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Bibliography of Health Economics

John Burkett October 14, 2010

Authors abstracts, when available, are reproduced below. I have summarized some works for which authors have not supplied abstracts.

[1] Henry Aaron. The Truth about Social Security and Medicare: Interview. Challenge, 47(3):2741, May-June 2004. Abstract: Social security and Medicare present entirely dierent challenges, says this authority. But you would not know that to listen to Alan Greenspans comments last winter. He said both programs would have to be cut. In contrast, future social security obligations can be accommodated without serious changes, this noted economist argues. The growth of Medicare obligations is much faster and will indeed require serious attention. [2] Daron Acemoglu, David Cutler, Amy Finkelstein, and Joshua Linn. Did Medicare Induce Pharmaceutical Innovation? American Economic Review, 96(2):10307, May 2006. The authors nd no evidence that the introduction of Medicare in 1965 increased drug use by the elderly and no evidence that it stimulated development of new drugs for the elderly. [3] Daron Acemoglu and Amy Finkelstein. Input and Technology Choices in Regulated Industries: Evidence From the Health Care Sector. Journal of Political Economy, 116(5):837880, October 2008. An online appendix is available at This paper examines the implications of regulatory change for input mix and technology choices of regulated industries. We study the increase in the relative price of labor faced by U.S. hospitals that resulted from the move from full cost to partial cost reimbursement under the Medicare Prospective Payment System (PPS) reform. Using the interaction of hospitals pre-PPS Medicare share of patient days with the introduction of PPS, we document substantial increases in capital-labor ratios and declines in labor inputs following PPS. Most interestingly, we nd that PPS seems to have encouraged the adoption of a range of new medical technologies. 1

[4] Scott J. Adams. Employer-Provided Health Insurance and Job Change. Contemporary Economic Policy, 22(3):35769, July 2004. Abstract: The author uses data from the 19882000 Annual Demographic Files of the Current Population Survey to revisit the question of whether job lock exists. Limiting the sample to males with employer-provided health insurance, it is tested whether the lack of a potential source of alternative coverage through the individuals spouse aects his or her job mobility. The author controls for both characteristics of the respondent and spouse, as well as the attributes of their jobs. Although evidence produced by other researchers using similar methodology has been mixed, this article presents signicant evidence that employer-provided health insurance lowers mobility. [5] Eddy M. M. Adang and George F. Borm. Is There an Association between Economic Performance and Public Satisfaction in Health Care? European Journal of Health Economics, 8(3):27985, September 2007. Abstract: Earlier studies on the association between health systems economic performance and public satisfaction were based on betweencountries comparisons. This approach can be challenged as it ignores the fact that subjective measures like satisfaction might be relative. Cohort analysis is a way of dealing with this issue as it focuses on within-countries comparisons. The association between change in satisfaction with health care systems and change in economic performance, determined by an output-orientated constant returns to scale DEA Malmquist model over the period 1995 to 2000/2002 using OECD data, is explored. The results show that a health care systems economic performance is not associated with public satisfaction. [6] Lu Ann Aday, Charles E. Begley, David R. Lairson, and Rajesh Balkrishnan. Evaluating the Healthcare System: Eectiveness, Eciency, and Equity. Health Administration Press, Chicago, 2004. Discusses eectiveness, eciency, equity, and the relationship of health services research to policy analysis. [7] Antnio Afonso and Miguel St. Aubyn. Relative Eciency of Health o Provision: a DEA Approach with Non-discretionary Inputs. Technical report, Technical University of Lisbon, Lisbon, Portugal, December 2006. Abstract: We estimate a semi-parametric model of health production process using a two-stage approach for OECD countries. By regressing data envelopment analysis output eciency scores on non-discretionary variables, both using Tobit analysis and a single and double bootstrap procedure, we show that ineciency is strongly related to GDP per head, the education level, and health behaviour such as obesity and smoking

habits. The used bootstrapping procedure corrects likely biased DEA output scores taking into account that environmental variables are correlated to output and input variables. [8] Kulsum Ahmed, Yewande Awe, and Douglas F. Barnes. Environmental Health and Traditional Fuel Use in Guatemala. Directions in Development. World Bank, 2005. Abstract: Estimates the health impacts of indoor air pollution resulting from traditional fuel use and outlines strategies and policies for mitigating health damage from this source. Examines the relationship between the use of dierent types of fuels and the health of women and children in Guatemala, presenting results of an exploratory study based on two large household surveys conducted between 1998 and 2000. Estimates the health impacts of indoor air pollution in the Guatemalan highlands, where the impact is potentially most severe. Investigates the potential of an improved stoves program to alleviate the problem of indoor air pollution. Assesses the liqueed petroleum gas (LPG) market in Guatemala and considers the potential problems that might discourage households from using LPG for cooking and heating. Summarizes policy recommendations. Bibliography; index. [9] Linda H. Aiken, Robert J. Blendon, and David E. Rogers. The Shortage of Hospital Nurses: A New Perspective. Annals of Internal Medicine, 95(3):36571, September 1981. There appears to be a critical shortage of hospital nurses in the United States, despite a 15-year national eort to bring the supply of nurses into balance with increased demand. Careful review of supply and requirement data does not provide an adequate explanation for the persistent shortage, and common misconceptions about the nature of the nurse shortage have clouded the debate. Several popular explanations for the shortage do not appear to be valid. Evidence strongly favors the explanation that the shortage has been caused by the depression of nurses incomes relative to incomes of other workers. The present wage structure has both short- and long-term eects on the shortage of nurses; allowing nurses salaries to rise to levels of comparable workers may be the only solution. [10] Anna Alberini and Aline Chiabai. Urban Environmental Health and Sensitive Populations: How Much are the Italians Willing to Pay to Reduce Their Risks? Working Paper 2005.105, Fondazione Eni Enrico Mattei, 2005. Abstract: We use contingent valuation to elicit WTP for a reduction in the risk of dying for cardiovascular and respiratory causes, the most important causes of premature mortality associated with heat wave and air pollution, among the Italian public. The purpose of this study is three-fold. First, we obtain WTP and VSL gures that can be applied when estimating the benets of heat advisories, other policies that reduce the mortality 3

eects of extreme heat, and environmental policies that reduce the risk of dying for cardiovascular and respiratory causes. Second, our experimental study design allows us to examine the sensitivity of WTP to the size of the risk reduction. Third, we examine whether the WTP of populations that are especially sensitive to extreme heat and air pollutionsuch as the elderly, those in compromised health, and those living alone and/or physically impairedis dierent from that of other individuals. We nd that WTP, and hence the VSL, depends on the risk reduction, respondent age (via the baseline risk), and respondent health status. WTP increases with the size of the risk reduction, but is not strictly proportional to it. All else the same, older individuals are willing to pay less for a given risk reduction than younger individuals of comparable characteristics. Poor health, however, tends to raise WTP, so that the appropriate VSL of elderly individuals in poor health may be quite large. Our results support the notion that the VSL is individuated. [11] Anna Alberini, Stefania Tonin, Margherita Turvani, and Aline Chiabai. Paying for Permanence: Public Preferences for Contaminated Site Cleanup. Working Papers 2006.113, Fondazione Eni Enrico Mattei, 441392D9-6FB0-407F-81B0-D97E9D6C08E1/2098/11306.pdf, 2006. Abstract: We use conjoint choice questions to investigate peoples preferences for income and reductions in mortality risks delivered by contaminated site remediation policies. Our survey is self-administered using the computer by residents of four cities in Italy with severely contaminated sites. We estimate the Value of a Statistical Life to be about Euro 5.6 million for an immediate risk reduction. If the risk reduction takes place 20 years from now, however, the implied VSL is about Euro 1.26 million. The discount rate implicit in the responses to the conjoint choice questions is about 7%. People are willing to pay for permanent risk reductions, but not just any amount. Risk reductions in the nearer future are valued more highly than risk reductions in the more distant future. We also nd that the VSL is individuated, in the sense that it depends on observable individual characteristics of the respondents, familiarity with contaminated sites, concern about the health eects of exposure to toxicants, having a family member with cancer, perceived usefulness of possible government actions, and the respondents beliefs about the goals of government remediation programs. Additional questions suggest that respondents discount lives, and do so at a discount rate in the ballpark of that implicit in their risk v. money tradeos. [12] Marcus Alexander and Nicholas A. Christakis. Bias and Asymmetric Loss in Expert Forecasts: A Study of Physician Prognostic Behavior with Respect to Patient Survival. Journal of Health Economics, 27(4):10951108, July 2008.

Abstract: We study the behavioral processes undergirding physician forecasts, evaluating accuracy and systematic biases in estimates of patient survival and characterizing physicians loss functions when it comes to prediction. Similar to other forecasting experts, physicians face dierent costs depending on whether their best forecasts prove to be an overestimate or an underestimate of the true probabilities of an event. We provide the rst empirical characterization of physicians loss functions. We nd that even the physicians subjective belief distributions over outcomes are not well calibrated, with the loss characterized by asymmetry in favor of over-predicting patients survival. We show that the physicians bias is further increased by (1) reduction of the belief distributions to point forecasts, (2) communication of the forecast to the patient, and (3) physicians own past experience and reputation. [13] Mohammad Amin, Kara Hanson, and Anne Mills. Price Discrimination in Obstetric ServicesA Case Study in Bangladesh. Health Economics, 13(6):597604, June 2004. Abstract: This article examines the existence of price discrimination for obstetric services in two private hospitals in Bangladesh, and considers the welfare consequences of such discrimination, i.e. whether or not price discrimination beneted the poorer users. Data on 1212 normal and caesarean section patients discharged from the two hospitals were obtained. Obstetric services were chosen because they are relatively standardised and the patient population is relatively homogeneous, so minimising the scope and scale of product dierentiation due to procedure and case-mix dierences. The dierences between the hospital list price for delivery and actual prices paid by patients were calculated to determine the average rate of discount. The welfare consequences of price discrimination were assessed by testing the dierences in mean prices paid by patients from three income groups: low, middle and high. The results suggest that two dierent forms of price discrimination for obstetric services occurred in both these hospitals. First, there was price discrimination according to income, with the poorer users beneting from a higher discount rate than richer ones; and second, there was price discrimination according to social status, with three high status occupational groups (doctors, senior government ocials, and large businessmen) having the highest probability of receiving some level of discount. [14] Jennifer Amsterlaw, Brian J. Zikmund-Fisher, Angela Fagerlin, and Peter A. Ubel. Can Avoidance of Complications Lead to Biased Healthcare Decisions? Judgment and Decision Making, 1(1):6475, July 2006. Abstract: Imagine that you have just received a colon cancer diagnosis and need to choose between two dierent surgical treatments. One surgery, the complicated surgery, has a lower mortality rate (16% vs. 20%) but compared to the other surgery, the uncomplicated surgery, also carries an additional 1% risk of each of four serious complications: colostomy, 5

chronic diarrhea, wound infection, or an intermittent bowel obstruction. The complicated surgery dominates the uncomplicated surgery as long as life with complications is preferred over death. In our rst survey, 51% of a sample (recruited from the cafeteria of a university medical center) selected the dominated alternative, the uncomplicated surgery, justifying this choice by saying that the death risks for the two surgeries were essentially the same and that the uncomplicated surgery avoided the risk of complications. In follow-up surveys, preference for the uncomplicated surgery remained relatively consistent (39% 51%) despite (a) presenting the risks in frequencies rather than percents, (b) grouping the 4 complications into a single category, or (c) giving the uncomplicated surgery a small chance of complications as well. Even when a pre-decision focusing exercise required people to state directly their preferences between life with each complication versus death, 49% still chose the uncomplicated surgery. People s fear of complications leads them to ignore important dierences between treatments. This tendency appears remarkably resistant to debiasing approaches and likely leads patients to make healthcare decisions that are inconsistent with their own preferences. Keywords: risk communication, medical decisions, cognitive biases [15] Paul Anand. The Integration of Claims to Health-Care: A Programming Approach. Journal of Health Economics, 22(5):73145, September 2003. Abstract: The paper contributes to the use of social choice and welfare theory in health economics by developing and applying the integration of claims framework to health-care rationing. Related to Sens critique of neo-classical welfare economics, the integration of claims framework recognises three primitive sources of claim: consequences, deontology and procedures. A taxonomy is presented with the aid of which it is shown that social welfare functions reecting these claims individually or together, can be specied. Some of the resulting social choice rules can be regarded as generalisations of health-maximisation and all have normative justications, though the justications may not be universally acceptable. The paper shows how non-linear programming can be used to operationalise such choice rules and illustrates their dierential impacts on the optimal provision of health-care. Following discussion of relations to the capabilities framework and the context in which rationing occurs, the paper concludes that the integration of claims provides a viable framework for modelling health-care rationing that is technically rigorous, general and tractable, as well as being consistent with relevant moral considerations and citizen preferences. [16] Gerard F. Anderson, Peter S. Hussey, Bianca K. Frogner, and Hugh R. Waters. Health Spending in the United States and the Rest of the Industrialized World. Health Aairs, 24(4):90314, JulyAugust 2005. Abstract: U.S. citizens spent $5,267 per capita for health care in 2002 53 percent more than any other country. Two possible reasons for 6

the dierential are supply constraints that create waiting lists in other countries and the level of malpractice litigation and defensive medicine in the United States. Services that typically have queues in other countries account for only 3 percent of U.S. health spending. The cost of defending U.S. malpractice claims is estimated at $6.5 billion in 2001, only 0.46 percent of total health spending. The two most important reasons for higher U.S. spending appear to be higher incomes and higher medical care prices. [17] Gerard F. Anderson, Uwe E. Reinhardt, Peter S. Hussey, and Petrosyan Varduhi. Its the Prices, Stupid: Why the United States is So Dierent from Other Countries. Health Aairs, 22(3):89105, MayJune 2003. Abstract: This paper uses the latest data from the Organization for Economic Cooperation and Development (OECD) to compare the health systems of the thirty member countries in 2000. Total health spending the distribution of public and private health spending in the OECD countriesis presented and discussed. U.S. public spending as a percentage of GDP (5.8 percent) is virtually identical to public spending in the United Kingdom, Italy, and Japan (5.9 percent each) and not much smaller than in Canada (6.5 percent). The paper also compares pharmaceutical spending, health system capacity, and use of medical services. The data show that the United States spends more on health care than any other country. However, on most measures of health services use, the United States is below the OECD median. These facts suggest that the dierence in spending is caused mostly by higher prices for health care goods and services in the United States. [18] Keith B. Anderson. Regulation, Market Structure, and Hospital Costs: A Comment on the Work of Mayo and McFarland. Working Paper 173, Bureau of Economics, Federal Trade Commission, Washington, D.C., May 1989. Abstract: This paper provides a critique of a recent paper in the Southern Economic Journal concerning the eectiveness of Certicate of Need (CON) regulation in controlling hospital costs. The major problem with the paper is that CON only aects costs through the number of beds a hospital operates. In addition, the measure of CON stringency suers from endogeneity problems and the analysis is restricted to a single state where all CON decisions are made by the same agency governed by the same law. When we reestimate the model using a dataset where variation in CON stringency can be observed and correcting for the other problems in their analysis, we nd that CON regulation has not been eective in reducing hospital costs. [19] Anders Anell. Swedish Healthcare under Pressure. Health Economics, 14(51):S23754, September 2005.

Abstract: Swedish healthcare, run by local governments at both the regional (county) and the municipal levels, has been under pressure during the last 15 years, following increased scrutiny of performance and demand for cost-containment. Health-care expenditures per capita and levels of resource inputs have grown, but more slowly than in other EU countries. At the same time, the number of elderly people has increased, as have options for medical treatment. In the late 1980s, several local governments referred to long waiting-lists for elective treatment and anecdotal evidence of ineciency and poor responsiveness when arguing for market-oriented reforms. A purchaser-provider split followed, and so did changes in the payment systems for health-care providers. According to the available evidence, these reforms yielded an increased volume of services in the short run; but traditional hierarchical management soon replaced the new incentives. Moreover, evidence suggests that changes introduced by the national government, and the deteriorating funding conditions together with a continued use of new medical technology, have had more far-reaching eects on health-care output and outcome than local-government reforms. [20] Anders Anell and Michael Willis. International Comparison of Health Care Systems Using Resource Proles. Bulletin of the World Health Organization, 78(6):77078, 2000. Abstract: The most frequently used bases for comparing international health care resources are health care expenditures, measured either as a fraction of gross domestic product (GDP) or per capita. There are several possible reasons for this, including the widespread availability of historic expenditure gures; the attractiveness of collapsing resource data into a common unit of measurement; and the present focus among OECD member countries and other governments on containing health care costs. Despite important criticisms of this method, relatively few alternatives have been used in practice. A simple framework for comparing data underlying health care systems is presented in this article. It distinguishes measures of real resources, for example human resources, medicines and medical equipment, from measures of nancial resources such as expenditures. Measures of real resources are further subdivided according to whether their factor prices are determined primarily in national or global markets. The approach is illustrated using a simple analysis of health care resource proles for Denmark, France, Germany, Sweden, the United Kingdom, and the USA. Comparisons based on measures of both real resources and expenditures can be more useful than conventional comparisons of expenditures alone and can lead to important insights for the future management of health care systems. [21] David P. Angrisani. Predicting Successful Hospital Mergers and Acquisitions: A Financial and Marketing Analytical Tool. Haworth Press, New York, 1997.

[22] John J. Antel, Robert L. Ohsfeldt, and Edmund R. Becker. State Regulation and Hospital Costs. The Review of Economics and Statistics, 77(3):416422, August 1995. Abstract: The eects of various regulations on hospital costs are estimated using a two decade long panel data set which spans the initiation, and in some instances the repeal, of various forms of hospital regulation. The long panel fosters two improvements over previous research. First, as state hos- pital cost levels may aect states incentive to regulate, xed eect estimators alleviate omitted variable bias derived from the states regulatory discretion. Second, the long panel per- mits the estimation of many dierent regulatory program eects, but also facilitates the analysis of potential regulatory program interaction. The empirical results suggest that previ- ous studies have exaggerated regulatory cost savings: although some interaction eects are indicated, hospital costs appear unresponsive to most regulatory programs. [23] Emanuela Antonazzo, Anthony Scott, Diane Skatun, and Bob Elliot. The Labour Market for Nursing: a Review of the Supply Side Literature. Health Economics Research Unit, University of Aberdeen, Discussion Paper 01/00, 2000. Forthcoming in Health Economics, June 2003. Summary: The aim of the paper is to assess current understanding of the labour supply behaviour of nurses and to highlight what issues deserve further investigation. A conceptual framework for the possible choices facing nurses at dierent stages of their career is also illustrated. The paper then reviews American and British economics literature that focuses on empirical econometric studies based on the classical static labour supply model. American research could be classied into rst generation, second generation and recent empirical evidence. This research was characterised by gradual improvement in model specication, datasets, estimation techniques and analysis of a wider range of labour supply issues. Linear probability model of participation and simple OLS regression of hours worked were gradually abandoned in favor of the more adequate Probit and Tobit model. Sample selection issues were also addressed using Heckmans procedure. There is a high degree of disagreement in the empirical results of the studies, since estimates of the determinants of labour supply appear particularly sensitive to the econometric and statistical assumptions. Even results on the sign and signicance of the wage were mixed, with more than one study nding an insignicant or a negative relationship with hours worked. Very little econometric empirical research has been conducted in the UK on nursing labour supply, although there is a growing literature on determinants of turnover, intentions to quit and job satisfaction. Only one study that met our inclusion criteria could be identied, but the dataset was dated and the sample size was small. Avenues of future research should include an examination of: the presence of a backward bending labour supply curve; discontinuities in the labour supply function due to labour market entry costs, and the relative importance 9

of pecuniary and non-pecuniary job characteristics in labour supply decisions. Theoretical modelling would benet from the extension of dynamic and family labour supply models to nursing research. [24] Alexander-Stamatios G. Antoniou, Cary L. Cooper, George P. Chrousos, Charles D. Spielberger, and Michael William Eysenck, editors. Handbook of Managerial Behavior and Occupational Health. Elgar, Northampton, Mass., 2009. [25] Keiko Aoki, Junyi Shen, and Tatsuyoshi Saijo. Consumer Reaction to Information on Food Additives: Evidence from an Eating Experiment and a Field Survey. Journal of Economic Behavior and Organization, 73(3):43338, March 2010. Abstract: Both the presence/absence of food additives and provision of accurate information pertaining to the same are considered to be important factors aecting individuals purchase decisions. In this paper, we apply the choice experiment approach under both real (the laboratory experiment) and hypothetical (the eld survey) environments to investigate how consumers value a food additive (sodium nitrite) present in ham sandwiches and whether the provision of information about sodium nitrite aects individuals choice. The results suggest that in both real and hypothetical situations, participants do not favor the use of sodium nitrite, per se, regardless of whether or not the detailed information is provided. Moreover, the willingness to pay values for ham sandwiches without sodium nitrite are estimated to be lower in the experiment and higher in the survey after negative and positive information is provided, implying that the eect of information provision diers between these two environments. In addition, further investigation of the participants reasons for choosing ham sandwiches indicates that the information related to avor seems to have more inuence on the consumers choice behavior in a real situation, while the information associated with health risk is like to play a relatively more important role in a hypothetical situation [26] Jennifer Arlen and W. Bentley MacLeod. Torts, Expertise, and Authority: Liability of Physicians and Managed Care Organizations. RAND Journal of Economics, 36(3):494519, Autumn 2005. Abstract: We examine optimal individual and entity-level liability for negligence when expected accident costs depend on both the agents level of expertise and the principals level of authority. We consider these issues in the context of physician and managed care organization (MCO) liability for medical malpractice. Under current law, physicians generally are considered independent contractors and hence MCOs are not liable for negligent acts by physicians. We nd that the practice of reviewing the medical decisions of physicians aects their incentives to take care, which in turn implies that it is ecient for MCOs to be held liable for the torts committed by their physicians.


