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PubMed2007

Health care funding levels and patient outcomes: a national study.

BACKGROUND: Health care funding levels differ significantly across geographic regions, but there is little correlation between regional funding levels and outcomes of elderly Medicare beneficiaries. Our goal was to determine whether this relationship holds true in a non-Medicare population cared for in a large integrated health care system with a capitated budget allocation system. METHODS: We explored the association between health care funding and risk-adjusted mortality in the 22 Veterans Affairs (VA) geographic Networks over a six-year time period. Allocations to Networks were adjusted for illness burden using Diagnostic Cost Groups. To test the association between funding and risk-adjusted three-year mortality, we ran logistic regressions with single-year patient cohorts, as well as hierarchical regressions on a six year longitudinal data set, clustering on VA Network. RESULTS: A 1000 dollar increase in funding per unit of patient illness burden was associated with a 2-8% reduction in three-year mortality in cross sectional regressions. However, in longitudinal hierarchical regressions clustering on Network, the significant effect of funding level was eliminated. CONCLUSIONS: When longitudinal data are used, the significant cross sectional effect of funding levels on mortality disappear. Thus, the factors driving differences in mortality are Network effects, although part of the Network effect may be due to past levels of funding. Our results provide a caution for cross sectional examinations of the association between regional health care funding levels and health outcomes.

Adult↗
PubMed2007

An empirical analysis of US and Japanese health insurance using age-period-cohort decomposition.

Aggregate data on household health insurance expenditure in the US and Japan that are classified by period and age are decomposed into age, period, and cohort effects by using the Bayesian cohort models. These models are developed to overcome the identification problem involved in cohort analysis. Despite the differences between the health insurance systems of the two countries, three interesting empirical findings are obtained. First, in both the countries, the age effects are the most influential, and the cohort effects have negligible influence. The latter provides a striking policy implication since the generational imbalance in social security expenditures is widely recognized in developed countries. Second, in both the countries, the period effects show a roughly upward trend. Finally, the age effects exhibit a roughly upward movement for all age groups in the US; however, in Japan, these effects show a downward movement for the 55-59 age group due to the changes in the health insurance system on retirement.

Adult↗
PubMed2007

Unrelated medical care in life years gained and the cost utility of primary prevention: in search of a 'perfect' cost-utility ratio.

An important subject of debate in cost-utility analysis of health care programmes is whether to include costs of unrelated medical care in life years gained. The inclusion of such costs is likely to be of consequence in the case of primary prevention. This paper presents different strategies regarding the inclusion not only of the costs, but also of the health effects of unrelated medical care in economic evaluations. Four different cost-utility ratios are presented and related to the criterion of internal consistency. In addition, the possibility to relate the ratios to a well-posed decision problem is analysed. An example computes the different ratios for smoking cessation interventions in different age groups. Including health care costs of unrelated medical care in life years gained increases cost utility ratios, but excluding unrelated medical costs favours smoking cessation interventions targeted at older smokers over those at younger smokers. We conclude that for primary prevention only a cost utility ratio that includes both the costs and effects of unrelated medical care meets the criterion of internal consistency and is related to a meaningful decision problem. Therefore, this type of cost-utility ratio should be preferred even if the data requirements may be substantial.

Cost-Benefit Analysis↗
PubMed2007

A note on cointegration of health expenditures and income.

Utilizing a panel data set of 50 US states, this note investigates nonstationarity and cointegration of health care expenditures and gross state products (GSP). Both the individual state-based method and the recent panel data method are applied. Allowing for structural breaks in the test, we find that health care expenditures and GSP are both nonstationary. The evidence also suggests that the two series form a cointegrating relationship. The income elasticities of health spending vary over states and became smaller in the 1990s.

Data Interpretation, Statistical↗
PubMed2007

Public versus private health care in a national health service.

This paper studies the interaction between public and private health care provision in a National Health Service (NHS), with free public care and costly private care. The health authority decides whether or not to allow private provision and sets the public sector remuneration. The physicians allocate their time (effort) in the public and (if allowed) in the private sector based on the public wage income and the private sector profits. We show that allowing physician dual practice 'crowds out' public provision, and results in lower overall health care provision. While the health authority can mitigate this effect by offering a higher wage, we find that a ban on dual practice is more efficient if private sector competition is weak and public and private care are sufficiently close substitutes. On the other hand, if private sector competition is sufficiently tough, a mixed system, with physician dual practice, is always preferable to a pure NHS system.

Health Care Rationing↗
PubMed2007

The relationship between road traffic accidents and real economic activity in Spain: common cycles and health issues.

