Showing papers in "Health Economics in 1993"
TL;DR: Recently, Ware and Sherbourne published a new short-form health survey, the MOS 36-Item Short-Form Health Survey (SF-36), consisting of 36 items included in long-form measures developed for the Medical Outcomes Study.
Abstract: Recently, Ware and Sherbourne published a new short-form health survey, the MOS 36-Item Short-Form Health Survey (SF-36), consisting of 36 items included in long-form measures developed for the Medical Outcomes Study. The SF-36 taps eight health concepts: physical functioning, bodily pain, role limitations due to physical health problems, role limitations due to personal or emotional problems, general mental health, social functioning, energy/fatigue, and general health perceptions. It also includes a single item that provides an indication of perceived change in health. The SF-36 items and scoring rules are distributed by MOS Trust, Inc. Strict adherence to item wording and scoring recommendations is required in order to use the SF-36 trademark. The RAND 36-Item Health Survey 1.0 (distributed by RAND) includes the same items as those in the SF-36, but the recommended scoring algorithm is somewhat different from that of the SF-36. Scoring differences are discussed here and new T-scores are presented for the 8 multi-item scales and two factor analytically-derived physical and mental health composite scores.
2,406 citations
TL;DR: The authors argue that the only legitimate (and clearly important) goal of QALY league tables is the maximization of the utility of health gains within a health service budget.
Abstract: This paper examines some of the difficulties in using QALY league tables in priority setting. Such tables sometimes are seen as being 'the' way to prioritise in health care and in particular, at present, with respect to priority setting among purchasers in the UK NHS. However the paper highlights the fact that the base on which such tables is built is small--relatively few studies in the English language using CUA have been conducted anywhere. Further, four issues which require handling with care are set out: (i) the relevant measure of cost in QALY league tables has to be restricted to health service resource use; (ii) the relevant measure of benefit in QALY league tables is clearly restricted to QALYs, thereby the utility of health gains and indeed the maximisation of the utility of health gains; (iii) in incorporating the results of CUA studies into QALY league tables there is a need for greater clarification on what the margin constitutes; and (iv) those who might use CUA results in QALY league tables need to ascertain whether the original context of the study will allow the results to be transferred to the local context of the decision maker. The paper suggests that there is a need to be quite clear what goal QALY league tables serve. The authors argue that the only legitimate (and clearly important) goal of QALY league tables is the maximization of the utility of health gains within a health service budget.(ABSTRACT TRUNCATED AT 250 WORDS)
196 citations
TL;DR: This paper argues that this formulation fails to capture the dynamic character of the model and proposes an alternative formulation, which appears to be more consistent with Grossman's theoretical model and which may also explain the apparent rejections of themodel by the data in the author's earlier empirical work.
Abstract: Previous tests of Grossman's model of the demand for health have been based on Grossman's own empirical formulation. This paper argues that this formulation fails to capture the dynamic character of the model. It proposes an alternative formulation, which appears to be more consistent with Grossman's theoretical model and which may also explain the apparent rejections of the model by the data in the author's earlier empirical work. The paper also presents some empirical results obtained using the new formulation, which are, on the whole, consistent with the predictions of Grossman's theoretical model.
187 citations
TL;DR: Although the existence of selective non-response cannot be excluded, its relevance can be considered to be small, and this finding is encouraging for the use of empirical utility values in allocative decisions.
Abstract: Problem: Non-response and non-usable response were found in population surveys on valuation of health states. If non-response is selective regarding valuations, then generalization of the resulting values to the whole survey population is not permitted. This could limit the use of empirical utility values in resource allocation in health care.
Methods: Response behaviour of a sample of 1400 from the Dutch general population to the mailed EuroQolc-questionnaire was analyzed by four methods. I. Phoning resolute non-respondents; II. comparison of zip code characteristics of respondents and non-respondents (because individual data on background characteristics were not available for the non-respondents); III. analysis of response over time (wave-analysis); IV: comparison of background variables of successful (less than two valuations missing) and unsuccessful respondents, combined with analysis of the effect of these background variables on valuations.
Results: No indications for selective non-response were found, although the phenomenon appeared hard to investigate. The successful response came from a slightly younger and better educated subsample. However, a general influence of age and educational level on valuations could not be shown. This finding is consistent with the literature.