[27] Jan Erik Askildsen, Badi H. Baltagi, and Tor Helge Holm Will Inas. creased Wages Reduce Shortage of Nurses? A Panel Data Analysis of Nurses Labor Supply. 10th International Conference on Panel Data, Berlin, 2002. Abstract: Shortage of nurses is a problem in several countries. It is an unsettled question whether increasing wages constitute a viable policy for extracting more labor supply from nurses. In this paper we use a unique matched panel data set of Norwegian nurses covering the period 19931997 to estimate wage elasticities. This data includes detailed information on 18,066 individuals over 5 years totaling 56,832 observations. The estimated elasticity when controlling for individual and time invariant xed eects is signicantly positive but not very high in magnitude. Individual and institutional features are signicant and important for working hours. We have also access to information about contractual arrangements. It turns out that shift work is important for hours of work, and that omitting information about this common phenomenon will underestimate the wage eect. [28] Vincenzo Atella and Partha Deb. Are Primary Care Physicians, Public and Private Sector Specialists Substitutes or Complements? Evidence from a Simultaneous Equations Model for Count Data. Journal of Health Economics, 27(3):77085, May 2008. Abstract: In this paper, we examine the relationships between health care visits to general practitioners, public and private sector specialists using data from Italy, which has a mixed public-private health care system. We develop a simultaneous equations model that allows for the discreteness of measures of utilization and estimate this model using maximum simulated likelihood. Once common unobserved heterogeneity is properly accounted for, general practitioners, public and private specialists are found to be substitute sources of medical care. In contrast, a naive model nds they are complements. [29] Jerry Avorn. Powerful Medicines: The Benets, Risks, and Costs of Prescription Drugs. Alfred A. Knopf, New York, 2004. Avorn (an M.D., associate professor of medicine at Harvard Medical School, and chief of the Division of Pharmacoepidemiology and Pharmacoeconomics at Brigham and Womens Hospital) describes the benets, risks, and costs of pharmaceuticals, discusses marketing and academic detailing (which he pioneered), and proposes policy initiatives, including compulsory insurance with consumer choice among not-for-prot integrated providers of physician and pharmacy services. [30] Jerry Avorn and Daniel H. Solomon. Cultural and Economic Factors That (Mis)Shape Antibiotic Use: The Nonpharmacologic Basis of Therapeutics. Annals of Internal Medicine, 133(2):128135, 18 July 2000.


Abstract: The use of antibiotics in both ambulatory and inpatient settings is heavily shaped by cultural and economic factors as well as by microbiological considerations. These nonpharmacologic factors are relevant to clinicians and policymakers because of the clinical and scal toll of inappropriate antibiotic prescribing, including excessive use, preventable adverse eects, and the increasing prevalence of resistant organisms. An understanding of the determinants of antibiotic consumption is critical to explain current patterns of use and to devise programs to reduce inappropriate use. Patient motivations include the desire for a tangible product of the clinical encounter coupled with incorrect perceptions of the eectiveness of antibiotics, particularly in viral infections. Physician behavior can be explained by such factors as lack of information, a desire to satisfy patient demand, and pressure from managed care organizations to speed throughput. Marketing campaigns directed at both physicians and patients further serve to increase demand, especially for newer, costlier products. Studies of antibiotic use patterns in inpatient and outpatient care consistently demonstrate considerable inappropriate prescribing, which is likely to exacerbate the emergence of resistant organisms. Several approaches have been shown to improve the rationality of antibiotic use. Computer-based algorithms or reminders can prompt physicians to improve antibiotic choices at the time of prescribing; paperbased order entry forms can achieve the same goal. Interactive educational outreach (academic detailing) is a practical implementation of social marketing principles to improve antibiotic use. Public education programs directed at consumers can help to reduce the inappropriate patient demand that helps to drive much improper antibiotic prescribing. [31] Katherine Baicker and Amitabh Chandra. The Eect of Malpractice Liability on the Delivery of Health Care. Working Paper 10709, National Bureau of Economic Research, Cambridge, Massachusetts, August 2004. Abstract: The growth of medical malpractice liability costs has the potential to aect the delivery of health care in the U.S. along two dimensions. If growth in malpractice payments results in higher malpractice insurance premiums for physicians, these premiums may aect the size and composition of the physician workforce. The growth of potential losses from malpractice liability might also encourage physicians to practice defensive medicine. We use rich new data to examine the relationship between the growth of malpractice costs and the delivery of health care along both of these dimensions. We pose three questions. First, are increases in payments responsible for increases in medical malpractice premiums? Second, do increases in malpractice liability drive physicians to close their practices or not move to areas with high payments? Third, do increases in malpractice liability change the way medicine is practiced by increasing the use of certain procedures? First, we nd that increases in malpractice payments made on behalf of physicians do not seem to be the driving force behind increases in premiums. Second, increases in malpractice costs (both pre12

miums overall and the subcomponent factors) do not seem to aect the overall size of the physician workforce, although they may deter marginal entry, increase marginal exit, and reduce the rural physician workforce. Third, there is little evidence of increased use of many treatments in response to malpractice liability at the state level, although there may be some increase in screening procedures such as mammography. [32] Laurence Baker and Joanne Spetz. Managed Care and Medical Technology Growth. In Garber [235], chapter 2, pages 2752. Analyzing U.S. hospital data, the authors nd evidence that managed care may have slowed technology growth in the 1980s but little that it did so in the 1990s. Their evidence leaves open the question of whether managed care can help control long term cost growth by slowing technology adoption (p. 27). [33] Laurence C. Baker, Ciaran S. Phibbs, Cassandra Guarino, Dylan Supina, and James L. Reynolds. Within-Year Variation in Hospital Utilization and its Implications for Hospital Costs. Journal of Health Economics, 23(1):191211, January 2004. Abstract: Variability in demand for hospital services may have important eects on hospital costs, but this has been dicult to examine because data on within-year variations in hospital use have not been available for large samples of hospitals. We measure daily occupancy in California hospitals and examine variation in hospital utilization at the daily level. We nd substantial day-to-day variation in hospital utilization, and noticeable dierences between hospitals in the amount of day-to-day variation in utilization. We examine the impact of variation on hospital costs, showing that increases in variance are associated with increases in hospital expenditures, but that the eects are qualitatively modest. [34] Laurence C. Baker and Anne Beeson Royalty. Medicaid Policy, Physician Behavior, and Health Care for the Low-Income Population. Journal of Human Resources, 35(3):480502, Summer 2000. Abstract: Responding to concerns about the health of poor children and mothers, Medicaid eligibility for pregnant women was expanded during the 1980s and 1990s and Medicaid fees paid to physicians for prenatal care and delivery were increased. We examine physician responses to these policy changes using data on physician practices. We nd that expanded eligibility for Medicaid did increase access to physician services. Contrary to some earlier ndings, however, increases in access are only apparent for the physicians in public institutions such as public clinics and hospital clinics; we nd no evidence that increases in eligibility increase access to private, oce-based physicians. [35] Badi H. Baltagi and Ingo Geishecker. Rational Alcohol Addiction: Evidence from the Russian Longitudinal Monitoring Survey. Health Economics, 15(9):893914, September 2006. 13

Abstract: Alcohol consumption in Russia is legendary and has been reported to be the third leading cause of death in the former Soviet Union after heart disease and cancer. Are Russian alcohol consumers rational addicts? This paper uses eight rounds of a nationally representative Russian survey spanning the period 19942003 to estimate a rational addiction (RA) model for alcohol consumption. This is done in a panel data setting as well as on a wave-by-wave basis. The prole of the Russian drinker nds a huge dierence between males and females and the model is estimated by gender. We do not nd support for the RA model in Russia for women. For men, although we nd that some implications of the RA model are satised, we fail to endorse the model empirically on grounds of implausible negative estimates of the discount rate. [36] Carlos Bantar, Beatriz Sartori, Eduardo Vesco, Claudia Heft, Mariano Saul, Francisco Salamone, and Maria Eugenia Oliva. A Hospitalwide Intervention Program to Optimize the Quality of Antibiotic Use: Impact on Prescribing Practice, Antibiotic Consumption, Cost Savings, and Bacterial Resistance. Clinical Infectious Diseases, 37(2):18086, July 2003. Abstract: Several ndings from Argentina provide compelling evidence of the need for more rational use of antimicrobial agents. Thus, a multidisciplinary antimicrobial treatment committee for the development of a hospital-wide intervention program was formed to optimize the quality of antibiotic use in hospitals. Four successive steps were developed during 6-month periods: baseline data collection, introduction of a prescription form, education, and prescribing control. Sustained reduction of drug consumption was shown during the study (R2 = 0.6885; P = .01). Total cost savings was 913,236 US dollars. To estimate the consumption of cefepime and aminopenicillin-sulbactam in relation to that of the third-generation cephalosporins, 2 indices were calculated: Icfp and Iams, respectively. Decreasing resistance to ceftriaxone by Proteus mirabilis and Enterobacter cloacae proved to be associated with increasing Icfp. Decreasing rates of methicillin-resistant Staphylococcus aureus were related to increasing Iams. The present study indicates that a systematic program performed by a multidisciplinary team is a cost-eective strategy for optimizing antibiotic prescribing. [37] F. Baquero and J. Campos. The Tragedy of the Commons in Antimicrobial Chemotherapy. Revista espanola de quimioterapia, 16(1):1113, March 2003. The authors argue that overuse of antimicrobial drugs is an instance of Garrett Hardins tragedy of the commons, analogous to overgrazing. They further argue that decision makers concern for their reputations may mitigate the tragedy. Several leading pharmaceutical companies marketing antibiotics seem to have simultaneously discovered . . . that in order to maintain their reputation (which is obviously required to sell products in


this and other elds) they need to help establish policies of appropriate prescribing behavior p. 12). [38] Joan Barenfanger, Michael A. Short, and Alisa A. Groesch. Improved Antimicrobial Interventions Have Benets. Journal of Clinical Microbiology, 39(8):282328, August 2001. The authors compare outcomes under two treatments. In the study group treatment, pharmacists were taught about microbiology and were alerted by a computer to potential interventions based on susceptibility tests. In the control group treatment, pharmacists manually reviewed susceptibility test data. The authors conclude that the study group treatment substantially reduced treatment costs. [39] Amber Batata. The Eect of HMOs on Fee-for-Service Health Care Expenditures: Evidence from Medicare Revisited. Journal of Health Economics, 23(5):95163, September 2004. Abstract: This paper implements a new method for calculating the extent of selection in the aged Medicare HMO market. Selection is measured as the dierence in average costs between new Medicare HMO enrollees and Medicare fee-for-service stayers with data from 1990 to 1994. Results suggest Medicare HMO enrollees were $1030 cheaper in their rst year of enrollment. The eect is found entirely in Part A (hospital) expenditures, conrming selection is based on inpatient rather than outpatient or preventive care. These results are consistent with previous work. [40] D. V. Bates. Adverse Health Impacts of Air Pollution Continuing Problems. Scandinavian Journal of Work Environment and Health, 21(6):405 11, December 1995. Abstract: Evidence has been published that current levels of ne particulate pollution are associated with a wide range of adverse health outcomes, including accelerated mortality. Tropospheric ozone, often in association with aerosol sulfates, is similarly and independently associated with increased emergency visits and hospital admissions for acute respiratory disease, and there are sound reasons for suspecting that asthma may be worsened by exposure to it. Whether nitrogen dioxide is important at current levels in inducing adverse health eects is unclear. Although the combination of sulfur dioxide and particulate pollution that results from uncontrolled coal burning has been known for 30 years to be harmful, the independent role of sulfur dioxide cannot yet be precisely dened. A rst report has appeared that ambient levels of volatile organic compounds may be associated with symptoms. Current eorts to assess the costs, in economic terms, of the adverse health eects attributable to air pollution are likely to be intensied. [41] Laurie J. Bates, Kankana Mukherjee, and Rexford E. Santerre. Medical Insurance Coverage and Health Production Eciency. Journal of Risk and Insurance, 77(1):21129, March 2010. 15

Abstract: Conventional economic theory predicts that medical insurance coverage causes an inecient production of health because of ex ante and ex post moral hazard eects. However, no research has empirically examined the magnitude of the ineciency. This study empirically examines the impact of medical insurance on the technical eciency of health production at the metropolitan level. The underlying health production function allows for preventive care, curative care, and behavioral factors. Data envelopment analysis determines relative technical eciency. The multiple regression results indicate that insurance coverage generates ineciency but the eciency loss appears to be relatively small on the extensive margin. [42] Laurie J. Bates and Rexford E. Santerre. Do Agglomeration Economies Exist in the Hospital Service Industry? Eastern Economic Journal, 31(4):61728, fall 2005. The authors nd evidence location economiesi.e., eciencies due to clustering of hospitals. [43] David Becker, Daniel Kessler, and Mark McClellan. Detecting Medicare Abuse. Working Paper 10677, National Bureau of Economic Research, Cambridge, Massachusetts, 2004. Abstract: This paper identies which types of patients and hospitals have abusive Medicare billings that are responsive to law enforcement. For a 20 percent random sample of elderly Medicare beneciaries hospitalized from 199498 with one or more of six illnesses that are prone to abuse, we obtain longitudinal claims data linked with Social Security death records, hospital characteristics, and state /year-level anti-fraud enforcement eorts. We show that increased enforcement leads certain types of types of patients and hospitals to have lower billings, without adverse consequences for patients health outcomes. [44] Perry Beider and Stuart Hagen. Limiting Tort Liability for Medical Malpractice. Congressional Budget Oce, cfm?index=4968&type=1, January 2004. According to the authors, on average, premiums for all physicians nationwide rose by 15 percent between 2000 and 2002 nearly twice as fast as total health care spending per person (p. 1). The eects of malpractice liability on eciency have been much debated. Defenders of unlimited liability say that it provides incentives to avoid malpractice. Opponents say that it forces doctors to practice wasteful defensive medicine. The authors nd that the existing evidence does not make a strong case that restricting malpractice liability would have a signicant eect, either positive or negative, on economic eciency (p. 7). [45] Fred Anthony Bellemore. Factors Aecting the Supply and Demand for Nursing Services. PhD thesis, MIT, Cambridge, 1992.


Abstract: The analysis in Part 2, The Supply of Labor to Part-time and Full-time Nursing, determined that four factors largely explain the increase in participation and hours worked over the 1977-1988 period, or in essence the total hours to nursing labor supply. (1) Factors which had negative eects on participation in 1977 were less of a deterrent to participation as time went on (specically preschool children and children; marriage actually went from having no eect to a positive one). (2) Education levels went up over the period. Wages increased with the level of education. Wages have a positive eect on both participation and full-time hours conditional on working full-time. Thus the increase in education led to higher wages and consequently to greater participation and hours. (3) Wage elasticities increased over the period, so that the higher wages had an even greater positive impact on total hours to labor supply. (4) Characteristics of the nursing population in addition to education and wages changed over the period and were partially responsible for the increase. The analysis in Part 3, Nurse Employment Choice with Regard to Temporary Nursing Services, determined that: (1) The presence of children in a household, especially preschool children, has a large positive eect on a nurses decision to work for a temporary nursing service rather than a hospital or other nursing employer; being female and age have a strong positive eect on the decision to work for an agency; being white and spousal income have a strong negative eect on the decision to work for an agency. (2) Nurses who work for agencies value wages more in relation to pension benets than nurses who work for other employers. (3) The fewer the number of hospitals and hospital beds in an area, the lower are wages and the probability of receiving benets; the fewer the number of hospitals, hospital beds, and nursing home beds in an area, the more likely it is that employers will use agencies. [46] Lee Benham. The Labor Market for Registered Nurses: A Three-Equation Model. Review of Economics and Statistics, 53(3):24652, 1971. The author investigates factors aecting the number of employed registered nurses and their earnings across states (p. 246). The model includes equations for demand, labor force participation, and geographic location. The author estimates how the market is aected by trends in per capita incomes, incomes of nurses spouses, birth rates, the number of nursing schools, and the number of substitutes for registered nurses. [47] R. M. Bennett, R. H. Phipps, and A. M. Strange. An Application of Life-Cycle Assessment for Environmental Planning and Management: The Potential Environmental and Human Health Impacts of Growing Genetically-Modied Herbicide-Tolerant Sugar Beet. Journal of Environmental Planning and Management, 49(1):5974, January 2006. Abstract: Life-Cycle Assessment (LCA) was used to assess the potential environmental and human health impacts of growing genetically-modied (GM), herbicide-tolerant sugar beet in the UK and Germany compared 17

with conventional sugar beet varieties. The GM variety results in lower potential environmental impacts on global warming, airborne nutrication, ecotoxicity (of soil and water) and watercourse enrichment, and lower potential human health impacts in terms of production of toxic particulates, summer smog, carcinogens and ozone depletion. Although the overall contribution of GM sugar beet to reducing harmful emissions to the environment would be relatively small, the potential for GM crops to reduce pollution from agriculture, including diuse water pollution, is highlighted. [48] Herman Benson. Who Will Organize 2.5 Million Nurses in the U.S.? WorkingUSA, 12(1):13141, March 2009. Subjects: Analysis of Health Care Markets; Professional Labor Markets; Occupational Licensing; Trade Unions: Objectives, Structure, and Eects [49] Robert A. Berenson, Sylvia Kuo, and Jessica H. May. Medical Malpractice Liability Crisis Meets Markets: Stress in Unexpected Places. Issue Brief (Center for Studying Health System Change), 68:17, September 2003. Abstract: While the causes of rapidly rising medical malpractice insurance premiums remain contentious and unsettled, the consequences are rippling through communities, threatening to diminish patients access to care and increase health care costs, with an uncertain impact on quality, according to ndings from the Center for Studying Health System Changes (HSC) 200203 site visits to 12 nationally representative communities. The severity of malpractice insurance problems varied across communities, with some physicians changing how and where they care for patients. For example, rather than treat patients in their oces, more physicians are referring patients to emergency departments. And many physicians, especially those practicing in high-risk specialties, are unwilling to provide emergency department on-call coverage because of malpractice liability concerns. [50] Mark C. Berger, Dan A. Black, and Frank A. Scott. Is There Job Lock? Evidence from the Pre-HIPAA Era. Southern Economic Journal, 70(4):95376, April 2004. Abstract: We estimate discrete time hazard models of employment duration and standard logarithmic wage equations using the 1987 and 1990 panels of the Survey of Income and Program Participation (SIPP) to examine the phenomenon of job lock. We test for job lock using dierences-in-dierences approaches among those with and without employer-provided health insurance and family members with and without health problems. We nd no statistically signicant evidence of job lock on employment duration or wages using this approach. We do nd some evidence of shorter employment spells for those with employer-provided health insurance and spouse-provided health insurance, and longer employment spells for those with employer-provided health insurance and 18

large families. Others have interpreted these ndings as evidence of job lock. However, the wage equation results using these measures are not consistent with job lock. Although anecdotal evidence makes it clear that some workers have been locked into less-than-optimal jobs because of the combination of health problems and employer-provided health insurance, our results do not suggest that this phenomenon is pervasive in the U.S. economy. [51] Ernst R. Berndt. International Comparisons of Pharmaceutical Prices: What Do We Know, and What Does It Mean? Journal of Health Economics, 19(2):2837, March 2000. Comments on four issues pertaining to Danzon and Chao [164]. [52] Ernst R. Berndt. Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price. Journal of Economic Perspectives, 16(4):4566, fall 2002. The author emphasizes the distinction between short- and long-run costs. Although the long-run supply of new pharmaceuticals depends critically on research and development eorts, in the short run, R&D costs are largely sunk or xed, while the marginal costs of manufacturing another tablet of a developed drug are typically very small (p. 45). The author also notes that pharmaceuticals often are experience (as opposed to search) goods because patient response in terms of ecacy, side eects and adverse interactions is idiosyncratic (p. 52). Experience goods tend to surpass search goods in their ratio of marketing expenditures to sales. Consistent with this pattern, this ratio is relatively high in the pharmaceutical industry (14% in 2000). [53] Ernst R. Berndt, Linda Bui, David H. Luckling-Reiley, and Glen L. Urban. The Roles of Marketing, Product Quality and Price Competition in the Growth and Composition of the U.S. Antiulcer Drug Industry. In Timothy F. Bresnahan and Robert J. Gordon, editors, The Economics of New Goods, volume 58 of Studies in Income and Wealth, pages 277 322, Chicago, 1997. National Bureau of Economic Research, University of Chicago Press. This is a new version of [54]. Among the conclusions are the following: First, marketing eorts such as detailing and medical journal advertising have long-lived impacts. Thus, in explaining current-period sales, a stock of cumulative detailing or cumulative medical journal advertising is a more appropriate measure of marketing impacts than are current monthly expenditures. In the context of industry demand, we distinguish investments of rms in these marketing activities by the industry structure prevailing when the expenditures originally occurred. In a monopoly market structure, all marketing expenditures are market-expanding, for the monopolist has 100 percent market share. In a market structure with k products, however, marketing activities become more rivalrous, ans as k become large, 19

we expect relatively little spillover of a rms marketing eorts in aecting industry demand. . . . There is clear evidence of spillovers. . . . For the most part, these spillovers decline as the number of products in the industry increases. Second, we nd that at the industry level, both cumulative minutes of detailing and cumulative pages of medical journal advertising aect sales; typical estimates of these elasticities are 0.5 and 0.2. . . . Third, a somewhat unexpected result we obtained is that at the industry level, the rate of depreciation of stocks of both minutes of detailing and medical journal advertising was estimated to be zero (pp. 310-11). [54] Ernst R. Berndt, Linda Bui, David Reiley, and Glen Urban. The Roles of Marketing, Product Quality and Price Competition in the Growth and Composition of the U.S. Anti-Ulcer Drug Industry. Working Paper 4904, National Bureau of Economic Research, Cambridge, 1994. Abstract: The introduction of Tagamet in the United States in 1977 represented both a revolution in ulcer therapy and the beginning of an important new industry. Today there are four prescription H2-antagonist drugs: Tagamet, Zantac, Pepcid and Axid, and they comprise a multi-billion dollar market for the treatment of ulcers and other gastric acid conditions. In this paper, we examine the determinants of sales in this market, using a carefully constructed data set made possible by IMS America. We concentrate particularly on the marketing of these drugs to physicians through detailing and medical journal advertising, and we make an innovative attempt to distinguish between industry-expanding and rivalrous marketing eorts. We nd that the impact of total marketing on the expansion of overall industry sales declines as the number of products on the market increases. In addition, we nd that the stock of industry-expanding marketing depreciates at a near-zero rate, while the stock of marketing oriented towards rivalrous market share competition depreciates at a 40% annual rate. We also nd that the products sales are aected signicantly by price, quality attributes (such as number of FDA-approved indications and number of adverse drug interactions), and order of entry into the market. [55] Ernst R. Berndt, Linda Bui, David R. Reiley, and Glen L. Urban. Information, Marketing, and Pricing in the U.S. Antiulcer Drug Market. American Economic Review, 85(2):10005, May 1995. The authors estimate an industry demand function (depending on price, detailing, medical-journal advertising, and direct-to-consumer advertising) and market share functions for Tagamet, Zantac, Pepcid, and Axid. They nd that brand specic own-price elasticities range from -.74 (Axid) to -1.03 (Zantac) and the industry level own-price elasticity is -.69. The marketing variables are measured as stocks (fed by ows of marketing expenditure and diminished by depreciation). The estimated elasticities of industry demand with respect to marketing stocks are .553 (detailing), .198 (medical journal advertising), and .008 (DCA). 20

