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This study investigates dynamic incentives to select patients for hospitals that are remunerated according to a prospective payment system of the diagnosis-related group (DRG) type. Using a model with patients differing in severity within a DRG, we show that price dynamics depend on the extent of hospital altruism and the relation between patients' severity and benefit. Upwards and downwards price movements over time are both possible. In a steady state, DRG prices are unlikely to give optimal incentives to treat patients. Depending on the level of altruism, too few or too many patients are treated. DRG pricing may also give incentives to treat low-severity patients even though high-severity patients should be treated. Copyright © 2016 John Wiley & Sons, Ltd.

In the absence of a perfect risk adjustment scheme, reimbursing health insurers' costs can reduce risk selection in community-rated health insurance markets. In this paper, we develop a model in which insurers determine the cost efficiency of health care and have incentives for risk selection. We derive the optimal cost reimbursement function, which balances the incentives for cost efficiency and risk selection. For health cost data from a Swiss health insurer, we find that an optimal cost reimbursement scheme should reimburse costs only up to a threshold.

Appropriate decisions based on cost-effectiveness evaluations of health care technologies depend upon the cost-effectiveness threshold and its rate of growth as well as some social rate of time preference for health. The concept of the cost-effectiveness threshold, social rate of time preference for consumption and social opportunity cost of capital are briefly explored before the question of how a social rate of time preference for health might be established is addressed. A more traditional approach to this problem is outlined before a social decision making approach is developed which demonstrates that social time preference for health is revealed through the budget allocations made by a socially legitimate higher authority. The relationship between the social time preference rate for health, the growth rate of the cost-effectiveness threshold and the rate at which the higher authority can borrow or invest is then examined. We establish that the social time preference rate for health is implied by the budget allocation and the health production functions in each period. As such, the social time preference rate for health depends not on the social time preference rate for consumption or growth in the consumption value of health but on growth in the cost-effectiveness threshold and the rate at which the higher authority can save or borrow between periods. The implications for discounting and the policies of bodies such as NICE are then discussed.

This paper analyzes the direct and indirect impacts of Brazil's Family Health Program, using municipality level mortality data from the Brazilian Ministry of Health, and individual level data from the Brazilian household survey. We estimate the effects of the program on mortality and on household behavior related to child labor and schooling, employment of adults, and fertility. We find consistent effects of the program on reductions in mortality throughout the age distribution, but mainly at earlier ages. Municipalities in the poorest regions of the country benefit particularly from the program. For these regions, implementation of the program is also robustly associated with increased labor supply of adults, reduced fertility, and increased school enrollment. Evidence suggests that the Family Health Program is a highly cost-effective tool for improving health in poor areas.

International audience; In this paper, we estimate the causal impact of a positive shock on supplementary health insurance coverage on theuse of specialists who balance bill. For that purpose, we evaluate the impact on patients' behavior of a shock consistingof better coverage of balance billing, while controlling for supply side drivers, i.e. proportions of physicians who balance bill and physicians who do not. We use a panel dataset of 58,336 individuals observed between January 2010 and December 2012, which provides information, at the individual level, on health care claims and reimbursements providedby basic and supplementary insurance. Our data makes it possible to observe enrollees that are heterogeneous in their propensity to use physicians who balance bill. We observe them when they are all covered by the same supplementary insurer, with no coverage for balance billing, and after 5,134 of them switched to other supplementary insurers whichoffer better coverage.Our estimations show that better coverage contributes to a rise in medical prices by increasing the demand forspecialists who balance bill. On the whole sample, we find that better coverage leads individuals to raise their proportion of consultations of specialists who balance bill by 9 %, which results in a 34 % increase in the amount of balance billingper consultation. However, the effect of supplementary health insurance clearly depends on the local supply side organization. The inflationary impact arises when specialists who balance bill are numerous and specialists who do notare relatively scarce. When people have a real choice between physicians, a coverage shock has no impact on the use ofspecialists who balance bill. When the number of specialists who charge the regulated fee is sufficiently high, there isno evidence of limits in access to health care, nor of an inflationary effect of supplementary coverage.

