The Cost Disease Baumol, William J; Malach, Monte; Pablos-Méndez, Ariel ...
09/2012
eBook
The exploding cost of health care in the United States is a source of widespread alarm. Similarly, the upward spiral of college tuition fees is cause for serious concern. In this concise and ...illuminating book, well-known economist William J. Baumol explores the causes of these seemingly intractable problems and offers a surprisingly simple explanation. Baumol identifies the "cost disease" as a major source of rapidly rising costs in service sectors of the economy. Once we understand that disease, he explains, effective responses become apparent.Baumol presents his analysis with characteristic clarity, tracing the fast-rising prices of health care and education in the U.S. and other major industrial nations, then examining the underlying causes of the phenomenon, which have to do with the nature of providing labor-intensive services. The news is good, Baumol reassures, because the nature of the disease is such that society will be able to afford the rising costs.
This report draws a range of new analyses and case studies carried out in preparation for the Accra High-Level Forum held in September 2008. It it is organized into four parts. Part 1 examines trends ...in aid for health from a global perspective, focusing both on how increases in aid finance have been used, and on financing modalities and patterns that impact on the implementation of the Paris declaration. Part 2 then draws on a series of country cases studies-including Rwanda, Uganda, Cambodia, Vietnam, Ethiopia, the Kyrgyz Republic, Mali and Tanzania-looking at practical experience from the perspective of the main pillars of the Paris Declaration. Part 3 examines current issues and future directions, highlighting new work on predictable financing, showcasing developments in mutual accountability through country compacts, and innovations in cross-cutting issues such as gender and human rights. Part 4 summarizes the key messages and recommendations following the structure and format of the Accra Agenda for Action.
We study the price adjustment practices and provide quantitative measurement of the managerial and customer costs of price adjustment using data from a large U.S. industrial manufacturer and its ...customers. We find that price adjustment costs are a much more complex construct than the existing industrial-organization or macroeconomics literature recognizes. In addition to physical costs (menu costs), we identify and measure three types of managerial costs (information gathering, decision-making, and communication costs) and two types of customer costs (communication and negotiation costs). We find that the managerial costs are more than 6 times, and customer costs are more than 20 times, the menu costs. In total, the price adjustment costs comprise 1.22% of the company's revenue and 20.03% of the company's net margin. We show that many components of the managerial and customer costs are convex, whereas the menu costs are not. We also document the link between price adjustment costs and price rigidity. Finally, we provide evidence of managers' fear of antagonizing customers.
Demand Uncertainty and Cost Behavior Banker, Rajiv D.; Byzalov, Dmitri; Plehn-Dujowich, Jose M.
The Accounting review,
05/2014, Volume:
89, Issue:
3
Journal Article
Peer reviewed
We investigate analytically and empirically the relationship between demand uncertainty and cost behavior. We argue that with more uncertain demand, unusually high realizations of demand become more ...likely. Accordingly, firms will choose a higher capacity of fixed inputs when uncertainty increases in order to reduce congestion costs. Higher capacity levels imply a more rigid short-run cost structure with higher fixed and lower variable costs. We formalize this "counterintuitive" argument in a simple analytical model of capacity choice. Following this logic, we hypothesize that firms facing higher demand uncertainty have a more rigid short-run cost structure with higher fixed and lower variable costs. We test this hypothesis for the manufacturing sector using data from Compustat and the NBER-CES Industry Database. Evidence strongly supports our hypothesis for multiple cost categories in both datasets. The results are robust to alternative specifications.
A growing number of archaeologists are applying Geographic Information Science (GIS) technologies to their research problems and questions. Advances in GIS and its use across disciplines allows for ...collaboration and enables archaeologists to ask ever more sophisticated questions and develop increasingly elaborate models on numerous aspects of past human behavior. Least cost analysis (LCA) is one such avenue of inquiry. While least cost studies are not new to the social sciences in general, LCA is relatively new to archaeology; until now, there has been no systematic exploration of its use within the field.
This edited volume presents a series of case studies illustrating the intersection of archaeology and LCA modeling at the practical, methodological, and theoretical levels. Designed to be a guidebook for archaeologists interested in using LCA in their own research, it presents a wide cross-section of practical examples for both novices and experts. The contributors to the volume showcase the richness and diversity of LCA’s application to archaeological questions, demonstrate that even simple applications can be used to explore sophisticated research questions, and highlight the challenges that come with injecting geospatial technologies into the archaeological research process.
