Health Economics Class Discussion Forum

Your discussion assignment for this week is the following. Please choose one among the following two topics to discuss.

Topic 1: Marcus Welby Medicine in the 21st Century

Step 1: Read Dr. Arrow’s paper to review the MWM model: Wk11_Arrow.pdfPreview the document.

Step 2: Answer the following questions.

Today, technology has changed everything. Individuals now buy drugs on the Internet and Tweet about their latest visit to the physician office. They can rate their doctors on healthgrades.com. They can research their own illnesses through websites such as WebMD.com and MDAdvice.com.* The recent development of Health Information Technology (HIT) such as Electronic Medical Records (EMR) could help prevent medical errors and exchange patient information among healthcare providers. Moreover, during the current pandemic, the use telemedicine has been expanded to ensure access to essential health services. (See CDC guideline for telehealth services during COVID-19 pandemic: https://www.cdc.gov/coronavirus/2019-ncov/hcp/telehealth.html (Links to an external site.) )

How might you harness modern technology to transform the role of the primary care physician, creating a “Marcus Welby for the 21st Century”? (I.e., how does technology such as telemedicine, healthgrades.com and WebMD.com change the role of primary care physicians?) Specifically, how does modern technology affect demand inducement (i.e., the extent to which physicians could potentially induce demand)?

* Note that these sites are not always a good source for determining what caused their illnesses or accurately providing a self-diagnosis. Sometimes these sites even create frustration and unnecessary worrying.

Topic 2: Identifying Demand Inducement

Step 1: Read Dr. Fuchs’s paper to review the demand inducement model: Wk12_Fuchs.pdfPreview the document .

Step 2: Describe Fuchs identifies demand inducement (i.e., the effect of the supply of surgeons on the demand for operations). Specifically, what instrumental variables (IVs) are used in the two stage least squares (TSLS) regression analysis? Do you think the IVs are valid in the sense that they are uncorrelated with the error terms (i.e., the demand for operations does not affect the IV, and there is no third factor that affects the IV and the demand for operations, aside from factors that are controlled for in the regression)? Explain why or why not. (Hint: here is an interesting article that may give you some idea about the validity of these IVs: Wk12_Dranove.pdfPreview the document)