This paper analyses the aggregate relationships between traffic accidents and real economic activity in Spain during the last 30 years. Our general approach is based on two basic assumptions: (1) the number of accidents depends on the use of cars and other exogenous variables, and (2) the level of economic activity affects variation in the stock of cars, as well as degree of utilization. We propose a novel turning point characterization for monthly seasonal data that allows to check whether economic and road accident cycles coincide and, to date the beginning and end of their respective cycles. Empirical results from this section are important in establishing posterior causal models and whether or not economic activity and road accidents have a common component in the long run and a varying lead-lag relationship, depending on the cycles. These models will be the basis to check when Spain will achieve the European Union figures in terms of the fatalities/accidents ratio under different scenarios. Empirical results as well as historical experiences from other European countries proved that reducing fatalities is not only a question of diminishing accidents rates.

Accidents, Traffic↗
PubMed2007

Demand for private health insurance in Chinese urban areas.

Between 1993 and 2003, the proportion of urban residents without health insurance rose from 27 to 50%. The probability of outpatient visits in the previous 2 weeks dropped from 19.9 to 11.8% in urban areas between 1993 and 2003, and from 16.0 to 13.9% in rural areas. To improve risk-pooling and risk-sharing, private health insurance should play an important role in China's health insurance system. This paper estimates the demand for private health insurance in urban areas using contingent valuation methods. Individuals were asked about their willingness-to-pay (WTP) for major catastrophic disease insurance (MCDI), inpatient expenses insurance (IEI), and outpatient expenses insurance (OEI). The study was based on a household survey conducted in four small cities in China in 2004 and included 2671 respondents. More people would like to buy IEI and MCDI (48.5 and 43.0%, respectively) than OEI (24.5%). In addition, individuals would pay a higher premium for MCDI and IEI than for OEI. The price elasticities of demand for MCDI, IEI, and OEI were -0.27, -0.34, and -0.42, respectively. The determinants of enrollment in the three private health insurance programs were similar with employment status, age, education, and income.

Adult↗
PubMed1992

Screening for diabetic retinopathy: a relative cost-effectiveness analysis of alternative modalities and strategies.

Diabetic retinopathy is the most common cause of blindness among adults of working age in the UK. If the disease is detected early effective treatment can be provided and this has resulted in calls for a systematic national screening programme. Using data on the screening of 3423 diabetics collected as part of an experimental programme in three UK centres, the relative cost-effectiveness of various screening options is assessed. The paper utilises direct evidence on a number of single modality screening options, including ophthalmoscopy undertaken by general practitioners or ophthalmic opticians, and non-mydriatic photography. With the objective of increasing the sensitivity of screening and using data collected in the study, options based on two further potential screening strategies are modelled and evaluated: combined screening using both ophthalmoscopy and non-mydriatic photography; and selective screening where high-risk diabetics are directly referred to an ophthalmologist and low-risk cases are either left unscreened or are screened by one of the single or combined modality screening options. Given the objective of early detection, effectiveness is assessed in terms of the sensitivity and specificity of the referral decisions of screening options. Both health service and private resource costs of the various screening options are estimated, the latter in terms of travel and the opportunity cost of time. Cost effectiveness is evaluated in terms of the expected cost per true positive case of diabetic retinopathy referred by the screening options. To narrow the choice between the options, those subject to three-way domination with respect to the three choice variables of sensitivity, specificity and expected cost per true positive are excluded. Amongst the remaining options, the choice is dependent on the trade-off between the higher specifics of unselective single modality screening options and the higher sensitivities and lower expected costs per true positive case detected of combined modality and selective screening options.

Adult↗
PubMed1992

Pooling international health care expenditure data.

The purpose of this paper is twofold. The first is to analyse the statistical relationship between real health care expenditure per capita and aggregate income, public share in finance, age-dependency ratio and inflation. The second purpose deals with methodological problems involved in pooling health care expenditure data. The empirical work is based on pooled cross-sectional, time-series data for 22 OECD countries from 1972 to 1987. Public finance share and inflation were found to be associated with lower per capita health care expenditure. No consistent correlation was found between the age-dependency ratio and health care expenditure. Contrary to results of earlier studies, we found that health care expenditure does not appear to be income (GDP) elastic. However, the results do not appear to be robust to changes in the time periods and countries included.

Age Factors↗
PubMed1992

Are increases in cigarette taxation regressive?

Using the latest published data from Tobacco Advisory Council surveys, this paper re-evaluates the question of whether or not increases in cigarette taxation are regressive in the United Kingdom. The extended data set shows no evidence of increasing price-elasticity by social class as found in a major previous study. To the contrary, there appears to be no clear pattern in the price responsiveness of smoking behaviour across different social classes. Increases in cigarette taxation, while reducing smoking levels in all groups, fall most heavily on men and women in the lowest social class. Men and women in social class five can expect to pay eight and eleven times more of a tax increase respectively, than their social class one counterparts. Taken as a proportion of relative incomes, the regressive nature of increases in cigarette taxation is even more pronounced.

