Saturday, February 13, 2010

College and health care

What colleges would be like if they priced like hospitals.

This piece is interesting in both directions. In thinking about health care, I have often wondered to what extent the administrative oddities of the health care industry are the result of antitrust rules (preventing development of common intake forms and the sharing of data) and other regulations. Are there state or federal regulations that limit changes in pricing strategies? I expect so.

In terms of higher education, we do in fact charge different prices for different groups: public universities charge different tuition for in-state and out-of-state residents, for students of different ability levels and family backgrounds, for graduate and professional students and so on. Some of these price differences are public information, others, like scholarship offers, are not. So it is not quite the one-price-fits-all industry implicit in the article. And some places, mostly business schools, do use types of pricing mechanisms to allocate slots in high-demand courses and such. Other times there is rationing at random or by waiting or by major, as with my ECON 406 undergraduate econometrics course.

If I had an alter ego, he might well be a health economist. There are so many interesting questions to study.

Hat tip: Ken Troske

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