Michael Grubb on FCC "bill shock" plan: It could deliver a new jolt to consumers

MIT Sloan Asst. Prof. Michael Grubb

The major cell phone companies recently bowed to pressure from consumer activists and the Obama Administration and agreed to warn users via text message when they are about to exceed the limits of their calling plans. FCC Chairman Julius Genachowski and President Obama himself hailed the agreement. Consumers Union Counsel Parul P. Desai said, “Ultimately, this is about helping people protect their pocketbooks, so we applaud the FCC and the industry for this effort to do right by consumers.”

But would this move to prevent “bill shock”—those big, unexpected charges on monthly bills— really make consumers better off?

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Higher health care spending, better outcomes–vacationers seeking emergency room treatment examined

MIT Sloan Assoc. Prof. Joe Doyle

As the debate about health care costs swirls, I’ve published an article that challenges the common view that higher healthcare spending is not correlated with better health outcomes. To the contrary, I found that tourists who become ill and receive emergency care at “high-spending” hospitals have significantly lower mortality rates compared to tourists who end up in “lower-spending” hospitals.

Because hospitals in general tend to spend more on sicker patients, I knew how difficult it is to estimate returns to healthcare spending. My goal was to compare apples to apples.  It’s not possible to conduct a randomized experiment where some patients go to a high-spending hospital system and others are sent to a low-spending one.  Since most people don’t choose their vacation destinations based on the budgets of local hospitals, tourists come close to mimicking this type of random assignment:  some are exposed to high-spending hospital systems while others are exposed to low-spending ones.

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