[56] Ernst R. Berndt, David M. Cutler, Richard G. Frank, Zvi Griliches, Joseph P. Newhouse, and Jack E. Triplett. Medical Care Prices and Output. In Culyer and Newhouse [152], chapter 3, pages 119180. Covers, inter alia, how medical products (including pharmaceutical, pp. 150-3) are treated in the producer price index. [57] Ernst R. Berndt, Robert S. Pindyck, and Pierre Azoulay. Consumption Externalities and Diusion in Pharmaceutical Markets: Antiulcer Drugs. Journal of Industrial Economics, 51(2):24370, June 2003. Abstract: We examine the role of consumption externalities in the demand for pharmaceuticals at both the brand level and over a therapeutic class of drugs. Externalities emerge when use of a drug by others aects its value, and/or conveys information about ecacy and safety to patients and physicians. This can aect the rate of market diusion for a new entrant, and can lead to dominance of one drug despite the availability of close substitutes. We use data for H2 -antagonist antiulcer drugs to estimate a dynamic demand model and quantify these eects. The model has three components: an hedonic price equation that measures how the aggregate usage of a drug, as well as conventional attributes, aect brand valuation; equations relating equilibrium market shares to quality-adjusted prices and marketing levels; and diusion equations describing the dynamic adjustment process. We nd that consumption externalities inuence both valuations and rates of diusion, and that they operate at the brand and not the therapeutic class level. [58] Patrick M. Bernet, Michael D. Rosko, Vivian G. Valdmanis, Anatoly Pilyavsky, and William E. Aaronson. Productivity Eciencies in Ukrainian Polyclinics: Lessons for Health System Transitions from Differential Responses to Market Changes. Journal of Productivity Analysis, 29(2):10311, April 2008. Abstract: Ukraines recent elections revealed deep divisions between eastern regions, which favored central economic planning, and western regions, which preferred more free market reforms. This study compares polyclinics in Ukraine to see if the inexibility of Soviet-style planned economies results in lower economic eciency in eastern regions. Using data from two geopolitical regions, Data Envelopment Analysis (DEA) scores for polyclinic eciencies are modeled as a function of demographic and economic determinants. Surprisingly, results indicate that polyclinics in western Ukraine are less ecient. Possible explanations, including case mix intensity, responsiveness to local preferences, physician entrepreneurial behavior and a legacy of inequitable funding, are discussed. [59] B. Douglas Bernheim and Antonio Rangel. Addiction and CueConditioned Cognitive Processes. Stanford University working paper, October 2002.


Abstract: We propose an economic theory of addiction based on the premise that cognitive mechanisms such as attention aect behavior independently of preferences. We argue that the theory is consistent with foundational evidence (e.g. from neuroscience and psychology) concerning the nature of decision-making and addiction. The model is analytically tractable, and it accounts for a broad range of stylized facts concerning addiction. It also generates a plausible qualitative mapping from the characteristics of substances into consumption patterns, thereby providing a basis for empirical tests. Finally, the theory provides a clear standard for evaluating social welfare, and it has a number of striking policy implications. [60] L. M. Bernstein, G. B. Chapman, and A. S. Elstein. Framing Eects in Choices between Multioutcome Life-Expectancy Lotteries. Medical Decision Making, 19(3):32438, JulySeptember 1999. Abstract: AIM: To explore framing or editing eects and a method to debias framing in a clinical context. METHOD: Clinical scenarios using multioutcome life-expectancy lotteries of equal value required choices between two supplementary drugs that either prolonged or shortened life from the 20-year benecial eect of a baseline drug. The eects of these supplementary drugs were presented in two conditions, using a betweensubjects design. In segregated editing (n = 116) the eects were presented separately from the eects of the baseline drug. In integrated editing (n = 100), eects of supplementary and baseline drugs were combined in the lottery presentation. Each subject responded to 30 problems. To explore one method of debiasing, another 100 subjects made choices after viewing both segregated and integrated editings of 20 problems (dual framing). RESULTS: Statistically signicant preference reversals between segregated and integrated editing of pure lotteries occurred only when one framing placed outcomes in the gain domain, and the other framing placed them in the loss domain. When both editings resulted in gain-domain outcomes only, there was no framing eect. There was a related relationship of framing-eect shifts from losses to gains in mixed-lottery-choice problems. Responses to the dual framing condition did not consistently coincide with responses to either single framing. In some situations, dual framing eliminated or lessened framing eects. CONCLUSION: The results support two components of prospect theory, coding outcomes as gains or losses from a reference point, and an s-shaped utility function (concave in gain, convex in loss domains). Presenting both alternative editings of a complex situation prior to choice more fully informs the decision maker and may help to reduce framing eects. Given the extent to which preferences shift in response to alternative presentations, it is unclear which choice represents the subjects true preferences. [61] Vasanthakumar N. Bhat. Institutional Arrangements and Eciency of Health Care Delivery Systems. European Journal of Health Economics,


6(3):21521, September 2005. Abstract: This study examined the eciency of health care delivery systems in 24 OECD countries. Practicing physicians, practicing nurses, inpatient beds, and pharmaceuticals were considered as inputs to treat populations of various age groups. Data envelopment analysis (DEA) was utilized to calculate eciency. We also calculated input eciency that should be helpful in determining excess number of physicians, nurses, inpatient beds, and pharmaceuticals consumed. Institutional arrangements aect eciency: public-contract and public-integrated countries are more ecient than public-reimbursement countries. Countries in which physicians are paid in wages and salaries and countries with capitation have higher eciency than fee-for-service countries. Countries in which a primary care physician acts as a gatekeeper are also more ecient than countries without gatekeepers. [62] Jay Bhattacharya and Neeraj Sood. Health Insurance and the Obesity Externality. Working Paper 11529, National Bureau of Economic Research, Cambridge, Mass., 2005. Abstract: If rational individuals pay the full costs of their decisions about food intake and exercise, economists, policy makers, and public health ocials should treat the obesity epidemic as a matter of indierence. In this paper, we show that, as long as insurance premiums are not risk rated for obesity, health insurance coverage systematically shields those covered from the full costs of physical inactivity and overeating. Since the obese consume signicantly more medical resources than the non-obese, but pay the same health insurance premiums, they impose a negative externality on normal weight individuals in their insurance pool. To estimate the size of this externality, we develop a model of weight loss and health insurance under two regimes (1) underwriting on weight is allowed, and (2) underwriting on weight is not allowed. We show that under regime (1), there is no obesity externality. Under regime (2), where there is an obesity externality, all plan participants face inecient incentives to undertake unpleasant dieting and exercise. These reduced incentives lead to inecient increases in body weight, and reduced social welfare. Using data on medical expenditures and body weight from the National Health and Interview Survey and the Medical Expenditure Panel Survey, we estimate that, in a health plan with a coinsurance rate of 17.5%, the obesity externality imposes a welfare cost of about $150 per capita. Our results also indicate that the welfare loss can be reduced by technological change that lowers the pecuniary and non-pecuniary costs of losing weight, and also by increasing the coinsurance rate. [63] Jayanta Bhattacharya, Dana Goldman, and Neeraj Sood. The Link between Public and Private Insurance and HIV-Related Mortality. Journal of Health Economics, 22(6):110522, November 2003.


Abstract: As policymakers consider expanding insurance coverage for the human immunodeciency virus (HIV+) population, it is useful to ask whether insurance has any eect on health outcomes, and, if so, whether public insurance is as ecacious as private insurance in preventing premature death. Using data from a nationally representative cohort of HIVinfected persons receiving regular medical care, we estimate the impact of dierent types of insurance on mortality in this population. Our main ndings are that (1) ignoring observed and unobserved health status misleads one to conclude that insurance may not be protective for HIV patients, (2) after accounting for observed and unobserved heterogeneity, insurance does protect against premature death, and (3) private insurance is more eective than public insurance. The better performance of private insurance can be explained in part by more restrictive Medicaid prescription drug policies that limit access to highly ecacious treatment. [64] Kevin Biller. Nurses and Monopsony Power of Hospitals: the Possibility of Structural Change. PhD thesis, Oklahoma State University, 1994. Abstract: Scope and method of study. This paper sought to analyze and discuss the ability of hospitals to use monopsony status to suppress wages for nursing professionals. Recent market developments, including the impact of government policy changes, were discussed. Monopsony models were examined to demonstrate the relationship between greater employer buying power and lower levels of wages and utilization for labor. Data for registered nurses in Oklahoma were evaluated in an eort to determine the factors relevant to wage and employment levels. A two stage, least squares (2SLS), simultaneous equations technique was applied to the data and adjustments were made to correct for possible biases resulting from market power. Findings and conclusions. Wage disparities between hospitals were largely explained by factors other than buying power. Two separate, short run, hospital labor supply elasticity estimates of 2.72 and 5.62, as well as an inability of demand variables to explain RN wage variation, suggested that average monopsony power was weak. [65] Lisa Black, Joanne Spetz, and Charlene Harrington. Nurses Who Do Not Nurse: Factors That Predict Non-Nursing Work in the U.S. Registered Nursing Labor Market. Nursing Economics, 28(4):245254, JulyAugust 2010. Abstract: The article presents a study on the factors aecting the labor market for registered nurses in the U.S. It examines the factors that affect the U.S. registered nurses to work outside their profession including market, political, and sociodemographic factors. It mentions that majority of the population of nurses particularly male married nurses worked in a nonhealth care related jobs due to discontent in wage dierentials from nursing and non-nursing jobs. [66] Inna Blam and Sergey Kovalev. Spontaneous Commercialisation, Inequality and the Contradictions of Compulsory Medical Insurance in Transi24

tional Russia. Journal of International Development,, 18(3):40723, April 2006. Abstract: This paper analyses spontaneous commercialisation phenomena in the public health care system of transitional Russia. The authors relate these phenomena to the governments policy of vague declarations of comprehensive universal coverage unsupported by sound nancial commitments. The paper provides an analysis of data from two Russian household surveys that conrms the existence of pronounced inequalities across income groups and geographical units, and connects these inequalities to the patterns of commercialisation of health care. The paper identies the diculties faced by more equitable policy initiatives in the context of the distorted incentives structures and vested interests generated by spontaneous commercialisation. [67] Jos L. T. Blank and Vivian G. Valdmanis. Environmental Factors and Productivity on Dutch Hospitals: A Semi-parametric Approach. Health Care Management Science, 13(1):2734, March 2010. Abstract: This paper describes the eciency of Dutch hospitals using the method of Data Envelopment Analysis (DEA). In particular the analysis focuses on explaining cost ineciency measures due to each hospitals operating environment. In previous works, the resulting DEA score is regressed on environmental factors via a Tobit approach. Previously, these approaches have been used [Simar and Wilson, J Prod Anal 7(1):63-80, 2000] but later these authors [Simar and Wilson 2007] demonstrated that bias is incurred since the eciency score is a point estimate without a probability distribution around it that is required by the Tobit methodology. In this paper we use the Simar and Wilson bootstrapping techniques in order to obtain more ecient estimates of the environmental eects. It is shown that dierences in estimated eects exist between the nonbootstrapped and bootstrapped models. [68] Jos L. T. Blank and Iris Vogelaar. Specifying Technical Change: A Research on the Nature of Technical Change in Dutch Hospital Industry. Quarterly Review of Economics and Finance, 44(3):44863, July 2004. Abstract: This paper studies the nature of technical change in Dutch hospitals. From the estimation of a cost function on data in the time period 19932000 we conclude that technical change is embodied (input biased) and non-scale augmenting. Technical change leads to an increasing use of medical personnel and material supplies at the expense of nursing personnel. Specifying technical change by a technology index allowing for a shock wise introduction of new technologies is to be preferred to the traditional time trends. Eciency scores however are hardly aected by the choice of specication.


[69] Sara Bleich, David Cutler, Christopher Murray, and Alyce Adams. Why Is the Developed World Obese? Annual Review of Public Health, 29(2):273 295, April 2008. Abstract: Obesity has risen dramatically in the past few decades. However, the relative contribution of energy intake and energy expenditure to rising obesity is not known. Moreover, the extent to which social and economic factors tip the energy balance is not well understood. This exploratory study estimates the relative contribution of increased caloric intake and reduced physical activity to obesity in developed countries using two methods of energy accounting. Results show that rising obesity is primarily the result of consuming more calories. We estimate multivariate regression models and use simulation analysis to explore technological and sociodemographic determinants of this dietary excess. Results indicate that the increase in caloric intake is associated with technological innovations as well as changing sociodemographic factors. This review offers useful insights to future research concerned with the etiology of obesity and suggests that obesity-related policies should focus on encouraging lower caloric intake. [70] David K. Blough, Scott Ramsey, Sean D. Sullivan, and Roger Yusen. The Impact of Using Dierent Imputation Methods for Missing Quality of Life Scores on the Estimation of the Cost-Eectiveness of Lung-VolumeReduction Surgery. Health Economics, 18(1):91101, January 2009. Abstract: A post hoc analysis of data from a prospective cost-eectiveness analysis (CEA) conducted alongside a randomized controlled trial (National Emphysema Treatment TrialNETT) was used to assess the impact of using dierent imputation methods for missing quality of life data on the estimation of the incremental cost-eectiveness ratio (ICER). The NETT compared lung-volume-reduction surgery plus medical therapy with medical therapy alone in patients with severe chronic obstructive pulmonary disease due to emphysema. One thousand sixty-six patients were followed for up to 3 years after randomization. The cost per quality-adjusted lifeyear gained was obtained, computing costs from a societal perspective and using the self-administered Quality of Well Being questionnaire to measure quality of life. Dierent methods of imputation resulted in substantial dierences in ICERs as well as dierences in estimates of the uncertainty in the point estimates as reected in the CEA acceptability curves. Paradoxically, the use of a conservative single imputation method resulted in relatively less uncertainty (anticonservative) about the ICER. Owing to the eects of dierent imputation methods for missing quality of life data on the estimation of the ICER, we recommend use of a minimum of two imputation methods that always include multiple imputation. [71] M. F. Bognanno, J. S. Hixson, and J. R. Jeers. The Short-Run Supply of Nurses Time. Journal of Human Resources, 9(1):8094, winter 1974.


Using data on married nurses in 1967 and 1968, the authors estimate that the participation decision is not dependent on the wage rate, while hours worked conditional on participation respond in a nonlinear manner suggestive of a backward bending labor supply curve (p. 80). Near the observed wage levels, hours increase slightly with wages. Overall, the authors conclude that the short-run reaction of nurse labor time supplied to an increase in wages would be negligible (p. 93). [72] J. Lyle Bootman, Raymond J. Townsend, and William F. McGhan, editors. Principles of Pharmacoeconomics. Harvey Whitney Books, Cincinnati, second edition, 1996. [73] Lavonne A. Booton and Julia I. Lane. Hospital Market Structure and the Return to Nursing Education. Journal of Human Resources, 20(2):18496, spring 1985. Abstract: Analysis of the results of surveys of more than 5,000 nurses attempts to increase the understanding of supply behavior and to identify the importance of market structure in the nurse labor market. The oligopsonistic nature of hospital demand and its impact on earnings dierences is the focus. The hospital market in Utah is examined, where 3 corporations control 26 of the 38 nonfederal hospitals, which leads to restricted competition in nurse hiring. Employers do not dierentiate among 2-, 3- and 4-year preparation times for nurses, thus discouraging the nurses with the most years of education, usually the baccalaureate-degreed RNs. The lack of compensation for additional preparation tends to encourage the baccalaureate RN to seek employment outside of hospitals or to drop from the employment scene, thus enabling hospitals to continue saying there is a nursing shortage. Licensing laws also fail to dierentiate among the levels of preparation for nurses. [74] Pierre I. Boumtje, Chung L. Huang, Jonq-Ying Lee, and Biing-Hwan Lin. Dietary Habits, Demographics, and the Development of Overweight and Obesity among Children in the United States. Food Policy, 30(2):11528, April 2005. Abstract: This study uses a multinomial logistic regression and data from the US Department of Agriculture (USDA) Continuing Survey of Food Intakes by Individuals (CSFII) to examine the factors that inuence overweight and obesity among school-age children in the United States. Results show that Black and Hispanic children seem to associate more with the development of at risk for being overweight and overweight. Poverty is another major variable that positively associates with overweight among school-age children. Frequency of physical exercises was found to be positively associated with normal weight and that sedentary behavior was negatively associated with normal weight and positively associated with overweight among children of ages between 12 and 18. The consumption of low fat milk, other dairy products, fruits and legumes is negatively associated with the probabilities of being at risk for overweight and overweight 27

among school-age children. In contrast, increasing consumption of soft drinks, fat and oils, and sodium appears to be the major dietary factors that positively associated with childhood overweight. [75] John B. Braden and Charles D. Kolstad, editors. Measuring the Demand for Environmental Quality. Elsevier, Amsterdam, 1991. [76] W. David Bradford and Robert E. Martin. Oce Triage and the Physicians Supply Curve. Empirical Economics, 20(2):30323, 1995. Abstract: This paper contains a theoretical and empirical model of the physician rm. The utility maximizing physician chooses the number of hours of labor to supply and the mix between patient visits and time per visit. Theory suggests that a serious specication error may occur if one estimates the labor supply curve and patient demand curve without simultaneously estimating the mix between patient visits and time per visit. A Chi-Square specication test reveals that this triage model statistically dominates the simple supply/demand model. Estimation results indicate relevant backward-bending labor and negatively sloped service supply functions. [77] Milan Brahmbhatt and Arindam Dutta. On SARS Type Economic Eects During Infectious Disease Outbreaks. Policy Research Working Paper Series 4466, World Bank, Washington, DC, 2008. Available at edu/servlet/WDSContentServer/WDSP/IB/2008/01/07/000158349_ 20080107092939/Rendered/PDF/wps4466.pdf. Abstract: Infectious disease outbreaks can exact a high human and economic cost through illness and death. But, as with severe acute respiratory syndrome (SARS) in East Asia in 2003, or the plague outbreak in Surat, India, in 1994, they can also create severe economic disruptions even when there is, ultimately, relatively little illness or death. Such disruptions are commonly the result of uncoordinated and panicky eorts by individuals to avoid becoming infected, of preventive activity. This paper places these SARS type eects in the context of research on economic epidemiology, in which behavioral responses to disease risk have both economic and epidemiological consequences. The paper looks in particular at how people form subjective probability judgments about disease risk. Public opinion surveys during the SARS outbreak provide suggestive evidence that people did indeed at times hold excessively high perceptions of the risk of becoming infected, or, if infected, of dying from the disease. The paper discusses research in behavioral economics and the theory of information cascades that may shed light on the origin of such biases. The authors consider whether public information strategies can help reduce unwarranted panic. A preliminary question is why governments often seem to have strong incentives to conceal information about infectious disease outbreaks. The paper reviews recent game-theoretic analysis that claries government incentives. An important nding is that government incentives to conceal 28

