DR. FOX – ECONOMIST

DR. FOX – ECONOMIST

When Dr. Fox received his undergraduate degree in 1968, his major was in Economics.  At the time, it was a Keynesian world but he did take a class in Monetary Theory in which one of the textbooks was Milton Friedman’s classic, A Monetary History of the United States, 1867-1960. It was an excellent counterpoint to the Keynesian consensus of the day.

While Dr. Fox then went on to medical school a few years later, he has always maintained an interest in the field of economics, especially as it pertains to healthcare.  The year before he entered the University of Minnesota Medical School he taught a class at the University on Health Care Delivery.

Later, when he was practicing as a specialist in children’s lung diseases, Dr. Fox published a paper entitled Increased Asthma and Bronchiolitis Hospital Utilization Rates for Publicly Insured California Children as Compared to Those Privately Insured and Uninsured in the Journal of Investigative Medicine, Vol. 47:2, p. 84A, February, 1999. The paper can be read here and the presentation slides can be seen here.

This paper found that California children covered under the state’s Medi-Cal program were much more likely to be hospitalized for asthma and related lung diseases, stayed in the hospital longer, and cost more money to treat as compared to children with private health insurance, and even as compared to California children with no insurance at all!  Both the children and the taxpayers would have been better of if the children had been covered by private insurance instead of Medi-Cal.

Still later, when Dr. Fox was a law student at Santa Clara University in 2008, he wrote a paper analyzing the application of the anti-trust laws to the health care industry.  The anti-trust laws are supposed to protect consumers from monopolistic business practices.  However, the methods used to determine whether a corporation is abusing consumers using monopolistic practices are very technical, controversial, and difficult to apply. 

For example, if a big hospital corporation comes into town and buys up the local hospital, or even several of the local hospitals, and then raises its charges to consumers and their health plans, how can this be proven?  It is easier to prove in the case of a simple consumer good, like gasoline, where consumers can easily compare prices and availability among a number of sellers. It is much more difficult to do this with health care where there are a great many different services to consider and there is little or no price information available.

In his paper, Dr. Fox found that the usual tools for competitive analysis used in the field of anti-trust law do not work for the healthcare market because the services are so numerous and specialized that it is hard to comparison shop.  You can read the full paper here, although it is very technical.

Recently, Dr. Fox has been very interested in the economics of the Affordable Care Act (“Obamacare”). Most of those newly insured under Obamacare have been covered by Medicaid, known in California as Medi-Cal.  Based on his earlier studies of Medi-Cal and children’s asthma, he has concluded that a highly regulated, government-directed program, such as Obamacare, is not a good program for either patients or taxpayers.  He thinks that a more free-market solution is necessary, including increasing choice for consumers and providing them with better information on quality, availability, and cost so that they can make more informed decisions. Also, the antitrust laws need to be more effectively implemented to preserve choice for patients and keep costs down.