Int J Health Care Finance Econ
· 2010 Mar · PMID 19757025
·
Publisher ↗
Managed care has been the dominant organization of health care coverage in the United States, and seeks to achieve cost control by constraining services. The restrictive practices of managed care organizations have been...Managed care has been the dominant organization of health care coverage in the United States, and seeks to achieve cost control by constraining services. The restrictive practices of managed care organizations have been widely criticized and the role of managed care in constraining health care services may be declining. Physician behavior is also believed to be influenced by the practices of managed care organization. This study examines the evolving nature of managed care and its restrictive effects on the provision of physician services. Physicians can choose whether and to what extent they are involved in managed care, so it is an endogenous decision. We employ instrumental variables method to correct for this endogeneity. Using data from the Community Tracking Study physician surveys from 2000-2001 and 2004-2005, we find that managed care organizations have became relatively less restrictive over time in terms of limiting the provision of physician services, compared to non-managed care organizations. These results suggest that managed care and non-managed care are converging in their effects on the provision of physician services.
Int J Health Care Finance Econ
· 2010 Jun · PMID 19705278
·
Publisher ↗
The proportion of large employers offering retiree health insurance in the US has declined by half in the past 20 years. This paper examines the potential implications of this change by estimating the effects of a retire...The proportion of large employers offering retiree health insurance in the US has declined by half in the past 20 years. This paper examines the potential implications of this change by estimating the effects of a retiree health insurance (RHI) offer on a comprehensive set of labor, health and health care use outcomes in the near-elderly population. An RHI offer increases the probability of early retirement by 37% for both men and women. While the results suggest that an RHI offer has little, if any, effect on health, there is strong evidence that RHI provides significant protection from high out-of-pocket medical costs. In the top 40% of the out-of-pocket spending distribution, those with an offer of retiree coverage spend 22% less on average. Estimates of the value of RHI of over $4,000 per year suggest that increasing opportunities for the near-elderly to purchase coverage at actuarially-fair prices through the individual market or public programs could significantly increase insurance coverage and reduce financial risk for this age group.
Int J Health Care Finance Econ
· 2010 Mar · PMID 19672707
·
Publisher ↗
This paper analyzes hospital cost shifting using a natural experiment generated by the Balanced Budget Act (BBA) of 1997. I find evidence that urban hospitals were able to shift part of the burden of Medicare payment red...This paper analyzes hospital cost shifting using a natural experiment generated by the Balanced Budget Act (BBA) of 1997. I find evidence that urban hospitals were able to shift part of the burden of Medicare payment reduction onto private payers. However, the overall estimated degree of cost shifting is small and varies according to a hospital's share of private patients. At hospitals where Medicare is a small payer relative to private insurers, up to 37% of BBA cuts was transferred to private payers through higher payments. In contrast, hospitals with greater reliance on Medicare were more financially distressed, as these hospitals saw large BBA cuts but were limited in their abilities to cost shift.
Int J Health Care Finance Econ
· 2010 Mar · PMID 19662527
·
Publisher ↗
Health care reforms in several European countries provide health insurers with incentives and tools to become prudent purchasers of health care. The potential success of this strategy crucially depends on insurers' barga...Health care reforms in several European countries provide health insurers with incentives and tools to become prudent purchasers of health care. The potential success of this strategy crucially depends on insurers' bargaining leverage vis-à-vis health care providers. An important determinant of insurers' bargaining power is the willingness of consumers to consider alternative providers. In this paper we examine to what extent consumers are willing to switch hospitals when they are fully covered for hospital services, which is typical for many European countries. Since prices do not matter to these patients, we estimate time-elasticities to assess hospital substitutability. Using data from a large Dutch health insurer on non-emergency neurosurgical outpatient hospital visits in 2003, we estimate a conditional logit model of patient hospital choice taking both patient heterogeneity and hospital characteristics into account. We use the parameter estimates to simulate the demand effect of an artificial increase in travel time by 10% for every patient, holding all other hospital attributes constant. Overall, the resulting point estimates of hospitals' time-elasticities are fairly high, although variation is substantial (-2.6 to -1.4). Sensitivity tests reveal that these estimates are very robust and differ significantly across individual hospitals. This implies that all hospitals in our study sample have at least one close substitute which is an important precondition for effective hospital competition.
Int J Health Care Finance Econ
· 2010 Mar · PMID 19526379
·
Publisher ↗
The paper investigated differences in the use of hospital care, out-patient care and pharmaceutical care in Piemonte, a region of northern Italy with 4,000,000 inhabitants, taking into account factors of need and supply,...The paper investigated differences in the use of hospital care, out-patient care and pharmaceutical care in Piemonte, a region of northern Italy with 4,000,000 inhabitants, taking into account factors of need and supply, for capitation purposes. The study used a geographical design, with the municipalities as statistical units, and was based on integrated data from health and health service information systems, the population census and on the geographical distances among municipalities. Hierarchical regression models were fitted with the utilisation of services as the outcome variable and a set of direct and indirect factors of need and supply indicators as covariates. Higher health service consumption rates were observed for the most disadvantaged employment categories, in addition to the elderly. Distance from hospital was inversely correlated with the hospitalisation rate. A formula for determining capitation can be developed using age and indirect factors of need as weights.
