CONTACT: Kevin Kane, APR, Editor-in-Chief, 1 (585) 399-6635 / Kevin.kane@excellus.com
Ronny Frishman, Managing Editor, 1 (585) 264-9122 / frishman@rochester.rr.com
NEWS FROM: INQUIRY - The Journal of Health Care Organization, Provision, & Financing

ROCHESTER, N.Y. - As the battle over health care reform continues to simmer, those interested in the core principles behind effective reform can look to four compelling papers, "Aspects of Health Reform," in the Summer 2009 issue of INQUIRY.

"Each of these papers addresses critical issues of efficiency and equity that are essential to consider in devising health reform strategies," says INQUIRY Editor Alan C. Monheit, who co-authored one of the papers. "It is our hope that these papers will inform and enlighten the ongoing debate over the structure and components of a viable and affordable health reform package."

The articles were commissioned by the Economic Research Initiative on the Uninsured (ERIU), sponsored by the Robert Wood Johnson Foundation (RWJF) and formerly housed at the University of Michigan. The series begins with an introduction co-authored by former ERIU Director Catherine McLaughlin, now with Mathematica Policy Research, Helen Levy of the University of Michigan, and Brian Quinn of RWJF. The other papers include:

"Employer-Sponsored Health Insurance and the Promise of Health Insurance Reform," by Thomas C. Buchmueller and Alan C. Monheit - This paper discusses how the United States arrived at its employment-based system and looks at the efficiency gains and losses of keeping it. The main issue explored is whether employer-sponsored insurance (ESI) can have a viable role in health system reform or whether it will have to be modified - or even abandoned - as policymakers work toward efficient provision and equitable distribution of health coverage.

"Mandates and the Affordability of Health Care," by Sherry Glied - This essay notes that while most people have an idea of what it means for something to be affordable, there is no standard economic definition of "affordability." Glied discusses the concept of affordability as it has been applied toward publicly supported housing and food, and then lays out the ways in which health care differs. The affordability issue is important because reform proposals are considering subsidies and mandates for expanding insurance coverage.

"Risk Selection and Risk Adjustment: Improving Insurance in the Individual and Small Group Markets," by Katherine Baicker and William H. Dow - The problem of adverse selection has plagued the individual and small group markets--- that is, sicker people tend to want to buy insurance and thus drive up premiums, potentially raising the cost of insurance for healthier people. This paper explores alternative approaches that policymakers have been considering to alleviate adverse selection: individual and employer mandates, government-sponsored purchasing pools, risk adjustment, and reinsurance. The authors suggest broader use of flexible risk adjustment schemes to improve insurance markets.

"Beneficial Moral Hazard and the Theory of the Second Best," by Kevin D. Frick and Michael E. Chernew - This paper challenges the idea that moral hazard associated with health insurance --- increased use of medical care and engaging in riskier behaviors --- is detrimental to welfare. The authors use the "theory of the second best" to show why insurance-induced consumption of medical care may improve welfare: insurance may offset market power and excessive prices; insurance can increase some positive "externalities," such as vaccines; and insurance can mitigate misinformation that often leads to underuse of medical care.

Also in the summer 2009 issue: "The View from Here: Reality Bites Health Reform" - In his most recent column, Editor Alan C. Monheit outlines some of the "harsh economic and political realities" that pose the greatest challenges to crafting successful health care reform.

Spring 2009: "The View from Here: Health Reform Thaw in the Winter of Our Discontent," by Alan C. Monheit

Fall 2008: "Open Letter to the New U.S. President: Health Care Reform in America," from Howard Berman, Bruce McPherson, Roger M. Kenny, Anthony Cirillo, Wayne M. Lerner, John O'Brien, and Douglas Brown