Productivity costs occur when the productivity of individuals is affected by illness, treatment, disability or premature death. The objective of this paper was to review past and current developments ...related to the inclusion, identification, measurement and valuation of productivity costs in economic evaluations. The main debates in the theory and practice of economic evaluations of health technologies described in this review have centred on the questions of whether and how to include productivity costs, especially productivity costs related to paid work. The past few decades have seen important progress in this area. There are important sources of productivity costs other than absenteeism (e.g. presenteeism and multiplier effects in co-workers), but their exact influence on costs remains unclear. Different measurement instruments have been developed over the years, but which instrument provides the most accurate estimates has not been established. Several valuation approaches have been proposed. While empirical research suggests that productivity costs are best included in the cost side of the cost-effectiveness ratio, the jury is still out regarding whether the human capital approach or the friction cost approach is the most appropriate valuation method to do so. Despite the progress and the substantial amount of scientific research, a consensus has not been reached on either the inclusion of productivity costs in economic evaluations or the methods used to produce productivity cost estimates. Such a lack of consensus has likely contributed to ignoring productivity costs in actual economic evaluations and is reflected in variations in national health economic guidelines. Further research is needed to lessen the controversy regarding the estimation of health-related productivity costs. More standardization would increase the comparability and credibility of economic evaluations taking a societal perspective.
Introduction This study was performed to assess the impact of use of PAP therapy for moderate or severe OSA on hospital-based care and costs in a large southeastern health system. Methods A ...retrospective cohort study was conducted among patients who had an in-laboratory sleep study with Atrium Health between Jan 1, 2014 and Dec 31, 2016. Patients were eligible if they: were at least 18 years old, were diagnosed with OSA, initiated PAP therapy, had an apnea-hypopnea index ≥ 15/hour and had a central apnea index ≤15/hour. Patients’ daily PAP usage data was obtained from Somnoware, a proprietary cloud-based management platform. Other data were obtained from the Atrium Health’s electronic data warehouse which contains patients’ clinical, billing, and scheduling data. Results The study consisted of 1098 patients, of which 60% (n=665) were on PAP >4 hours/night for ≥70% of the studied nights. After adjusting for significant covariates, association between PAP usage and acute care utilization was still evident in different measures of adherence. Increasing PAP usage was negatively associated with inpatient (IP) and overall acute care visits. For every 1 hour/night increase in PAP usage, there was 8% decrease in IP visits (RR=0.92, 95% CI:0.86-0.98) and 4% decrease in overall visits (RR=0.96, 95% CI:0.92-0.99). Increasing PAP usage was associated with less likelihood of having positive cost from IP (OR=0.93, 95% CI:0.86-1.00) and overall acute care visits (OR=0.94, 95% CI:0.89-1.00). Conclusion Broadly, use of PAP therapy above 4 hours per night over the 18m period was associated with a reduction in overall inpatient visits and costs. There was a linear response to hours of PAP usage to reduction in acute care visits. Using CMS criteria to PAP changed some of the subcategory associations, but generally led to similar conclusions of reduced visits and costs with patients using PAP >4h/70% (a slightly higher bar than averaging more than 4 hours/night). As patients and healthcare systems evaluate methods to reduce medical costs, treating OSA effectively should be considered part of the solution. Support (If Any) NA
Objective
To provide guidance on selecting the most appropriate price index for adjusting health expenditures or costs for inflation.
Data Sources
Major price index series produced by federal ...statistical agencies.
Study Design
We compare the key characteristics of each index and develop suggestions on specific indexes to use in many common situations and general guidance in others.
Data Collection/Extraction Methods
Price series and methodological documentation were downloaded from federal websites and supplemented with literature scans.
Principal Findings
The gross domestic product implicit price deflator or the overall Personal Consumption Expenditures (PCE) index is preferable to the Consumer Price Index (CPI‐U) to adjust for general inflation, in most cases. The Personal Health Care (PHC) index or the PCE health‐by‐function index is generally preferred to adjust total medical expenditures for inflation. The CPI medical care index is preferred for the adjustment of consumer out‐of‐pocket expenditures for inflation. A new, experimental disease‐specific Medical Care Expenditure Index is now available to adjust payments for disease treatment episodes.
Conclusions
There is no single gold standard for adjusting health expenditures for inflation. Our discussion of best practices can help researchers select the index best suited to their study.
The high cost of success Floyd, Raymond E.
IEEE potentials,
2022-July-Aug., Volume:
41, Issue:
4
Journal Article
Peer reviewed
Current college students look at the ongoing activities in space as common and mature. Even with billionaires making inroads to space excursions, the rate of success is high, with no particular ...problems noted in the past 20 years. That success rate does not really provide any insight into the cost of the space program in the years before, which cannot be measured in simply the dollars invested. One consideration most frequently forgotten is the human lives that were part of the cost of success for the space program.
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