Conclusion: Although the existence of selective non-response cannot be excluded, its relevance can be considered to be small. This finding is encouraging for the use of empirical utility values in allocative decisions.
165 citations
TL;DR: Analysis of family physician use in Canada suggests that analyses of utilization based on simple multivariate techniques and aggregate data can produce a picture of utilization that conceals important, policy relevant relationships while revealing other relationships that are essentially artifacts of inappropriate aggregation in ways which provide a false sense of achievement.
Abstract: In this paper we analyse the distribution of family physician use in Canada to explore whether the stated goal of reasonable access to care has been achieved. We test hypotheses to see whether (a) variations in incidence and quantity of use are independent of need for care as proxied by self-assessed health status and (b) any observed relationship between variations in use and need is independent of other population characteristics.
Previous research has conceptual, statistical and data limitations which bring into question the validity of the findings. These limitations are addressed by using more appropriate data, a conditional model for service utilization and correction for self-selectivity of users in the statistical analysis.
Variations in need are identified as important and significant in explaining variations in both incidence and quantity of use with the estimated relationship between use and need being positive. Other population characteristics were found to be important and significant in explaining variations in use although household income is not among them. The relationship between use and need is associated with other variables including education, social support and region of residence.
These findings suggest that analyses of utilization based on simple multivariate techniques and aggregate data can produce a picture of utilization that conceals important, policy relevant relationships while revealing other relationships that are essentially artifacts of inappropriate aggregation in ways which provide a false sense of achievement.
121 citations
TL;DR: It is concluded that application of the standard principles of statistical inference to economic data is not straightforward and will require value judgements to be made about statistical significance and economic importance, which may differ from those already made in purely clinical studies.
Abstract: The assessment of economic and quality-of-life outcomes of health care interventions is moving into a new era, with such assessments increasingly being made within the context of controlled clinical trials. Traditionally the measurement of many variables in economic evaluations, particularly costs, has been deterministic. In the context of clinical trials the measurement of variables is stochastic, with the standard principles of statistical inference being applied to analyse differences between treatments in terms of effectiveness. Economists participating in clinical research are therefore being called upon to specify the sample size for the economic component of the evaluation and to undertake statistical tests for differences in cost or cost-effectiveness. This paper discusses the current methodological issues surrounding stochastic measurement in clinical trials, discusses the additional issues raised by the assessment of economic and quality-of-life outcomes and specifies the challenges facing economists if they are to answer the questions now being posed about economic analysis by statisticians and clinical researchers. It is concluded that application of the standard principles of statistical inference to economic data is not straightforward and will require value judgements to be made about statistical significance and economic importance, which may differ from those already made in purely clinical studies.
84 citations
TL;DR: Results are presented from two Norwegian surveys in which a random sample of the population and a sample of health planners were asked to prioritise between alternative health care programmes, and make trade-offs between future health gains and more immediate gains.
Abstract: The purpose of this study was to elicit the implied discount rates to be used in economic evaluations of health care programmes. The paper presents results from two Norwegian surveys in which a random sample of the population and a sample of health planners were asked to prioritise between alternative health care programmes, and make trade-offs between future health gains and more immediate gains. The questionnaire had four hypothetical choice situations; two for life saving and two for health improvement.
82 citations
TL;DR: By distilling evidence from previous research a reduced list of services is identified which accounts for the greater part of the total costs of care packages and this approach could expand the current costs information base and move towards meeting the pressing practice demands for costs data.
Abstract: The demands for cost information in health services are many and various but the supply of such information is less than might be expected and is compounded by the expense of undertaking costs research. This paper examines a short cut to mental health research which, if certain rules and conventions are obeyed, can still produce valid costs data. By distilling evidence from previous research a reduced list of services is identified which accounts for the greater part of the total costs of care packages. By concentrating on these key services, 94 per cent of the total costs of care were predicted for discharged long-stay patients and no less than 91 per cent for people supported by community psychiatric nurses. The results suggest that this reduced list method can work well where the aim is to obtain broad orders of magnitude for the costs of care. By reducing the resources required for research, the approach could expand the current costs information base and move towards meeting the pressing practice demands for costs data.
61 citations
TL;DR: The paper analyses aggregate time-series data, using the cointegration approach, on health, health care expenditures and national income and concludes that there is no objective scientific method to determine optimal health expenditure, nor should the authors expect one.
