Int J Health Care Finance Econ
· 2007 Dec · PMID 17602295
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While the prevalence of end-stage renal disease (ESRD) in Spain is high, the incidence in comparison to the United States and Japan is low. Spain's rate of deceased organ donation is the highest in the world, and its ren...While the prevalence of end-stage renal disease (ESRD) in Spain is high, the incidence in comparison to the United States and Japan is low. Spain's rate of deceased organ donation is the highest in the world, and its renal transplant incidence rate is also relatively high. In addition, ESRD care represents a large portion of the overall health care budget. Quality of care in the National Health Service is not determined by competition or performance rewards; instead, several health agencies and scientific societies monitor it. Nevertheless, nephrologists with low salaries have relatively few professional and economic incentives to improve quality.
Int J Health Care Finance Econ
· 2007 Mar · PMID 17484050
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We examine whether U.S. states can use their market power to reduce the costs of supplying prescription drugs to uninsured and underinsured persons with HIV through a public program, the AIDS Drug Assistance Program (ADA...We examine whether U.S. states can use their market power to reduce the costs of supplying prescription drugs to uninsured and underinsured persons with HIV through a public program, the AIDS Drug Assistance Program (ADAP). Among states that purchase drugs from manufacturers and distribute them directly to clients, those that purchase a greater volume pay lower average costs per prescription. Among states depending on retail pharmacies to distribute drugs and then claiming rebates from manufacturers, those that contract with smaller numbers of pharmacy networks have lower average costs. Average costs per prescription do not differ between the two purchase methods.
van Kleef RC, Beck K, van de Ven WP
… +1 more, van Vliet RC
Int J Health Care Finance Econ
· 2007 Mar · PMID 17431767
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Full text
Theoretically, a risk avers consumer takes a deductible if the premium rebate (far) exceeds his/her expected out-of-pocket expenditures. In the absence of risk equalization, insurers are able to offer high rebates becaus...Theoretically, a risk avers consumer takes a deductible if the premium rebate (far) exceeds his/her expected out-of-pocket expenditures. In the absence of risk equalization, insurers are able to offer high rebates because those who select into a deductible plan have below-average expenses. This paper shows that, for high deductibles, such rebates cannot be offered if risk equalization would "perfectly" adjust for the effect of self selection. Since the main goal of user charges is to reduce moral hazard, some effect of self selection on the premium rebate can be justified to increase the viability of voluntary deductibles.
Int J Health Care Finance Econ
· 2007 Mar · PMID 17401645
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Dramatic expansions in public health insurance eligibility for U.S. children have only modestly reduced the aggregate number of uninsured at the national level. This paper shows that Medicaid and SCHIP expansions had dif...Dramatic expansions in public health insurance eligibility for U.S. children have only modestly reduced the aggregate number of uninsured at the national level. This paper shows that Medicaid and SCHIP expansions had different impacts on child health insurance coverage patterns based upon local labor market characteristics. Metropolitan areas with high levels of unemployment were most likely to have seen improvements in overall insurance coverage for children between 1990 and 2001. Areas with greater fractions of employment in services, retail or wholesale trade were more likely to have experienced increases in public coverage but not overall coverage rates.
Int J Health Care Finance Econ
· 2007 Mar · PMID 17351750
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The mean of a distribution of medical expenditures in an insured population can be affected significantly by the occurrence of a few high cost cases. This fact leads some organizations that hold the primary risk for the...The mean of a distribution of medical expenditures in an insured population can be affected significantly by the occurrence of a few high cost cases. This fact leads some organizations that hold the primary risk for the population (e.g., health plans or self-insured employers) to seek reinsurance arrangements that spread the risk of high cost cases across a broader pool. Recently, the private reinsurance market has experienced some difficulties, attributable to information asymmetries between primary risk holders and reinsurers. The disproportionate effect of a few high cost cases also has generated interest in the development of "risk-adjustment" systems that attempt to reduce the difference in health plans' unreimbursed costs either to endogenous management decisions or random chance. We discuss these issues in light of a well-known statistical result regarding the probability of "streaks" in random data. We illustrate problems that can arise and suggest methods to distinguish random streaks from systematic trends.
