Addressing economic challenges in an evolving health care market

Health-care spending represents nearly 20 percent of the U.S. economy. Following the enactment of the Affordable Care Act, many observers have agreed that new and forward-thinking policy solutions are needed to confront the enduring economic challenges in health care and health insurance markets. Fortunately, promising developments toward addressing these challenges have been identified through innovative new research on topics ranging from: enhancing consumer decision-making in health plan selection; innovating how health plans cover new medical technologies and treatments; and reexamining the charity care provided by nonprofit hospitals.

On October 7, The Hamilton Project hosted a policy forum addressing these economic challenges in an evolving health-care market, with a focus on three new papers released in conjunction with this event. Opening remarks were delivered by former U.S. Treasury Secretary Robert E. Rubin. Jason Furman, chairman of The Council of Economic Advisers, delivered framing remarks. Event participants included: Peter Orszag, nonresident senior fellow in Economic Studies at Brookings and vice chairman of corporate and investment banking at Citigroup, Inc.; Rick Pollack, president and CEO of the American Hospital Association; Niall Brennan, chief data officer, the Centers for Medicare & Medicaid Services; Julie Rovner, Robin Toner distinguished fellow and senior correspondent, Kaiser Health News; Martin Gaynor, E.J. Barone professor of economics and health, Carnegie Mellon University; and Dan Durham, executive vice president, America’s Health Insurance Plans.

The first panel discussed a new paper by Professors David Dranove, Craig Garthwaite and Christopher Ody (each of Northwestern University’s Kellogg School of Management) which proposes a tradable credit system of community benefits in the non-profit hospital sector. The second panel focused on two new papers: “Correcting Signals for Innovation in Health Care,” by Professors Nicholas Bagley (University of Michigan), Amitabh Chandra (Harvard University), and Austin Frakt (Boston University) and “Improving Decision Making in Health Insurance Markets” by Professors Benjamin Handel and Jonathan Kolstad (both of University of California, Berkeley).