Abstract: The size of national health care expenditure is an important research and policy issue. This paper reviews theoretical and empirical analyses of an implied optimal size for a health sector. Various economic theories are explicitly or implicitly invoked, but none is fully satisfactory. Theory provides, at best, a loose justification for empirical specifications of health sector behaviour. Nevertheless, this has a large and growing empirical research industry. The complexity of the issues provides an excuse for reliance on empirical analyses using ad hoc models. The paper analyses aggregate time-series data, using the cointegration approach, on health, health care expenditures and national income. Only one national model met both statistical criteria and showed a significant relationship: between potential life years lost and health care expenditure in the UK. The case for any general relationships remains unproven. There is no objective scientific method to determine optimal health expenditure, nor should we expect one. However, positive analyses can help with normative questions. A better understanding of health expenditure determination would arise from better specification of the relationships, perhaps by analysis at a lower level of aggregation.
60 citations
47 citations
TL;DR: The findings suggest that there is potential to increase service delivery within existing budgets by more cost-effective allocation of inputs and improved resource allocation decisions heavily depend on the existence of information systems at the health facility level.
Abstract: 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
TL;DR: An empirical investigation of physician labour supply is presented, based on a two-stage budgeting model, drawing on an analogy with consumer theory, to identify physicians' responses to exogenous shocks in the remuneration system.
Abstract: 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 Quebec 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.
TL;DR: It can be concluded that, once sufficient experience with laparoscopy has been achieved, most hospitals could realise cost savings by switching, as much as is medically justified, to laparoscopic procedures.
Abstract: The costs and effects of open versus laparoscopic cholecystectomies are compared, from the point of view of hospitals and patients, for a consecutive series of 47 patients undergoing a cholecystectomy in the University Hospital Gasthuisberg, in Belgium. For the patients the laparoscopic technique is superior, since effects are better and direct costs are lower than for the open technique. From a financial viewpoint, hospitals have to weigh the higher costs of the laparoscopic equipment against the lower variable costs due to the shorter postoperative length of stay. Total hospital costs would be lower in case all cholecystectomies were performed with the laparoscopic rather than with the open technique if at least 140 cholecystectomies are done annually with the electrocautery technique, or 300 procedures with laser. However, more recent data reveal that the operating time reduces with the number of laparoscopic procedures (learning effects), implying that the laparoscopic electrocautery procedure would already be the cheaper alternative if more than 70 cholecystectomies are done annually, if disposables are used (or if 50 procedures are done with re-usables). It can be concluded that, once sufficient experience with laparoscopy has been achieved, most hospitals could realise cost savings by switching, as much as is medically justified, to laparoscopic procedures. This will also hold for hospitals performing few cholecystectomies, as long as re-usables and electrocautery are used.
TL;DR: This paper considers estimators of tobacco demand equations using Becker and Murphy's model of addiction with a complete panel of households for Spain and follows an instrumental variable approach to tackle the limited-dependent variable problem.
Abstract: This paper considers estimators of tobacco demand equations using Becker and Murphy's model of addiction with a complete panel of households for Spain. With these tools, we face two main problems: first, the endogeneity of past and future consumption and, second, the limited-dependent variable. To control these problems simultaneously is difficult and we proceed to confront them separately. We follow an instrumental variable approach (which also allows us to control for measurement errors in variables and non-independent effects) to tackle the first and we use a consistent within-group procedure to obtain the parameter vector of the structural form, once we have estimated T-Tobit models for the reduced form in order to deal with the limited-dependent variable problem.
TL;DR: In this work, the variations in health care expenditure in all the countries of the European Community except Greece and Portugal are analyzed and income elasticities have been estimated using econometric methods that allow us to obtain simultaneously equilibrium long-run relationships and adjustment processes in the short-run.
Abstract: In this work we have tried to analyse the variations in health care expenditure in all the countries of the European Community except Greece and Portugal. We have wanted to provide additional evidence on the empirical relationship between expenditure on health care and income. Our analysis, starting from the approach of Fuchs and Baumol, has been an extension of the traditional studies on health care international comparisons, in at least three directions: we have not imposed any restrictions on the price effects, we have analysed dynamic models instead of the cross-sectional analysis and we have used proper deflators. We have deflated health care expenditure in each country by means of its sectoral price index and by the purchasing parity power of its currency, to allow international comparisons. In the former case we express health care in terms of 'expenditure', in the latter we express health care in terms of 'weighted quantity'. Income elasticities, in the short and in the long-run, have been estimated using econometric methods that allow us to obtain simultaneously equilibrium long-run relationships, if any, and adjustment processes in the short-run. We have found cointegrating relationships and we have estimated consistent estimators of the elasticities. The estimated income elasticities are greater than one in all the models analysed.