Int J Health Care Finance Econ
· 2009 Dec · PMID 19455419
·
Publisher ↗
This paper proposes a novel model of the hospital industry in the United States in which firms in effect choose their ownership type and the regulatory and tax regimes under which they must function. Accordingly, I devel...This paper proposes a novel model of the hospital industry in the United States in which firms in effect choose their ownership type and the regulatory and tax regimes under which they must function. Accordingly, I develop a model in which firms have identical objectives but differ in their ability to benefit from a given ownership form. Changes in the economic environment alter firms' incentives to maintain a given ownership type. This in turn induces firms to modify their capacity and encourages some firms to switch ownership type. One implication of this model is that changes in the economic environment that have occurred since 1960 imply that the optimal size of those firms which choose to be for profit should more closely approximate the optimal size of firms which choose to be nonprofit. Hospital level data indicate that this size convergence has indeed occurred. In 1960, U.S. nonprofit hospitals maintained on average more than three times as many beds per hospital as their for-profit counterparts; following a monotonic decline in relative size, by 2000, the average nonprofit hospital was only 32% larger than the typical for-profit hospital. Declining roles of government hospitals, population growth, suburbanization, and increasing government intervention in the healthcare market help explain the convergence in size. Analysis of data at the state and Metropolitan Statistical Area (MSA) levels is consistent with the principal theoretical predictions.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19408114
·
Publisher ↗
Given an increasingly complex web of financial pressures on providers, studies have examined how hospitals' overall financial health affects different aspects of hospital operations. In our study, we develop an empirical...Given an increasingly complex web of financial pressures on providers, studies have examined how hospitals' overall financial health affects different aspects of hospital operations. In our study, we develop an empirical proxy for the concept of soft budget constraint (SBC, Kornai, Kyklos 39:3-30, 1986) as an alternative financial measure of a hospital's overall financial health and offer an initial estimate of the effect of SBCs on hospital access and quality. An organization has a SBC if it can expect to be bailed out rather than shut down. Our conceptual model predicts that hospitals facing softer budget constraints will be associated with less aggressive cost control, and their quality may be better or worse, depending on the scope for damage to quality from noncontractible aspects of cost control. We find that hospitals with softer budget constraints are less likely to shut down safety net services. In addition, hospitals with softer budget constraints appear to have better mortality outcomes for elderly heart attack patients.
Eggleston K, Shen YC, Lu M
… +4 more, Li C, Wang J, Yang Z, Zhang J
Int J Health Care Finance Econ
· 2009 Jun · PMID 19399608
·
Publisher ↗
Using data from 276 general acute hospitals in the Pearl River Delta region of Guangdong Province from 2002 and 2004, we construct a preliminary metric of budget constraint softness. We find that, controlling for hospita...Using data from 276 general acute hospitals in the Pearl River Delta region of Guangdong Province from 2002 and 2004, we construct a preliminary metric of budget constraint softness. We find that, controlling for hospital size, ownership, and other factors, a Chinese hospital's probability of receiving government financial support is inversely associated with the hospital's previous net revenue, an association consistent with soft budget constraints.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19396629
·
Publisher ↗
Hospitals in Thailand operate in a multiple insurance payment environment. This paper examines (1) access to medicines and other medical technologies, (2) treatment outcomes, and (3) efficiency in resource use, among ben...Hospitals in Thailand operate in a multiple insurance payment environment. This paper examines (1) access to medicines and other medical technologies, (2) treatment outcomes, and (3) efficiency in resource use, among beneficiaries of the three government health insurance schemes in Thailand. Using 2003-2005 outpatient and inpatient data for patients with three tracer diseases from three government hospitals, we find that utilization of more expensive items differs between patients whose insurers pay on a closed- or open-ended basis. Where new vs. conventional drugs are both available, patients whose insurer pays on a fee-for-service basis tend to have greater access to new drugs, compared to patients whose insurer pays on a capitated or case basis. Similar patterns were found where there are options between originator versus generic drugs, drugs in different dosage forms, and more versus less advanced diagnostic technologies. Effects of insurance payment are more pronounced where price gaps among the medical technologies are significant. Efficiency results are mixed, depending on nature of the disease conditions and type of resources required for treatment.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19377869
·
Publisher ↗
