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Application of an economic model to the study of leprosy control costs.

The effectiveness of various control methods for reducing the incidence of leprosy have been tested over 20 years and compared with predictions made using the present current control method (early diagnosis and mass treatment). Specific vaccination of the whole population, a control measure yet to be developed, has been identified as the most effective strategy in the long run. A cost-effectiveness analysis has been carried out for three indicators, annual incidence, annual prevalence and cumulative prevalence at 20 years, using cumulative costs. The analysis indicates that specific vaccination at high levels of coverage is the most effective method for controlling incidence in the long term. Provided the cost of the vaccination campaign during the first years (roughly fourfold the funds required for carrying out the current strategy) can be supported, specific vaccination is also the most cost-effective method where a high level of effectiveness is required. Specific vaccination is still the most advantageous method if prevalence or cumulative prevalence are taken to indicate the effectiveness of leprosy control. The BCG-type of vaccination is not only less effective, it is also less cost-effective. Reducing the rate of abandonment of treatment (which in the model has been simulated by increasing the rate of resuming treatment) and earlier detection both appear as useful methods under conditions of severe budgetary constraints. Their ultimate effectiveness in terms of incidence reduction is, however, very small. As expected, segregation is costly and ineffective compared with other methods. In each simulation, the cost of treating the backlog of patients already ill or infected (incubating) at the time the control measures are initiated is high. Methods aimed at reducing transmission, such as vaccination, early treatment or segregation, have long-delayed effects on the cost even if incidence is reduced. The major cost item in these control measures is the prolonged or even life-long treatment of patients. The development of fast-acting, effective treatment is likely to be the only way to reduce the cost in the short term. Thus, in addition to research aimed at developing a vaccine for leprosy, resources should also be allocated for developing new therapeutics.

BCG Vaccine↗

An economic model of large Medicaid practices.

Public attention given to Medicaid "mills" prompted this more general investigation of the origins of large Medicaid practices. A dual market demand model is proposed showing how Medicaid competes with private insurers for scarce physician time. Various program parameters--fee schedules, coverage, collection costs--are analyzed along with physician preferences, specialties, and other supply-side characteristics. Maximum likelihood techniques are used to test the model. The principal finding is that in raising Medicaid fees, as many physicians opt into the program as expand their Medicaid caseloads to exceptional levels, leaving the maldistribution of patients unaffected while notably improving access. Still, the fact that Medicaid fees are lower than those of private insurers does lead to reduced access to more qualified practitioners. Where anti-Medicaid sentiment is stronger, access is also reduced and large Medicaid practices more likely to flourish.

Fee Schedules↗

[Evaluation of drug iatrogeny by medico-economic modelling techniques].

Decision-making methods can be extremely useful in managing the large amount of information available on the complex effects of medication over various time spans. Event trees help to formulate data and visualise the medical strategies with the highest performance in regard to clinical benefits, adverse side effects, cost and cost-benefit ratios. However when the quantity of phenomena becomes too diversified (i.e. multiplicity of events, long observation periods, changing variables, etc.) we can use one of the more sophisticated modelling techniques available with today's more powerful computers.

Anti-Inflammatory Agents, Non-Steroidal↗

Modeling the economic benefits of an AIDS vaccine.

Economic models were used to describe the potential for an AIDS vaccine to prevent medical spending and lost productivity throughout the world. In terms of avoided medical spending, preventing 75% of the AIDS risk for 10 years in one adult male is estimated to be worth US$ 343 in western Europe, US$ 4.59 in south and SE Asia, and US$ 2.67 in sub-Saharan Africa. The expected medical savings from a 75% effective vaccine would exceed US$ 25.00 per person for over 700 million people. Although an AIDS vaccine would save more lives in poverty stricken areas, it would save more money in developed countries. The mismatch between the public health needs and market forces is highlighted by this model.

AIDS Vaccines↗

Economic weights for feed intake in the growing pig derived from a growth model and an economic model.

