SELECTED FOR YOU... OCTOBER 2009: books of the month - working papers

All the Selected for you


Principles in Health Economics and Policy.

Olsen J.A.
Oxford : Oxford University Press : 2009. 224 p.

Principles in Health Economics and Policy is a clear and concise introduction to health economics and its application to health policy. It introduces the subject of economics, explains the fundamental failures in the market for health care, and discusses the concepts of equity and fairness when applied to health and health care. Written for students and health professionals with no background in economics, the book takes a policy-oriented approach, emphasising the application of economic analysis to universal health policy issues. It explores the key questions facing health policy-makers across the globe right now, such as: How should society intervene in the determinants that affect health?

Beyond Health Insurance : public health policy to improve health.

Helmchen L. / ed., Kaestner R. / ed., Lo Sasso A. / ed.

Bingley : JAI Press : 2009 : XII - 206 p.

In light of the imbalance in the health policy debate in the United States, in November 2007, the Institute of Government and Public Affairs and the College of Medicine of the University of Illinois sponsored a conference The conference focused on four areas: reducing racial and ethnic health disparities, preventing disease and promoting health, developing and regulating pharmaceuticals, and improving consumer information.


Health Insurance

Regulation of private health insurance markets: Lessons from enrollment, plan type choice, and adverse selection in Medicare Part D.

Heiss F., McFadden D., Winter J.

Cambridge : NBER : 2009/09 : 47 p.

We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets that control adverse selection and assure adequate access and coverage. We model Part D enrollment and plan choice assuming a discrete dynamic decision process that maximizes life-cycle expected utility, and perform counterfactual policy simulations of the effect of market design on participation and plan viability. Our model correctly predicts high Part D enrollment rates among the currently healthy, but also strong adverse selection in choice of level of coverage. We analyze alternative designs that preserve plan variety.

Health Economics

Understanding the Economic Consequences of Shifting Trends in Population Health

Michaud P.-C., Goldman D., Lakdawalla D., Zheng Y., Gayley A.

Cambridge : NBER : 2009/08 : 41 p.

The public economic burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy - with a concomitant decrease in the public-sector’s annuity burden - but these savings may be offset by worsening functional status, which increases health care spending, reduces labor supply, and increases public assistance. Using a microsimulation approach, we quantify the competing public-finance consequences of shifting trends in population health for medical care costs, labor supply, earnings, wealth, tax revenues, and government expenditures (including Social Security and income assistance). Together, the reduction in smoking and the rise in obesity have increased net public-sector liabilities by $430bn, or approximately 4% of the current debt burden. Larger effects are observed for specific public programs: annual spending is 10% higher in the Medicaid program, and 7% higher for Medicare.

The Convergence of Health Care Financing Structures: Empirical Evidence from OECD-Countries

Leitz A.M., Theurl E.

Innsbruck : University of Innsbruck : 2009/08 : 32 p.

In this paper we concentrate on the question whether the financing structure of the health care systems converges. In a world of increasing economic integration convergence in health care financing (HCF) and, hence, decreasing differences in HCF across countries enhance individuals’ (labour) mobility and support harmonization processes. As an indicator for convergence we take the public financing ratio in % of total HCF and in % of GDP. The major finding is that HCF in the OECD countries converged in the time period 1970 – 2005. This conclusion also holds when looking at smaller sub groups of countries and shorter time periods. However, we find evidence that countries do not move towards a common mean and that the rate of convergence is decreasing over time.

Health Status

Health Inequality over the Life-Cycle

Halliday T.

Bonn : The Institute for the Study of Labor : 2009/08 : 31 p.

We investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endowments, and permanent and transitory shocks. We employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model. We estimate that permanent shocks account for under 10% of the total variation in health for the college educated, but between 35% and 70% of total health variability for people without college degrees. Consistent with this, we find that health inequality moves substantially more slowly over the life-course for the college educated.

Correcting Focal Biases in Subjective Health Expectations: Application to the Rand-HRS Data

Huynh K.P., Jung J.