In Norway specialized health services are provided both by public hospitals and by privately practicing specialists who have a contract with the public sector. A patient's co-payment is the same irrespective of the type of provider he visits. The ambition of equity in the allocation of medical care is high among all political parties. The instruments for auditing whether these goals are fulfilled are not equally ambitious. The objective of the present study is to explore whether laws and regulations that govern the allocation of specialist health care resources in fact are fulfilled. Panel data from the Survey of Living Conditions are merged with data on capacity and spatial access to primary and specialist care. We find that accessibility and socio-economic variables play a considerable role in determining both the probability of at least one visit and the number of visits to a private specialist. A person with a higher university degree living in a municipality with the highest value of the geographical accessibility index has a 46%-points higher probability of at least one visit to a private specialist compared with a person with junior high living in a municipality with the lowest value of the accessibility index. With regard to visits to a hospital outpatient department these variables are not found to have significant effects. We conclude that public ambitions and regulations are fulfilled for specialist services provided by public hospitals. With regard to the provision of services provided by publicly financed private specialists we find a discrepancy between public goals and surveyed practice.

The criterion of cost-effectiveness in health management may be given a welfare-theoretical justification if people are risk neutral with respect to life years. With risk aversion, the optimal allocation of health expenditures changes: Compared to the cost-effective allocation, more resources should be allocated to health conditions for which the expected outcomes even after treatment are worse than average. The consequences of medical interventions are usually not known with certainty. Given this type of uncertainty, simple application of cost-effectiveness analysis would recommend maximization of expected health benefits given the health budget. We show that when people are risk averse with respect to the number of life years they live, the uncertainty associated with different types of interventions should play a role in allocating the health budget.

This paper reconsiders the equity issue in Swedish health care utilization previously analysed by Gerdtham (Health Econ 1997; 6: 303-319) within the framework of the standard two-part model. Departing from the user/non-user distinction, we use the more flexible framework of the finite mixture model that distinguishes between frequent/infrequent users. Our results indicate that the support for the inequity hypothesis reported by Gerdtham is sensitive to model specification and the way standard errors of coefficients are estimated. The new framework offers an alternative perspective on the magnitude of the income-related difference in health care utilization.

Successful supply-side interdictions into illegal drug markets are predicated on the responsiveness of drug prices to enforcement and the price elasticity of demand for addictive drugs. We present causal estimates that targeted interventions aimed at methamphetamine input markets ('precursor control') can temporarily increase retail street prices, but methamphetamine consumption is weakly responsive to higher drug prices. After the supply interventions, purity-adjusted prices increased then quickly returned to pre-treatment levels within 6-12 months, demonstrating the short-term effects of precursor control. The price elasticity of methamphetamine demand is -0.13 to -0.21 for self-admitted drug treatment admissions and between -0.24 and -0.28 for hospital inpatient admissions. We find some evidence of a positive cross-price effect for cocaine, but we do not find robust evidence that increases in methamphetamine prices increased heroin, alcohol, or marijuana drug use. This study can inform policy discussions regarding other synthesized drugs, including illicit use of pharmaceuticals. Copyright © 2015 John WileySons, Ltd.

To combat growing levels of obesity, health-related taxes have been suggested with taxes on foods high in fat or sugar. Such taxes have been criticised on the basis of their regressivity and potentially adverse impact upon poverty. This paper analyses the effect of such taxes on a range of poverty measures and also examines the effect of a revenue-neutral tax subsidy mixed with a tax on unhealthy food combined with a subsidy on more healthy food. Using Irish expenditure data, the results indicate that taxes on high fat/sugar goods on their own will be regressive but that a tax-subsidy combination can be broadly neutral with respect to poverty.

To prevent modern diseases such as obesity, cancer, cardiovascular conditions and diabetes, which have reached epidemic-like proportions in the last decades, many health experts have called for students to receive Health Education (HED) at school. Although this type of education aims mainly to improve children's health profiles, it might affect other family members as well. This paper exploits state HED reforms as quasi-natural experiments to estimate the causal impact of HED received by children on their parents' physical activity. We use data from the Panel Study of Income Dynamics (PSID) for the period 1999-2005 merged with data on state HED reforms from the National Association of State Boards of Education (NASBE) Health Policy Database, and the 2000 and 2006 School Health Policies and Programs Study (SHPPS). To identify the spillover effects of HED requirements on parents' behavior we use a "differences-in-differences-in-differences" (DDD) methodology in which we allow for different types of treatments. We find a positive effect of HED reforms at elementary school on parents' probability of doing light physical activity. The implementation of HED for the first time increases fathers' probability of engaging in physical activity in 14 percentage points, although it does not seem to affect mothers' probability of being physically active. We find evidence of two channels that may drive these spillovers. We conclude that information sharing between children and parents as well as the specialization of parents in doing typically-male or female activities with their children may play a role in generating these indirect effects and in turn in shaping healthy lifestyles within the household.

