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Tag: Recession

How We Ration Care

There are not very many good things you can say about a deep recession. But from a researcher’s point of view, there is one silver lining. This recession has given us a natural experiment in health economics — and the results are stunning.

But, first things first. Here is the conventional wisdom in health policy:

  • In the United States, we ration health care by price, whereas other developed countries rely on waiting and other non-price rationing mechanisms.
  • The U.S. method is especially unfair to low-income families, who lack the ability to pay for the care they need.
  • Because of this unfairness, there is vast inequality of access to care in the U.S.
  • ObamaCare will be a boon to low-income families — especially the uninsured — because it will lower price barriers to care.

As it turns out, the conventional wisdom is completely wrong. Here is the alternative vision, loyal readers have consistently found at this blog:

  • The major barrier to care for low-income families is the same in the U.S. as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
  • The U.S. system is actually more egalitarian than the systems of many other developed countries, with the uninsured in the U.S., for example, getting more preventive care than the insured in Canada.
  • The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
  • ObamaCare, by lowering the money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.

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Shifts in Humanitarian Aid: A Look at Post-Recession Data

A few agencies have recently published their concerns that the “double dip” recession will negatively affect humanitarian aid, even as the worst famine in decades continues to hit East Africa. Have aid levels really been affected by the recession? If so, which countries are likely to feel the most impact? What factors are shaping aid decisions? In this post, we look at the latest data from the OECD’s Development Assistance Committee (DAC), the definitive source for international humanitarian aid data, and discuss the changes in aid that have transpired since the start of the 2007 recession.

Overall trends

If humanitarian aid shifts during this recession, such a shift would be a new phenomenon; when we investigated global aid trends during prior recessions, we found that aid usually didn’t significantly change during or soon after economic downturns, probably because foreign assistance is such as small part of government budgets, and because aid changes are often driven by disasters and conflicts rather than supply-side politics alone.

The first graph above depicts global humanitarian aid from 2006 to 2009 (all graphs are courtesy of GHA; note that the colors in this graph are incorrect for the last column, which should be black on top and green on the bottom). As shown in the graph, humanitarian aid actually increased a bit during 2008, likely reflecting commitments made before the recession. But aid then decreased 11% to $15.1 billion in 2009. The 2010 numbers won’t be released until later this year. The available figures refer to forms of aid that reach “delivery agencies” such as United Nations subsidiaries, non-governmental organizations and the Red Cross. Of note, while the 2008 contribution from governments is smaller than 2007, it still remains higher than earlier years. Of particular interest is that private donations have increased almost 50% since 2006 and have remained steady during the recession.

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