New York : Social Science Electronic Publishing : 2009/05 : 23 p.

Subjective health expectations are derived using the RAND-HRS dataset. A Bayesian updating mechanism is used to correct for focal point responses and reporting errors of the original health expectations variable. We then test the quality of the health expectations measure and describe its correlation with various health indicators and other individual characteristics. We find that subjective health expectations do contain additional information that is not incorporated in subjective mortality expectations and that the rational expectations assumption cannot be rejected for subjective health expectations. Finally, the data suggest that individuals younger than 70 years of age seem to be more pessimistic about their health than individuals in their 70’s.


A Pharmaceutical Innovation – Is it Worth the Money? Whose Money?

Sennhauser M., Zweifel P.

Working Paper ; n° 0911

This study seeks to provide evidence for deciding whether or not a pharmaceutical innovation should be included in the benefit list of social health insurance. A discrete choice experiment (DCE) was conducted in Germany to measure preferences for modern insulin therapy. Of the 1,100 individuals interviewed in 2007, 200 suffered from type 1 diabetes, 150 from insulin-treated type 2 diabetes, and 150 from insulin-naive type 2 diabetes. The long-acting insulin analogue ”Insulin Detemir” is compared to human insulin as the status quo. The DCE contains two price attributes, copayment and increased contributions to health insurance. As one would expect, non-affected non-diabetics and insulin-naive diabetics exhibit higher willingness-to-pay (WTP) values through copayment (adjusted for probability of contracting diabetes), while affected type 1 and insulin-treated type 2 diabetics have higher WTP through increased contributions. However, WTP values exceed the extra treatment cost in both financing alternatives, justifying inclusion of the innovation in the benefit list from a cost-benefit point of view.

Health Politics

Towards common European health policies.What are the implications for the Nordic countries?

Blomqvist P., Larsson J.

Stockolm : Institute for futures studies : 2009 : 35 p.

Health care is an area that remains formally outside the competence of the EU. Despite this, the union’s influence on national health care policies has increased substantially over the past decade. In a series of rulings, the European Court of Justice (ECJ) established a de facto system of patient rights, which, under certain conditions, entitle European citizens to receive health care in other member states at the expense of the social insurance system of their home country. This undermines the autonomy of the member states in the area of health, a key sector in national welfare systems. In 2008, the Commission proposed a new directive on patients’ rights which builds directly on the ECJ rulings, thus consolidating politically the legal precedent set by the Court. The ECJ Court rulings have also spurred the initiation of a so-called OMC process in the area of health care, whereby the member states commit themselves to policy harmonization on a voluntary basis. In this paper, we review the contents of emerging EU policies in the area of health and discuss their implications for the Nordic health care systems. A central question is whether any coherent, common European policy may be discerned and, if so, how it will affect health care systems of the Nordic type, which are tax-based and universalistic in orientation ?.

Health and Work

Effect of Job Stress and Personal Life Stress on Mental Health and Job Outcomes of Medical Professionals.

Patiraj K., Mishra R.

New York : Social Science Electronic Publishing : 2009/07 : 19 p.

The performance of a health organization depends on the knowledge, skills and motivation of individuals. It is therefore important for employees to provide suitable working conditions to ensure that the performances of employees meet the desired standards. The study aims to identify stress related factors that positively and negatively affect performance of medical professionals. We have confined our self to two types of stress. Job Stress and Personal Life Stress and its impact on Mental Health and Job Outcomes. And under job outcomes the focus will be on job satisfaction and performance. The present study was conducted on 75 subjects belonging to medical profession. To measure stress we used Life Changes Experience Survey developed by Dohrenwend, Krashaff, Askensey and Dohrenwend (1978). Mental Health Questionnaire (MHQ) developed by Srivastava and Bhatt (1973) was used for the assessment of the extent of mental ill-health of employees. Mental Health Inventory (MHI) developed by Jagdish & Srivastav (1983) was employed in the assessment of mental health. Satisfaction - Dissatisfaction (S.D) Employees Inventory developed by Pestonjee (1973) was used to measure the level of job satisfaction.

