Tuesday, October 23, 2012 2:27pm

Medicare

Question A: Consider one of two proposals for restraining future Medicare spending, each by the same amount: The method that President Obama enacted in the Affordable Care Act — reducing Medicare-related payments to private insurers and altering the payment system for doctors and hospitals — imposes risks on future Medicare patients because over time the supply of doctors, hospitals and insurers willing to offer them health services may decline in response to restrained payments.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question B: Consider the other of two proposals for restraining future Medicare spending, each by the same amount: The method that Governor Romney advocates — giving future seniors a fixed payment for premiums and letting private insurers compete with Medicare — imposes risks on future Medicare patients because competition may not be powerful to enough to offer future seniors the same quality of care that is currently promised without supplementing their premium support.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Disagree 7
There is fat and monopoly markups in the system to be cut. The problem with the ACA is the absence of across the board credible cost cutting
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 8
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 7
Bio/Vote History
         
Autor David Autor MIT Agree 8
Obamacare is a risky step into the unknown; The alternative of voucher-care is a faith-based exercise, already disproved by the evidence.
Bio/Vote History
         
Baicker Katherine Baicker Harvard Uncertain 6
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 3
Bio/Vote History
         
Chetty Raj Chetty Harvard Uncertain 5
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 7
Savings could result both from particular therapies being disallowed as well as control over price of a given therapy.
Bio/Vote History
         
Currie Janet Currie Princeton Strongly Disagree 10
Medicare is such an important market that providers will not be able to turn their backs on these patients.
Bio/Vote History
         
Cutler David Cutler Harvard Agree 3
Every policy has risks, so one can't say no. The evidence suggests this is not major, though.
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 4
It is supposed to be compensated by there being fewer uninsured.
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 2
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 8
The amount of risk depends not just on supply but on the political will to restrain payments if supply shrinks
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 8
Bio/Vote History
         
Fair Ray Fair Yale Agree 4
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 6
Bio/Vote History
         
Goldin Claudia Goldin Harvard Disagree 6
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Did Not Answer
Bio/Vote History
         
Greenstone Michael Greenstone MIT Did Not Answer
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 4
It seems unlikely that such serious cutbacks would ever occur. The risk is to the government's fiscal position, not to US health.
Bio/Vote History
         
Holmström Bengt Holmström MIT Uncertain 5
Implementation details will determine how severe this problem becomes. Not a big problem in many countries with national health insurance.
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 6
These payments come from a bargaining process. When too high, Medicare pushes them down. If there is exit, Medicare will allow them to rise.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 3
Assuming that they actually hold the line on payments.
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 5
Medicare is not on a sustainable path, so some sacrifice of promised future benefits is inevitable.
-see background information here
Bio/Vote History
         
Lazear Edward Lazear Stanford Did Not Answer
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 5
Surely pricing decisions in Medicare have incentive effects but would expect how cuts are made to matter a lot.
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 8
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Uncertain 4
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Disagree 4
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Did Not Answer
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Agree 7
Bio/Vote History
         
Shin Hyun Song Shin Princeton Agree 6
Bio/Vote History
         
Stokey Nancy Stokey Chicago Agree 7
If it becomes a serious problem, the reimbursement method or something else) will be modified.
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 3
Of course, there is no such thing as a risk free lunch.
Bio/Vote History
         
Udry Christopher Udry Yale Agree 4
There is some probability that complementary policies to contain the growth of medical costs will not be sufficiently effective.
Bio/Vote History
         
Zingales Luigi Zingales Chicago Agree 6
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Disagree 6
the problem isn't lack of power from competition but other parts of the plan which do not make sense and may rely on cutting redistribution
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 8
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 7
Bio/Vote History
         
Autor David Autor MIT Strongly Agree 10
There is no evidence that private sector is more effective at healthcare cost control than public sector. Privatization only shifts costs.
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 6
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 3
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 5
Bio/Vote History
         
Chevalier Judith Chevalier Yale Strongly Agree 9
Bio/Vote History
         
Currie Janet Currie Princeton Strongly Agree 10
The market for health care is not competitive. Under this proposal prices will increase, leaving seniors unable to afford care.
Bio/Vote History
         
Cutler David Cutler Harvard Strongly Agree 10
This depends enormously on how the voucher is set wrt expected costs. The proposals involve enormous risks.
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Agree 9
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 3
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Strongly Agree 10
This risk verges on certainty. The private insurance system has not been very good at restraining costs.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Strongly Agree 8
Bio/Vote History
         
Fair Ray Fair Yale Agree 4
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 6
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 7
Cherrypicking will occur and the government option gets more adversely selected.
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Did Not Answer
Bio/Vote History
         
Greenstone Michael Greenstone MIT Did Not Answer
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 4
So, of course, premium support in lieu of Medicare would be raised. Again the risk is to fiscal, not medical, health.
Bio/Vote History
         
Holmström Bengt Holmström MIT Strongly Agree 7
I don't see how competition can eliminate serious adverse selection problems
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 8
Insurance companies will spend money to attract healthy people and push others to Medicare.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 3
Also risky assuming premium support is limited; some cherry picking could also cause problems for traditional Medicare
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 5
Future benefits have to fall, and this is one way. Massachusetts offers hope that a hybrid plan could reduce non-plan costs too.
-see background information here
Bio/Vote History
         
Lazear Edward Lazear Stanford Did Not Answer
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 5
Again seems hard to say - depends on plan requirements and level of premium support.
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 8
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 4
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 5
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Did Not Answer
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Agree 7
Bio/Vote History
         
Shin Hyun Song Shin Princeton Disagree 5
Bio/Vote History
         
Stokey Nancy Stokey Chicago Uncertain 6
It is not obvious what the current system "promises" to a fifty- or sixty-year old.
Bio/Vote History
         
Thaler Richard Thaler Chicago Strongly Agree 7
This one is more substantive. It is like changing from an indexed DB plan to a nominal DC plan. Worse, adds risks that states default!
Bio/Vote History
         
Udry Christopher Udry Yale Strongly Agree 7
Bio/Vote History
         
Zingales Luigi Zingales Chicago Agree 4
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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