TL;DR: Using Dutch micro data on some 200,000 individuals, this article simulates various alternative capitation models based on, among others, diagnostic information from previous hospitalizations, suggesting 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.
Abstract: 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.
TL;DR: Two methodological concerns in utility estimation, the development of health state descriptions (scenarios) and the interpretation of interval scale anchor points, are examined in the context of disease-specific cost utility analyses (CUA).
Abstract: Two methodological concerns in utility estimation, the development of health state descriptions (scenarios) and the interpretation of interval scale anchor points, are examined in the context of disease-specific cost utility analyses (CUA). It is contended that results in CUA can be fundamentally biased by: (i) how the information presented in a scenario is generated; and (ii) the researcher's 'definition' of anchor points, when these are used as bounds to the interval scale. A number of recommendations are made, in particular for a more explicit reporting of these issues in CUA, to facilitate greater consistency in the application of utility measurement techniques.
TL;DR: This paper critically reviews the literature, and highlights several ways in which future evaluations might be improved, including the adoption of a broader perspective regarding the questions to be addressed and the relevant margins.
Abstract: 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.
TL;DR: How hospitals alter their provision of care to the poor in a more cost conscious and competitive environment is revealed and is found to be compatible with a quid pro quo hypothesis which states that hospital regulators reward large uncompensated care providers with profitable CON licenses.
Abstract: In the past decade alone there have been numerous changes in the financial and competitive environment of hospitals in the United States. Some examples include the advent of Medicare's Prospective Payment System, growth in managed care options, relaxation of states' Certificate of Need (CON) regulations, and court cases questioning the tax-exempt status of nonprofit hospitals. In this paper we attempt to reveal how hospitals alter their provision of care to the poor in a more cost conscious and competitive environment. Using hospital data from the State of California for the fiscal years ending in 1983 and 1987, estimates explaining uncompensated care commitments are presented. In particular, this study illustrates how hospitals under different ownership control varied their provision of uncompensated care over the period studied on average and by profitability level. Other factors, such as hospital location, teaching status, medicare patient load, and contractual adjustments, are also included in the analysis. A number of interesting trends are detected. Moreover, the results are found to be compatible with a quid pro quo hypothesis which states that hospital regulators reward large uncompensated care providers with profitable CON licenses.
TL;DR: It is argued that the comparison between CV, QALYs, and HYEs is premature and confuses rather than clarifies the debate.
Abstract: Morrison & Gyldmark (MG)1 in a recent issue of health economics reviewed the use of the contingent valuation (CV) method of measuring willingness to pay in the health area. Although it is useful to examine the appropriate role of the CV method in the health care field, the appraisal by MG has a number of limitations which are pointed out in this paper. These relate to some inaccuracies in the review of the literature, the limited nature of the criteria proposed by MG to evaluate CV studies, and finally I argue that the comparison between CV, QALYs, and HYEs is premature and confuses rather than clarifies the debate.
TL;DR: The research reported here assessed the value of malaria control through a cost-effectiveness study of the vertically-organized malaria control programme in Nepal, and concluded that the Nepalese programme appears no less cost-effective than many other health interventions.
Abstract: The research reported here assessed the value of malaria control through a cost-effectiveness study of the vertically-organized malaria control programme in Nepal. It presents a methodological framework for analysing cost-effectiveness which includes resource-saving consequences as well as health consequences. The methods used to collect data on control costs, cases and deaths prevented, treatment costs averted and production gains are described and the assumptions required by the analysis are made explicit. A variety of cost-effectiveness ratios are calculated, sensitivity analysis applied and the policy implications of the results considered. The results from Nepal are compared to estimates for parasitic disease and other health programmes in other countries: it is concluded that the Nepalese programme appears no less cost-effective than many other health interventions. It can also be justified by reference to the population groups benefiting from malaria control.
