Against the proportionality principle: Experimental findings on bargaining over losses.

The outcomes of bargaining over losses, the subject of this paper, have rarely been studied. But experimental studies of related situations, such as those involving bankruptcies or bequests in which the sum of the legal claims that can be made against a bank or firm or estate are greater than their values, have produced strong support for the proportionality principle. To test whether this principle would find support in other situations involving losses we designed an experimental game in which four players start out with differing initial endowments of real money. They are then informed that a certain amount of this resource has to be given back to the experimenter. How should the loss be shared among the agents? This game was run at different locations and under different treatments over a period of almost three years. We found that the proportionality principle was rarely proposed and even less frequently accepted as a solution to this problem. One of the main reasons for this result was that the two players with the smallest endowments opposed most of the proposals which asked them to contribute at least some positive amount of their own initial resource.

Moving Beyond Marriage: Healthcare and the Social Safety Net for Families.

This article teases out the relationship between family form and the state's social safety nets around healthcare, showing the deep unfairness of measuring social safety nets by whether a couple marries. By continuing to tie healthcare benefits to specific family structures, we perpetuate the "galloping" inequality marking America today. This article concludes that, whatever happens with the thousands of benefits given to married couples in other domains, social policy should move beyond marriage with respect to healthcare. Delinking support for healthcare coverage and services from family form is just, better assists struggling families, and is in our collective self-interest.

Bankruptcy Prevention: New Effort to Reflect on Legal and Social Changes.

Every corporation has an economic and moral responsibility to its stockholders to perform well financially. However, the number of bankruptcies in Slovakia has been growing for several years without an apparent macroeconomic cause. To prevent a rapid denigration and to prevent the outflow of foreign capital, various efforts are being zealously implemented. Robust analysis using conventional bankruptcy prediction tools revealed that the existing models are adaptable to local conditions, particularly local legislation. Furthermore, it was confirmed that most of these outdated tools have sufficient capability to warn of impending financial problems several years in advance. A novel bankruptcy prediction tool that outperforms the conventional models was developed. However, it is increasingly challenging to predict bankruptcy risk as corporations have become more global and more complex and as they have developed sophisticated schemes to hide their actual situations under the guise of "optimization" for tax authorities. Nevertheless, scepticism remains because economic engineers have established bankruptcy as a strategy to limit the liability resulting from court-imposed penalties.

Bankruptcy as Implicit Health Insurance.

This paper examines the implicit health insurance that households receive from the ability to declare bankruptcy. Exploiting multiple sources of variation in asset exemption law, I show that uninsured households with a greater financial cost of bankruptcy make higher out-of-pocket medical payments, conditional on the amount of care received. In turn, I find that households with greater wealth at risk are more likely to hold health insurance. The implicit insurance from bankruptcy distorts the insurance coverage decision. Using a microsimulation model, I calculate that the optimal Pigovian penalties are three-quarters as large as the average penalties under the Affordable Care Act.

Regulatory neutrality is essential to establishing a level playing field for accountable care organizations.

Accountable care organizations (ACOs) are among the most widely discussed models for encouraging movement away from fee-for-service payment arrangements. Although ACOs have the potential to slow health spending growth and improve quality of care, regulating them poses special challenges. Regulations, particularly those that affect both ACOs and Medicare Advantage plans, could inadvertently favor or disfavor certain kinds of providers or payers. Such favoritism could drive efficient organizations from the market and thus increase costs or reduce quality of and access to care. To avoid this type of outcome, we propose a general principle: Regulation of ACOs should strive to preserve a level playing field among different kinds of organizations seeking the same cost, quality, and access objectives. This is known as regulatory neutrality. We describe the implications of regulatory neutrality in four key areas: antitrust, financial solvency regulation, Medicare governance requirements, and Medicare payment models. We also discuss issues relating to short-term versus long-term perspectives--to promote the goal of regulatory neutrality and allow the most efficient organizations to prevail in the marketplace.

Washington State cancer patients found to be at greater risk for bankruptcy than people without a cancer diagnosis.

Much has been written about the relationship between high medical expenses and the likelihood of filing for bankruptcy, but the relationship between receiving a cancer diagnosis and filing for bankruptcy is less well understood. We estimated the incidence and relative risk of bankruptcy for people age twenty-one or older diagnosed with cancer compared to people the same age without cancer by conducting a retrospective cohort analysis that used a variety of medical, personal, legal, and bankruptcy sources covering the Western District of Washington State in US Bankruptcy Court for the period 1995-2009. We found that cancer patients were 2.65 times more likely to go bankrupt than people without cancer. Younger cancer patients had 2-5 times higher rates of bankruptcy than cancer patients age sixty-five or older, which indicates that Medicare and Social Security may mitigate bankruptcy risk for the older group. The findings suggest that employers and governments may have a policy role to play in creating programs and incentives that could help people cover expenses in the first year following a cancer diagnosis.