decline the more numerous are non-ocial sources of information about a possible disease outbreak. The ndings suggest that honesty may indeed be the best public policy under modern conditions of easy mass global communications. [78] Elizabeth Brainerd and David M. Cutler. Autopsy on an Empire: Understanding Mortality in Russia and the Former Soviet Union. Journal of Economic Perspectives, 19(1):107130, winter 2005. Abstract: Male life expectancy at birth fell by over six years in Russia between 1989 and 1994. Many other countries of the former Soviet Union saw similar declines, and female life expectancy fell as well. Using cross-country and Russian household survey data, we assess six possible explanations for this upsurge in mortality. Most nd little support in the data: the deterioration of the health care system, changes in diet and obesity, and material deprivation fail to explain the increase in mortality rates. The two factors that do appear to be important are alcohol consumption, especially as it relates to external causes of death (homicide, suicide, and accidents) and stress associated with a poor outlook for the future. However, a large residual remains to be explained. [79] Victor Brajer, Robert W. Mead, and Feng Xiao. Health Benets of Tunneling through the Chinese Environmental Kuznets Curve (EKC). Ecological Economics, 66(4):674686, July 2008. Abstract: In this paper, we rst add to what is a growing literature on the existence and nature of the environmental Kuznets curve (EKC) model for developing countries, by testing for the existence of an EKC for China using a panel data set of city-specic, annual ambient levels of SO2 pollution. We nd some support for both the typical inverted-U-shaped relationship and an N-shaped, cubic conguration. More signicantly, we then explore the possibility of Chinas tunneling through the EKC, by using newer, cleaner technologies, and thereby avoiding some of the environmental degradation that had often accompanied economic growth. Specically, we estimate and economically value the health benets realizable to Chinese cities from successful eorts to tunnel under the EKC over the next generation. [80] R. L. Brannon. The Reorganization of the Nursing Labor Process: From Team to Primary Nursing. International Journal of Health Services, 20(3):51124, 1990. Abstract: The author presents a labor process analysis of recent changes in nursing work on hospital wards. In the immediate post-World War II decades, hospital nursing was organized to include stratied nurses registered and auxiliary nurses (licensed practical nurses and nurses aides)in a common labor process called team nursing. Team nursing adapted Taylorist principles to sharply demarcate tasks between registered


nurses (RNs) and auxiliaries. In the 1970s and 1980s, team nursing increasingly replaced by primary nursing with a majority of RNs. Auxiliaries were displaced as RNs assumed undivided responsibility for complete nursing care. The transition to primary nursing is partly explained through the convergence of managerial interests with the professionalizing interests of nursings elite. However, primary nursing was not simply imposed from the top down. Team nursing produced divisiveness between RNs and auxiliaries at the same time that it forced these workers to violate the ofcial dierentiation of tasks and held RNs responsible for work performed by auxiliaries. Primary nursing eliminates the problems of team nursing as RNs perform reunied tasks in an unmediated RN-patient relationship. However, primary nursing has produced a new set of contradictions, including an intensied labor process. [81] R. L. Brannon. Restructuring Hospital Nursing: Reversing the Trend Toward a Professional Work Force. International Journal of Health Services, 26(4):64354, 1996. Abstract: Registered nurses are currently threatened by a new managerial strategy to restructure work on hospital wards through the implementation of Continuous Quality Improvement and the downsizing of the professional work force. The strategy reintroduces nonprofessional and unlicensed nursing personnel in a manner that may displace large numbers of registered nurses (RNs) and aect patient care adversely. Ironically, not only is this change being implemented principally to reduce hospital costs rather than to improve quality, it reverses the cost-containment strategy implemented in the 1980s when hospitals displaced nonprofessional nursing workers and moved toward a professional work force. In this article, the author reviews the prior shift from team nursing with a stratied work force that included licensed practical nurses and nurses aides to primary nursing and the trend toward all-RN stang, and explains how this trend contributed to the present eort to reverse the process. The author then discusses current work redesign methods that have been adapted from traditional industrial applications to destroy work jurisdictions and further rationalize hospital production through the downsizing of the professional work force and the creation of cross-trained workers in a new team-based management approach. The article concludes by discussing nursings response to corporate-imposed work restructuring and the signicance of these changes. [82] A. L. Bretteville-Jensen. Addiction and Discounting. Journal of Health Economics, 18:393407, 1999. Keywords: health economics, rationality, addiction, time preferences [83] Carol S. Brewer. The Roller Coaster Supply of Registered Nurses: Lessons from the Eighties. Research in Nursing & Health, 19(4):34557, August 1996.


Using U.S. data, the author nds that the wage elasticity of labor supply for RNs hours (near mean wage) was signicantly greater than zero for females (1.35 in 1984 and 1.45 in 1988) but low and insignicant for males (.85 in 1984 and .26 in 1988). [84] Carol S. Brewer. The History and Future of Nursing Labor Research in a Cost-Control Environment. Research in Nursing & Health, 21:16777, 1998. The author surveys research on the labor supply behavior of RNs, covering articles published from 1970 to 1997. [85] James A Brickley. Managerial Incentives in Nonprot Organizations: Evidence from Hospitals. Journal of Law and Economics, 45(1):22749, April 2002. Abstract: This paper examines the incentives of chief executive ocers (CEOs) in a large sample of nonprot hospitals. The evidence indicates that both turnover and compensation of these CEOs are signicantly related to nancial performance (return on assets). We nd no evidence that nonprot hospitals provide explicit incentives for their CEOs to focus on altruistic activities. The turnover/performance relation appears stronger in nonprot hospitals than in for-prot hospitals and other for-prot corporations (our data do not allow us to compare compensation incentives). Past research suggests that there is little distinction between the outputs and behaviors of private nonprot and for-prot hospitals. Consistent with these ndings, our study suggests that managers face incentives to concentrate on nancial performance in both types of organizations. [86] Patrick L. Brockett, Ray E. Chang, John J. Rousseau, John H. Semple, and Chuanhou Yang. A Comparison of HMO Eciencies as a Function of Provider Autonomy. Journal of Risk and Insurance, 71(1):119, March 2004. Abstract: Current debates in the insurance and public policy literatures over health care nancing and cost control measures continue to focus on managed care and HMOs. The lower utilization rates found in HMOs (compared to traditional fee-for-service indemnity plans) have generally been attributed to the organizations incentive to eliminate all unnecessary medical services. As a consequence HMOs are often considered to be a more ecient arrangement for delivering health care. However, it is important to make a distinction between utilization and eciency (the ratio of outcomes to resources). Few studies have investigated the eect that HMO arrangements would have on the actual eciency of health care delivery. Because greater control over provider autonomy appears to be a recurrent theme in the literature on reform, it is important to investigate the eects these restrictions have already had within the HMO market. In this article, the eciencies of two major classes of HMO arrangements are


compared using game-theoretic data envelopment analysis (BE) models. While other studies conrm that absolute costs to insurance rms and sponsoring companies are lowered using HMOs, our empirical ndings suggest that, within this framework, eciency generally becomes worse when provider autonomy is restricted. This should give new fuel to the insurance companies providing fee-for-service (FFS) indemnication plans in their marketplace contentions. [87] John M. Brooks, Bernard Sorofman, and William Doucette. Varying Health Care Provider Objectives and Cost-Shifting: The Case of Retail Pharmacy in the US. Health Economics, 8:13750, 1999. Keywords: health economics, health care providers, cost-shifting, Medicaid pharmacy reimbursements, retail pharmacy [88] Douglas M. Brown. The Rising Price of Physicians Services: A Correction and Extension on Supply. Review of Economics and Statistics, 76(2):389 93, May 1994. Abstract: The eect of changing prices on the supply of physicians services has important policy implications. In this note, a correction of previous work on supply by the author . . . shows that with aggregate data the price elasticity of supply is zero. However, using individual physician data in the context of a utility-maximizing model of supply, it is found that the price elasticity of supply is about -0.2. This result could portend serious problems ahead for recently enacted Medicare pricing strategies to contain physician spending. [89] Douglas M. Brown and Harvey E. Lapan. The Supply of Physicians Services. Economic Inquiry, 17(2):26979, April 1979. Abstract: This paper presents a model of the supply of physicians services based upon the assumption that physicians are price-taking utility maximizers. Assuming physicians services are produced using physicians labor and purchased inputs, the paper shows that the impact of changes in nal product or input prices on the supply of physicians services depends on the physicians labor-leisure choice and on the degree of substitutability between physicians labor and purchased inputs. The empirical results presented indicate that the physicians labor supply curve is backwardbending, but that the supply curve of physicians services is positively sloped. [90] H. Shelton Brown, III. Managed Care and Technical Eciency. Health Economics, 12(2):14958, February 2003. Abstract: By focusing exclusively on consumer benet, previous studies of the eects of managed care have ignored important hospital eciency gains. This study uses the HCUP sample of hospitals for 199296 to estimate a stochastic frontier model of hospital technical eciency. After controlling for hospital and market area variables, the study nds strong 32

evidence that increased managed care insurance in a given market is associated with improved technical eciency in the areas hospitals, especially in tertiary cases. Using Battese and Coellis one-stage method (1995), the coecients estimates are more ecient than for two-stage methods found in the literature. [91] Jerey R. Brown and Amy Finkelstein. The Private Market for LongTerm Care Insurance in the U.S.: A Review of the Evidence. Journal of Risk and Insurance, 76(1), March 2009. Abstract: This article reviews the growing literature on the market for private long-term care insurance, a market notable for its small size despite the fact that long-term care expenses are potentially large and highly uncertain. After summarizing long-term care utilization and insurance coverage in the United States, the article reviews research on the supply of and the demand for private long-term care insurance. It concludes that demand-side factors impose important limits on the size of the private market and that we currently have a limited understanding of how public policies could be designed to encourage the growth of this market. [92] Timothy Tyler Brown. Three Essays on the Labor Market for Nonphysician Clinicians. PhD thesis, University of California, Berkeley, 1999. Abstract: This series of essays examines three areas of the labor market: supply behavior in primary employment; the propensity to take a second job; and the impact of restrictive regulations on earnings. The rst essay notes the diering measures of earnings-per-hour elasticity of supply found in the literature on the labor supply of nurses and seeks to evaluate this literature to determine the reasons for these dierences. An advanced model of labor supply which estimates the supply curve in three parts rather than two-parts is used to more accurately measure supply behavior. Separate estimates are made for registered nurses (RNs) and advanced practice nurses (APNs). The results show large dierences between the two groups and large dierences within each group by marital status. The second essay examines the propensity of RNs and APNs to take a second job and nds that all previous literature on the propensity to take a second job has overlooked a critical point which has resulted in previous parameter estimates being signicantly biased. This point is that the shape of the supply curve changes as the hours worked on the primary job increases. Thus, the factors which explain the propensity to take a second job vary systematically with the amount of work a person has already supplied to their primary job. This is supported by the empirical ndings for RNs with less support for APNs which is likely due to the smaller sample used to analyze APN behavior. The third essay analyzes the eects of three sets of restrictive regulations on the earnings of nurse practitioners (NPs): physician oversight requirements, prescriptive authority restrictions, and reimbursement restrictions. Rather than using an index of regulatory restrictiveness which has potentially serious 33

econometric problems, each regulation is evaluated independently. The effect of each regulation is evaluated using RNs as a control group to avoid improperly ascribing eects to the restrictive regulations which may actually be due to unintentionally omitted factors aecting both RNs and NPs. This approach nds much larger negative eects from restrictive regulations than previous studies have found, with restrictions on prescriptive authority yielding the largest negative eects. [93] Stirling Bryan, Shoshanna Sofaer, Taryn Siegelberg, and Marthe Gold. Has the Time Come for Cost-Eectiveness Analysis in US Health Care? Health Economics, Policy and Law, 4(4):42543, October 2009. Abstract: Cost-eectiveness analysis (CEA) is a powerful analytic tool for assessing the value of health care interventions but it is a method used sparingly in the US. Despite its growing acceptance internationally and its endorsement in the academic literature, most policy analysts have assumed that US decision makers will resist using CEA to inform coverage decisions. This study sought to clarify the extent to which CEA is understood and accepted by US decision makers, including regulators, private and public insurers, and purchasers, and to identify their points of diculty with its use. We conducted half-day workshops with a sample of six California-based health care organizations that spanned a range of public and private perspectives regarding coverage of health care services. Each workshop included an overview of CEA methods, a prioritysetting exercise that asked participants (acting as social decision makers) to rank condition treatment pairs prior to and following provision of cost-eectiveness information; and a facilitated discussion of obstacles and opportunities for using CEA in their own organizations. Pre and postquestionnaires inquired as to obstacles toward implementing CEA, attitudes toward rationing, and views on the use of CEA in Medicare and in private insurance coverage decision-making. In post-workshop surveys, major obstacles identied included: fears of litigation, concerns about the quality and accuracy of studies that were commercially sponsored, and failure of CEAs to address shorter horizon cost implications. Over 90% of participants felt that CEA should be used as an input to Medicare coverage decisions and 75% supported its use in such decisions by private insurance plans. Despite the wide acceptance of CEA, at the conclusion of the workshop, 40% of the sample remained uncomfortable with support of rationing per se. We suggest that how cost-eectiveness analysis is framed will have important implications for its acceptability to US decision makers. [94] Thomas C. Buchmueller, Mireille Jacobson, and Cheryl Wold. How Far to the Hospital? The Eect of Hospital Closures on Access to Care. Working Paper 10700, National Bureau of Economic Research, Cambridge, Massachusetts, 2004.


Abstract: Do urban hospital closures aect health care access or health outcomes? We study closures in Los Angeles County between 1997 and 2003, through their eect on distance to the nearest hospital. We nd that increased distance to the nearest hospital shifts regular care away from emergency rooms and outpatient clinics to doctors oces. While most residents are otherwise unaected by closures, lower-income residents report more diculty accessing care, working age residents are less likely to receive HIV tests, and seniors less likely to receive u shots. We also nd some evidence that increased distance raises infant mortality rates and stronger evidence that it increases deaths from unintentional injuries and heart attacks. [95] Peter I. Buerhaus, David I. Auerbach, and Douglas O. Staiger. The Recent Surge In Nurse Employment: Causes And Implications. Health Aairs, 28(4):w657w668, June 2009. Registered nurse (RN) employment has increased during the current recession, and we may soon see an end to the decade-long nurse shortage. This would give hospitals welcome relief and an opportunity to strengthen the nurse workforce by addressing issues associated with an increasingly older and foreign-born workforce. The recent increase in employment is also improving projections of the future supply of RNs, yet large shortages are still expected in the next decade. Until nursing education capacity is increased, future imbalances in the nurse labor market will be unavoidable. [96] Peter I. Buerhaus, Douglas O. Staiger, and David I. Auerbach. Associate Degree Graduates and the Rapidly Aging RN Workforce. Nursing Economics, 18(4):178184, JulyAugust 2000. [97] Peter I. Buerhaus, Douglas O. Staiger, and David I. Auerbach. Expanding Career Opportunities for Women and the Declining Interest in Nursing as a Career. Nursing Economics, 18(5), SeptemberOctober 2000. [98] Peter I. Buerhaus, Douglas O. Staiger, and David I Auerbach. Policy Responses to an Aging Registered Nurse Workforce. Nursing Economics, 18(6):278303, NovemberDecember 2000. [99] Peter I. Buerhaus, Douglas O. Staiger, and David I. Auerbach. Why Are Shortages of Hospital RNs Concentrated in Specialty Care Units? Nursing Economics, 18(3):16, MayJune 2000. The authors present evidence that intensive care units have historically tended to hire relatively young RNs. A decline of the number of young RNs concentrates the shortage of RNs in intensive care units. [100] Melinda J. Beeuwkes Buntin, Jose J. Escarc, Dana Goldman, Hongjun e Kan, Miriam J. Laugesen, and Paul Shekelle. Increased Medicare Expenditures for Physicians Services: What Are the Causes? Inquiry, 41(1):83 94, Spring 2004.


Abstract: In light of rising expenditures for physicians services and the scheduled decreases in the amounts Medicare pays for such services, we identied the sources of change in the volume and intensity of Medicare physicians services. We found that the per capita volume and intensity of physicians services used by Medicare beneciaries increased more than 30% between 1993 and 1998. Our analyses indicated that, at most, half of this increase was due to measurable changes in the demographic composition, places of residence, prevalence of health conditions, and managed care enrollment of beneciaries. The other half was due to a general increase in the use of care across beneciary categories. [101] Mary Burke and Frank Heiland. Social Dynamics of Obesity. Economic Inquiry, 45(3):57191, July 2007. Abstract: We explain the recent increases in obesity in the United States with a model involving falling food prices, endogenous social body weight norms, and heterogeneous human metabolism. Calibrating an analytical choice model to American women in the 30- to 60-yr-old age bracket, we compare the predicted weight distributions to National Health and Nutrition Examination survey data spanning (intermittently) the years 19762000. The model, the rst to describe explicitly complete weight distribution dynamics for this group, predicts average weights and obesity rates with considerable accuracy and captures a signicant portion of the recent growth in upper quantile weights. [102] John P. Burkett. The Labor Supply of Nurses and Nursing Assistants in the United States. Eastern Economic Journal, 31(4):58599, fall 2005. Abstract: Employers of nurses and nursing aides often report shortages and seek public assistance to enable them to pay higher wages. Persistent shortages may in theory be due to monopsony power, rigidity of relative wages, or incomplete contracts. Consistent with rigidity of relative wages, time series for employment and earnings of registered nurses (RNs), licensed practical nurses (LPNs), and nursing aides, orderlies, and attendants (NAOAs), 19872002, suggest coexistence of excess demand for RNs and NAOAs with excess supply of LPNs since 1993. Labor supply functions for RNs and NAOAs are estimated by Bayesian limited information methods, yielding posterior distributions for short- and long-run wage elasticities of labor supply. The results suggest that increased public assistance to health care providers, designed to raise wages, probably would not reduce reported shortages arising from monopsony power but would nonetheless increase employment of RNs and NAOAs moderately in the short-run and strongly in the long-run. [103] W. Scott Butsch, Jamy D. Ard, David B. Allison, Amit Patki, C. Suzanne Henson, Miriam M. Rueger, Katherine A. Hubbert, Gerry L. Glandon, and Douglas C. Heimburger. Eects of a Reimbursement Incentive on Enrollment in a Weight Control Program. Obesity, 15(11):27332738, November 2007. 36