The Janssen-Cilag proposal for a risk-sharing agreement regarding bortezomib received a welcome signal from NICE. The Office of Fair Trading report included risk-sharing agreements as an available tool for the National Health Service. Nonetheless, recent discussions have somewhat neglected the economic fundamentals underlying risk-sharing agreements. We argue here that risk-sharing agreements, although attractive due to the principle of paying by results, also entail risks. Too many patients may be put under treatment even with a low success probability. Prices are likely to be adjusted upward, in anticipation of future risk-sharing agreements between the pharmaceutical company and the third-party payer. An available instrument is a verification cost per patient treated, which allows obtaining the first-best allocation of patients to the new treatment, under the risk sharing agreement. Overall, the welfare effects of risk-sharing agreements are ambiguous, and care must be taken with their use.

We investigate risk selection between public and private health insurance in Germany. With risk-rated premiums in the private system and community-rated premiums in the public system, advantageous selection in favor of private insurers is expected. Using 2000 to 2007 data from the German Socio-Economic Panel Study (SOEP), we find such selection. While private insurers are unable to select the healthy upon enrollment, they profit from an increase in the probability to switch from private to public health insurance of those individuals who have experienced a negative health shock. To avoid distorted competition between the two branches of health care financing, risk-adjusted transfers from private to public insurers should be instituted.

The geographical imbalance of the health workforce in Tanzania represents a serious problem when it comes to delivering crucial health services to a large share of the population. This study provides new quantitative information about how to make jobs in rural areas more attractive to newly educated clinical officers. A unique data set stemming from a discrete choice experiment with clinical officer finalists in Tanzania is applied. The results show that offering continuing education after a certain period of service is one of the most powerful recruitment instruments the authorities have available. Increased salaries and hardship allowances will also substantially increase recruitment in rural areas. Offers of decent housing and good infrastructure, including the provision of equipment, will increase recruitment to rural remote areas but not as much as higher wages and offers of education. Women are less responsive to pecuniary incentives and are more concerned with factors that directly allow them to do a good job, while those with parents living in a remote rural area are generally less responsive to the proposed policies. When the willingness to help other people is a strong motivating force, policies that improve the conditions for helping people appear particularly effective.

When measuring health inequality using ordinal data, analysts typically must choose between indices specifically based upon ordinal data and more standard indices using ordinal data, which has been transformed into cardinal data. This paper compares inequality rankings across a number of different approaches and finds considerable sensitivity to the choice between ordinal- and cardinal-based indices. There is relatively little sensitivity to the ethical choices made by the analyst in terms of the weight attached to different parts of the distribution.

Empirical evidence from U.S. studies suggests that, on average, female physicians earn less than their male counterparts. This gap in earnings does not disappear when individual and market characteristics are con- trolled for. This paper investigates whether a gender earnings difference can also be observed in a health care system predominantly financed by public insurance companies. Using a unique data set of physicians' earn- ings recorded by a public social security agency in an Austrian province between 2000 and 2004, we find a gender gap in average earnings of about 32 percent. A substantial share of this gap (20 to 47 percent) cannot be explained by individual and market characteristics, leaving labor market discrimination as one possible explanation for the observed gender earn- ings difference of physicians.

Two surveys conducted in Taiwan during the spring 2003 severe acute respiratory syndrome (SARS) epidemic reveal a high degree of concern about the threat posed by SARS to Taiwan and its residents, although respondents believe they are knowledgeable about the risk of SARS and that it is susceptible to individual control. Willingness to pay (WTP) to reduce the risk of infection and death from SARS is elicited using contingent valuation methods. Estimated WTP is high, implying values per statistical life of US dollars 3 to 12 million. While consistent with estimates for high-income countries, these values are substantially larger than previous estimates for Taiwan and may be attributable to the high degree of concern about SARS at the time the data were collected.

In France, public health insurance is universal but incomplete, with private payments accounting for roughly 25% of all spending. As a result, most people have supplemental private health insurance. We investigate the effects of such insurance on the utilization of physician services using data from the 1998 Enquete sur la sante et la protection sociale, a nationally representative survey of the non-institutionalized French population. Our results indicate that insurance has a strong and significant effect on the utilization of physician services. Individuals with supplemental coverage have substantially more physician visits than those without. While French patients have greater freedom than patients in other countries to choose to see a specialist rather than a general practitioner, we find no evidence that supplemental insurance affects this decision.