TL;DR: Health care finance and provision in Italy is unusual by international standards: public financing relies heavily on both general taxation and social insurance, and although the vast majority of expenditure is publicly financed, the majority of care is provided by the private sector.
Abstract: Health care finance and provision in Italy is unusual by international standards: public financing relies heavily on both general taxation and social insurance, and although the vast majority of expenditure is publicly financed, the majority of care is provided by the private sector. The system suffers, however, from a chronic failure to control expenditures and its record on perinatal and infant mortality is poor. Hospitals in Italy have a low bed-occupancy rate by international standards and the per diem system of reimbursing private hospitals encourages unduly long stays. Costs per inpatient day are high by international standards, but costs per admission are close to the OECD average. Ambulatory care costs are extremely low, but this appears to be due to the fact that GPs see so many patients that their role is inevitably mainly administrative. Consumption of medicines is extremely high, but because the cost per item is low, expenditure per capita is not unduly high. Despite the emphasis on social insurance, the financing system appears to be progressive. There is evidence of inequalities in health in Italy, and some evidence that health care is not provided equally to those in the same degree of need.
TL;DR: Both costs and quality of care were found to vary greatly amongst community residential facilities and the most important factors explaining differences in cost were case-mix factors relating to client age, dependency and length of stay.
Abstract: Successive UK governments have pursued a policy of community care for people with learning disabilities which, in the past ten years, has led to a marked change in the nature of residential provision. Research evidence on the costs and quality of alternative forms of community provision is inconclusive and contradictory. It is therefore timely to consider whether or not community residential facilities have delivered the expected quality of service at appropriate cost. The paper presents the results of a cost function analysis of a random stratified sample of staffed community facilities in England excluding London.
Both costs and quality of care were found to vary greatly amongst community residential facilities. The most important factors explaining differences in cost were case-mix factors relating to client age, dependency and length of stay. Facility characteristics such as the type of building, the internal layout and the structural quality were not significant. Quality of service measures such as the extent to which care-regimes were client orientated and made use of local community services were positively and significantly associated with costs. Type of provider had no impact on costs independent of differences in case-mix and quality of care with the exception of the private for profit sector which appeared less expensive than other agencies.
The shortcomings of the methods and implications of these findings for policy makers are discussed.
TL;DR: A test of convergent validity is undertaken for two methods of quality of life assessment, one based on a shortened version of the Health Measurement Questionnaire and the other based on professional clinical judgement, which yield outcomes broadly consistent with criteria.
Abstract: In the paper, a test of convergent validity is undertaken for two methods of quality of life assessment, one based on a shortened version of the Health Measurement Questionnaire and the other based on professional clinical judgement. The Nottingham Health Profile is used as the comparator, and the data derive from a sample of colorectal cancer patients. Criteria for convergent validity are established and both methods yield outcomes broadly consistent with such criteria.
TL;DR: A randomised trial of two common appointment methods to assess the costs of achieving high compliance and found that for screening services with fixed budgets, high compliance is achieved only by screening fewer people.
Abstract: High population compliance is seen as a prerequisite for an equitable screening service. To achieve high compliance fixed appointments are usually advocated. However, the costs of achieving high compliance have not previously been described. To assess the costs of achieving high compliance we have used a randomised trial of two common appointment methods: 800 women aged 45-49 living within 20 miles of Aberdeen were selected at random from the Community Health Index. They were randomly assigned to receive one of two letters—one offering a fixed appointment, the other inviting them to telephone to make an appointment.
For a defined population fixed appointments achieved high compliance but only by reducing the opportunities for screening; for every 100 women screened, 110 additional women were denied the opportunity of a screening test. In contrast the open letters of invitation achieved efficiency by increasing the number of women screened with given resources within a larger population. Thus for screening services with fixed budgets, high compliance is achieved only by screening fewer people.
TL;DR: The main factors influencing the costs and effectiveness of endoscopic surgery are reviewed and the need for more and better evaluation studies highlighted.
Abstract: Endoscopic surgery is a rapidly defusing treatment approach subject to continual technological advance. It offers great potential for economic benefits as well as health gains, but as shown in the article in this issue by Kesteloot and Penninckx, the relative cost of open versus endoscopic surgery is a quite complex issue. The main factors influencing the costs and effectiveness of endoscopic surgery are reviewed and the need for more and better evaluation studies highlighted.