This study applies the theory and the conceptual framework of the soft budget constraint (SBC) to the hospital sector. The first part deals solely with hospitals in state ownership, but the study moves later onto the pro...This study applies the theory and the conceptual framework of the soft budget constraint (SBC) to the hospital sector. The first part deals solely with hospitals in state ownership, but the study moves later onto the problems of ownership relations as well. The question posed is why the SBC phenomenon is so general in the hospital sector (including specialist outpatient clinics and diagnostic or nursing establishments that operate as separate units). The study contains several references to Hungarian experience, but the subject is of a more general nature. The SBC phenomenon is not confined to the Hungarian hospital sector, nor to the socialist system, nor as a vestige of socialism during post-socialist transformation. Soft budget constraints inevitably develop in the hospital sector, even in capitalist market economies.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19360467
·
Publisher ↗
This article uses incomplete contract theory to study the allocation of control rights in public-private partnerships (PPPs) between pharmaceutical enterprises and nonprofit organizations; it also investigates how this a...This article uses incomplete contract theory to study the allocation of control rights in public-private partnerships (PPPs) between pharmaceutical enterprises and nonprofit organizations; it also investigates how this allocation influences cooperation efficiency. We first develop a mathematic model for the allocation of control rights and its influence on cooperation efficiency, and then derive some basic hypotheses from the model. The results of an empirical test show that the allocation of control rights influences how enterprises invest in PPPs. A proper allocation provides incentives for firms to make fewer self-interested and more public-interested investments. Such an allocation also improves the cooperation efficiency of PPPs.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19357949
·
Publisher ↗
When both physicians and pharmacists in Taiwan prescribed and dispensed drugs, many elderly people considered the two types of health care providers more or less synonymous (i.e., close substitutes). Two policies mandate...When both physicians and pharmacists in Taiwan prescribed and dispensed drugs, many elderly people considered the two types of health care providers more or less synonymous (i.e., close substitutes). Two policies mandated in the 1990 s changed this perception: National Health Insurance (NHI), which provides insurance coverage to all citizens, and a separation policy (SP) that forbid physicians from dispensing and pharmacists from prescribing drugs. The author finds that by providing an economic incentive to the previously uninsured elderly, NHI raised the probability that they would visit physicians, relative to their continuously insured counterparts. In particular, some previously uninsured elderly who once only visited pharmacists were more likely to also visit physicians after NHI was implemented. Following this, the SP made it more likely that all elderly patients would only visit physicians and buy drugs from on-site pharmacists hired by physicians--a result different than its policy goal.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19357948
·
Publisher ↗
Since the mid-1980s, health maintenance organizations (HMOs) have grown rapidly in the United States. But despite initial successes in constraining health care costs, they have come under increasing criticism for their r...Since the mid-1980s, health maintenance organizations (HMOs) have grown rapidly in the United States. But despite initial successes in constraining health care costs, they have come under increasing criticism for their restrictive practices. This suggests that, to remain viable, HMOs must change their behavior. Yet few studies offer empirical evidence on the matter. The present study investigates one cost-containment mechanism often associated with HMOs: the assignment of primary care physicians as gatekeepers (who, among other things, monitor patients' use of specialist physicians). In particular, we estimate the effect of physician-HMO involvement on the percentage of HMO patients for whom physicians serve as gatekeepers. We examine this relationship over two time periods: 2000-2001 and 2004-2005. Because physicians can choose whether and to what extent they participate in HMOs, we employ instrumental variables (IV) estimation to correct for the endogeneity of the HMO measure. Although the single-equation estimates suggest that HMO assignment of physician gatekeepers diminished modestly over time, the endogeneity-corrected estimates show no change between the two time periods. Thus, one major tool used by HMOs to constrain health care costs--the physician gatekeeper--has not declined even in a period of backlash against managed care.
Int J Health Care Finance Econ
· 2009 Jun · PMID 19357947
·
Publisher ↗
This article seeks to assess whether physician payment reforms in the United States and Switzerland were likely to attain their objectives. We first introduce basic contract theory, with the organizing principle being th...This article seeks to assess whether physician payment reforms in the United States and Switzerland were likely to attain their objectives. We first introduce basic contract theory, with the organizing principle being the degree of information asymmetry between the patient and the health care provider. Depending on the degree of information asymmetry, different forms of payment induce "appropriate" behavior. These theoretical results are then pitted against the RBRVS of the United States to find that a number of its aspects are not optimal. We then turn to Switzerland's Tarmed and find that it fails to conform with the prescriptions of economic contract theory as well. The article closes with a review of possible reforms that could do away with uniform fee schedules to improve the performance of the health care system.