Int J Health Care Finance Econ
· 2006 Dec · PMID 17340175
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Several U.S. states enforce Certificate of Need (CON) regulations, which limit the number of hospitals performing open heart surgery or coronary angioplasty. CON regulations were intended to restrain cost growth and impr...Several U.S. states enforce Certificate of Need (CON) regulations, which limit the number of hospitals performing open heart surgery or coronary angioplasty. CON regulations were intended to restrain cost growth and improve quality of care. This study compares mortality rates and costs for cardiac care in states with and without CON. CON appears to raise hospital procedure volume and lower the average cost of care. However, CON is associated with little reduction in inpatient mortality, and it may lead hospitals to operate on more patients than they would otherwise. The claimed welfare benefits of CON regulations require careful reconsideration.
Int J Health Care Finance Econ
· 2006 Dec · PMID 17318391
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To assess the performance of the employment-based health insurance system, it is necessary to understand how well workers sort into jobs that offer their desired mix of cash wages relative to benefits. However, few studi...To assess the performance of the employment-based health insurance system, it is necessary to understand how well workers sort into jobs that offer their desired mix of cash wages relative to benefits. However, few studies directly measure the extent of sorting. We quantify the prevalence of mismatches between workers' preferences and firms' insurance offerings by considering two types of mismatch: (1) workers who appear to desire coverage through their employer, but work for firms that do not offer coverage, and; (2) workers who appear not to desire coverage through their employer, but work for firms that offer coverage. Most workers (79.6%) enjoy labor market matches that appear consistent with their preferences. The remaining 20.4% of workers appear to be mismatched. For most of these mismatches, the primary consequence is lower wages than would be earned if individuals were better matched in the labor market. However, a minority of the identified mismatches appear to be "involuntarily uninsured" workers who would gain insurance if they were to find a better match. Extrapolating from the analysis sample, these involuntarily uninsured workers and their uninsured dependents may represent up to one in six uninsured individuals in the United States.
Int J Health Care Finance Econ
· 2006 Dec · PMID 17136599
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The extent to which the moral hazard caused by health insurance represents economic inefficiency has been the subject of much debate. This paper incorporates health status in a model of moral hazard, and finds that serio...The extent to which the moral hazard caused by health insurance represents economic inefficiency has been the subject of much debate. This paper incorporates health status in a model of moral hazard, and finds that seriously ill patients are likely to exhibit greater moral hazard than healthier patients but the proportion of moral hazard that is inefficient declines with the severity of illness. Because of these competing tendencies, the cost of resource misallocation is parabolic in the severity of illness. The effect of the consumer's initial wealth endowment is also considered.
Int J Health Care Finance Econ
· 2006 Dec · PMID 17111213
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Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992-1996 Health Care Utilization Project sample of hospitals to analyze the relatio...Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992-1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals.
Int J Health Care Finance Econ
· 2006 Sep · PMID 17103308
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Sutton (1991, Sunk costs and market structure. Cambridge: MIT Press; 1998, Technology and market structure. Cambridge: MIT Press) theorised that industries evolve into distinct market configurations in terms of concentra...Sutton (1991, Sunk costs and market structure. Cambridge: MIT Press; 1998, Technology and market structure. Cambridge: MIT Press) theorised that industries evolve into distinct market configurations in terms of concentration, depending upon product homogeneity and whether R&D or advertising are relevant relative to set-up costs. This paper tests the existence of such a relationship between technological profiles and market structure empirically, using the health care services provided by the Italian National Health Service as the specific economic framework. Our results support the empirical predictions made by Sutton. In particular, in markets where the technological intensity is low the lower bound to concentration converges monotonically to zero when the market size increases, for any level of product homogeneity. Conversely, in markets where the technological intensity is high the lower bound of concentration converges to some positive (non-zero) value when market size increases, while the lower bound increases (from zero) when the level of product homogeneity increases.
