The Wrong Weapon for the Wrong War

The emergency fiscal and monetary policies recently announced remind me of the saying: Generals always fight the last war and economists always fight the last recession. The Great Recession of 2007-2009 was a demand shock recession. The banking system collapsed which required large purchases of bonds by the Federal Reserve and fiscal stimulus to propContinue reading “The Wrong Weapon for the Wrong War”

Where Have You Gone, Vilfredo?

We’re still talking about the high price of drugs and how to lower them while not decreasing incentives for research and development. There is a mechanism for achieving this that was explored over a hundred years ago by an Italian engineer, statistician and economist named Vilfredo Pareto. Government economic policies often contemplate exchanges of wealthContinue reading “Where Have You Gone, Vilfredo?”

The Problem with Drug Price Regulations

In previous posts I asserted that the Centers for Medicare and Medicaid Services (CMS) pays much less than private insurers for the same healthcare services because price discrimination by healthcare providers is easy to achieve (here and here). In general, price discrimination gets a bad rap in the economic literature and is even illegal inContinue reading “The Problem with Drug Price Regulations”

If the Market for Pharmaceutical Drugs is Sick, then What is the Cure?

Markets, like people, can be either healthy or sick. Healthy markets need no assistance from the government to provide adequate quantities at reasonable prices; however, sick markets do. For a market to be healthy, its price must equal the marginal cost of production. In equation form this is P = MC. Marginal cost (MC) isContinue reading “If the Market for Pharmaceutical Drugs is Sick, then What is the Cure?”

The Lone Economist Does Drugs

The prices of some life-saving drugs are astronomical in the United States with some treatments costing over $100,000 over the course of a year. Unlike its pricing policies for other types of healthcare, Medicare pays roughly the same for prescription drugs as private insurers. This policy has come under attack by several policy-makers and politiciansContinue reading “The Lone Economist Does Drugs”

Optimal Medicare Expansion

I have explained Optimal Medicare Expansion (OME) in several posts but haven’t provided a comprehensive summary of all its features vis-a-vis the other public health insurance proposals.  Each proposal I have seen has at least one major flaw compared to OME. What follows is a brief synopsis of its features with comparisons to the majorContinue reading “Optimal Medicare Expansion”

Hustlers, Handicaps and Health Insurance

I’ve been calling my idea for a better public health insurance system Medicare Prime. However, I should have Googled it first, since there is a company that has already trademarked that name. So, I’ll use Optimal Medicare Expansion (OME) from now on. Part of the fun of being a masked vigilante is that I canContinue reading “Hustlers, Handicaps and Health Insurance”

There is No Such Thing as Universal Healthcare

Medicare For All is often described as being one way to achieve universal healthcare, a system in which all residents are assured access to healthcare. Such descriptions remind me of the tired but true adage that there is no such thing as a free lunch. A while back, the Lone Economist conceded that the USAContinue reading “There is No Such Thing as Universal Healthcare”

Free PIE for Everyone!

Readers of my blog are aware that I am not a big fan of Obamacare and Medicare For All (MFA). I have proposed an alternative to these two programs, Medicare Prime (MP). But the term “alternative” implies that this new proposal is opposed to Obamacare and MFA. The fact is that MP is a generalizedContinue reading “Free PIE for Everyone!”