Feb 25, 2019

New Research on Healthcare and Banking Regulation

Research Round-Up: February 25, 2019
Christian McGuire Communications Associate

How Certificate-of-Need Reform Can Increase Access to Higher-Quality, Lower-Cost Healthcare in Vermont

Matthew D. Mitchell and Elise Amez-Droz | Policy Brief

From the brief: "Unfortunately, CON laws have achieved none of the stated objectives that policymakers intended, which vindicates Congress’s decision to do away with the federal mandate 32 years ago. Instead, research suggests that the rules exist to protect incumbent providers from competition rather than to protect patients or taxpayers. Antitrust authorities at the federal Department of Justice and the Federal Trade Commission have long taken the position that these rules are anticompetitive. And recent research has found that political campaign donations are statistically significantly associated with CON approval.”

When More Competition Does More Good Than Harm in Medical Care and Insurance Markets

Mark V. Pauly | Research Paper

From the summary: "Market competition helps create incentives for testing and selecting ideas to transform an economy while discarding those ideas that don’t work as well. Many informed buyers choose to obtain goods and services (at differing quality levels) from many profit-maximizing and equally informed sellers. But actual markets are imperfect— always less than ideal and sure to be unpredictable. Reducing those imperfections can bring greater gains than the alternatives of a confused status quo or an additional dose of government intervention that might make things worse. Perhaps the greatest benefit from free and vigorous competition in healthcare and insurance markets is that it can encourage sorely needed innovation while helping to select those innovations that produce the best results.”

Regulatory Capital Rule: Capital Simplification for Qualifying Community Banking Organizations

Stephen Matteo Miller | Public Interest Comment

From the comment: "Overall, I commend the regulators for their efforts to put forth a proposal to simplify capital adequacy standards. Simpler, higher measures of capital adequacy that investors can understand and verify will work effectively toward eliminating the “too big to fail” problem that has generated considerable debate. They can also work effectively toward eliminating the “too small to survive” problem that has historically posed a challenge to the broader economy in the United States.”

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