Hits and Misses
Tyler Cowen reviews the literature: the minimum wage does little to reduce poverty.
Margaret Carlson’s tribute to Tom Coburn.
CNS News interviews me on “death spirals.”
Bryan Caplan explains why economists put so high an economic value on life.
In Europe, immigrants can move to the country that pays the highest welfare benefits.
“Retail clinics run by nurses save money.”
There is no question that NPs and PAs can be useful as physician extenders. In fact, for minor complaints and for routine preventive care, there is not necessarily a need for a full-fledged MD. Additionally, there will most certainly be an MD shortage. However, I believe some backup is essential for the ultimate safety of the system. If NPs will be able to practice independently, why spend all those years and go into debt by going to medical school to become a low-paid primary care physician?
Dr. Goodman explains very well the serious situation we are facing right now. He is warning the American population that there is a threat of a death spiral and that Obamacare has destroyed the individual market. Meaning we are on the verge of a collapse of the healthcare system as a whole. Sometimes the remedy is worse than the disease and the healthcare system is a great example.
When will they understand that an increase in minimum wage will obviously do very little on reducing poverty. Since most earners of minimum wage are second or third earners, this only enriches young people who populate these jobs who are likely students, or are only short term employees.
Not to mention this will only elevate the requirements for these low skilled jobs and make getting employment that much more difficult.
Jobs will only become more scarce.
“How much would you pay to reduce your probability of death by 1 percentage-point? Alternately: How much someone have to pay you to increase your probability of death by 1 percentage-point?”
This definitely is only something that could come out of the mind of an economist.
“But as premiums rise, even less young people sign up for coverage.”
Exactly, because they see no need to pay for expensive premiums when they will only go to the doctor once a year.
Dr. Goodman is correct that since the exchange website has had so many problems, the only ones who persevered and signed up were the already sick. Young people have no incentive to continue to try if he network will not allow them to.
The young generation has enough problems, as they are generally underemployed and coupled with massive student loan debts. Can you blame them for not jumping at the chance to pay high mandated insurance premiums?
The linked article on retail clinics points to a Health Affairs article on research that John linked to a little while back. So no new results in that link. The savings from switching from retail clinics with no nurse independence to practice (cost $543) to having NP practice independence (cost $484) is about $60 per visit (savings go down if NPs can prescribe independently). The authors cite work that projects retail clinics to make up 10% of outpatient primary care visits in 2015. So switching from no NP independence to practice to NP independence to practice (but not prescribe) would lead to a cost savings of $810,000,000. The larger cost savings would be going from non-retail to retail visits. Using the authors numbers if all the non-retail outpatient patients were served by retail clinics with NP independence to practice (but not prescribe) the savings would be about $30 billion. This is no small amount, but it is only a little more than 1% of spending on medical care in the US (total spending = 17% of $16 trillion = $2.7 trillion). So while the savings are worth noting, if we are concerned about cost, retail clinics with NP independence to practice is only a drop in the bucket.
Cowen discusses two different papers that analyze the same problem and arrive to different conclusions. He talks about how Sabia and Burkhauser’s paper concludes that a raise in the minimal wage doesn’t affect, as much, those living in poverty. They state that only 11% of minimum wage workers actually live in poor households, while 63% of them are members of households that surpass the poverty line. He compares this paper to Dube’s econometric paper which concludes the contrary. He questions the validity of Dube’s paper as his econometric model portrays correlation not causation.
Although I’m no expert on the matter I side with Sabia and Burkhauser. They show that those living in poverty are not those receiving the minimum wage, thus an increase in the minimal wage doesn’t translates to having less poor.
The discussion is not being focused on the right issue. I don’t care how many of the poor receive the minimum wage or not. The way to eradicate poverty is by fomenting economic growth and that its benefits are felt throughout the population. The studies should focus on the impact of increasing the minimum wage on GDP and how that affects people living in poverty.
The only real way to improve poverty rates is by fostering economic growth. Increasing minimum wage rates is not a viable solution.
Wow, Caplan’s paper is one of the best pieces I have read in a while. He makes an interesting argument on how to value a person’s life and why economist value life so high. At the end it actually makes sense, you don’t value your life on what you can possibly make in the future. The value of life depends on your willingness to accept (how much do you value your chances of living) as well as others desire for you to live.
It certainly is a more insightful way to determine the value of life.
Margaret Carlson’s tribute to Tom Coburn.
Coburn will be missed.
Retail clinics run by nurses save money.
Let me explain this in economic terms:
1) NPs and PAs have less intensive education and the cost to train them is lower.
2) People who tend to use PAs and NPs present with less serious, trivial complaints — some of which would get better on their own.
3) Allowing people with less expensive education (and lower expectations) to treat less life threatening conditions for lower fees is bound to save money.
NPs and PAs do have less intensive education (though I don’t know what you mean by lower expectations), so that is where some cost savings may come in. Your second point is controlled for by the researchers by only looking at certain medical ailments. From the report, “For each person in our sample, we identified visits to any site or type of provider for the following ten clinical conditions commonly seen in retail clinics: upper respiratory infection, immunization and screening, otitis media, bronchitis, urinary tract infection, eye infection, allergies, viral infection, tonsillitis, and influenza.” By looking at only these 10 conditions and comparing it across medical providers, almost all of the cost savings can be attributed to each provider cost structure rather than the severity of the ailment. NB: I said “almost” all the difference in cost, there still may be some selection issue (which is not modeled in the paper and probably should have been).