Economic weights are obtained for feed intake using a growth model and an economic model. The underlying concept of the growth model is the linear plateau model. Parameters of this model are the marginal ratio (MR) of extra fat and extra protein deposition with increasing feed intake (FI) and the maximum protein deposition (Pd(max)). The optimum feed intake (FI0) is defined as the minimum feed intake that meets energy requirements for Pd(max). The effect of varying FI and MR on performance traits was determined. An increase in FI results in a larger increase in growth rate with lower MR. For a given MR, feed conversion ratio is lowest when FI equals FI0. Lean meat percentage (LMP) is largest for a low MR in combination with a low FI. The decrease in LMP with higher FI islargest when FI exceeds FI0. Economic weights for FI, MR and Pd(max) depend on FI in relation to FI0. Economic weights for FI are positive when FI is less than FI0 and negative when FI is larger than FI0. The MR has only then a negative economic weight, when FI is below FI0. Economic weights of FI and MR have a larger magnitude with lower MR and lower Fl. In contrast, economic weights for growth rate and FI derived from the economic model only change in magnitude and not in sign with different levels of these traits. The economic model always puts a negative economic weight on FI since it expresses profit due to a decrease in FI with constant growth rate and LMP. This holds the risk of continuous decrease in FI in pig breeding programs. In contrast, the use of growth models for genetic improvement allows direct selection for an optimum feed intake which maximizes feed efficiency in combination with maximum lean meat growth. It is concluded that recording procedures have to be adapted to collect the data necessary to implement growth models in practical pig breeding applications.

Adipose Tissue↗

An introduction to Markov modelling for economic evaluation.

Markov models are often employed to represent stochastic processes, that is, random processes that evolve over time. In a healthcare context, Markov models are particularly suited to modelling chronic disease. In this article, we describe the use of Markov models for economic evaluation of healthcare interventions. The intuitive way in which Markov models can handle both costs and outcomes make them a powerful tool for economic evaluation modelling. The time component of Markov models can offer advantages of standard decision tree models, particularly with respect to discounting. This paper gives a comprehensive description of Markov modelling for economic evaluation, including a discussion of the assumptions on which the type of model is based, most notably the memoryless quality of Markov models often termed the 'Markovian assumption'. A hypothetical example of a drug intervention to slow the progression of a chronic disease is employed to demonstrate the modelling technique and the possible methods of analysing Markov models are explored. Analysts should be aware of the limitations of Markov models, particularly the Markovian assumption, although the adept modeller will often find ways around this problem.

Economics, Pharmaceutical↗

Economic-demographic modeling with endogenously determined birth and migration rates: theory and prospects.

"The standard demographic approach to population forecasting consists of extrapolating into the future carefully measured birth, death, and migration rates. An alternative is to forecast changes in those rates on the basis of social science theories. In this paper the prospects for incorporating those theories into forecasting models are assessed. The paper has two parts, the first devoted to fertility and the second to migration. Each contains a description of the demographic methods currently used by the US Bureau of the Census followed by a comprehensive review of the theoretical foundations for forecasting and an assessment of the prospects for doing so."

Americas↗

Modeling urban decline: a multilevel economic-demographic model for the Dortmund region.

"Selected results of a multilevel dynamic simulation model of the economic and demographic development of the urban region of Dortmund [Federal Republic of Germany] are presented. In particular, the capability of the model to capture both urban growth and urban decline processes is illustrated. The mechanisms that control spatial growth, decline, or redistribution of activities in the model are first outlined, and a demonstration of how the model reproduces the general pattern of past spatial development follows. Finally, results of simulations covering a wide range of potential overall economic and demographic development in the region are discussed." (summary in FRE, ITA, JPN, )

Demography↗

[The role of models in economic evaluation of healthcare].

INTRODUCTION: The information on which decision-making in healthcare is based --especially information on new drugs or technologies-- comes mainly from phase III clinical trials, which are carried out according to clinical efficacy criteria. Placebos are frequently used as comparators. Therefore, no clinical or economic evidence is usually available to assess the new product or technology in real-life practice (effectiveness). Efficiency is seldom evaluated either. METHODS: The clinical evidence generated by clinical trials usually evaluates intermediate, not final clinical variables. This makes decision-making difficult, both for clinicians or health-care managers in areas as varied as financing drugs or technology, inclusion of these in a therapeutic formulary or in clinical pathways. CONCLUSION: To obtain clinical and economic information, modelling techniques have been developed in the field of health economics. This study reviews the justification of the use of models, their characteristics, methodological requirements and steps followed for their construction and resolution, while Markov models are explained.

Clinical Trials, Phase III as Topic↗

General equilibrium of an ecosystem.

