Policy makers in several industrial countries are seeking to limit the rise in health care cost growth by supporting coordinated or integrated care programs, which differ from most prevailing forms ...of medical organization in how physicians are paid and how they work in groups. However, as long as fee-for-service payment systems remain an option, general practitioners will be reluctant to embrace coordinated care because it would give them less autonomy in how they practice. A study in Switzerland indicates that general practitioners will require a pay increase of up to 40 percent before they are willing to accept coordinated care, and a similar study found that Swiss consumers wanted a substantial reduction in premiums to accept it. These findings suggest that provisions of US health care reform designed to encourage the growth of coordinated care--such as accountable care organizations and medical homes--may face a challenging future.
This contribution reviews developments in the microeconomic analysis applied to three fields that are rarely considered in combination - energy, insurance, and health - focusing on four themes. ...First, it finds that stocks are crucial not only in energy but also motivate (in the guise of assets) demand for insurance coverage, as well as healthcare services designed to maintain one's stock of health. Second, however, the three fields strongly diverge in terms of their industry structure. While oil and, until recently, electricity are vertically integrated, healthcare has been the leading example of a cottage industry, with private insurance in between. Third, the structure of innovation also differs. In energy and private insurance, process and organizational innovation prevail; in healthcare, it is product innovation, meaning new characteristics at higher cost, facilitated by health insurance. Finally, government regulation impinges on all three industries.
At the 2015 World Conference of the International Health Economics Association in Milan, a participant from the European Observatory on Health Systems and Policy presented work that seeks to extend ...the concept of catastrophic healthcare expenditure (cHCE) from low-income countries to Europe. The authors started from the definition of the World Health Organization (WHO), according to which cHCE is out-of-pocket HCE that pushes down consumption below an estimated poverty line. They noted several shortcomings, causing them to adapt the concept for Europe. This note argues that cHCE has severe shortcomings when applied anywhere.
The point of departure of this Editorial is the fact that we all are engaged in self-rationing in our everyday lives. We would like to spend more money on all sorts of nice things and devote more ...time to our cherished activities. Imposed rationing is characteristic of wartime governments, who seek to prevent the rich from gobbling up the resources left by the army. Since the publication in 1987 of David Callahan's Setting Limits: Medical Goals in an Aging Society (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987), rationing of health care has become a widely debated issue (the Internet is full of pertinent entries). While rationing has also been addressed by health economists, there are three puzzling observations. First, Callahan (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987) wrote for an American audience whereas rationing was introduced by the British National Health Service (NHS) well before 1987, with little debate. Second, the economic theory of rationing had been laid out by James Tobin Ectrica 20(4): 521-533, 1952 as early as 1952—but health economists seem to have neglected his groundwork when writing about rationing. Third, they accept government-imposed rationing as inevitable in the case of health care, as though the self-rationing alternative was unavailable. An attempt is made here to provide rational explanations for these puzzles.
Several countries outside the European Union consider adopting its solvency regulation for their insurance industries. However,
and (to a lesser extent)
were found to run the risk of inducing more ...rather than less risk-taking by insurers (Zweifel, Peter. 2014. “Solvency Regulation of Insurers: A Regulatory Failure?”
37 (2): 135–157.). Companies are led to neglect parameters that link them to developments in the capital market when determining their endogenous perceived efficiency frontier (EPEF), causing it to become steeper. Given homothetic risk preferences, senior management is predicted to opt for increased rather than reduced volatility. By way of contrast, if modeled after
for banks, planned
will ask insurers to take developments in the capital market into account in their formulation of business strategies designed to ensure solvency (Principle 5 of
). In addition, the stipulated decrease in their leverage ratio is shown to reduce the slope of the EPEF for insurers with little solvency capital. Contrary to its predecessors,
is therefore predicted to make insurers take on less risk, which argues for its for adoption beyond the European Union if properly implemented.
Traditionally, health care systems have been compared mainly in terms of their finance, that is, Beveridge‐type vs Bismarck‐type arrangements. This article adopts a novel approach permitting not only ...comparisons of a broader range of systems but also assessments of their potential competitiveness. This will become an issue at the latest when citizens of the European Union obtain the right to choose their health insurance. Systems are characterised by their so‐called dominant complementary agents, who promise to correct an important failure in the physician–patient relationship but differ in their incentives and their capacity to deal with a number of emerging challenges.
Healthcare expenditure (HCE) spent during an individual’s last year of life accounts for a high share of lifetime HCE. This finding is puzzling because an investment in health is unlikely to have a ...sufficiently long payback period. However, Becker et al. (2007) and Philipson et al. (2010) have advanced a theory designed to explain high willingness to pay (WTP) for an extension of life close to its end. Their testable implications are complemented by the concept of ‘pain of risk bearing’ introduced by Eeckhoudt and Schlesinger (2006). They are tested using a discrete choice experiment performed in 2014, involving 1,529 Swiss adults. An individual setting where the price attribute is substantial out-of-pocket payment for a novel drug for treatment of terminal cancer is distinguished from a societal one, where it is an increase in contributions to social health insurance. Most of the economic predictions receive empirical support.
As the Corona pandemic of 2020 has shown, disposing of sufficient hospital capacity is of great importance. Ideally, this capacity should be provided by efficient units, calling for measurement of ...their performance. However, the standard cost frontier model yields biased efficiency scores because it ignores (often unobserved) heterogeneity between hospitals. In this paper, efficiency scores are derived from a cost function with both random intercept and random slope parameters which overcomes the problem of unobserved heterogeneity in stochastic frontier analysis. Based on an unbalanced panel covering the years 2004 to 2007 and comprising at least 100 Swiss hospitals per year, Bayesian inference points to significant heterogeneity suggesting rejection of the standard cost frontier model. When unobserved heterogeneity is fully accounted for, average estimated inefficiency decreases to 5%, below the 14% (21%, respectively) value reported for a number of European and Middle-Eastern countries (Hollingsworth,
2008
; Alawi et al.
2019
). Moreover, hospitals rated below 85% efficiency according to the standard model gain up to 12% points. They can provide much needed capacity that otherwise would be discarded on the grounds that they are not sufficiently efficient providers.
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