Int J Health Care Finance Econ
· 2006 Sep · PMID 17029024
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While "integrated" systems regulate the quantity of health services, "Bismarckian" systems regulate their price. This paper compares the consumers' allocations implemented within the two reimbursement systems. In the mod...While "integrated" systems regulate the quantity of health services, "Bismarckian" systems regulate their price. This paper compares the consumers' allocations implemented within the two reimbursement systems. In the model, illness has a negative impact on labor productivity while public insurance is financed through income tax. Consumers have private information with respect to a parameter which can be interpreted as heterogeneity either in intensity of their preferences for treatment or in the type of illness. The social planner may be constrained to adopt uniform insurance plans, or may be free to choose self selecting plans. The analysis of uniform plans shows that Bismarckian systems dominate integrated systems from the social welfare point of view; whereas the opposite ranking holds with self-selecting plans.
Int J Health Care Finance Econ
· 2006 Sep · PMID 17016764
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The Balanced Budget Act of 1997 dramatically changed the way that Medicare pays skilled nursing facilities, providing a natural experiment in nursing home behavior. Medicare payment policy (directed at short-stay residen...The Balanced Budget Act of 1997 dramatically changed the way that Medicare pays skilled nursing facilities, providing a natural experiment in nursing home behavior. Medicare payment policy (directed at short-stay residents) may have affected outcomes for long-stay, chronic-care residents if services for these residents were subsidized through cost-shifting prior to implementation of Medicare prospective payment for nursing homes. We link changes in both the form and level of Medicare payment at the facility level with changes in resident-level quality, as represented by pressure sores and urinary tract infections in Minimum Data Set (MDS) assessments. Results show that long-stay residents experienced increased adverse outcomes with the elimination of Medicare cost reimbursement.
Int J Health Care Finance Econ
· 2006 Sep · PMID 17001535
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We analyze Program Realignment, California's 1991 policy of decentralizing control of health, mental health, and social services, from the state to the counties. Drawing from the economics literature on intergovernmental...We analyze Program Realignment, California's 1991 policy of decentralizing control of health, mental health, and social services, from the state to the counties. Drawing from the economics literature on intergovernmental transfers and using data constructed for this study, we analyze the impact of Realignment on uninsured health spending. We find a change in the pattern of spending on indigent health services by counties following decentralization. Our results suggest, however, that county-level governments maintain a level of commitment to social-service spending that recent studies indicate may be lacking at the state level.
Int J Health Care Finance Econ
· 2006 Jun · PMID 16783507
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To avoid risk selection, the market for complementary health insurance is usually completely separate from the market for basic health insurance. In Switzerland, however, the basic benefit package and complementary insur...To avoid risk selection, the market for complementary health insurance is usually completely separate from the market for basic health insurance. In Switzerland, however, the basic benefit package and complementary insurance are offered by the same insurer. Risk-based premiums are allowed with respect to complementary insurance. This paper compares the Swiss integration approach to the separation approach. It is shown that under the integration approach insurers cream-skim by selling complementary insurance to low risks at a discount. Nevertheless, the integration approach can be Pareto-superior if the cost savings due to the integration of basic and complementary insurance are sufficiently large.
Int J Health Care Finance Econ
· 2006 Jun · PMID 16783506
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Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians' fee-for-service Medicare service volume. We find that Medicare fees...Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians' fee-for-service Medicare service volume. We find that Medicare fees are positively related to both the number of beneficiaries treated (eta = 0.12 to 0.61) and service intensity (eta = 1.04-1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee. Finally, several market factors appear to influence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicare's fee-for-service program.
