Emergent Order

Percunia Ante Homines

A most intresting thesis

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Two days shy of a  week ago Robin Hanson made not of his being the chairman of a thesis defense committee.  The thesis has a section asserting that companies that self-insure, to avoid the cost of state regulation on health insurance spend 18%-25% more on their employees than companies that do not. The PhD candidate, Iwona Kicinger, makes this assertion while controlling for age, gender, race, poverty level, income, education, geographic region, firm size, industry, other benefits, unions, single vs. family coverage, and profit vs nonprofit.

Now what one can conclude from this is not clear-cut. Assuming this is true, I would have to ask what are the sources of these additional expenses, what are the health outcomes of the employees of both self- insured and non self-insured firms, and is there a marginal benefit to the increase in cost. In other words, ae these cost increases rational? if not, then one may have to turn to behavioral economics for an explanation.

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Written by weso

December 21, 2009 at 07:07

Posted in Uncategorized

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