Primary health care

The Gate is Open: Primary Care Physicians as Social Security Gatekeepers .

Carlsen B., Nyborg K.

Oslo : University of Oslo : 2009 : 24 p.

Primary care physicians have two roles: the healer and the gatekeeper. We show that, due to information asymmetries, they cannot be expected to fulfill the latter role. Better gatekeepers will be poorer healers; hence all patients, both truly sick and shirkers, will strictly prefer physicians who give priority to healing. The choice between work and sick leave thus lies, essentially, with the patient. Interviews with Norwegian primary care physicians confirm this: Our interviewees report that shorter sick leaves are granted at request, while longer sick leaves are normally granted if the patient still prefer so after discussions with the physician.

How Payment Systems Affect Physicians' Provision Behavior - An Experimental Investigation.

Henning-Schmidt H., Selten R., Wiesen D.

New York : Social Science Electronic Publishing : 2009/07 : 34 p.

A central concern in health economics is to understand the influence of commonly used physician payment systems. We introduce a controlled laboratory experiment to analyze the influence of fee-for-service (FFS) and capitation (CAP) payments on physicians' behavior. Medical students decide as experimental physicians on the quantity of medical services. Real patients gain a monetary benefit from their choices. Our main findings are that patients are overserved in FFS and underserved in CAP. Financial incentives are not the only motivation for physicians' quantity decisions, though. The patient benefit is of considerable importance as well. Patients are affected differently by the two payment systems. Those in need of a low level of medical services are better off under CAP, whereas patients with a high need of medical services gain more health benefit when physicians are paid by FFS.

Health care systems

Improving the performance of the public health care system in Greece.

Economou C., Giorno C.

Paris : OCDE : 2009/07 : 36 p.

Les résultats de la Grèce dans le domaine de la santé se comparent favorablement avec la moyenne de l’OCDE. Cependant, le fonctionnement du système de soins n’est pas satisfaisant selon la population. Une source d’insatisfaction concerne la proportion élevée des dépenses privées de santé des ménages, y compris des paiements informels, alors que les dépenses médicales publiques en proportion du PIB sont parmi les plus faibles de l’OCDE. Cette situation conduit à des problèmes d’équité d’accès à certains services médicaux. On observe aussi une baisse d’efficacité du système à laquelle il import de remédier au plus tôt compte tenu de la hausse de la demande de soins, qui devrait s’intensifier au cours des prochaines décennies et du besoin de contrôle sur la croissance des dépenses publiques de santé. Ceci milite en faveur de réforme dans quatre domaines : (i) réviser la structure très fragmentée du système de soins et sa gouvernance; (ii) améliorer la qualité des services publics de soins primaires ; (iii) moderniser l’administration hospitalière ; et (iv) renforcer davantage le contrôle sur les dépenses pharmaceutiques.

Health and Ageing

The Effect of Health on Consumption Decisions in Later Life: Evidence from the UK.

Karagiannaki E.

Londres : CASE : 2009 : 41 p.

The analysis in this paper focuses on the impact of health on the savings and consumption decisions of the elderly. In principle, there are at least five alternative channels through which health may affect consumption and savings. Ill health may affect both consumption capacities and needs while the risk of deteriorating health might increase subjective mortality expectations inducing higher consumption. Conversely ill health may induce lower consumption and an increase in precautionary savings given that agents may anticipate increased consumption needs following a negative health shock. Our main objective in this paper is to describe how consumption decisions of the elderly adjust to health changes and to disentangle of the different channels through which consumption responds to health changes. To identify the effect of health on consumption and saving decisions we use data from the British Household Panel Survey and the English Longitudinal Survey of Ageing (ELSA) and we estimate a series of regression models which relate health changes to observed consumption changes. Our findings suggest that there are significant adjustments in the composition of consumption following an illness onset. These adjustments reflect mainly the combined effect of increased costs associated with illness.

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October 13th, 2009