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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Today’s Policy Update: Fewer Companies Are Starting, Brookings Thinks This Is a Big Problem



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U.S. companies are getting older on average, a Brookings report finds, and they think it’s a problem.

In the Wall Street Journal, Asma Ghribi reports on a Brookings Institute report showing that the rate of new business growth in the U.S. has been shrinking for three decades:

The share of firms older than 16 years has increased by eleven percentage points over the last 20 years, and those firms employ an ever-growing proportion of the workforce. And it seems that as existing firms increase their influence, new companies struggle to compete and survive. In every sector, the amount of companies that failed after their first year was significantly higher in 2011 than 1991.

The Brookings authors argue that new, young companies are necessary for innovation and growth, and old companies are keeping newcomers out of the market, a combination that would be detrimental to economic growth.

Did pot legalization really make Colorado’s roads safer? Probably not.

In the Washington PostRadely Balko points out that traffic fatalities in Colorado are for 2014 are lower than they have been on average since 2002, and closer to the lowest rates in the last ten years than the highest ones:

Fatalities in the last two years have been below average and have dropped a bit, but they’re not way below average, so Balko’s suggestion that low fatality rates may have something to do with legalization seems like a stretch.

There is evidence of how that would work: One study found marijuana legalization to be associated with an 8 to 11 percent decrease in traffic fatalities. This could be because people are more likely to use marijuana in their homes instead of in public places from which they have to drive home, or because people substitute alcohol use with marijuana use. Marijuana use has been shown to have minimal detrimental effects on driving ability, so it doesn’t seem like it should matter much either way in the debate.

One way for patients to lower health costs: bargain in an online marketplace.

Kaiser’s Sandra G. Boodman reports on Medibid, a new health-care business that helps patients get much lower prices for some services by allowing providers to bid online to perform the procedures:

To Medibid founder Ralph Weber, a benefits consultant who said he left his native Canada for the United States in 2005 to escape “socialized health care,” using the Internet to arrange non-emergency medical care is long overdue. Americans, he says, are increasingly going online to book travel and even find a mate. Medibid enables them to strip away the opacity that surrounds health-care pricing, Weber maintains, where charges vary wildly even in the same market and can be nearly impossible for consumers to obtain.

“We introduce transparency and also competition,” said Weber, whose company is based in Murfreesboro, Tenn. “We are a disruptive innovation, a free-market alternative to Obamacare.” Weber said that about 120,000 consumers — Medibid calls them “seekers” — have used the service. Many are uninsured, holders of high-deductible plans or enrollees in faith-based plans, which have grown as a conservative alternative to the Affordable Care Act. Seekers are charged $25 for each request or about $60 for an unlimited number of requests per year.

Medibid could be increasingly important as health costs continue to rise and the Affordable Care Act pushes more customers into high-deductible plans, where they’re more conscious about the prices they pay. Goodman reports that the service allowed one patient to receive a knee replacement for just $7,500, which is just half of the lowest price he could find through a typical provider.

To help patients make informed choices, Medibid sends patients their doctor’s license number, which allows patients to find reviews and records for their doctor online. Some members of the medical community, though, still worry that patients won’t get quality care, and insurers are likely to oppose the rise of services like Medibid. It’s not hard to see how there will soon be a move to regulate it out of existence.



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