Abstract: Objective: The objective was to examine the eect of oering a reimbursement incentive on the percentage of inquirers who enrolled in a weight control program and on weight loss and program attendance among enrollees. Research Methods and Procedures: We used a sequential control-intervention design to observe how inquirers of the University of Alabama at Birmingham EatRight Lifestyle Program responded to an enrollment incentive for potential 50% ($150) reimbursement of the total program fee if they attended 10 of 12 classes and lost at least 6% of their current body weight. Inquirers had to be adults with a BMI 30 kg/m, seeking information about a weight control program, and informed of the program cost. Outcomes included proportion of inquirers enrolled, overall number of classes attended, and weight loss. Results: Of the 401 people who inquired during the study periods, 24.5% and 25.0% enrolled in the intervention and control periods, respectively. There was a trend toward higher attendance in the intervention group, compared with the control group; there were no dierences in percentage of weight loss. The odds of attending 10 classes were 2.4 times as high, and both losing >6% body weight and attending 10 classes were three times as high in the intervention subjects compared with controls, although non-signicant. Discussion: The potential of earning a performance-based reimbursement incentive did not aect enrollment in the EatRight Lifestyle Program. Performance-based incentives may be an ideal mechanism for extending coverage of weight-loss interventions by insurers because of limited nancial risk and improved adherence. [104] John E. Calfee, Cliord Winston, and Randolph Stempski. Direct-toConsumer Advertising and the Demand for Cholesterol-Reducing Drugs. Journal of Law and Economics, 45(2, part 2):67390, 2002. Abstract: In August 1997, the Food and Drug Administration (FDA) reinterpreted its advertising regulations to ease limits on the use of broadcast media when advertising prescription drugs directly to consumers. We estimate the eect of direct-to-consumer advertising on demand, using 19952000 data from the market for the statin class of cholesterol-reducing drugs. We nd no statistically signicant eect from any form of advertising and promotion on new statin prescriptions or renewals and no evidence of adverse market eects from advertising or the FDA policy change. We did nd evidence, however, that television advertising increased the proportion of cholesterol patients who had been successfully treated, which suggests that advertising reinforces compliance with drug therapy. [105] Elizabeth S. Campbell and Michael W. Ahern. Have Procompetitive Changes Altered Hospital Provision of Indigent Care? Health Economics, 2(3):28189, October 1993. Abstract: In the past decade alone there have been numerous changes in the nancial and competitive environment of hospitals in the United States. Some examples include the advent of Medicares Prospective Pay37

ment System, growth in managed care options, relaxation of states Certicate of Need (CON) regulations, and court cases questioning the taxexempt status of nonprot 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 scal years ending in 1983 and 1987, estimates explaining uncompensated care commitments are presented. In particular, this study illustrates how hospitals under dierent ownership control varied their provision of uncompensated care over the period studied on average and by protability 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 protable CON licenses. [106] David Card, Dobkin, Carlos, and Nicole Maestas. The Impact of Nearly Universal Insurance Coverage on Health Care Utilization and Health: Evidence from Medicare. Working Paper 10365, National Bureau of Economic Research, Cambridge, Massachusetts, 2004. Abstract: We use the increases in health insurance coverage at age 65 generated by the rules of the Medicare program to evaluate the eects of health insurance coverage on health related behaviors and outcomes. The rise in overall coverage at age 65 is accompanied by a narrowing of disparities across race and education groups. Groups with bigger increases in coverage at 65 experience bigger reductions in the probability of delaying or not receiving medical care, and bigger increases in the probability of routine doctor visits. Hospital discharge records also show large increases in admission rates at age 65, especially for elective procedures like bypass surgery and joint replacement. The rises in hospitalization are bigger for whites than blacks, and for residents of areas with higher rates of insurance coverage prior to age 65, suggesting that the gains arise because of the relative generosity of Medicare, rather than the availability of insurance coverage. Finally, there are small impacts of reaching age 65 on self-reported health, with the largest gains among the groups that experience the largest gains in insurance coverage. In contrast we nd no evidence of a shift in the rate of growth of mortality rates at age 65. [107] Bruce E. Carpenter and Stephen P. Neun. An Analysis of the Location Decision of Young Primary Care Physicians. Atlantic Economic Journal, 27(2):13549, June 1999. Abstract: The major objective of this study is to determine the factors inuencing the rst-time location decision of young primary care physicians. Employing a county-based data set that includes a host of health industry characteristics, demographic attributes, and economic factors, this study explores the factors that come into play when a young pri38

mary care physician decides where to practice medicine. In the demand side of the market, it was found that young physicians have an anity for locating in moderately populated areas. Supply factors also come into play as young physicians appear most willing to locate in counties free of crime, poverty, and excessive taxes and where there is a strong academic presence. A moderate cost of living was also important. [108] Penelope A. Cash, Donna Daines, Rose Marie Doyle, Linda von Tettenborn, and R. Colin Reid. Recruitment and Retention of Nurse Educators: A Pilot Study of What Nurse Educators Consider Important In Their Workplaces. Nursing Economic, 27(6):384389, November December 2009. Abstract: The article focuses on the need to implement retention strategies for nurse educators in Canada. An online survey participated by 115 female nurse educators which seeks to determine the needs of the nurses in their work environment is presented. It is also suggested that extensive research are still to be carried out both at national and international levels to ensure quality working environments for nurse educators. [109] Marianela Castillo-Riquelme. Modelling Geographic Variation in the CostEectiveness of Control Policies for Infectious Vector Diseases: The Example of Chagas Disease. Journal of Health Economics, 27(2):40526, March 2008. Abstract: Few cost-eectiveness analysis (CEA) models have accounted for geographic variation in input parameters. This paper describes a deterministic discrete-time multi-state model to estimate the cost-eectiveness of vector control policies for Chagas disease, where implementation varies according to village characteristics. The model outputs include the total number of new infections, disability adjusted life years (DALYs) incurred, costs of associated healthcare, and total costs of the Ministry of Healths control policy for house surveillance and spraying. Incremental net benets were estimated to determine Colombian villages in which it is cost-eective to implement the control policy. The robustness of these conclusions was evaluated by deterministic sensitivity analyses. The model should help provide a decision-support system to compare control policies and to allocate resources geographically. [110] Steven B. Caudill, Jon M. Ford, and David L. Kaserman. Certicate-ofNeed Regulation and the Diusion of Innovations: A Random Coecient Model. Journal of Applied Econometrics, 10(1):7378, JanuaryMarch 1995. Abstract: In this paper, we examine empirically the eect that certicateof-need regulation by state health planning organizations has had on the speed of diusion of a relatively new medical technologyhaemodialysis. Specically, we test the hypothesis that a requirement that investments be subject to certicate-of-need review has signicantly slowed the rate of 39

adoption of this particular treatment modality. In subjecting this hypothesis to empirical verication, we estimate a random coecient model. This approach allows us to make more ecient use of the available data than the traditional two-stage approach to modeling diusion processes wherein separate logistic functions are rst estimated over the time series observations followed by hypothesis tests conducted over the cross-sectional observations. We nd evidence that certicate-of-need regulation slows the spread of haemodialysis technology. [111] Richard E. Caves, Michael D. Whinston, and Mark A. Hurwitz. Patent Expiration, Entry, and Competition in the U.S. Pharmaceutical Industry. Brookings Papers on Economic Activity: Microeconomics, pages 148, 1991. [112] Kalipso Chalkidou, Anthony Culyer, Bhash Naidoo, and Peter Littlejohns. Cost-Eective Public Health Guidance: Asking Questions from the Decision-Makers Viewpoint. Health Economics, 17(3):44148, March 2008. Abstract: In February 2004, in his assessment of the long-term nancial viability of the NHS, Derek Wanless recommended the use of a consistent framework, such as the methodology developed by NICE, to evaluate the cost-eectiveness of interventions and initiatives across health care and public health. One year later public health was added to NICEs remit and the new National Institute for Health and Clinical Excellence (NICE) was established, with amended statutory instruments to permit consideration of broader public sector costs when developing cost-eective guidance for public health. With the principle of a consistent framework put forward by Wanless as the starting point, this paper provides an insight into the most challenging aspects of applying the principles of cost-eectiveness analysis in the public health context from the policymakers perspective. It reects on the long-term consequences of taking on responsibility for producing public health guidance on the Institutes overall approach to guidance development and describes the tension between striving for consistency and cross-evaluation comparability while ensuring that the methodological tools used are t for the purpose of developing public health guidance. [113] Frank J. Chaloupka and Kenneth E. Warner. The Economics of Smoking. In Culyer and Newhouse [152], chapter 29, pages 15391627. Notes that smoking leads all other causes of death in virtually all industrialized countries (p. 1542) and that the price elasticity of demand for cigarettes is around -.4. Reviews controversies about addition (myopic or rational?) and advertising (market enlarging or dividing). Abstract: While the tobacco industry ranks among the most substantial and successful of economic enterprises, tobacco consumption is associated with more deaths than any other product. Economic analysis of


the markets for tobacco products, particularly cigarettes, has contributed considerable insight to debates about the importance of the industry and the appropriate roles of public policy in grappling with the health consequences of tobacco. Certainly the most signicant example of this phenomenon has been the rapidly expanding and increasingly sophisticated body of research on the eects of price increases on cigarette consumption. Because excise tax comprises an important component of price, the resultant literature has played a prominent role in legislative debates about using taxation as a principal tool to discourage smoking. In addition to informing legislative debates, this literature has contributed both theory and empirical evidence to the growing interest in modeling the demand for addictive products. This chapter examines this body of research in detail, as well as a variety of equity and eciency concerns accompanying debates about cigarette taxation. Coverage also includes economic analysis of the role of other tobacco control policies, such as restrictions on advertising, of special interest due to their prominence in debates about tobacco control. The chapter concludes with consideration of research addressing the validity of the tobacco industrys argument that its contributions to employment, tax revenues, and trade balances are vital to the economic health of states and nations. This argument is one of the industrys principal weapons in its battle against policy measures intended to reduce tobacco product consumption. [114] Pierre Chandon and Brian Wansink. The Biasing Health Halos of FastFood Restaurant Health Claims: Lower Calorie Estimates and Higher Side-Dish Consumption Intentions. Journal of Consumer Research., 34(3):301314, October 2007. Abstract: Why is America a land of low-calorie food claims yet highcalorie food intake? Four studies show that people are more likely to underestimate the caloric content of main dishes and to choose highercalorie side dishes, drinks, or desserts when fast-food restaurants claim to be healthy (e.g., Subway) compared to when they do not (e.g., McDonalds). We also nd that the eect of these health halos can be eliminated by simply asking people to consider whether the opposite of such health claims may be true. These studies help explain why the success of fastfood restaurants serving lower-calorie foods has not led to the expected reduction in total calorie intake and in obesity rates. They also suggest innovative strategies for consumers, marketers, and policy makers searching for ways to ght obesity. [115] Gretchen B. Chapman and Arthur S. Elstein. Cognitive Processes and Biases in Medical Decision Making. In Chapman and Sonnenberg [116]. The authors describe three classes of biases. First, biases can occur when judging the probability of events such as potential diagnoses and treatment outcomes. Second, deviations from normative principles can occur in preferences or evaluations of the utility of an outcome, as when choosing a 41

treatment or management course. Finally, time and temporal sequencing can aect decision making (pp. 183-84). [116] Gretchen B. Chapman and Frank A. Sonnenberg, editors. Decision Making in Health Care: Theory, Psychology, and Applications. Cambridge University Press, Cambridge, 200. Contains sections titled Introduction and Theory, Health Policy and Economics, Psychology of Medical Decision Making, and Applications. [117] Kenneth Chay, Carlos Dobkin, and Michael Greenstone. The Clean Air Act of 1970 and Adult Mortality. Journal of Risk and Uncertainty, 27(3):279300, December 2003. Abstract: Previous research has established an association between air pollution and adult mortality. However, studies utilizing short-term uctuations in pollution may detect mortality changes among the already ill or dying, while prospective cohort studies, which utilize geographic differences in long-run pollution levels, may suer from severe omitted variables bias. This study utilizes the long-run reduction in total suspended particulates (TSPs) pollution induced by the Clean Air Act of 1970, which mandated aggressive regulation of local polluters in heavily polluted counties. We nd that regulatory status is associated with large reductions in TSPs pollution but has little association with reductions in either adult or elderly mortality. These ndings are interpreted with caution due to several caveats. [118] Kenneth Y. Chay and Michael Greenstone. Air Quality, Infant Mortality, and the Clean Air Act of 1970. Working Paper 10053, National Bureau of Economic Research, Cambridge, Massachusetts, 2003. Abstract: We examine the eects of total suspended particulates (TSPs) air pollution on infant health using the air quality improvements induced by the 1970 Clean Air Act Amendments (CAAA). This legislation imposed strict regulations on industrial polluters in nonattainment counties with TSPs concentrations exceeding the federal ceiling. We use nonattainment status as an instrumental variable for TSPs changes to estimate their impact on infant mortality changes in the rst year that the 1970 CAAA was in force. TSPs nonattainment status is associated with sharp reductions in both TSPs pollution and infant mortality from 1971 to 1972. The greater reductions in nonattainment counties near the federal ceiling relative to the attainment counties narrowly below the ceiling suggest that the regulations are the cause. We estimate that a one percent decline in TSPs results in a 0.5 percent decline in the infant mortality rate. Most of these eects are driven by a reduction in deaths occurring within one month of birth, suggesting that fetal exposure is a potential biological pathway. The results imply that roughly 1,300 fewer infants died in 1972 than would have in the absence of the Clean Air Act. 42

[119] Kenneth Y. Chay and Michael Greenstone. The Impact of Air Pollution on Infant Mortality: Evidence from Geographic Variation in Pollution Shocks Induced by a Recession. Quarterly Journal of Economics, 118(3):112167, August 2003. Abstract: The 19811982 recession induced substantial variation across sites in air pollution reductions. This is used to estimate the impact of total suspended particulates (TSPs) on infant mortality. We nd that a 1-percent reduction in TSPs results in a 0.35 percent decline in the infant mortality rate at the county level, implying that 2500 fewer infants died from 1980-1982 than would have in the absence of the TSPs reductions. Most of these eects are driven by fewer deaths occurring within one month of birth, suggesting that fetal exposure is a potential pathophysiologic mechanism. The analysis also reveals nonlinear eects of TSPs pollution and greater sensitivity of black infant mortality at the county level. Importantly, the estimates are stable across a variety of specications. [120] Lei Chen and Subhash C Ray. Cost Eciency and Scale Economies in General Dental Practices in the U.S.: A Non-parametric and Parametric Analysis. Working papers 2010-11, University of Connecticut, Department of Economics,, 2010. Abstract: This paper uses both the non-parametric method of Data Envelopment Analysis (DEA) and the econometric method of Stochastic Frontier Analysis (SFA) to study the production technology and cost eciency of the U.S. dental care industry using practice level data. The American Dental Association (ADA) 2006 survey data for a number of general dental practices in Colorado are used for the empirical analyses. The result shows that the average cost eciency score is 0.79 for DEA and 0.87 for SFA, and the cost ineciency comes mainly from the allocative ineciency. The minimum average cost of production is 50.6 cents for each dollar of gross billing generated. The optimal output level for a dental practice to fully exploit the economies of scale is at $1.68 million. Both DEA and SFA provide generally consistent results. [121] M. Keith Chen and Judith A. Chevalier. The Taste for Leisure, Career Choice, and the Returns to Education. Economics Letters, 99(2):May, 2008. Abstract: We develop a simple methodology to estimate the returns to education despite heterogeneous labor/leisure preferences. The labor supply behavior of doctors and physician assistants is consistent with people choosing between the two careers based on diering tastes for leisure. [122] Yvana A. Chiha and Charles R. Link. The Shortage of Registered Nurses and Some New Estimates of the Eects of Wages on Registered Nurses Labor Supply: A Look at the Past and a Preview of the 21st Century. Health Policy, 64(3):34975, June 2003. 43

Abstract: The US and many other countries are in the midst of a severe shortage of registered nurses (RNs). Labor supply models for currently trained RNs are estimated by gender and marital status using the 1992, 1996, and 2000 data from the National Sample Surveys of Registered Nurses. This analysis extends earlier work by Link (Res. Labor Econ. 13 (1992) 287) which provided labor supply estimates for 1960, 1970, 1977, 1980, 1984, and 1988. Since the methodology and variables employed in the present study are the same as those used by Link, the empirical literature on RN labor supply is brought together for the last 40 years. Moreover, comparisons are made with other studies in the literature of the labor supply of nurses and females in the general population. Results for the key variables are consistent over the dierent data sets and consistent with earlier work by Link. The RNs own wage had minor eects on both labor force participation and hours worked given participation. The RN wage is still an important variable since it has a signicant and positive eect on the number of people who enter rst-degree nursing programs in the US. These results are important to policy-makers in light of the current shortage of RNs. [123] Susan Chimonas, Zachary Frosch, and David J. Rothman. From Disclosure to Transparency: The Use of Company Payment Data. Archives of Internal Medicine, September 13, 2010. published online. Abstract: Background: It has become standard practice in medical journals to require authors to disclose their relationships with industry. However, these requirements vary among journals and often lack specicity. As a result, disclosures may not consistently reveal author-industry ties. Methods: We examined the 2007 physician payment information from 5 orthopedic device companies to evaluate the current journal disclosure system. We compared company payment information for recipients of $1 million or more with disclosures in the recipients journal articles. Payment data were obtained from Biomet, DePuy, Smith & Nephew, Stryker, and Zimmer. Disclosures were obtained in the acknowledgments section, conict of interest statements, and nancial disclosures of recipients published articles. We also assessed variations in disclosure by authorship position, payment-article relatedness, and journal disclosure policies. Results: Of the 41 individuals who received $1 million or more in 2007, 32 had published articles relating to orthopedics between January 1, 2008, and January 15, 2009. Disclosures of company payments varied considerably. Prominent authorship position and article-payment relatedness were associated with greater disclosure, although nondisclosure rates remained high (46% among rst-, sole-, and senior-authored articles and 50% among articles directly or indirectly related to payments). The accuracy of disclosures did not vary with the strength of journals disclosure policies. Conclusions Current journal disclosure practices do not yield complete or consistent information regarding authors industry ties. Medical journals,


along with other medical institutions, should consider new strategies to facilitate accurate and complete transparency. [124] Andrew T. Ching. A Dynamic Oligopoly Structural Model for the Prescription Drug Market After Patent Expiration. In Levine and Zame [401]. Abstract: Motivated by the slow diusion of generic drugs and the increase in prices of brand-name drugs after generic entry, this paper incorporates consumer learning and consumer heterogeneity in price sensitivity into a dynamic oligopoly model. In the model, rms choose prices to maximize their expected total discounted prots. Moreover, generic rms make their entry decisions before patent expiration. The demand side parameters are estimated in a previous paper. The supply side parameters are estimated and calibrated here. The model is then used to examine the impact of two policy experiments on an anti-hypertension drug, clonidine. The rst experiment shortens the expected approval time for generics. Although this brings each generic to the market sooner, it also reduces the number of generic entrants. The second experiment imposes price control on brand-name drugs. In this experiment, the demand for brand-name drugs increases but the demand for generic drugs hardly changes. [125] William Choi and Lan Liang. Reverse Moral Hazard of Liability Insurers: Evidence from Medical Malpractice Claims. Applied Economics, 39(1618):233140, October 2007. Abstract: This study investigates putative dierences in the legal defense of medical malpractice claims between liability carriers with distinct ownership forms: doctor-controlled and commercial-stock. The scope of a carriers legal defense is determined by claim characteristics, such as injury severity and liability, and possibly the doctors private costs from settling or losing a claim. When a carrier does not internalize the doctors private costs from losing or settling a claim, then a conict of interest arises as the carrier provides a lower level of legal defense than preferred by the doctor (i.e., reverse moral hazard). The perception is that doctor-sponsored carriers mitigate such conicts of interest. If this is the case, we should expect to see dierences in the amount spent by the carrier in defense of the doctor and the propensity to settle claims. To test these expectations, we use medical malpractice claims led in Florida between 1985 and 1990. We indeed nd dierences in legal defense in terms of amount spent on legal defense and settlement rate between carriers with dierent ownership. The doctor-sponsored carrier we investigated was less likely to settle out-of-court, and did spend more on a doctors legal defense than stock carriers. [126] Peggy Choong. Relationship Marketing of Health Care Plans: Retaining Corporate Customers in a Competitive Environment. Health Marketing Quarterly, 17(4):3750, 2000.


