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Bacterial meningitis in the pediatric population: paradigm shifts and ramifications for otolaryngology-head and neck surgery.

Various population-based studies have suggested that the incidence and epidemiology of bacterial meningitis is changing. No studies have been published which examine a sample population of the United States at large. Records of pediatric patients age 5 and under who were treated for bacterial meningitis (n = 470) at all US Army medical facilities between 1986 and 1991 were reviewed. The incidence of bacterial meningitis declined by 75% in the study group during this period. The largest decrease occurred in infants less than 1 year of age. The bacterial organisms isolated most commonly, in decreasing frequency were: Haemophilus influenza type b (HIB), pneumococcal, streptococcal, and staphylococcal. The most dramatic abatement occurred in Haemophilus meningitis following the introduction of HIB vaccinations. Neurologic sequelae were identified in 10% of meningitis survivors. The 2 most common impairments were hearing loss and speech/language delay. Economic modeling demonstrates tremendous savings in health care dollars from the decrease in disease incidence. These changes will have substantial bearing on training programs and practitioners, since the management of neurologic sequelae requires the expertise of multiple subspecialists. In the face of a medical onslaught, once devastating diseases are in retreat.

Child, Preschool↗

The doctor as double agent: information asymmetry, health insurance, and medical care.

In a model incorporating uncertainty and state-dependent utility of health services, as well as information asymmetry between patients/buyers and physicians/sellers, two types of equilibria are compared: (1) when consumers have conventional third-party insurance and doctors are paid on the basis of fee-for-service; and (2) when insurance is through an HMO which provides health services through its own doctors. Conditions are found under which contractual or legal incentives can overcome the information asymmetry problem and bring about an efficient allocation of resources to health services provision.

Canada↗

Adverse selection, moral hazard, and wealth effects in the Medigap insurance market.

Using data from a longitudinal study of the recently retired we attempt to separate the moral hazard effect of Medicare supplementary (Medigap) insurance on health care expenditures from the adverse selection effect of poor health on Medigap coverage. We find evidence of adverse selection, but its magnitude is unlikely to create serious efficiency problems. Taking adverse selection into account reduces the estimate of the moral hazard effect. In addition, we find a strong positive wealth effect on the demand for supplementary insurance.

Aged↗

Willingness to pay for antihypertensive therapy--results of a Swedish pilot study.

In this methodological study the results of a Swedish pilot study about willingness to pay for antihypertensive therapy are presented. The aim of the study was to test the feasibility of the contingent valuation (CV) method in this area. Open-ended and discrete CV questions were compared in a mail questionnaire. The open-ended CV question did not work well. The answers to the discrete question, analysed by logistic regression analysis, indicated a willingness to pay in the range SEK 2500-5000 per year for antihypertensive therapy. Further studies should be undertaken to explore the reliability and the validity of the CV method.

Attitude to Health↗

'Profit' variability in for-profit and not-for-profit hospitals.

This paper proposes two tests of the hypothesis that not-for-profit hospitals (NFPs) behave differently than for-profit hospitals. The profit variability test states that the profits of an NFP will be less variable over time than profits of a for-profit hospital if the NFP maximizes utility subject to a profit constraint. The second test examines whether NFP profits respond less to change in exogenous factors, such as Medicare reimbursement rates, than profits of for-profit hospitals. Both tests, performed on panel data from 1983 to 1988, support the hypothesis that NFPs behave differently than for-profit hospitals.

Cost Allocation↗

Cost function analysis of Medicare policy: are reimbursement limits for rural home health agencies sufficient?

This paper estimates a hybrid total cost function to determine to what extent an urban/rural differential exists in home health agency expenditures in Wisconsin in 1987-1988. We find that costs are over $16 higher per visit in urban Milwaukee than in rural and small MSA counties, providing no evidence that Medicare reimbursement limits should be raised to reflect 'ruralness'. However, the cost of providing skilled nursing care exceeds both urban and rural reimbursement limits. Because rural agencies depend more on Medicare clients and provide disproportionately more skilled nursing visits, this might represent the source of any financial difficulty.

Health Care Costs↗

Equity considerations in utility-based measures of health outcomes in economic appraisals: an adjustment algorithm.

In this paper we consider whether methods currently used to measure utility of health outcomes are consistent with the equity criteria adopted by researchers. We show that unless the chosen equity criterion is incorporated in the design of the measurement instrument, the derived health state utilities are inconsistent with the equity criterion (except under special circumstances). Adjustment algorithms are derived, based on the axioms of von Neumann-Morgenstern utility theory, which take account of difference equity criteria currently adopted in the literature. The proposed approach is based on simple lottery questions of the type already used widely in empirical studies.