Int J Health Care Finance Econ
· 2009 Dec · PMID 19301123
·
Publisher ↗
Recent evidence indicates that the relationship between age and health care expenditure is not as straightforward as it appears. In fact, micro-level studies find that time to death, rather than ageing, is possibly the m...Recent evidence indicates that the relationship between age and health care expenditure is not as straightforward as it appears. In fact, micro-level studies find that time to death, rather than ageing, is possibly the main driver of the escalating health care costs in developed countries. Unfortunately, the evidence at the macro level is less clear and often depends on the specification of the empirical model used. We use an aggregate demand framework to assess whether health expenditure is more likely to be driven by ageing per se or proximity to death. Using panel data from 22 OECD countries from the first half of the 1990s, we find population ageing to be negatively correlated with health expenditure once proximity to death is accounted for. This suggests that the effects of ageing on health expenditure growth might be overstated while the effects of the high costs of medical care at the end of life are potentially underestimated. With respect to the latter, our finding highlights the importance of long-term and hospice care management. An expanded long-term care program may not only improve patient welfare, but also reduce costs of care by reducing the duration of hospital care for terminally ill patients. If expensive medical treatment for patients near the end of life can be controlled for, health expenditure growth resulting from population ageing is unlikely to present a most serious problem.
Int J Health Care Finance Econ
· 2010 Mar · PMID 19294502
·
Publisher ↗
The cost of a six-dose pertussis immunization programs for children and adolescents is investigated in relation to estimators of the price of acellular vaccine, the value of a child's life, levels of vaccination rate and...The cost of a six-dose pertussis immunization programs for children and adolescents is investigated in relation to estimators of the price of acellular vaccine, the value of a child's life, levels of vaccination rate and discount rates. We compare the cost of the program maintained over time at 90% with three alternative strategies, each involving a decrease in vaccination coverage. Data from England and Wales, 1966-2005, is used to formalize a delay in occurrence of pertussis cases as a result of a fall in coverage. We first apply the criterion of minimization of the total social cost of pertussis to identify the best cost saving immunization strategy. The results are also discussed in form of the discounted present value of the total social net benefits. We find that the discounted present value of the total social net benefit is maximized when a stable vaccination program at 90% is compared to a gradual decrease in vaccination coverage leading to the lowest vaccination rate. The benefits to society of providing sustained immunization strategy, vaccinating the highest proportion of children and adolescents, are systematically proved on the basis of the second optimisation criterion, independently of the level of estimators applied during economic evaluation for the cost variables.
Int J Health Care Finance Econ
· 2009 Dec · PMID 19277859
·
Publisher ↗
Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide much evidence to support this prediction. However, in other insuranc...Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide much evidence to support this prediction. However, in other insurance contexts that involve adverse health events, evidence of ex ante moral hazard is more consistent. In this paper, we extend the analysis of the effect of health insurance on health behaviors by allowing for the possibility that health insurance has a direct (ex ante moral hazard) and indirect effect on health behaviors. The indirect effect works through changes in health promotion information and the probability of illness that may be a byproduct of insurance-induced greater contact with medical professionals. We identify these two effects and in doing so identify the pure ex ante moral hazard effect. This study exploits the plausibly exogenous variation in health insurance as a result of obtaining Medicare coverage at age 65. We find evidence that obtaining health insurance reduces prevention and increases unhealthy behaviors among elderly men. We also find evidence that physician counseling is successful in changing health behaviors.
Boonen LH, Schut FT, Donkers B
… +1 more, Koolman X
Int J Health Care Finance Econ
· 2009 Dec · PMID 19242791
·
Publisher ↗
Efficient contracting of health care requires effective consumer channeling. Little is known about the effectiveness of channeling strategies. We study channeling incentives on pharmacy choice using a large scale discret...Efficient contracting of health care requires effective consumer channeling. Little is known about the effectiveness of channeling strategies. We study channeling incentives on pharmacy choice using a large scale discrete choice experiment. Financial incentives prove to be effective. Positive financial incentives are less effective than negative financial incentives. Channeling through qualitative incentives also leads to a significant impact on provider choice. While incentives help to channel, a strong status quo bias needs to be overcome before consumers change pharmacies. Focusing on consumers who are forced to choose a new pharmacy seems to be the most effective strategy.
Int J Health Care Finance Econ
· 2009 Sep · PMID 19152067
·
Publisher ↗
This paper aims to incorporate option values into the economic evaluation of positron emission tomography (PET). The installation of this equipment requires a substantial capital outlay, while uncertainty, especially reg...This paper aims to incorporate option values into the economic evaluation of positron emission tomography (PET). The installation of this equipment requires a substantial capital outlay, while uncertainty, especially regarding the possibility of new applications, is relevant, because the evidence available is still insufficient. Treating the number of examinations to provide as a stochastic variable, the cost-effectiveness analysis is extended to include the value of flexibility both with respect to the timing of investment and to the size of the project. The threshold values of the stochastic variable that ensure the cost-effectiveness of a PET scan according to this approach are obtained as a function of the value of the incremental effectiveness.