There are significant simultaneity problems with observing self-insured status v. medical spend. Higher spending encourages opportunities to obtain more control; larger claims experience is more stable and therefore easier to self-insure; larger companies tend to face collectively bargained plans that can be quite rich.

Firms that self-insure are less willing or able to deny, restrict, and inconvenience their employees who wish to use medications than a third party insurance company. Not only is this plausible it would be extremely surprising if it wasn’t true.

After all unlike the third party insurer the firm risks worse employee moral when imposing discouraging measures on medication purchase. Moreover, they lack the knowledge, capital overhead, and corporate culture to effectively discourage medication usage without seeming to be disgustingly evil. I mean let me put the point another way.

An medical insurance company is a firm specialized in finding ways of minimizing claims while appearing to offer broad coverage. . It’s business 101 that they should be better at doing so than a company specialized in something else.

* Did employees at self-insured firms have better health outcomes?
* How did overall (not just employer) spending on healthcare compare with firms that were not self-insured?
* What was the impact on salaries and other benefits offered by self-insured firms, and what were the entry-level, median(, etc.) salaries at self-insured firms comparative to non-self-insured firms? (This could be answered by the way the specified controls were applied, but it makes me interested in how a control for income would work in relation to company-wide insurance policy and spending decisions)
* What was the comparative quality and flexibility of the available policies at self-insured firms v. non-self-insured firms?
* Did self-insured firms experience any differences in employee selection based on any of the specified controls (e.g., different age ranges in self-insured v. non-self-insured firms)?

Good basis for discussion but still need more information.

Either the government or entrepreneurs are going to have to do it. Its not clear to me that the government is going to be better at this than the private sector. At least in America, it seems very unlikely the government will be able to do this. I also seems unlikely the private sector will, though at least they’re saving the patient’s own money.

Its a hard sell either way. The root of the problem may be people’s irrational respect for the medical industry rather than any socialist vs. capitalist argument.

Much better to leave this to entrepreneurs. If this research is right, here’s what you should do. Start a self-insurance management company. Eliminated the procedures you think are wasteful. Replace them with cheaper procedures that deliver whatever benefit is causing people to consume. If it’s psychological benefit, you could have sham procedures that look really impressive. Everybody wins. Especially you, your outsourcing company would be really profitable.

Oh, wait. This would be _prevented_ by regulation. Perhaps the solution then is _less_ regulation.