Abstract: Corporate employers have become major purchasers of health care. They are gatekeepers who decide whether to retain or drop an insurance company from the choice set oered to employees as well as whether to include new insurers into this choice set. If marketers of health maintenance organizations are to maintain their market share in this competitive environment, they need to understand issues considered important to corporate employers. This paper identies the key drivers of satisfaction among corporate employers and shows the impact these key drivers have on overall satisfaction. More importantly, it demonstrates both theoretically and empirically that the impact of performance attributes on satisfaction is asymmetrical. Positive performances of attributes are shown to have smaller impacts on satisfaction than negative performances. The theoretical underpinnings of these phenomena are shown to lie in prospect theory. Finally, quantitative indicators are computed to aid managerial decision-making. Marketing managers of health insurance companies will optimize returns on their investment by understanding this asymmetric eect and eliminate existing deciencies. [127] Shin-Yi Chou, Michael Grossman, and Henry Saer. An Economic Analysis of Adult Obesity: Results from the Behavioral Risk Factor Surveillance System. Journal of Health Economics, 23(3):56587, May 2004. Abstract: This paper examines the factors that may be responsible for the 50% increase in the number of obese adults in the US since the late 1970s. We employ the 19841999 Behavioral Risk Factor Surveillance System, augmented with state level measures pertaining to the per capita number of fast-food and full-service restaurants, the prices of a meal in each type of restaurant, food consumed at home, cigarettes, and alcohol, and clean indoor air laws. Our main results are that these variables have the expected eects on obesity and explain a substantial amount of its trend. [128] Christa Claes, Ralf Rene Reinert, and Johann-Matthias Graf von der Schulenburg. Cost Eectiveness Analysis of Heptavalent Pneumococcal Conjugate Vaccine in Germany Considering Herd Immunity Eects. European Journal of Health Economics, 10(1):2538, February 2009. Abstract: In Germany the heptavalent pneumococcal conjugate vaccine (PCV7) has been recommended as a general infant vaccination since 2006. Data from similar programmes in the USA have reported a reduction of pneumococcal diseases in both vaccinated and unvaccinated populations, suggesting herd immunity eects. This study analyses the costeectiveness of a general vaccination with PCV7 in Germany based on these ndings. A Markov model adapts ecacy and herd immunity data to the German population. Further main model inputs are incidence, vaccination uptake, serotype distribution, case fatality rates, and vaccination and health-care costs. A general vaccination with PCV7 would avoid about 232,000 pneumococcal infections and 1,879 premature deaths per year in Germany. From the health-care payers perspective, direct cost savings 46

would outweigh vaccination expenditures by a ratio of 1:1.16. The sensitivity analysis shows that these estimates are quite conservative. Based on the health-economic evaluation, the authors recommend the continuation of the general recommendation of PCV7 according to the 3 + 1 schedule within the German Statutory Health Insurance. [129] Paul F. Clark and Darlene A. Clark. Challenges Facing Nurses Associations and Unions: A Global Perspective. International Labour Review, 142(1):2947, 2003. Abstract: Nurses are at the heart of every countrys health care system. What sort of problems do they face at work? What are the coping strategies that they and their organizations pursue? Drawing on the ndings of a unique global survey of nurses associations and unions, the authors provide clear answers to these and related questions at a time when population aging, epidemics, privatization and understang are putting heightened pressures on health care systems around the world. Interestingly, the priority concerns of nurses organizations the world over have much in common despite the widely diering national contexts in which they operate. [130] Jan P. Clement, Vivian G. Valdmanis, Gloria J. Bazzoli, Mei Zhao, and Askar Chukmaitov. Is More Better? An Analysis of Hospital Outcomes and Eciency with a DEA Model of Output Congestion. Health Care Management Science, 11(1):6777, March 2008. Abstract: This paper applies a new methodology to the study of hospital eciency and quality of care. Using a data set of hospitals from several states, we jointly evaluate desirable hospital patient care output (e.g., patient stays) and the simultaneous undesirable output (e.g., risk-adjusted patient mortality) that occurs. With a DEA based approach under two dierent sets of assumptions, we are able to include multiple quality indicators as outputs. The results show that lower technical eciency is associated with poorer risk-adjusted quality outcomes in the study hospitals. They are consistent with other studies linking poor quality outcomes to higher cost. [131] J. Coast, R. D. Smith, and M. R. Millar. An Economic Perspective on Policy to Reduce Antimicrobial Resistance. Social Science & Medicine, 46(1):2938, January 1998. Abstract: Resistance to antimicrobial drugs is increasing worldwide. This resistance is, at least in part, associated with high antimicrobial usage. Despite increasing awareness, economists (and policy analysts more generally) have paid little attention to the problem. In this paper antimicrobial resistance is conceptualised as a negative externality associated with the consumption of antimicrobials and is set within the broader context of the costs and benets associated with antimicrobial usage. It is dicult to determine the overall impact of attempting to reduce resistance, 47

given the extremely limited ability to model the epidemiology of resistant and sensitive micro-organisms. It is assumed for the purposes of the paper, however, that dealing with resistance by reducing antimicrobial usage would lead to a positive societal benet. Three policy options traditionally associated with environmental economics (regulation, permits and charges) are examined in relation to their potential ability to impact upon the problem of resistance. The primary care sector of the U.K.s National Health Service provides the context for this examination. Simple application of these policies to health care is likely to be problematic, with diculties resulting particularly from the potential reduction in clinical freedom to prescribe when appropriate, and from the desire for equity in health care provision. The paper tentatively concludes that permits could oer the best policy response to antimicrobial resistance, with the caveat that empirical research is needed to develop the most practical and efcient system. This research must be conducted alongside the required epidemiological research. [132] Joanna Coast and Richard Smith. Antimicrobial Resistance: Can Economics Help? Eurohealth, 7(2):3233, summer 2001. The authors argue that the tendency of antimicrobial use to exacerbate antimicrobial resistance is a negative externality with both global and inter-generational impacts (p. 32). They conclude that economics help asses the costs and benets of alternative policies for dealing with antimicrobial resistance. [133] Joanna Coast, Richard Smith, Anne-Marie Karcher, Paula Wilton, and Michael Millar. Superbugs II: How Should Economic Evaluation Be Conducted for Interventions Which Aim to Contain Antimicrobial Resistance? Health Economics, 11(7):63747, October 2002. Abstract: To date, there has been little examination of the problems associated with conducting economic evaluation for interventions designed to contain antimicrobial resistance. There are two quite dierent types of intervention aimed at containing antimicrobial resistance: interventions which are designed to avoid the emergence of resistant organisms; and interventions that are designed to avoid the transmission of resistance organisms. Four aspects of economic evaluation where the ease of assessment might be expected to dier across evaluations for these dierent types of intervention are examined: problems associated with the identication of diuse impacts, problems associated with comparing current and future impacts, problems associated with uncertainty, and problems associated with diculties in measurement and valuation. The paper suggests that it may be much easier to conduct rigorous economic evaluations for interventions designed to avoid transmission of resistance, than for those intended to avoid emergence. Unfortunately, the transmission policies, which are likely to be the easiest to evaluate, are not likely to produce an optimal long-term outcome given the apparent irreversibility of much resistance 48

and the potentially severe harms which could be imposed as a result. Given the desirability of avoiding a scenario where, in the evidence-based medicine culture, the most rigorously evaluated policies are followed even though they may be less important, there is the need to consider carefully what, and how, economic evaluation should be conducted in the area of antimicrobial resistance. It is suggested that research should focus on the use of modelling as a means of evaluating optimal policy responses and on trying to resolve some of the diculties associated with measurement and valuation. [134] Joanna Coast, Richard D. Smith, and Michael R. Millar. Superbugs: Should Antimicrobial Resistance be Included as a Cost in Economic Evaluation? Health Economics, 5(3):21726, MayJune 1996. Abstract: This paper argues that increasing resistance to antimicrobials is an important social externality that has not been captured at the level of economic appraisal. The paper explicitly considers reasons why the externality of antimicrobial resistance has not generally been included as a cost in economic evaluations comparing management strategies for infectious diseases. Four reasons are considered: rst, that the absolute cost of antimicrobial resistance is too small to be worth including; second, that there is an implicit discounting of the costs of antimicrobial resistance on the basis of time preference which makes the cost too small to be worth including; third, that there is an implicit discounting of the costs of antimicrobial resistance on the basis of uncertainty which makes the cost too small to be worth including; and fourth, that the costs are too dicult to measure. Although there does not appear to be methodological justication for excluding the costs of antimicrobial resistance, it seems likely that, because of the practical diculties associated with measuring these costs, they will continue to be ignored. The paper concludes with a discussion of the applicability of standard policy responses used to deal with externalities in other areas of welfare economics. [135] A. F. Coburn, R. H. Fortinsky, and C. A. McGuire. The Impact of Medicaid Reimbursement Policy on Subacute Care in Hospitals. Medical Care, 27(1):2533, January 1989. Abstract: Concerns about the increasing cost of hospital care have directed policy attention to inappropriate hospital use and, in particular, to hospital patients awaiting long-term care (LTC) placement. In 1982, pursuant to changes in federal Medicare and Medicaid law, Maine implemented changes in Medicaid reimbursement policy for subacute patients designed to reduce hospital backups and corresponding Medicaid expenditures for unnecessary hospital care. This article evaluates the impact of this change in Medicaid hospital payment policy on the volume of subacute patient days and the length of subacute stays (LOS) in Maine. Although declines in Medicaid expenditures, total subacute days, and LOS of patients awaiting LTC placement were observed in the 1st year of the policy, 49

study ndings do not show a statistically signicant impact of the policy on the length of patients subacute stays. Patient diagnosis of mental and nervous system disorders and nursing home occupancy rates in the hospital service area were both signicant predictors of subacute LOS. Study ndings indicate that eorts to reduce hospital backups must address specic barriers to timely LTC placement, including shortages of institutional and noninstitutional LTC services, and the lack of nancial incentives for LTC providers to accept heavier care patients. [136] Bart Cockx and Carine Brasseur. The Demand for Physician Services Evidence from a Natural Experiment. Journal of Health Economics, 22(6):881913, November 2003. Abstract: This study exploits a natural experiment in Belgium to estimate the eect of copayment increases on the demand for physician services. It shows how a dierences-in-dierences (DD) estimator of the price eects can be decomposed into eects induced by the common average proportional price increase (income eects) and by the change in relative prices (substitution eects). The price elasticity of a uniform proportional price increase is relatively small (-0.13 for men and -0.03 for women). Substitution eects are large, especially for women, but imprecisely estimated. Despite the substantial price increases, the eciency gain of the reform, if any, is modest. [137] Joel W. Cohen and William D. Spector. The Eect of Medicaid Reimbursement on Quality of Care in Nursing Homes. Journal of Health Economics, 15(1):2348, February 1996. Abstract: This study uses a nationally representative sample of nursing homes and nursing home residents to examine the eect of Medicaid reimbursement on quality of care. The analysis shows that both reimbursement approach and level aect nursing home quality, as measured by case-mix adjusted sta-to-resident ratios. The analysis also shows that stang ratios have a signicant impact on resident outcomes and these impacts vary by professional category of sta. Reimbursement does not have a signicant impact on outcomes, however. [138] Joshua Parsons Cohen, Elly Stolk, and Maartje Niezen. Role of Budget Impact in Drug Reimbursement Decisions. Journal of Health Politics, Policy and Law, 33(2):22547, April 2008. Abstract: There are three known criteria that underlie drug reimbursement decisions: therapeutic value, cost-eectiveness, and burden of disease. However, evidence from recent reimbursement decisions in several jurisdictions points to residual, unexplained variables, among which is budget impact. Budget impact refers to the total costs that drug reimbursement and use entail with respect to one part of the health care system, pharmaceutical care, or to the entire health care system, taking into account the possible reallocation of resources across budgets or sectors of 50

the health care system. The economic and equity rationale for carrying out budget impact analyses is opportunity cost, or benets forgone, measured in terms of utility or equitable distribution, by using resources in one way rather than another. In other words, by choosing to draw down the budget in one way, decision makers forgo other opportunities to use the same resources. Under a set of unrealistic assumptions, cost-eectiveness analysis accounts for opportunity cost while conveying to the decision maker the price of maximizing health gains, subject to a budget or resource constraint. However, the underlying assumptions are implausible, particularly in the context of pharmaceutical care. Moreover, budget impact analysis is more useful to the decision maker than cost-eectiveness analysis if the objective is not to maximize health gains subject to a budget or resource constraint, but to reduce variance in health gains. With respect to equitable distribution, budget impact analyses lay bare the individuals or groups who lose outthose who bear the opportunity cost of spending resources in accordance with one decision rule rather than another. [139] Carrie Conaway. Diagnosis: Shortage. The Past, Present, and Future of the Registered Nurse Workforce. Federal Reserve Bank of Boston, Regional Review, 11(3):815, 2001. [140] Caterina Conigliani and Andrea Tancredi. A Bayesian Model Averaging Approach for Cost-Eectiveness Analyses. Health Economics, 18(7):807 21, July 2009. Abstract: We consider the problem of assessing new and existing technologies for their cost-eectiveness in the case where data on both costs and eects are available from a clinical trial, and we address it by means of the cost-eectiveness acceptability curve. The main diculty in these analyses is that cost data usually exhibit highly skew and heavy-tailed distributions so that it can be extremely dicult to produce realistic probabilistic models for the underlying population distribution, and in particular to model accurately the tail of the distribution, which is highly inuential in estimating the population mean. Here, in order to integrate the uncertainty about the model into the analysis of cost data and into cost-eectiveness analyses, we consider an approach based on Bayesian model averaging: instead of choosing a single parametric model, we specify a set of plausible models for costs and estimate the mean cost with a weighted mean of its posterior expectations under each model, with weights given by the posterior model probabilities. The results are compared with those obtained with a semi-parametric approach that does not require any assumption about the distribution of costs. [141] Paul Contoyannis, Jeremiah Hurley, Paul Grootendorst, Sung-Hee Jeon, and Robyn Tamblyn. Estimating the Price Elasticity of Expenditure for Prescription Drugs in the Presence of Non-linear Price Schedules: An Illustration from Quebec, Canada. Health Economics, 14(9):90923, September 2005. 51

Abstract: The price elasticity of demand for prescription drugs is a crucial parameter of interest in designing pharmaceutical benet plans. Estimating the elasticity using micro-data, however, is challenging because insurance coverage that includes deductibles, coinsurance provisions and maximum expenditure limits create a non-linear price schedule, making price endogenous (a function of drug consumption). In this paper we exploit an exogenous change in cost-sharing within the Quebec (Canada) public Pharmacare program to estimate the price elasticity of expenditure for drugs using IV methods. This approach corrects for the endogeneity of price and incorporates the concept of a rational consumer who factors into consumption decisions the price they expect to face at the margin given their expected needs. The IV method is adapted from an approach developed in the public nance literature used to estimate income responses to changes in tax schedules. The instrument is based on the price an individual would face under the new cost-sharing policy if their consumption remained at the pre-policy level. Our preferred specication leads to expenditure elasticities that are in the low range of previous estimates (between -0.12 and -0.16). Naive OLS estimates are between 1 and 4 times these magnitudes. [142] Philip J. Cook and Michael J. Moore. Alcohol. In Culyer and Newhouse [152], chapter 30, pages 16291673. The authors note that the distribution of alcohol consumption among drinkers is approximately log-normal. International comparative studies of drinking have found remarkable consistency in the distribution. As per capita consumption by drinkers increases (over time or across populations), the consumption associated with each quantile tends to increase in proportion (p. 1634). Using a Grossman-type human capital model, the authors develop model of demand for alcohol, demand for medical care, and supply of labor. Own-price elasticities for beer, wine, and spirits are about -.35, -.68, and -.98. The evidence on whether alcohol and marijuana are complements or substitutes is mixed, with Pacula supporting complements but Chaloupka and Laixuthai supporting substitutes. Saer argues that rivalry among alcohol producers may push advertising to levels where small variations have little eect on total alcohol consumption, even though elimination of advertising might substantially reduce consumption. Cites Leon et al., who say that in Russia, 199094, substantial changes in alcohol consumption . . . could plausibly explain the main features of the mortality uctuations observed (p. 1646). Most studies conclude that highway fatalities decline when the minimum purchase age or alcohol excise taxes are increased (p. 1647). Alcohol accounts for a majority of [cirrhosis] cases within population groups where drinking is widespread; indeed, the cirrhosis-mortality rate has long been used as an indicator of the prevalence of alcoholism in a population (p. 1649). While the disease takes years to develop, death rates respond quickly because the progression of the disease (toward death) is slowed when drinking is cur52

tailed (p. 1650). There is a U-shaped pattern between all-cause mortality rates and alcohol consumption. The lowest mortality rate was for light drinkers (24 drinks per week) (p. 1652). Alcohol consumption has a signicantly positive eect on rape, aggravated assault, and robbery (p. 1652). [143] Emery Coppola, Jr and Ferenc Szidarovszky. Conict between Water Supply and Environmental Health Risk: A Computational Neural Network Approach. International Game Theory Review, 6(4):47592, December 2005. Abstract: A two-person conict is analyzed, where a water company and a community are the players and water supply and health risk constitute the payo functions. An aquifers response to dierent pumping policies is estimated at points of interest by a computational neural network, which was trained using simulation data from MODFLOW, a large-scale complicated nite dierence model. Using the weighting method, the Pareto frontier is rst determined, and four particular resolution methodologies are applied. The numerical results are analyzed and compared. [144] Hope Corman, Kelly Noonan, and Nancy E. Reichman. Mothers Labor Supply in Fragile Families: The Role of Child Health. Eastern Economic Journal, 31(4):60116, fall 2005. The authors nd that having a child in poor health reduces the mothers probability of working by eight percentage points and her hours of work by three per week when she is employed (p. 614). [145] Andrea Coscelli. Entry of New Drugs and Doctors Prescriptions. Discussion Papers in Economics 98/13, Department of Economics, Royal Holloway University of London, Royal Holloway University of London, London, 1996. Abstract: This paper is about entry of new drugs in pharmaceutical markets. More specically, I analyze the diusion of new drugs among doctors. My empirical analysis uses non-parametric duration models, which are exible enough to identify the most important covariates inuencing the doctors adoption decisions. My results speak to issues such as why generic drugs do not have large market shares in post-patent drug markets. When I analyze entry of bio-equivalent products, I nd that the doctors past dispersion across drugs in a therapeutic market is the best predictor of the likelihood of adoption. When a new presentation form is introduced by an incumbent rm, the doctors who extensively prescribed the brand in the other presentation forms are the ones most likely to adopt the new drug. Finally, I nd that doctors are not rm-loyal in their prescribing behaviour across therapeutic markets. [146] Sara E. Cosgrove and Yehuda Carmeli. The Impact of Antimicrobial Resistance on Health and Economic Outcomes. Clinical Infectious Diseases, 36(11):143337, June 2003. 53

Abstract: Despite an increasing prevalence of antimicrobial-resistant pathogens, the health and economic impact of colonization and infection with these organisms has not been fully elucidated. We explore how antimicrobial resistance can aect patient outcomes by enhancing virulence, causing a delay in the administration of appropriate therapy, and limiting available therapy. Next, we examine the dierent perspectives held by hospitals, third-party payers, patients, and society on the impact of resistance. Finally, we review methodological issues in designing and assessing studies that address the clinical outcomes for patients infected or colonized with resistant pathogens, including adjustment for important confounding variables, control group selection, and the quantication of economic outcomes. [147] Teresa A. Coughlin, Sharon K. Long, and Holahan John. Commercial Health Plan Participation in Medicaid Managed Care: An Examination of Six Markets. Inquiry, 38(1):2234, spring 2001. Abstract: This study examines six local health care markets to gain a better understanding of the factors associated with the decision by commercial plans to participate in Medicaid managed care (MMC). Findings suggest that no single factor explained why plans chose to participate in MMC in a particular market. Instead, a combination of factorsgenerally economic but not always determined whether a plan participated. While rate adequacy was central, it was not the only factor. Results indicate that it is capitation rates relative to other factors (such as provider costs, administrative costs, enrollment volume, growth opportunities in other markets) that matter rather than simply the level of rates. [148] B. M. Craven, C. Fiala, A. Shiers, and G. T. Stewart. Time Consistency and the Development of Vaccines to Treat HIV/AIDS in Africa. Economic Issues, 8(1):1531, March 2003. Abstract: AIDS is perceived to represent an unprecedented medical, political and economic challenge to African and world leaders. This paper examines the economics of pricing and supplying drugs and vaccines in the context of AIDS and HIV. It addresses the time consistency and other economic issues associated with patented drugs and research into vaccines for diseases that are mainly prevalent in poor countries. The paper examines the nancial implications of treating HIV/AIDS with the medical procedures currently used to treat patients in industrialised countries. The paper concludes rst that the time consistency problem is not the main obstacle preventing research into developing an HIV vaccine and thus addressing AIDS in Africa. Second, it is impracticable, at present, to mobilise adequate nancial and conventional medical resources to address the perceived HIV/AIDS problem in Africa. Third, the most practical and appropriate health policy to tackle the African problem is by health education.


