Wednesday, May 15, 2013

Legal reform v. behavioral change in health reforms

Here's Hsiao et al. on the importance of considering social norms and behavioral change when enacting health reforms:
Experience has also taught us that, because of its complexity, the behavior of a health-care system is not easy to control.  Change payment schemes, and doctors and hospitals are likely to modify their behavior to defend their incomes.  Impose regulations on hospitals, and reports may be adjusted to show more compliance than actually occurs.  Create new payroll taxes, and some businesses will seek to avoid them.  Furthermore, the causal relationships in the system are complex.  Change incentives to hospitals to foster efficiency, but not the authority of hospital managers, and the new scheme may produce little change.  Institute competitive bidding in situations where there are few competitors, and the hoped-for decline in prices and costs may not occur.  

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