Ecosystems and economies are inextricably linked: ecosystem models and economic models are not linked. Consequently, using either type of model to design policies for preserving ecosystems or improving economic performance omits important information. Improved policies would follow from a model that links the systems and accounts for the mutual feedbacks by recognizing how key ecosystem variables influence key economic variables, and vice versa. Because general equilibrium economic models already are widely used for policy making, the approach used here is to develop a general equilibrium ecosystem model which captures salient biological functions and which can be integrated with extant economic models. In the ecosystem model, each organism is assumed to be a net energy maximizer that must exert energy to capture biomass from other organisms. The exerted energies are the "prices" that are paid to biomass, and each organism takes the prices as signals over which it has no control. The maximization problem yields the organism's demand for and supply of biomass to other organisms as functions of the prices. The demands and supplies for each biomass are aggregated over all organisms in each species which establishes biomass markets wherein biomass prices are determined. A short-run equilibrium is established when all organisms are maximizing and demand equals supply in every biomass market. If a species exhibits positive (negative) net energy in equilibrium, its population increases (decreases) and a new equilibrium follows. The demand and supply forces in the biomass markets drive each species toward zero stored energy and a long-run equilibrium. Population adjustments are not based on typical Lotka-Volterra differential equations in which one entire population adjusts to another entire population thereby masking organism behavior; instead, individual organism behavior is central to population adjustments. Numerical simulations use a marine food web in Alaska to illustrate the model and to show several simultaneous predator/prey relationships, prey switching by the top predator, and energy flows through the web.

Animals↗

Behavioral externalities in natural resource production possibility frontiers: integrating biology and economics to model human-wildlife interactions.

Production possibility modeling has been applied to a variety of wildlife management issues. Although it has seen only limited employment in modeling human-wildlife output decisions, it can be expected that the theory's use in this area will increase as human interactions with and impacts on wildlife become more frequent. At present, most models applying production possibility theory to wildlife production can be characterized in that wildlife output quantities are determined by physically quantifiable functions representing rivalrous resources. When the theory is applied to human-wildlife interactions, it may not be sufficient to model the production tradeoffs using only physical constraints. As wildlife are known to respond to human presence, it could be expected that human activity may appear in wildlife production functions as an externality. Behavioral externalities are revealed by an output's response to the presence of another output and can result in a loss of concavity of the production possibilities frontier. Ignoring the potential of a behavioral externality can result in an unexpected and inefficient output allocation that may compromise a wildlife population's well-being. Behavioral externalities can be included in PPF models in a number of ways, including the use of data or cumulative effects modeling. While identifying that behavioral externalities exist and incorporating them into a model is important, correctly interpreting their implications will be critical to improve the efficiency of natural resource management. Behavioral externalities may cause a loss of concavity anywhere along a PPF that may compel managerial decisions that are inconsistent with multiple use doctrines. Convex PPFs may result when wildlife species are extremely sensitive to any level of human activity. It may be possible to improve the PPF's concavity by reducing the strength of the behavioral effect. Any change in the PPF that increases the convexity of the production set could offer natural resource managers additional opportunities to optimally provide multiple natural resource outputs. Techniques that minimize the effect could focus on either the human or wildlife outputs, or both. Methods could focus on reducing the externality itself through changing the production of the offending output or to reduce the impact of the externality through a change in the production of the affected output. Managers unfamiliar with PPF modeling can employ PPF thinking by recognizing that every decision involves tradeoffs and that sometimes these tradeoffs are unnecessary negative impacts that could be mitigated without compromising the resource.

Animals↗

[Medicamentous kidney protection in type 2 diabetic patients--is cheaper also more economical? A model calculation for Swiss health care].

Impaired renal function occurs in about 50% of patients suffering from type 2 diabetes, and diabetic nephropathy has become the leading cause of endstage renal disease. Reduction of blood pressure to levels around 120/80 mmHg is one of the most effective way to slow progression of diabetic nephropathy. Recent meta-analyses, however, have emphasized on the fact that ACE inhibitors (ACEI) and non-dihydropyridine calcium channel blockers (NDHP-CCB) exert nephro-protective effects which go beyond the effect of blood pressure reduction. This has lately been confirmed by a prospective trial in comparison to the betablocker atenolol. Based on these data, demographics of the Swiss population, literature data on mortality rates of type 2 diabetics with impaired renal function and studies on true costs of antihypertensives, we calculated the costs of a longterm intervention (20 years) with antihypertensives in 3536 middle-aged Swiss patients with type 2 diabetes and macro-albuminuria whose antihypertensive regimen was based either on the ACEI lisinopril, or the ND-HP-CCB verapamil, or the betablocker atenolol. Under atenolol, acquisition costs were lowest, whereas faster loss of renal function over time increased mortality rate and thus reduced the number of patients to be treated. Nevertheless, due to the fact that patients reached uremia and had to be dialyzed, 20 years of atenolol-based regimen with costs of 316 millions of Swiss francs turned out to be much more expensive than the lisinopril- or the verapamil-based regimen with 121 and 38 millions of Swiss francs, respectively. Thus, low acquisition cost is not necessarily the only important determinant of overall costs of drug therapy.

