Executive Health Administration

William D. Leach, Ph.D.

Bill Leach teaches in USC's online master’s program in Public Administration at the Sol Price School of Public Policy.

Recent Posts

8 Communication Strategies to Combat Harmful Health Misconceptions

[fa icon="calendar'] Apr 14, 2015 8:33:00 AM / by William D. Leach, Ph.D. posted in Health Policy, Psychological Sciences, Behavioral Economics, Health Misconceptions

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One of the most popular tools in public health is the “myth-versus-fact” brochure. Government agencies and nonprofits, from CDC to American Red Cross, frequently use this tool to combat misinformation on all manner of health topics including vaccination, fluoridated water, first-aid remedies, and suicide prevention. Myth-versus-fact is also a popular narrative device among journalists who value it for its seemingly balanced airing of both sides of a controversy, and for its ability to hook the reader through dramatic, head-to-head conflict. Engaging our rational and emotional faculties alike, the myth-versus-fact format has obvious appeal... Obvious, and apparently all wrong.

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Obamacare Subsidies: Intergenerational Equity and Economic Impact

[fa icon="calendar'] Mar 26, 2015 8:56:00 AM / by William D. Leach, Ph.D. posted in Health Economics, Affordable Care Act

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When insurance companies began pricing their Affordable Care Act policies in 2013, younger Americans were left holding the short end of the stick. True, young adults ages 18-to-25 were the first demographic to benefit from the 2011 phase-in of the health care law, which allowed adult children to remain on a parent’s policy. Some 2 to 3 million young adults joined the ranks of the insured under that provision. But policies for older Millennials and those without an insured parent were often priced comparably or higher than before Obamacare, even after factoring in federal subsidies. As Forbes columnist Scott Gottlieb put it, “Obamacare is asking young adults to effectively subsidize the healthcare costs of older Americans.” Looking at premium prices alone, young Americans seemed to have gained relatively little from the new insurance exchanges.

To gain broader perspective on the generational equity of Obamacare, it is helpful to place Marketplace subsidies in the context of the nation’s entire social safety net. In a previous post, I detailed how ACA subsidies compare to other entitlement programs in terms of average monthly benefit and total cost to taxpayers. To recap, the average Marketplace subsidy of $268 per month is a modest benefit relative to other programs, such as unemployment insurance, Social Security, Medicare, and Medicaid, which spend $800 to $1,500 per beneficiary per month, on average. Moreover, with a total annual cost of $30 billion, Obamacare subsidies are adding less than 2% to the total cost of America’s social welfare system.

Generational issues come into focus by ranking the various social programs according to age of beneficiary, as in the first two graphics below.

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Affordable Care Act Subsidies in Perspective

[fa icon="calendar'] Mar 16, 2015 8:49:00 AM / by William D. Leach, Ph.D.

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On January 26, the UK’s Daily Mail ran a headline "Obamacare program costs $50,000 in taxpayer money for every American who gets health insurance." The claim was repeated in various blogs and news sites, drawing the attention of fact-check organizations, which criticized the British tabloid for glossing over the fact that this was a 10-year total (not the annual cost), and for conflating insurance subsidies with several other provisions of the health care law.

The actual cost will be closer to $268 per month per person, which works out to $3,216 per year.  According to the Department of Health and Human Services, this is the cost of the average subsidy for the 6.5 million people who had enrolled via the federal exchange for 2015 coverage, as of January 30.  An earlier Congressional Budget Office report had projected somewhat larger subsidies, averaging $4,330 per year for 2015.

With the politics of the Affordable Care Act subsidies in full swing, and the Supreme Court set to rule this summer on whether the IRS can provide the subsidy in the 37 states that rely on the federal Marketplace, now is a good time to place ACA subsidies in perspective by examining their fiscal impacts relative to other social welfare programs.

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Four Ways Behavioral Economics Can Drive Smarter Decisions in Health Care

[fa icon="calendar'] Mar 2, 2015 6:56:00 AM / by William D. Leach, Ph.D. posted in Pay-for-Performance, Health Policy, Health Economics, USC Schaeffer Center, Psychological Sciences, Accountable Care Organizations, Behavioral Economics

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In the 200-year history of the social sciences, no assumption about human nature has been more influential than the idea that people are basically rational and self-interested.  Rational self-interest is a defining premise in economics, and it has propagated throughout the social sciences to fields such as public administration and human resource management. If you want employees to work harder, the prescription is clear: pay them more when they perform well, and monitor their performance to detect and punish shirking.
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