[149] Michael Creel and Montserrat Farell. Likelihood-Based Approaches to Modeling Demand for Medical Care. Technical report, Department of Economics and Economic History, Universitat Aut`noma de Barcelona, o October 2001. Abstract: We review recent likelihood-based approaches to modeling demand for medical care. A semi-nonparametric model along the lines of Cameron and Johanssons Poisson polynomial model, but using a negative binomial baseline model, is introduced. We apply these models, as well a semiparametric Poisson, hurdle semiparametric Poisson, and nite mixtures of negative binomial models to six measures of health care usage taken from the Medical Expenditure Panel survey. We conclude that most of the models lead to statistically similar results, both in terms of information criteria and conditional and unconditional prediction. This suggests that applied researchers may not need to be overly concerned with the choice of which of these models they use to analyze data on health care demand. [150] Maureen L. Cropper and A. Myrick Freeman III. Environmental Health Eects. In Braden and Kolstad [75], pages 165211. Reprinted in Maureen Cropper, Valuing Environmental Benets, pages 71121, Edward Elgar, Northampton, Mass., 1999. The authors state that their purpose is to describe and evaluate the available methods for assigning monetary values to the improvements in human health that can be attributed to improved environmental quality (p. 166). They dene the benets of a reduction in the risk of death or incidence of illness as the sum of what each of the aected people is willing to pay to reduce his own risk of death or illness plus the sum of what everyone in society is willing to pay over and above this amount to reduce the risk of death or illness for any of the other exposed people (p. 208). The monetary value of health benets can be estimated by direct or indirect methods. Direct methods, such as contingent valuation, involve surveying a random sample of the population and asking each person to value a small change in mortality risk or symptom frequency (p. 210). These methods are criticized for basing valuations on answers to hypothetical questions, answers that may be unreliable (p. 210). Indirect methods infer monetary values from behavior. In the case of mortality, two indirect methods have been widely used: one is based on compensating wage dierentials received by workers in risky occupations; the other is based on the cost of activities that increase safety, such as wearing a seatbelt or operating a smoke detector (p. 208). Estimates of the value of reducing mortality risks based on contingent valuation overlap with recent estimates based on wage-risk studies, which themselves vary by a factor of two (p. 209). Estimates based on contingent valuation are four to six times larger than estimates based on averting behavior (p. 209). Indirect methods for estimating the value of reduced morbidity ex-


amine activities that reduce exposure to pollution. . . or that mitigate the strength or duration of symptoms (p. 209). [151] William H. Crown, Davina Ling, and Ernst Berndt. Measuring the Costs and Benets of Pharmaceutical Expenditures. Expert Review of Pharmacoeconomics and Outcomes Research, 2(5):46775, October 2002. Abstract: In response to concerns about the cost burden of medical care in general and rising pharmaceutical costs in particular, a number of recent studies have examined trends in pharmaceutical expenditures. These studies have reached apparently disparate conclusions about factors responsible for rising pharmaceutical costs and the role that price and volume increases have played. In this paper, we examine methodological approaches that have been used to describe and analyze trends in medical and pharmaceutical expenditures using recent studies as examples. We present in detail one methodology for decomposing the factors of pharmaceutical spending and describe how variation in method can aect study ndings. Finally, we consider some research extensions that we feel could considerably improve our understanding of the costs and benets associated with pharmaceutical expenditures. [152] Anthony J. Culyer and Joseph P. Newhouse, editors. Handbook of Health Economics. Elsevier, Amsterdam, 2000. [153] Janet Currie, Mehdi Farsi, and W. Bentley MacLeod. Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts., October 2002. This paper uses data from the 1990s to examine changes in the wages, employment, and eort of nurses in California hospitals following takeovers by large chains. The market for nurses has been described as a classic monopsony, so that one might expect increases in rm market power to be associated with declines in wages. However, we show that if one extends the monopsony model to consider eort, or if we apply a basic contracting model to the data, then we would expect to see eects on eort rather than on wages. This prediction is borne out by the data: nurses see few declines in wages following takeovers, but see increases in the number of patients per nurse, our measure of eort. We also nd that these changes are similar in the largest for-prot and non-prot chains, suggesting that market forces are more important than institutional form. [154] Janet Currie and Matthew Neidell. Air Pollution and Infant Health: What Can We Learn From Californias Recent Experience? IZA Discussion Papers 1056, Institute for the Study of Labor (IZA), March 2004. available at Abstract: We examine the impact of air pollution on infant death in California over the 1990s. Our work oers several innovations: First, many previous studies examine populations subject to far greater levels of pollution. In contrast, the experience of California in the 1990s is clearly 56

relevant to current debates over the regulation of pollution. Second, many studies examine a few routinely monitored pollutants in isolation, generally because of data limitations. We examine four criteria pollutants in a common framework. Third, we develop an identication strategy based on within zip code variation in pollution levels that controls for potentially important unobserved characteristics of high pollution areas. Fourth, we use rich individual level data to investigate eects of pollution on infant mortality, fetal deaths, low birth weight and prematurity in a common framework. We nd that the reductions in carbon monoxide (CO) and particulates (PM10) over the 1990s in California saved over 1,000 infant lives. However, we nd little consistent evidence of pollution eects on fetal deaths, low birth weight or short gestation. [155] John Currie, Janet; Fahr. Hospitals, Managed Care, and the Charity Caseload in California. Journal of Health Economics, 23(3):42142, May 2004. Abstract: We ask whether increasing HMO penetration causes hospitals to cut back on charity care using California hospital discharge data for 1988 1996. There is little evidence at the hospital level that private hospitals respond to HMOs by turning away uninsured and/or Medicaid patients. In the for-prot sector hospitals actually reduce the share of privately insured patients and increase the shares of Medicare patients and Medicaid births. Apparently, HMO penetration reduces the price paid by privately insured patients, making them relatively less attractive to for-prot hospitals. [156] David Cutler, Angus Deaton, and Adriana Lleras-Muney. The Determinants of Mortality. Journal of Economic Perspectives, 20(3):97120, summer 2006. The authors argue that in western Europe and the United States mortality decline in three phases. The rst phase, from the middle of the 18 th century to the middle of the 19 th century, is the one where improved nutrition and economic growth, may well have played a large role in health.... In the closing decades of the nineteenth century and into the twentieth, the second phase occurred, in which public health mattered more rst negatively, because of high mortality in cities, then positively in the delivery of clean water and removal of wastes, and advice about personal health practices. The third phase, dating from the 1930s on, has been the era of big medicine, starting with vaccination and antibiotics, and moving on to the expensive and intensive personal interventions that characterize the medical system today (p. 106). In the authors view, much of the link between income and health is a result of the latter causing the former, rather than the reverse. There is most likely a direct positive eect of education on health. While the exact mechanism underlying this link is unclear, stress and the dierential use of health knowledge and technology are almost certainly important parts of the explanation.... [S]ome of the post-1970 decrease in mortality in the 57

United States and elsewhere might be attributable to the large increases in the average education of the population, with correspondingly less attributed to medical care (pp. 11516). Overall, the authors believe that knowledge, science and technology are the keys (p. 116) to explaining variation in mortality. They expect improvements in knowledge, science, and technology to continue reducing average mortality rates. Introduction of new knowledge, science, and technology may initially benet most the best educated. However, medical help is on the way, not only for those who receive it rst, but eventually for everyone (p. 117). [157] David M. Cutler, editor. The Changing Hospital Industry: Comparing Not-for-Prot and For-Prot Institutions. University of Chicago Press, Chicago, 2000. [158] David M. Cutler. Equality, Eciency, and Market Fundamentals: The Dynamics of International Medical-Care Reform. Journal of Economic Literature, 40(3):881906, September 2002. Cutler states that universal insurance coverage in most developed countries was designed to guarantee equal access to medical care for all. . . . Eciency was not a great concern when health care systems were established. . . . But the equality-eciency balance has been upset by advances in medical technology, which increase the scope and cost of benecial treatments. To curb rising medical costs many countries tightened regulations in the 1970s and 1980s. The regulations temporarily slowed the rise of medical costs but exacerbated waiting lines and access restrictions. Dissatisfaction with regulation has led to experiments with introducing competition into medical care and providing incentives. . . to use less medical care and to choose less-expensive health insurance plans. However, price-governed systems are not as equitable as the older systems they replace. [159] David M. Cutler and Mark McCellan. Productivity Change in Health Care. American Economic Review, 91(2):2816, May 2001. The authors review the evidence on health care productivity. Recent studies of treatments for common diseases nd substantial productivity gains. However, the authors new evidence on breast cancer treatment suggest at best small productivity improvement. [160] Leemore Dafny and David Dranove. Do Report Cards Tell Consumers Anything They Dont Already Know? The Case of Medicare HMOs. RAND Journal of Economics, 39(3):790821, 2008. Abstract: Estimated responses to report cards may reect learning about quality that would have occurred in their absence (market-based learning). Using panel data on Medicare HMOs, we examine the relationship between enrollment and quality before and after report cards were mailed


to 40 million Medicare beneciaries in 1999 and 2000. We nd consumers learn from both public report cards and market-based sources, with the latter having a larger impact. Consumers are especially sensitive to both sources of information when the variance in HMO quality is greater. The eect of report cards is driven by beneciaries responses to consumer satisfaction scores. [161] Leemore S. Dafny. How Do Hospitals Respond to Price Changes? American Economic Review, 95(5):152547, December 2005. Abstract: This paper examines hospital responses to changes in diagnosisspecic prices by exploiting a 1988 policy reform that generated large price changes for 43 percent of Medicare admissions. I nd hospitals responded primarily by upcoding patients to diagnosis codes with the largest price increases. This response was particularly strong among for-prot hospitals. I nd little evidence hospitals increased the volume of admissions dierentially for diagnoses subject to the largest price increases, despite the nancial incentive to do so. Neither did they increase intensity or quality of care in these diagnoses, suggesting hospitals do not compete for patients at the diagnosis level. [162] Goodarz Danaei1, Eric L. Ding, Dariush Mozaarian, Ben Taylor, Jrgen u Rehm, Christopher J. L. Murray, and Majid Ezzati. The Preventable Causes of Death in the United States: Comparative Risk Assessment of Dietary, Lifestyle, and Metabolic Risk Factors. PLoS Medicine, 6(4):123, April 2009. Available from info\%3Adoi\%2F10.1371\%2Fjournal.pmed.1000058. Abstract: Background: Knowledge of the number of deaths caused by risk factors is needed for health policy and priority setting. Our aim was to estimate the mortality eects of the following 12 modiable dietary, lifestyle, and metabolic risk factors in the United States (US) using consistent and comparable methods: high blood glucose, low-density lipoprotein (LDL) cholesterol, and blood pressure; overweightobesity; high dietary trans fatty acids and salt; low dietary polyunsaturated fatty acids, omega-3 fatty acids (seafood), and fruits and vegetables; physical inactivity; alcohol use; and tobacco smoking. Methods and Findings: We used data on risk factor exposures in the US population from nationally representative health surveys and disease-specic mortality statistics from the National Center for Health Statistics. We obtained the etiological eects of risk factors on disease-specic mortality, by age, from systematic reviews and meta-analyses of epidemiological studies that had adjusted (i) for major potential confounders, and (ii) where possible for regression dilution bias. We estimated the number of disease-specic deaths attributable to all non-optimal levels of each risk factor exposure, by age and sex. In 2005, tobacco smoking and high blood pressure were responsible for an estimated 467,000 (95% condence interval [CI] 436,000500,000) and 395,000 (372,000414,000) deaths, accounting for about one in ve or six 59

deaths in US adults. Overweight-obesity (216,000; 188,000237,000) and physical inactivity (191,000; 164,000222,000) were each responsible for nearly 1 in 10 deaths. High dietary salt (102,000; 97,000107,000), low dietary omega-3 fatty acids (84,000; 72,00096,000), and high dietary trans fatty acids (82,000; 63,00097,000) were the dietary risks with the largest mortality eects. Although 26,000 (23,00040,000) deaths from ischemic heart disease, ischemic stroke, and diabetes were averted by current alcohol use, they were outweighed by 90,000 (88,00094,000) deaths from other cardiovascular diseases, cancers, liver cirrhosis, pancreatitis, alcohol use disorders, road trac and other injuries, and violence. Conclusions: Smoking and high blood pressure, which both have eective interventions, are responsible for the largest number of deaths in the US. Other dietary, lifestyle, and metabolic risk factors for chronic diseases also cause a substantial number of deaths in the US. [163] Patricia M. Danzon. Liability for Medical Malpractice. In Culyer and Newhouse [152], pages 13391404. Abstract: Physicians are traditionally liable under a negligence rule of liability. Economic analysis of liability rules, including malpractice, assumes that the primary function of liability is injury prevention (deterrence). Compensation can be provided more eciently through other forms of social or private insurance. In theory, a negligence rule creates incentives for ecient care, hence there should be no negligence, no claims and no demand for liability insurance. In practice, the incidence of negligent injury has been estimated at roughly one per hundred hospital admissions in the US and about one in seven physicians is sued per year. These discrepancies between the theory and actual operation of the negligence system arise primarily because of imperfect information on the part of courts, doctors, patients, liability insurers and health insurers. Imperfect information and extensive health insurance lead to biased and uncertain legal standards. Uncertain legal standards create incentives for physicians to practice defensive medicine and incentives for plaintis and defendants to invest in litigation, leading to high overhead costs, such that compensation through the malpractice system carries a load of $1.50 per $1.00 of compensation. Nevertheless, the extreme criticisms of the malpractice system are exaggerated. Malpractice premiums are less than 1 percent of total health care costs. There are no comprehensive estimates of defensive medicine costs; in any case such costs are likely to decline with the growth of managed care. Although claim disposition exhibits both Type 1 and Type 2 errors, negligent injuries are much more likely to lead to a claim being led and payment to the plainti than non-negligent injuries, and awards are strongly related to loss incurred. The limited empirical evidence of provider response to liability and the deterrent eect of claims suggestsbut cannot provethat the net benets of the malpractice system may plausibly be positive. Nevertheless, reforms designed to reduce inappropriate compensation and deter excessive litigation and defensive 60

practice would make the system more cost-eective. The empirical evidence, based primarily in the US, includes studies of malpractice injuries; physician response to liability; trends in claim frequency, severity (size), and claim disposition; and the malpractice insurance market. Analyses of actual and proposed reforms address tort reform, no fault, enterprise liability and optimal liability under managed care. More limited evidence is available on the negligence regimes in Canada and the UK, and the quasi no-fault regimes in Sweden and New Zealand. [164] Patricia M. Danzon and Li-Wei Chao. Cross-National Price Dierences for Pharmaceuticals: How Large, and Why? Journal of Health Economics, 19(2):15995, March 2000. Examining seven countries, the authors nd no evidence that drug prices are much higher in the US than elsewhere. Their work is critically examined by Berndt [51]. [165] Patricia M. Danzon and Mark V. Pauly. Health Insurance and the Growth in Pharmaceutical Expenditures. Journal of Law and Economics, 45(2, part 2):587613, October 2002. Abstract: This paper examines the contribution of insurance coverage to the recent unprecedented growth in spending on pharmaceuticals. Trends in drug spending over time closely paralleled the growth in drug coverage. Most of the coverage growth reects an increase in the number of people with coverage, 65 percent from 1987 to 1996, rather than increased depth of coverage. The direct moral hazard eect of this insurance growth accounts for between one-fourth and one-half of the increase in drug spending. Technological change contributed to these changes, because both the ow of new drugs increased the demand for insurance and information technologies enabled the development of pharmacy benet management, which reduced the real price of drug coverage. It is plausible that insurance growth also stimulated drug promotion. The only obvious source of ineciency is the tax subsidy, which may lead to excessive insurance and promotion. This applies to all health care, not just pharmaceuticals. [166] Thomas Davidson and Lars-Ake Levin. Is the Societal Approach Wide Enough to Include Relatives? Incorporating Relatives Costs and Eects in a Cost-Eectiveness Analysis. Applied Health Economics and Health Policy, 8(1):2535, 2010. Abstract: It is important for economic evaluations in healthcare to cover all relevant information. However, many existing evaluations fall short of this goal, as they fail to include all the costs and eects for the relatives of a disabled or sick individual. The objective of this study was to analyse how relatives costs and eects could be measured, valued, and incorporated into a cost-eectiveness analysis. In this article, we discuss the theories underlying cost-eectiveness analyses in the healthcare arena; the general conclusion is that it is hard to nd theoretical arguments for 61

excluding relatives costs and eects if a societal perspective is used. We argue that the cost of informal care should be calculated according to the opportunity cost method. To capture relatives eects, we construct a new term, the R-QALY weight, which is dened as the eect on relatives QALY weight of being related to a disabled or sick individual. We examine methods for measuring, valuing and incorporating the R-QALY weights. One suggested method is to estimate R-QALYs and incorporate them together with the patients QALY in the analysis. However, there is no well established method as yet that can create R-QALY weights. One diculty with measuring R-QALY weights using existing instruments is that these instruments are rarely focused on relative-related aspects. Even if generic quality-of-life instruments do cover some aspects relevant to relatives and caregivers, they may miss important aspects and potential altruistic preferences. A further development and validation of the existing caregiving instruments used for eliciting utility weights would therefore be benecial for this area, as would further studies on the use of time trade-o or standard gamble methods for valuing R-QALY weights. Another potential method is to use the contingent valuation method to nd a monetary value for all the relatives costs and eects. Because cost-eectiveness analyses are used for decision making, and this is often achieved by comparing different cost-eectiveness ratios, we argue that it is important to nd ways of incorporating all relatives costs and eects into the analysis. This may not be necessary for every analysis of every intervention, but for treatments where relatives costs and eects are substantial there may be some associated inuence on the cost-eectiveness ratio. [167] Gianni De Fraja. Market and Public Provision in the Presence of Human Capital Externalities. Journal of Public Economics, 92(5-6):96285, June 2008. Abstract: For many goods and services, such as health, education, legal services, police protection, the cost incurred by an individual supplier for providing quality is aected by the human capital of her colleagues. The paper shows that this human capital externality is crucial to determine whether such goods and services should be privately or publicly provided. Public and private provisions give individuals dierent incentives to acquire human capital, and the paper shows that either may be socially preferable, depending on the nature of the human capital externality: private provision of the nal goods and services gives stronger incentives to human capital acquisition (and may therefore be socially preferable) if own human capital and ones colleagues human capital are substitutes, and if suppliers with high human capital benet more than suppliers with low human capital from their colleagues human capital, but not excessively so. [168] Melanie De Grano, D. J. Medeiros, and David Eitel. Accommodating Individual Preferences in Nurse Scheduling via Auctions and Optimization.


Health Care Management Science, 12(3):22842, September 2009. Abstract: This paper describes a two-stage approach to nurse scheduling that considers both nurse preferences and hospital constraints. In the auction stage, nurses bid for their preferred working shifts and rest days using points. An optimization model awards shifts to the highest bidders insofar as possible while maintaining hospital requirements. In the schedule completion stage, an optimization model allocates the unlled shifts to nurses who have not yet met their minimum required hours. The approach is demonstrated via a case study in the emergency department at York Hospital. A schedule with a high percentage of awarded bids was generated in a few minutes of computer time. Further experimentation suggests that the approach works well under a variety of conditions. [169] Kris De Jaegher and Marc Jegers. A Model of Physician Behaviour with Demand Inducement. Journal of Health Economics, 19(2):23158, March 2000. Abstract: We present a model of the physician-patient relationship extending on the model by Farley (1986) of supplier-induced demand (SID). First, we make a case for the way this model species professional ethics, physician competition, and SID itself. Second, we derive predictions from this model, and confront them with the neoclassical model. Finally, we stress the importance of considering how SID aects patient welfare in providing an example where physicians ability to induce makes patients better o. To evaluate patient welfare, we derive approximations of the patients welfare loss due to physician market power in both the neoclassical model and the inducement model. [170] Kris De Jaegher and Marc Jegers. The Physician-Patient Relationship as a Game of Strategic Information Transmission. Health Economics, 10(7):65168, October 2001. Abstract: We show that the intuition underlying the supplier-induced demand (SID) hypothesis is reected in the cheap-talk literature from game theory, and in the credence-good literature from the economics of information. Applying these theories, we conclude that a neoclassical version of the SID hypothesis is only relevant for treatment decisions involving an expensive treatment that is equally eective in curing several states, but ecient in curing only some of these states (in that a cheaper treatment is ecient otherwise). For a simple game involving such a treatment decision, we show that a Nash equilibrium exists where the patient is able to constrain the physician in inducing demand, without the market for the potentially induced treatment failing. This equilibrium allows us to derive comparative statistics and welfare results. [171] E. De Trizio and C. S. Brennan. The Business of Human Embryonic Stem Cell Research and an International Analysis of Relevant Laws. Journal of Biolaw & Business, 7(4):1422, 2004. 63

Abstract: Few sciences have held out such therapeutic promise and correspondingly stirred so much controversy in countries throughout the world as the developing science surrounding human embryonic stem cells. Since the rst reported development of several lines of human embryonic stem cells in 1988, many governments around the world have attempted to address the thorny ethical issues raised by human embryonic stem cell research by the passage of laws. In some cases these laws have directly regulated governmental funding of the science; in other cases they have created a legal environment that has either encouraged or discouraged both governmental and private funding of the science. This article rst dierentiates human embryonic stem cells from other types of stem cells and frames the ethical controversy surrounding human embryonic stem cell research, then surveys laws governing human embryonic stem cell research in various scientically advanced countries located throughout the Pacic Rim, Europe and North America and explains the impact these laws have had on governmental and private funding of human embryonic stem cell research. [172] Pol De Vos, Wim De Ceukelaire, and Patrick Van der Stuyft. Colombia and Cuba, Contrasting Models in Latin Americas Health Sector Reform. Tropical Medicine and International Health, 11(10):160412, October 2006. Abstract: Latin American national health systems were drastically overhauled by the health sector reforms the 1990s. Governments were urged by donors and by the international nancial institutions to make major institutional changes, including the separation of purchaser and provider functions and privatization. This article rst analyses a striking paradox of the far-reaching reform measures: contrary to what is imposed on public health services, after privatization purchaser and provider functions are reunited. Then we compare two contrasting examples: Colombia, which is internationally promoted as a successfuland radicalexample of market-oriented health care reform, and Cuba, which followed a highly conservative path to adapt its public system to the new conditions since the 1990s, going against the model of the international institutions. The Colombian reform has not been able to materialize its promises of universality, improved equity, eciency and better quality, while Cuban health care remains free, accessible for everybody and of good quality. Finally, we argue that the basic premises of the ongoing health sector reforms in Latin America are not based on the peoples needs, but are strongly inuenced by the needs of foreignespecially North Americancorporations. However, an alternative model of health sector reform, such as the Cuban one, can probably not be pursued without fundamental changes in the economic and political foundations of Latin American societies. [173] Partha Deb and Pravin K. Trivedi. The Structure of Demand for Health Care: Latent Class versus Two-Part Models. Journal of Health Economics,


