STEPHAN GOHMANN, University of Louisville - Department of Economics
Email: sfgohm01@louisville.edu
MYRA J. MCCRICKARD, Bellarmine College - W. Fielding Rubel School for Business
Email: mmcckrickard@bellarmine.edu

Health insurance mandates require health insurers to provide coverage for particular health services or illnesses. This paper examines how various state health insurance mandates influence premiums and enrolment in health insurance plans. Contrary to previous studies that compare premiums across states, we examine premiums for the same plans in cities that lie on state borders. By holding both plan and population characteristics constant, we isolate the impact of state mandates on insurance premiums. We estimate that some mandates can increase premiums by up to 16 percent. These higher premiums not only affect enrollment in health plans, but also can affect the decisions of individuals to become self-employed or to change jobs.

THEODORE R. MARMOR, Yale School of Management
Email: theodore.marmor@yale.edu
ANTONIA MAIONI, McGill Institute for the Study of Canada
Email: antonia.maioni@staff.mcgill.ca

The dialogue links a portrait of health reform politics in the US from the seventies to 2008 by Ted Marmor with a comparable, parallel essay by Antonia Maioni about Canada's struggles. The pairing is also unusual in having the North Americans comment on each other's portrayal. They do not disagree so much with the descriptions as with how those facts appear and what they mean when looking comparatively.

ERIK MEIJER, RAND Corporation
Email: meijer@rand.org
ARIE KAPTEYN, RAND Corporation, Institute for the Study of Labor (IZA)
Email: kapteyn@rand.org
TATIANA ANDREYEVA, Yale University
Email: tatiana.andreyeva@yale.edu

It is widely believed that health plays a major role in retirement decisions. The most important problem in including health in retirement models is the lack of availability of a good measure of health at the individual level in existing data sets. This problem is exacerbated when a model spanning multiple countries is desired, because self-reports on health may not be comparable across countries. Arguably, physical measures are less influenced by cultural and linguistic differences than self-reports on general health or even on health conditions. The authors develop a cross-country measurement model for health in which the relations between functional limitations, self-reports, and physical measures like grip strength are used to construct health indexes. Comparability across countries is achieved by using the physical measurements to define the measurement scales, and allowing other parameters to vary across countries to account for cultural and linguistic differences in response patterns. The usefulness of the health indexes is then investigated by including it in some simple retirement models.

MICHAEL TANNER, Cato Institute
Email: mtanner@cato.org

Critics of the U.S. health care system frequently point to other countries as models for reform. They point out that many countries spend far less on health care than the United States yet seem to enjoy better health outcomes. The United States should follow the lead of those countries, the critics say, and adopt a government- run, national health care system.

However, a closer look shows that nearly all health care systems worldwide are wrestling with problems of rising costs and lack of access to care. There is no single international model for national health care, of course. Countries vary dramatically in the degree of central control, regulation, and cost sharing they impose, and in the role of private insurance. Still, overall trends from national health care systems around the world suggest the following:

* Health insurance does not mean universal access to health care. In practice, many countries promise universal coverage but ration care or have long waiting lists for treatment.
* Rising health care costs are not a uniquely American phenomenon. Although other countries spend considerably less than the United States on health care, both as a percentage of GDP and per capita, costs are rising almost everywhere, leading to budget deficits, tax increases, and benefit reductions.
* In countries weighted heavily toward government control, people are most likely to face waiting lists, rationing, restrictions on physician choice, and other obstacles to care.
* Countries with more effective national health care systems are successful to the degree that they incorporate market mechanisms such as competition, cost sharing, market prices, and consumer choice, and eschew centralized government control.

Although no country with a national health care system is contemplating abandoning universal coverage, the broad and growing trend is to move away from centralized government control and to introduce more market-oriented features.

The answer then to America's health care problems lies not in heading down the road to national health care but in learning from the experiences of other countries, which demonstrate the failure of centralized command and control and the benefits of increasing consumer incentives and choice.

JOHN F. COGAN, Stanford University - The Hoover Institution on War, Revolution and Peace, National Bureau of Economic Research (NBER)
Email: COGAN@HOOVER.STANFORD.EDU
DANIEL P. KESSLER, Stanford Graduate School of Business, National Bureau of Economic Research (NBER)
Email: FKESSLER@STANFORD.EDU
ROBERT GLENN HUBBARD, affiliation not provided to SSRN
Email: ws2187@columbia.edu

Subsidies for health insurance for chronically ill, high-cost individuals may increase coverage in the broader population by improving the functioning of insurance markets. In this paper, we assess an historical example of a policy intervention of this sort, the extension of Medicare to the disabled, on the private insurance coverage of non-disabled individuals. We use data on insurance coverage from the Panel Study of Income Dynamics from before and after the extension of Medicare to the disabled to estimate the effect of the program on private insurance coverage rates in the broader population. We find that the insurance coverage of individuals who had a health condition that limited their ability to work increased significantly in states with high versus low rates of disability. Our findings suggest that that subsidizing individuals with high expected health costs is an effective way to increase the private insurance coverage of other high-cost individuals.

ALAN M. GARBER, Stanford University - Center for Primary Care and Outcomes Research, Government of the United States of America - Palo Alto Veterans Affairs Medical Center, National Bureau of Economic Research (NBER)
Email: garber@stanford.edu
JONATHAN S. SKINNER, Dartmouth College - Department of Economics, National Bureau of Economic Research (NBER)
Email: jonathan.skinner@dartmouth.edu

The U.S. health system has been described as the most competitive, heterogeneous, inefficient, fragmented, and advanced system of care in the world. In this paper, we consider two questions: First, is the U.S. health care system productively efficient relative to other wealthy countries, in the sense of producing better health for a given bundle of hospital beds, physicians, nurses, and other factor inputs? Second, is the U.S. allocatively efficient relative to other countries, in the sense of providing highly valued care to consumers? For both questions, the answer is most likely no. Although no country can claim to have eliminated inefficiency, the U.S. has fragmented care, high administrative costs, and stands out with regard to heterogeneity in treatment because of race, income, and geography. The U.S. health care system is also more likely to pay for diagnostic tests, treatments, and other forms of care before effectiveness is established and with little consideration of the value they provide. A number of proposed reforms that are designed to ameliorate shortcomings of the U.S. health care system, such as quality improvement initiatives and coverage expansions, are unlikely by themselves to reduce expenditures. Addressing allocative inefficiency is a far more difficult task but central to controlling costs.

RANDALL CEBUL, Case Western Reserve University - Center for Health Care Research and Policy
Email: rdc@case.edu
JAMES B. REBITZER, Case Western Reserve University - Department of Economics, Institute for the Study of Labor (IZA), National Bureau of Economic Research (NBER)
Email: JAMES.REBITZER@WEATHERHEAD.CWRU.EDU
LOWELL J. TAYLOR, Carnegie Mellon University - H. John Heinz III School of Public Policy and Management
Email: lt20@andrew.cmu.edu
MARK VOTRUBA, Case Western Reserve University - Weatherhead School of Management
Email: mark.votruba@case.edu

Many goods and services can be readily provided through a series of unconnected transactions, but in health care close coordination over time and within care episodes improves both health outcomes and efficiency. Close coordination is problematic in the US health care system because the financing and delivery of care is distributed across a variety of distinct and often competing entities, each with its own objectives, obligations and capabilities. These fragmented organizational structures lead to disrupted relationships, poor information flows, and misaligned incentives that combine to degrade care quality and increase costs. We illustrate our argument with examples taken from the insurance and the hospital industries, and discuss possible responses to the problems resulting from organizational fragmentation.