Adult↗

A comparison between integrating clinical practice setting and randomized controlled trial setting into economic evaluation models of therapeutics.

BACKGROUND: Cost-effectiveness analyses generated from randomized controlled trials (RCTs) represent results obtained under ideal experimental conditions (efficacy) and the applicability of these data to real-world settings (effectiveness) may be questionable. OBJECTIVE: To compare cost-effectiveness results obtained from a RCT setting with the results derived from community-based clinical practice. METHODS: Using data from a community-based cohort study and from a RCT, two cost-effectiveness analyses were performed and the incremental cost-effectiveness ratios (ICERs) were calculated for the use of etanercept in the treatment of patients with rheumatoid arthritis. RESULTS: Using an effectiveness-based analysis, the mean quality-adjusted life years (QALYs) gained during the 12-month monitoring period were 0.45 and 0.35 for the treatment and control groups respectively. The ICER for etanercept treatment was 174,200 dollars (CDN) per QALY (95% confidence limits between 119,500 dollars and 285,000 dollars). Incorporating efficacy data obtained from the RCT into the analysis, the mean QALYs gained were 0.56 and 0.35 for the treatment and control groups respectively. This resulted in a substantially lower ICER for etanercept treatment of 82,952 dollars per QALY (95% confidence limits between 66,500 dollars and 103,430 dollars). CONCLUSION: Depending on the type of clinical setting used for the analysis, the resulting ICER for etanercept treatment was very different. These results help to explain the difference in cost-effectiveness reported in previous modeling studies, some based on RCT assumptions and some based on effectiveness setting.

Anti-Inflammatory Agents, Non-Steroidal↗

Economic implications of a new technology installation: a CT model.

Economic factors will have considerable impact on the development, distribution, specifications, and use of any new technology. Costs and revenues of CT in 1980 have been analyzed and used to develop a "model" for installation and operation of a future new imagine method. It is likely that any new method will be expensive, have a high proportion of fixed costs, and will require frequent (efficient) use in order to financially break even with charges acceptable to patients, physicians, and third-party payers. While expenses can be reduced, an associated reduction in quality of care is probable. An economic analysis also suggests that distribution of any new technology to smaller volume radiologic practices will be difficult and probably delayed for several years.

Cost-Benefit Analysis↗

The demographics of macro-economic-demographic models.

A number of macro-economic-demographic models have been created for developing countries during the decades of the 1970s and 1980s. Such models purport to simulate relationships between demographic variables and the process of socioeconomic development in the particular country, with the dual purposes of enhancing our knowledge of the process in particular settings and, by examining alternative scenarios, providing useful information to policy makers on the selection of demographic and economic policies to enhance economic development and improve human welfare. This paper 1st reviews the antecedents and then focuses on assessing the demographic functions (fertility, mortality, and internal migration rates) used in the 2 families of models which have had perhaps the largest number of applications in developing countries--the Bachue models, originating at the International Labour Office (Geneva), and the ESCAP models, originating at the Economic and Social Commission for Asia and the Pacific (Bangkok). Each has been applied, with significant variations, in at least 3 countries. Economic-demographic functions are defined as endogenous (and substantively meaningful, from the points of view of this paper) whenever there is an effect of economic growth or change in economic structure on the particular demographic function. The bulk of this paper assesses the realism and endogeneity of the fertility, mortality, and migration functions used in the Bachue and ESCAP models, noting, where possible, both the apparent and prima facie behavioral relationships and those that are actually important on the dynamic simulation. Shortcomings are described, including the lack of government expenditure functions with effects on demographic variables. The paper concludes more positively, noting areas of congruence and appealing endogenous relationships and functional forms specified in certain country models. It also suggests further development of, on the 1 hand, both simpler and more realistic planning models (focusing on particular behavioral relationships or sectors of importance to the country), which will be easier for country planners to understand and hence use, and, on the other hand, more complex research models aimed at enhancing our understanding of fundamental, dynamic relationships between economic factors, government policies and fertility, mortality and migration rates during the course of socioeconomic change.

Demography↗

Migration in an economic-demographic model for the Canadian provinces.

"This paper is a description of the structure of a multiregion economic-demographic model for the Canadian provinces. An important part of the demographic model is the estimation of net migration equations based on a human capital approach and incorporating the adding-up constraint that arises since the sum of the net migration flows across all provinces must be 0 in each period. These endogenous migration flows allow for variables from the economic model (wage rates and unemployment rates) to influence the source population, the labour force and, therefore, the unemployment rate and other variables in the economic model." The model is used in simulation experiments in order to illustrate the interaction between economic and demographic factors and how this interaction affects the impact of policies.

Americas↗