Algorithms↗

The effects of market structure and bargaining position on hospital prices.

PPOs and HMOs have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers. We investigated prices obtained in different types of markets by the largest PPO in California. Our findings indicate that greater hospital competition leads to lower prices. Furthermore, as the importance of a hospital to the PPO in an area increases, the price rises substantially. Our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price-increasing effects of a merger.

Blue Cross Blue Shield Insurance Plans↗

Implications of basing health-care resource allocations on cost-utility analysis in the presence of externalities.

Cost-utility analysis is increasingly being advocated as a tool for helping to establish funding priorities among programs and services in the health-care sector. As currently conducted, however, cost-utility analysis is problematic as a basis for achieving allocative efficiency because it excludes externalities. The exclusion of externalities may bias program ranking in unpredictable ways, leading to a non-optimal allocation of resources. Consideration of externalities also raises a number of distributional issues for the evaluation of health services and highlights the important of developing economic evaluation methods that are consistent with the conceptual basis for allocating resources.

Canada↗

Cost effectiveness/utility analyses. Do current decision rules lead us to where we want to be?

Despite the growing literature on economic evaluation of health care programmes, little attention has been paid to the theoretical foundations of cost-effectiveness and cost utility analyses and the validity of the decision rules adopted as methods of achieving the stated goals. We show that although applications of the techniques can be used to pursue some managerial objectives in the context of highly constrained environments, such applications are inconsistent with both welfare economic objectives and the interpretations of the findings of these applications. Alternative strategies are identified as potential and practical methods for pursuing welfare economic objectives.

Canada↗

Equity in the finance of health care: some international comparisons.

This paper presents the results of a ten-country comparative study of health care financing systems and their progressivity characteristics. It distinguishes between the tax-financed systems of Denmark, Portugal and the U.K., the social insurance systems of France, the Netherlands and Spain, and the predominantly private systems of Switzerland and the U.S. It concludes that tax-financed systems tend to be proportional or mildly progressive, that social insurance systems are regressive and that private systems are even more regressive. Out-of-pocket payments are in most countries an especially regressive means of raising health care revenues.

Cross-Cultural Comparison↗

Equity in the delivery of health care: some international comparisons.

This paper presents the results of an eight-country comparative study of equity in the delivery of health care. Equity is taken to mean that persons in equal need of health care should be treated the same, irrespective of their income. Two methods are used to investigate inequity: an index of inequity based on standardized expenditure shares, and a regression-based test. The results suggest that inequity exists in most of the eight countries, but there is no simple one-to-one correspondence between a country's delivery system and the degree to which persons in equal need are treated the same.

Cross-Cultural Comparison↗

The effect of per-item fees on the behaviour of general practitioners.

The recent government White Paper 'Working for Patients' emphasised the use of financial incentives as a means of altering the behaviour of general practitioners (GPs) in the U.K. This paper examines the impact of financial incentives on GPs' behaviour with respect to maternity care and cervical cytology. Changes in per-item fees over the period 1966-89 appear to have had little effect on the numbers of treatments; rather service provision was related to patient demand and the availability of GPs. However, target payments for cervical cytology introduced in 1990 appear to have had a major impact.

Fees, Medical↗

Technological diffusion in primary health care.

The paper contains a theoretical and empirical analysis of the driving forces behind the diffusion of dry chemical laboratory equipment in Norwegian primary health care. The empirical analysis is embedded in a theoretical model of a dynamic investment problem focusing on heterogeneity in the potential adopters' profit functions. The empirical analysis indicates that most adopters are too late in adopting the new technology. A logit analysis of the diffusion process lends some support to the notion that profit function heterogeneity influences the diffusion process. An offspin of the empirical analysis is information on the reimbursement system, indicating that this system does not promote efficient resource allocation in the sector.

Autoanalysis↗

A risk-based prospective payment system that integrates patient, hospital and national costs.

We suggest that a desirable form for prospective payment for inpatient care is hospital average cost plus a linear combination of individual patient and national average cost. When the coefficients are chosen to minimize mean squared error loss between payment and costs, the payment has efficiency and access incentives. The coefficient multiplying patient costs is a hospital specific measure of financial risk of the patient. Access is promoted since providers receive higher reimbursements for risky, high cost patients. Historical cost data can be used to obtain estimates of payment parameters. The method is applied to Medicare data on psychiatric inpatients.

Costs and Cost Analysis↗