There is a new version of my book on health care finance reform.
Well actually it has been available for a while but I have neglected this blog. So not only is there a new version of the book, as of September, 2012, but there was also a brand new website…
To go directly to purchase a copy of Standard Errors: Our Failing Health Care (Finance) Systems And How To Fix Them you can use this link:
If you want to visit the site, you can go to:
If you would like a copy of my dissertation, you can get it at:
My working papers, well those that have found their way to the website, can be reached through:
If you think that capitation, the Medicare/Medicaid Prospective Payment Systems for hospitals, physicians, nursing homes and home health agencies are bad, but do not wuite understand how bad, or why they are bad,
Standard Errors: Our Failing Health Care (Finance) Systems And How To Fix Them
has the answers you are seeking.
Insurance works best when a great many policyholders all buy insurance. Insurance does not work at all if we all buy our insurance from the person living next door. Insurers need a lot of policyholders to benefit from the Central Limit Theorem.
As insurers issue more and more policies, assuming the premiums are correct for the risks being insured, the insurer’s ratio of losses to premiums will more closely approximate the population loss ratio.
As it turns out this is a really good thing because a loss ratio close to the population loss ratio means the insurer can plan for its economic liabilities and will know exactly what its losses will be before it writes the policies.
Rather than having a great deal of risk, a very, very large insurer has virtually no risk at all.