Michael Worley and Dr. Mark Showalter, Economics

This project had two main, interdependent goals. The first was to study changes in health care costs over the past few decades and consider changes in policy over the course of the recent past in the context of recent health care legislation. The second was to establish a NSF (National Science Foundation) data center at Brigham Young University, and thereby have access to much better data to analyze to help us understand the affects changes in policy had.

The NSF project, of course, required approval by the University which, unfortunately, was never obtained. This reduced severely the amount of work doable and attainable by this project. It was discovered that the majority of data useful on the project was only available through the data center. Only summary statistics were available for most of the project.

Notwithstanding, 2 substantial papers were written. The first paper showed that costs were rising substantially throughout the country. Of special focus was the New England states, which have had higher costs for many years. As the paper said “The New England area average was $1,221 for small firms, compared to $794 nationwide. For large firms, the average was $1097, compared to $907 nationwide).”

Nationally, the paper confirmed what the media had already reported– the cost of health insurance has been rising dramatically, double or more the rate of inflation. This provided independent confirmation These changes were especially big among family plans– family plans rode by approximately $1000 (see figure 1). All plans rose by at least 75% from 2001-2008.

This project, while it did not produce all of its stated objectives, led to two papers. In addition, skills for further analysis of state-level data were achieved. Building off of the work, a paper was also written regarding instrumental variables in Health Care for Economics 588. This paper underlined a key problem in the issue of Health Care… most statistics are interrelated and it is head to check for correlations independent of other variables. The paper attempted to find variables, using the database, that wool be good instruments. The overall project led to a substantial skill set the student now carries with him.

Figure 1: Total average cost of deductibles.
Figure 2: Percent rise in cost of deductibles