Int J Health Care Finance Econ
· 2006 Jun · PMID 16783505
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We study price competition between high-quality global products and low-quality local products in a developing country, i.e., China, Nearly all previous studies on pharmaceutical price competition focused on developed co...We study price competition between high-quality global products and low-quality local products in a developing country, i.e., China, Nearly all previous studies on pharmaceutical price competition focused on developed countries with bioequivalent generics. In China, local generic products are not bioequivalent and are deemed of lower quality, while global products in the same class are considered similar in quality and better substitutes. We hypothesize that local generic competition drives down local product price but not global product price. In addition, we hypothesize that therapeutic competition among similar global products lowers global product price. Our empirical results support both hypotheses. Number of local generic competitors has a significantly negative effect on local product price but no effect on global product price, while number of global therapeutic competitors has a significantly negative effect on global product price. Policy changes that encourage bioequivalent local products and accelerate global product approvals will enhance price competition in China.
Int J Health Care Finance Econ
· 2006 Jun · PMID 16783504
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We study the quality choices of institutional health-care providers, such as hospitals, assuming that the utility function of the key organizational decision maker includes both quality of care and financial surplus. We...We study the quality choices of institutional health-care providers, such as hospitals, assuming that the utility function of the key organizational decision maker includes both quality of care and financial surplus. We are primarily concerned with how changes in outside claims--particularly proportional outside claims--on the provider's financial surplus affect his choice of quality. We use the term "rate of surplus retention" to refer to the fraction of surplus remaining after deducting all such claims. Using the Arrow-Pratt coefficient of relative risk aversion as a measure of curvature of the provider's utility-from-money function, we show that increasing the surplus retention rate increases (decreases) quality if the provider's coefficient of relative risk aversion is greater than (less than) 1.
Int J Health Care Finance Econ
· 2006 Mar · PMID 16612572
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In this study stochastic frontier cost function was used to estimate the teaching and research costs of Finnish hospitals. Predicted efficiency adjusted costs were calculated and compared to evaluate the current level of...In this study stochastic frontier cost function was used to estimate the teaching and research costs of Finnish hospitals. Predicted efficiency adjusted costs were calculated and compared to evaluate the current level of teaching and research reimbursement. The efficiency adjustment had significant impact on the marginal and average cost estimates of the teaching and research output. The results suggest that the average rate of teaching and research reimbursement should be approximately 14.6% of the total operating costs in university teaching hospitals. The main finding was that the university teaching hospitals were underfunded with respect to both research and teaching output.
Int J Health Care Finance Econ
· 2006 Mar · PMID 16612571
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Because minimum government standards for quality regulate only part of the market failure, they may have unintended effects. We present a general theory of how government regulation of quality of care may affect differen...Because minimum government standards for quality regulate only part of the market failure, they may have unintended effects. We present a general theory of how government regulation of quality of care may affect different market segments, and test the hypotheses for the nursing home market. OBRA 1987 was a sweeping government reform to improve the quality of nursing home care. We study how the effect of OBRA on the quality of nursing home care, measured by resident outcomes, varied with nursing home profitability. Using a semi-parametric method to control for the endogenous effects of regulation, we found that this landmark legislation had a negative effect on the quality of care in less profitable nursing homes, but improved the quality in more profitable nursing homes during the initial period after OBRA. But, this legislation had no statistically significant effect in the later period when the regulation was weakly enforced.
Int J Health Care Finance Econ
· 2006 Mar · PMID 16612570
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In 1997, nearly two-thirds of married couples with children under age 18 were dual-earner couples. Such families may have a variety of insurance options available to them. If so, declining a high employee premium contrib...In 1997, nearly two-thirds of married couples with children under age 18 were dual-earner couples. Such families may have a variety of insurance options available to them. If so, declining a high employee premium contribution may be a mechanism for one spouse to take money wages in lieu of coverage while the other spouse takes coverage rather than high wages. Employers may use these preferences and the size of premium contributions to encourage workers to obtain family coverage through their spouse. The purpose of this paper is to explore the effects of labor force composition, particularly the proportion of dual-earner couples in the labor market, on the marginal employee premium contribution (marginal EPC) for family coverage. We analyze data from the 1997-2001 Medical Expenditure Panel Survey--Insurance Component (MEPS-IC) List Sample of private establishments. We find strong evidence that the marginal EPC for family coverage is higher when there is a larger concentration of women in the workforce, but only in markets with a higher proportion of dual-earner households.