Two interesting posts from Mankiw’s blog

I particularly agree on the following two steps that should be taken to fix the health-care system, one on its supply side and one on its demand side. These thoughts are offered by Jeffrey Flier (The Dean of Harvard Medical School): 

"Second, identify and eliminate the many barriers to entry and innovation in the health care and insurance marketplace. Eliminating what are often hidden barriers to competition will encourage entrepreneurs to offer lower-cost ways of financing and delivering health care, approaches that will deliver greater health care value for the dollars spent.

Third, make a serious effort, despite the context of widespread political demagoguery, toward deeply reforming Medicare and Medicaid. As one of many possible examples, try giving some Medicare and Medicaid enrollees earned income credits so they can make cost-conscious decisions among competing health plans. The sicker and less affluent should receive larger transfers, so they can buy adequate coverage. Among other benefits, such an experiment could break the logjam in payment reform and reliance on fee for service and centralized price controls."


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