tag:blogger.com,1999:blog-32053362.post6078165017548862704..comments2024-03-26T00:25:34.026-04:00Comments on Not Running a Hospital: Captivated by captivesPaul Levyhttp://www.blogger.com/profile/17065446378970179507noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-32053362.post-723106160768891162015-05-27T17:34:20.148-04:002015-05-27T17:34:20.148-04:00
Your point is actually a subtle one on several fr...<br />Your point is actually a subtle one on several fronts. Importantly, since stand alone insurance companies make a percentage of their total premiums, it is in their interest for premiums to rise, reflecting increased risk, moderated only by competition, but there can also be a tacit understanding one would think among the insurers not to do too much with intervention. Also, a captive can be much more active within a company than an external company. Here is one instance where vertical integration is quite a good thing.Bobnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-91074477247348343662015-05-27T07:04:16.062-04:002015-05-27T07:04:16.062-04:00True, Barry, that why I cleverly said "everyt...True, Barry, that why I cleverly said "everything else being equal." (The economist's savior and catch-all!)<br /><br />Seriously, over time, those factors could be expected to even out, but you are of course right about their confounding effect.Paul Levyhttps://www.blogger.com/profile/17065446378970179507noreply@blogger.comtag:blogger.com,1999:blog-32053362.post-7433384891638034972015-05-27T06:58:20.966-04:002015-05-27T06:58:20.966-04:00Two issues that could complicate the analysis you ...Two issues that could complicate the analysis you are asking for are (1) any changes, for better or worse, in the local litigation environment over the relevant time period and (2) any changes in patient expectations that might make them more or less likely to sue over a given outcome at different points in time. Separately, if the hospital later adopted a policy like “sorry works” where it admits a mistake and apologizes to the patient and provides appropriate compensation, there could be more payouts than before but each one could be smaller on average, in part, because the patient appreciated the apology and also because the associated legal costs were a lot lower.Barry Carolnoreply@blogger.com