the united states and many other countries payers attempt to address this incentive by setting a risk adjusted price that pays more for more expensive enrollees as it is conventionally practiced risk adjustment sets prices for people proportional to their expected cost based on observable characteristics the federal medicare program for example has used age sex welfare status and county of residence adjusters to set prices to managed care plans to convey how what we term conventional risk adjustment works suppose age is the risk adjuster for a medicare population over 65 if it is determined that the 75to 84 year old population costs 20 percent more than the overall average in medicare the assumption in conventional risk adjustment is that the premium paid to plans for someone in this group should be 20 percent above the average we fundamentally disagree that this is the right way to think about and do risk adjustment

voluntary public health insurance we look at the consequences of allowing public health insurance puhi to be voluntary when its coverage can be supplemented in the market puhi redistributes with respect to risk and income and the market is affected by adverse selection we argue that making puhi voluntary does not lead to its collapse since individuals always participate in it additionally in some cases a voluntary puhi scheme increases market efficiency because participation in it sends a signal to private insurers of an individual s health risk type the welfare consequences depend on the status quo if in the status quo no political support exists for a compulsory puhi making it voluntary constitutes a pareto improvement and in some cases all individuals are strictly better off if instead the status quo implements compulsory puhi making it voluntary then results in less redistribution

reprint of the insurance value of state tax and transfer programs abstract this paper estimates the total value that individuals derive from their state s tax and transfer program and shows how this value varies by income the paper decomposes this total value into two components redistributive value which is due to predictable changes in income and family circumstances and insurance value which occurs when taxes and transfers compensate for unexpected income shocks our approach is a forward looking one where we examine income and transfers net of taxes over a 10 year period we model state taxes personal income taxes the eitc and sales taxes and state means tested transfers afdc tanf and medicaid schip the calculations are made using the panel study of income dynamics and allow for analysis of the role of changes in tax and transfer programs demographics and income in the value of state net benefits over a period of more than 30 years we find that the redistributive value of state tax and transfer programs sharply declines with income but that the insurance value is increasing in income the resulting total value still declines with income but not nearly as sharply as the redistributive value hence the insurance value mitigates the incentives for mobility that would undo state redistributive spending

the multiperiod principal agent problem in repeated principal agent models long term contracts can improve on short term contracts only if they commit either principal or agent to a payoff in some future circumstance lower than could be obtained from a short term contract negotiated if that circumstance occurs we show that efficient contracting under moral hazard alone does not require long term commitment from the principal provided a short term contract can punish the agent sufficiently in a sense made precise it requires no commitment from the agent either then linking payoffs in one period to outcomes in previous periods does not improve the tradeoff between incentives and risk sharing

does enforcement deter cartels a tale of two tails this paper investigates the deterrent impact of anti cartel enforcement it is shown theoretically that if enforcement is effective in deterring and constraining cartels then there will be fewer cartels with low overcharges and fewer with high overcharges this prediction provides an indirect method for testing whether the enforcement of competition law is effective using historical data on legal cartels to generate the counterfactual we find significantly less mass in the tails of the overcharge distribution compared to illegal cartels this result is robust to controlling for confounding factors and we interpret this as the first tentative confirmation of effective deterrence

quantifying the deterrent effect of anticartel enforcement this paper presents a rare attempt to quantify the deterrent effect of anti cartel policy it develops a conceptual framework which establishes the sort of information necessary for such quantification this is then illustrated and calibrated by drawing upon existing literatures and using evidence from legal cartels to approximate what would be observed absent policy measuring impact by the proportion of all potential harm that is deterred our best estimate is two thirds and even on conservative assumptions at least half of all harms or seven times the detected harm is deterred

organizing the health insurance market this paper presents a new approach to organizing universal health insurance first the government divides the entire population into many large groups then the government creates a federal health insurance system healthfed modeled on the federal reserve system to fill the role now played by the benefits office of a large firm the healthfed would create a short menu of alternatives solicit bids for insuring the entire group and price alternatives there would be redistribution between groups and pricing of alterna tives to reflect optimal social insurance principles there would be no connection between health insurance and employment it may seem odd that this presidential address is my first publication in health economics at the time when i might have been working on an alternative address i was chair of an expert panel for the advisory council on social security looking at issues in both retirement income and medical care 2 in the process of this work i have come up with a new approach to organizing universal health insurance that is the subject of this paper before starting on health insurance i will say a few words about a wider context offering what i will say as an example in that setting 3 a great deal of attention has been focused on the exciting issue of reorganizing economies dropping central planning commonly economists from those countries em brace capitalism or more specifically laissez faire competition with an enthusi asm which exceeds that ofwestern economists although not necessarily western businessmen yet laissez faire capitalism has received little serious support in the west for a very long time we all know the fundamental welfare theorem which shows many ways that capitalism can be imperfect we have also seen a growth in discussion and analysis of the many ways governments can mess up resource allocation the real question is the design of arrangements that try to integrate the things that each type of institution does better this is hard for two reasons one is that it is in the realm of second best with many constraints the more the constraints the harder the analysis the second is that we do not have good positive theories of government behavior good examples yes good theories no thus the analysis is more intuitive less theory driven than in our picture of private markets but also in our private market analyses we have been greatly complicating our picture recognizing all sorts of information imperfec tions that affect the way that private markets work so i will present to you a proposal for universal health insurance meant to combine something that

cartel overcharges survey and meta analysis abstract the article presents a novel meta regression analysis of the size of cartel overcharges from a sample of more than 800 observations collected from a wide variety of published sources the analysis of a subsample of 395 cartel episodes finds that duration legal environment and organizational characteristics of cartels explain variation in overcharge rates to a greater extent than the type of publication or the method of calculation overcharges tend to be significantly higher for durable international cartels secular decline is observed as antitrust enforcement regimes have stiffened