Adult↗
PubMed1993

The cost and efficiency of public and private health care facilities in Ogun State, Nigeria.

During the 1980s, Nigeria faced difficult economic conditions resulting in a severely constrained budget for public health services. To assess more carefully the costs and efficiency of the public and private health sectors, the Federal Ministry of Health in Nigeria undertook a comprehensive survey of health care facilities in Ogun State in 1987, the analysis of which is presented in this study. The findings suggest that there is potential to increase service delivery within existing budgets by more cost-effective allocation of inputs. Many public and private providers are not operating a full technical capacity. It also appears that public facilities are not using cost-minimizing combinations of high and low-level health workers, in particular, too many low-level staff are being used to support high-level workers. The cost analysis indicates that there are short-run increasing returns to scale for inpatient and nearly constant returns to scale for outpatient services. Economies of scope for joint production of inpatient and outpatient services are not being realized. A major implication of such analysis is that improved resource allocation decisions heavily depend on the existence of information systems at the health facility level which carefully integrate financial information with other appropriate and adequate measures of service inputs, health care quality, facility utilization and ultimately health status.

Budgets↗
PubMed1993

Sometimes sensitive, seldom specific: a review of the economics of screening.

As the policy relevance of screening has increased, the application of the techniques of economic evaluation to screening has become widespread. This paper critically reviews the literature, and in so doing, highlights several ways in which future evaluations might be improved. These include: the adoption of a broader perspective regarding the questions to be addressed and the relevant margins; a reconsideration of the nature of the benefits and how they might be valued; and a greater emphasis being placed upon the role of individual behaviour and its potential impact on the outcome of economic evaluations.

Cost-Benefit Analysis↗
PubMed1993

Income transfers and the labour market participation of disabled individuals in the UK.

Data from the OPCS Disability Survey are used to model the labour force participation of disabled individuals. The model is an endogenous switching regression and estimation is by the two stage probit procedure. The estimates are used to simulate the impact of Disability Working Allowance, introduced in April 1992, on the participation rate of the disabled population.

Adolescent↗
PubMed1993

A cell based approach to modelling public expenditure.

The paper examines the use of a cell based model to analyse the effects of demographic change on the level and distribution of public expenditure. The nature and advantages of a cell based model for this purpose are described. The level and distribution of the key components of welfare state expenditure--health, education, social security--and of direct taxes, is examined for the base year of 1985. The net transfer of resources is compared to the distribution of income across cells. The effect of demographic change on the level and distribution of health and education expenditure is analysed. Issues in the further development of this approach are then reviewed.

Adolescent↗
PubMed1993

Financial incentives for physicians: the Quebec experience.

This paper presents an empirical investigation of physician labour supply, based on a two-stage budgeting model, drawing on an analogy with consumer theory. Physicians' trade-offs between income and leisure constitute the first stage of the decision-making process. In turn, choices are made in the second stage concerning the choice of particular activities (hospital versus office care, for example) or procedures (ordinary versus complete medical examinations), given the total medical care activity chosen in the first stage. The objective of the study is to identify physicians' responses to exogenous shocks in the remuneration system. The focus of analysis is shifted away from the identification of Supply-Induced Demand (SID) to a more pragmatic analysis of some of the determinants of physicians' choices. The study uses monthly activity data on a panel of 677 Québec GPs between 1977 and 1983. Quantity adjustments and drifts to more complex (and therefore better paid) procedures are evidenced, mainly in response to a fifteen month tariff-freeze. Physicians' ability to control their own work loads is also documented, both in terms of timing and level of complexity, and expenditure caps (in the form of an individual ceiling on GPs' quarterly gross income) are found to be effective at curbing high activity rates.

Budgets↗
PubMed1993

Capitation payments based on prior hospitalizations.

In many countries the concept of capitating health care insurers is receiving increasing attention. In a competitive environment, capitation should induce insurers to concentrate more on cost containment instead of indulging in risk selection. The necessary premium-replacing capitation payments should account for predictable variations in annual per-person health care expenditures as far as these are related to health status. Various studies have shown that crude capitation models based on e.g. age, sex and place of residence, do not reflect expected costs accurately. This implies inefficient pricing possibly leading to risk selection and windfall profits or losses for insurers, thereby undermining the objectives of a capitation system. Using Dutch micro data on some 200,000 individuals, this article stimulates various alternative capitation models based on, among others, diagnostic information from previous hospitalizations. Results suggest that the problems of both risk selection and windfall profits/losses may be mitigated substantially by using this type of information together with data on prior costs. These results are not only relevant for situations where competing insurers are capitated, as intended in the Netherlands, but also when providers are capitated, as in the UK, or when HMOs are capitated, as in the US.

Capitation Fee↗