21(4):60125, 2002. Abstract: We contrast the two-part model (TPM) that distinguishes between users and non-users of health care, with a latent class model (LCM) that distinguishes between infrequent and frequent users. In model comparisons using data on counts of utilization from the RAND Health Insurance Experiment (RHIE), we nd strong evidence in favor of the LCM. We show that individuals in the infrequent and frequent user latent classes may be described as being healthy and ill, respectively. Although sample averages of price elasticities, conditional means and event probabilities are not statistically dierent, the estimates of these policy-relevant measures are substantively dierent when calculated for hypothetical individuals with specic characteristics. [174] Sandra L. Decker and Dahila K. Remler. How Much Might Universal Health Insurance Reduce Socioeconomic Disparities in Health? A Comparison of the US and Canada. Applied Health Economics and Health Policy, 3(4):20516, 2004. Abstract: A strong association between lower socioeconomic status and worse health has been documented within many countries, but little work has been done to compare the strength of this relationship across countries. We compare the strength of the relationship between income and self-reported health in the US and Canada. We nd that being below median income raises the likelihood that a middle-aged person is in poor or fair health by about 15 percentage points in the US, compared with less than 8 percentage points in Canada. We also nd that this 7 percentage points stronger relationship between low income and poor health in the US compared with Canada is reduced by about 4 percentage points after age 65, the age at which virtually all US citizens receive basic health insurance through the Medicare programme. Income dierences in the probability that an individual lacks a usual source of care are also significantly larger in the US than in Canada before the age of 65, but about the same after age 65. Our results are therefore consistent with the theory that the availability of universal health insurance in the US, or at least some other dierence that occurs around the age of 65 in one country but not the other, decreases the dierence in the strength of the income-health relationship in the US compared with Canada. [175] Eric Delattre and Brigitte Dormont. Fixed Fees and Physician-Induced Demand: A Panel Data Study on French Physicians. Health Economics, 12(9):74154, September 2003. Abstract: This paper investigates on the existence of physician-induced demand (PID) for French physicians. The test is carried out for GPs and specialists, using a representative sample of 4500 French self-employed physicians over the 19791993 period. These physicians receive a fee-forservices (FFS) payment and fees are controlled. The panel structure of our data allows us to take into account unobserved heterogeneity related to the 65

characteristics of physicians and their patients. We use generalized method of moments (GMM) estimators in order to obtain consistent and ecient estimates. We show that physicians experience a decline of the number of consultations when they face an increase in the physician:population ratio. However this decrease is very slight. In addition, physicians counterbalance the fall in the number of consultations by an increase in the volume of care delivered in each encounter. Econometric results give a strong support for the existence of PID in the French system for ambulatory care. [176] Daniel Denee and Robert T. Masson. What Do Not-for-Prot Hospitals Maximize? International Journal of Industrial Organization, 20(4):461 92, April 2002. Using Virginia data, the authors reject (a) the hypothesis that not-forprot hospitals maximize rents for agents controlling them and (b) the hypothesis that these hospitals maximize output. The results are consistent with the hypothesis that these hospitals objectives include both rents and output. [177] P. J. Devereaux, D. Heels-Ansdell, C. Lacchetti, T. Haines, K. E. Burns, Cook D. J., N. Ravindran, S. D. Walter, H. McDonald, S. B. Stone, R. Patel, M. Bhandari, H. J. Schunemann, P. T. Choi, A. M. Bayoumi, J. N. Lavis, T. Sullivan, G. Stoddart, and G. H. Guyatt. Payments for Care at Private For-Prot and Private Not-For-Prot Hospitals: A Systematic Review and Meta-Analysis. Canadian Medical Association Journal, 170(12):181724, June 8 2004. Abstract: BACKGROUND: It has been shown that patients cared for at private for-prot hospitals have higher risk-adjusted mortality rates than those cared for at private not-for-prot hospitals. Uncertainty remains, however, about the economic implications of these forms of health care delivery. Since some policy-makers might still consider for-prot health care if expenditure savings were suciently large, we undertook a systematic review and meta-analysis to compare payments for care at private forprot and private not-for-prot hospitals. METHODS: We used 6 search strategies to identify published and unpublished observational studies that directly compared the payments for care at private for-prot and private not-for-prot hospitals. We masked the study results before teams of 2 reviewers independently evaluated the eligibility of all studies. We conrmed data or obtained additional data from all but 1 author. For each study, we calculated the payments for care at private for-prot hospitals relative to private not-for-prot hospitals and pooled the results using a random effects model. RESULTS: Eight observational studies, involving more than 350 000 patients altogether and a median of 324 hospitals each, fullled our eligibility criteria. In 5 of 6 studies showing higher payments for care at private for-prot hospitals, the dierence was statistically signicant; in 1 of 2 studies showing higher payments for care at private not-for-prot hospitals, the dierence was statistically signicant. The pooled estimate 66

demonstrated that private for-prot hospitals were associated with higher payments for care (relative payments for care 1.19, 95% condence interval 1.07-1.33, p = 0.001). INTERPRETATION: Private for-prot hospitals result in higher payments for care than private not-for-prot hospitals. Evidence strongly supports a policy of not-for-prot health care delivery at the hospital level. [178] M. L. Di Tommaso, S. Strm, and E. M. Sther. Nurses Wanted: Is the Job Too Harsh or Is the Wage Too Low? Journal of Health Economics, 28(3):74857, May 2009. Abstract: When entering the job market, nurses choose among dierent kind of jobs. Each of these jobs is characterized by wage, sector (primary care or hospital), and shift (daytime work or shift). This paper estimates a multi-sector-job-type random utility model of labor supply on data for Norwegian registered nurses (RNs) in 2000. The empirical model implies that labor supply is rather inelastic; 10% increase in the wage rates for all nurses is estimated to yield 3.3% increase in overall labor supply. This modest response shadows for much stronger inter-job-type responses. Our approach diers from previous studies in two ways: rst, to our knowledge, it is the rst time that a model of labor supply for nurses is estimated taking explicitly into account the choices that RNs have regarding work place and type of job. Second, it diers from previous studies with respect to the measurement of the compensations for dierent types of work. So far, it has been focused on wage dierentials. But there are more attributes of a job than the wage. Based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indierent between types of jobs, here between shift work and daytime work. It turns out that Norwegian nurses working shifts may be willing to work shift relative to daytime work for a lower wage than the current one. [179] Mark Dickie and John List. Economic Valuation of Health for Environmental Policy: Comparing Alternative Approaches. Introduction and Overview. Environmental and Resource Economics, 34(3):339346, July 2006. Abstract: Protecting human health is a primary goal of environmental policy and economic evaluation of health can help policy-makers judge the relative worth of alternative actions. Economists use two distinct approaches in normatively evaluating health. Whereas environmental economists use benet-cost analysis supported by monetary valuation in terms of willingness-to-pay, health economists evaluate interventions based on cost-eectiveness or cost-utility analysis (CEA), using quality-adjusted life-years (QALY) or similar indexes. This paper provides background on the controversy about the relative merits of these approaches and introduces the remaining papers in the special issue. These papers (with one exception) were presented at a conference sponsored by the Department of 67

Economics at the University of Central Florida with support from the US Environmental Protection Agency. Although CEA might not lead to substantially dierent implications for environmental policy than benet-cost analysis, and QALY may provide a benet transfer tool to ll gaps in the morbidity valuation literature, the papers in this issue raise serious concerns about the suitability of QALY-based CEA for environmental regulatory analysis. QALY does not in general appropriately represent individual preferences for health and CEA is neither independent of income distribution nor adequate to assess eciency. Key words: benet-cost analysis; cost-eectiveness analysis; environmental policy; quality adjusted life years; regulatory analysis; value of a statistical life; willingness to pay. [180] Michael Dickson and J. Lyle Bootman. Pharmacoeconomics: An International Perspective. In Bootman et al. [72], chapter 2, pages 2042. [181] Paul Dolan. The Measurement of Health-Related Quality of Life. In Culyer and Newhouse [152], chapter 32, pages 17231760. Focuses on problems of preference-based measurement of quality adjusted life years (QALYs). Notes evidence that preferences are shaped rather than elicited by research procedures. Several passages are garbled by typos. [182] Paul Dolan. Developing Methods that Really Do Value the Q in the QALY. Health Economics, Policy and Law, 3(1):6977, January 2008. Abstract: Most health economists recommend that improvements in health be valued by asking members of the general public to imagine themselves in dierent states of health and then to think about how many years of life they would give up or what risk of death they would be willing to accept in order to be in full health. In this paper, I argue that preferences are not a very good guide to future experiences and a more suitable way to value health is to ask people in dierent states of health how they think and feel about their lives. Valuing health in this way may result in greater priority being given to mental health services. Whatever the precise implications, it is my contention that it is much better to ration health care according to real experiences rather than according to hypothetical preferences. [183] Paul Dolan and Daniel Kahneman. Interpretations of Utility and Their Implications for the Valuation of Health. Economic Journal, 118(525):215234, January 2008. Abstract: The term utility can be interpreted in terms of the hedonic experience of an outcome (experienced utility) or in terms of the preference or desire for that outcome (decision utility). It is this second interpretation that lies at the heart of the methods that economists have developed to value nonmarket goods, such as health. In this article, we argue that decision utility is unlikely to generate meaningful data on the utility associated with dierent experiences, and instead economists should


look towards developing measures that focus more directly on experienced utility. [184] R. F. Donnell. Changes in Medicare Reimbursement: Impact on Therapy for Benign Prostatic Hyperplasia. Current Urology Reports, 3(4):28084, August 2002. Abstract: Medicare spending accounts for 17% of all health spending and therefore exerts a signicant inuence on health care spending policies. Medicare policies such as Diagnostic Related Groups and the Resource Based Relative Value System have resulted in profound changes in health care delivery in the United States. These resource-allocation methods are one of the major sources of controversies between managers, doctors, politicians, and social scientists. Financial disincentives associated with these resource-allocation policies have eectively rationed select therapies, particularly transurethral resection of the prostate (TURP). As a consequence, TURP, once the second most common surgical procedure billed to Medicare and comprising 38% of major surgical procedures performed by urologists, is increasingly challenged by medical therapy and minimally invasive surgical therapies that may be associated with lower ecacy and durability. This article examines the history of Medicare policies and their inuence on TURP. [185] Avi Dor, Michael Grossman, and Siran M. Koroukian. Hospital Transaction Prices and Managed-Care Discounting for Selected Medical Technologies. American Economic Review, 94(2):35256, May 2004. Analyzing insurance claims from about 80 large U.S. employers that selfinsure, the authors nd evidence that hospitals bargain with employers over prices for medical services provided to insured employees. Hospitals appear to oer discounts to large employers. Greater market concentration in hospitals tends to raise prices. A large share of the cost savings by managed care organizations is due to per-unit price reductions. . . . However, the extent to which these discounts are passed on to consumers remains an open question (p. 356). [186] Avi Dor, Siran M. Koroukian, and Michael Grossman. Managed Care Discounting: Evidence from the MarketScan Database. Inquiry, 41(2):159 69, summer 2004. Abstract: The paper examines price discounting by health maintenance organizations (HMOs) and preferred provider organizations (PPOs) in markets for hospital services. Our empirical analysis focuses on transaction prices for angioplasty, which is a relatively common procedure with well-dened product characteristics. After controlling for patient and procedure heterogeneity and market power, we nd that on average angioplasty prices are 8% lower for PPOs than for fee-for-service plans, followed by point-of-service HMOs, which capture a 24% discount. Our results are


in general agreement with earlier work by Cutler, McClellan, and Newhouse (2000) , who show that managed care discounts are real, after accounting for case severity and process of care. [187] David Dranove. The Economic Evolution of American Health Care: From Marcus Welby to Managed Care. Princeton University Press, Princeton, 2000. [188] David Dranove and Mark A. Satterthwaite. The Industrial Organization of Health Care Markets. In Culyer and Newhouse [152], chapter 20, pages 10931139. Focuses on physicians as imperfect agents for patients and monopolistic competition among health care providers. The three regimes discussed are independent physicians, regulated physicians in a prospective payment system, and contracted physicians in managed care systems. [189] Denis Drechsler and Johannes Jutting. Dierent Countries, Dierent Needs: The Role of Private Health Insurance in Developing Countries. Journal of Health Politics, Policy and Law, 32(3):497534, June 2007. Abstract: This article discusses the role of private health insurance (PHI) in developing countries. Three broad regional clusters are identied that share similar characteristics and policy challenges for the eective integration of private insurance into national health care systems: (1) Latin America and Eastern Europe, where there are already developed insurance industries facing important market and policy failures; (2) the Middle East/North Africa region and East Asia, where there is a projected strong growth of PHI that needs to be accompanied by ecient regulation; and nally, (3) South Asia and Sub-Saharan Africa, where PHI will only play a marginal role in the foreseeable future while the scaling up of small-scale, nonprot insurance schemes appears to be of critical importance. Overall, this survey shows that the role of private insurance varies depending on the economic, social, and institutional settings in a country or region. Private health insurance schemes can be valuable tools to complement existing health-nancing options only if they are carefully managed and adapted to local needs and preferences [190] Adam Drewnowski and Nicole Darmon. Food Choices and Diet Costs: an Economic Analysis. Journal of Nutrition, 135:90004, April 2005. Abstract: Obesity in the United States is a socioeconomic issue. It is related to limited social and economic resources and may be linked to disparities in access to healthy foods. Added sugars and added fats are far more aordable than are the recommended healthful diets based on lean meats, whole grains, and fresh vegetables and fruit. There is an inverse relationship between energy density of foods (kJ/g) and energy cost ($/MJ), such that energy-dense grains, fats, and sweets represent the lowest-cost dietary options to the consumer. Good taste, high convenience, and the


low cost of energy-dense foods, in conjunction with large portions and low satiating power, may be the principal reasons for overeating and weight gain. Financial disparities in access to healthier diets may help explain why the highest rates of obesity and diabetes are found among minorities and the working poor. If so, then encouraging low-income households to consume more costly foods is not an eective strategy for public health. What is needed is a comprehensive policy approach that takes behavioral nutrition and the economics of food choice into account. [191] Adam Drewnowski and S. E. Specter. Poverty and Obesity: the Role of Energy Density and Energy Costs. American Journal of Clinical Nutrition, 79(1):616, January 2004. Abstract: Many health disparities in the United States are linked to inequalities in education and income. This review focuses on the relation between obesity and diet quality, dietary energy density, and energy costs. Evidence is provided to support the following points. First, the highest rates of obesity occur among population groups with the highest poverty rates and the least education. Second, there is an inverse relation between energy density (MJ/kg) and energy cost ($/MJ), such that energy-dense foods composed of rened grains, added sugars, or fats may represent the lowest-cost option to the consumer. Third, the high energy density and palatability of sweets and fats are associated with higher energy intakes, at least in clinical and laboratory studies. Fourth, poverty and food insecurity are associated with lower food expenditures, low fruit and vegetable consumption, and lower-quality diets. A reduction in diet costs in linear programming models leads to high-fat, energy-dense diets that are similar in composition to those consumed by low-income groups. Such diets are more aordable than are prudent diets based on lean meats, sh, fresh vegetables, and fruit. The association between poverty and obesity may be mediated, in part, by the low cost of energy-dense foods and may be reinforced by the high palatability of sugar and fat. This economic framework provides an explanation for the observed links between socioeconomic variables and obesity when taste, dietary energy density, and diet costs are used as intervening variables. More and more Americans are becoming overweight and obese while consuming more added sugars and fats and spending a lower percentage of their disposable income on food. [192] Lisa Dubay, Robert Kaestner, and Timothy Waidmann. The Impact of Malpractice Fears on Cesarean Section Rates. Journal of Health Economics, 18(4):491522, August 1999. Abstract: A longstanding issue in the health care industry is whether physicians malpractice fears lead to defensive medicine. The authors use national birth certicate data from 1990 through 1992 to conduct a county xed-eects analysis of the impact of malpractice claims risk on Cesareansection rates and infant health. Malpractice claims risk is measured by obstetricians malpractice premiums. The study provides evidence that 71

physicians practice defensive medicine in obstetrics but that the impact of increased Cesarean sections that results from malpractice fears on total obstetric care costs is small. The study also nds that physicians defensive response varies with the socioeconomic status of the mother. [193] Lisa Dubay, Robert Kaestner, and Timothy Waidmann. Medical Malpractice Liability and Its Eect on Prenatal Care Utilization and Infant Health. Journal of Health Economics, 20(4):591611, July 2001. Abstract: In this paper we conduct the rst national evaluation of the eect of malpractice liability pressure, as measured by malpractice premiums, on prenatal care utilization and infant health. Our results indicate that a decrease in malpractice premiums that would result from a feasible policy reform would lead to a decrease in the incidence of late prenatal care by between 3.0 and 5.9% for black women and between 2.2 and 4.7% for white women. Although, we found evidence that malpractice liability pressure was associated with greater prenatal care delay and fewer prenatal care visits, we did not nd evidence that such pressure negatively aected infant health. [194] Richard Dusansky, Mel Ingber, Alan Leiken, and John Walsh. On Increasing the Supply of Nurses: An Interstate Analysis. Atlantic Economic Journal, 14(3):3444, September 1986. Abstract: An econometric model is used to investigate ways of increasing the supply of nurses. The model is based on Benhams (1971) 3-equation model of supply and demand for registered nurses (RN). It extends the Benham model by including licensed practical nurses (LPN). The 3-stage least squares estimation method is used to determine: 1. the degree to which increases in the output of nurse training programs increase nurse stocks, 2. the extent to which increases in nurse wages increase nurse participation, and 3. the degree to which hospitals have attempted to substitute auxiliary health personnel for RNs. The data are taken primarily from the 1970 US Census, which reports the earnings for RNs, LPNs, and attendants separately. The results suggest that the labor supply behavior of RNs and LPNs is highly similar, if not quite identical. Given uniform policy goals, dierentiated policy prescriptions for the 2 groups would not be necessary. RNs and LPNs can be treated as one homogeneous grouping. [195] Venkatesh Dutta, Subhash Chander, and Leena Srivastava. Public Support for Water Supply Improvements: Empirical Evidence from Unplanned Settlements of Delhi, India. Journal of Environment and Development, 14(4):43962, December 2005. Abstract: The unplanned sector of Indias capital city has an enormous backlog in the provision of reliable water supplies to its population, which is further exacerbated by the growing number of informal urban settlements. In this context, contingent valuation method (CVM) is applied to


evaluate a policy of providing better water supply with improved quality and reliability in unplanned settlements of Delhi. Willingness to pay (WTP) questions are used to value a specic outcome of a policy intended to assure a reliable water supply that has no health risk of contamination. The estimation from linear utility models assert that the proposed changes would provide positive net benets to customers who are otherwise incurring considerable amounts of coping cost in the absence of a reliable water supply. The ndings have important policy implications for gauging public support for water supply improvements in infrastructurally disadvantaged households. [196] Stephanie R. Earnshaw, Katherine Hicks, Anke Richter, and Amanda Honeycutt. A Linear Programming Model for Allocating HIV Prevention Funds with State Agencies: A Pilot Study. Health Care Management Science, 10(3):23952, 2007. Abstract: Given the initiatives to improve resource allocation decisions for HIV prevention activities, a linear programming model was designed specically for use by state and local decision-makers. A pilot study using information from the state of Florida was conducted and studied under a series of scenarios depicting the impact of common resource allocation constraints. Improvements over the past allocation strategy in the number of potential infections averted were observed in all scenarios with a maximal improvement of 73%. When allocating limited resources, policymakers must balance eciency and equity. In this pilot study, the optimal allocation (i.e., most-ecient strategy) would not distribute resources in an equitable manner. Instead, only 12% of at-risk people would receive prevention funds. We nd that less ecient strategies, where 58% fewer infections are averted, result in signicantly more equitable allocations. This tool serves as a guide for allocating funds for prevention activities. [197] Matthew J. Eichner. The Demand for Medical Care: What People Pay Does Matter. American Economic Review, 88(2):11721, May 1998. Eichner estimates the price elasticity of demand for health care among employees of a large U.S. rm in the early 1990s. This rm provided health insurance covering employees and their dependents. The insurance had an annual deductible. After meeting the deductible, insured individuals were responsible only for a small copay. Using injuries to dependents as an instrumental variable for the price of medical care, Eichner estimates the price elasticity of demand to lie between -0.22 and -0.79. [198] Mats Ekelund and Bjorn Persson. Pharmaceutical Pricing in a Regulated Market. Review of Economics and Statistics, 85(2):298306, May 2003. Abstract: We compare how new pharmaceuticals are priced in the priceregulated Swedish market with how they are priced in the U.S. market, as studied by Lu and Comanor (1998). We collect a data set consisting of all new chemical entities (NCEs) launched in Sweden between 1987 and 1997, 73

and test the same models as Lu and Comanor. In line with their results, we nd that introductory prices depend on the degree of therapeutic innovation. Contrary to the results from the U.S. market, Swedish real prices for NCEs fall substantially over time for all classes of therapeutic innovation. Also contrary to the ndings of Lu and Comanor, we nd no eect of the presence of branded substitutes on either introduction prices or price dynamics. Our results indicate that the price regulation discourages price competition between brand-name drugs. [199] Elamin H Elbasha. Deadweight Loss of Bacterial Resistance Due to Overtreatment. Health Economics, 12(2):12538, February 2003. Abstract: Widespread use of antibiotics is considered the major driving force behind the development of antibiotic resistance. The benets of exceeding the welfare-maximizing level of antibiotic use are below the costs of resistance created by this excess quantity of antibiotics used, thereby resulting in a welfare deadweight loss. This paper uses a simple economic model to examine the theoretical and empirical aspects of the welfare loss generated by resistance and analyzes its policy implications. The annual deadweight loss associated with outpatient prescriptions for amoxicillin in the United States is estimated at $225 million. [200] Leslie Eldenburg, Benjamin E. Hermalin, Michael S. Weisbach, and Marta Wosinska. Governance, Performance Objectives and Organizational Form: Evidence from Hospitals. Journal of Corporate Finance, 10(4):52748, September 2004. Abstract: In a sample of California hospitals, we nd that the composition of the board of directors varies systematically across ownership types. For all ownership types, except government-owned, we nd that poor nancial performance is related to board and CEO turnover. However, dierent ownership types place dierent weights on levels of charity care and administrative expenses. Our overall ndings support the proposition that ownership type reects heterogeneity across consumers and producers, and that dierences in these groups lead to dierences in the organizations objectives and governance. [201] Robert Elliot, Diane Sk atun, and Emanuela Antonazzo. The Nursing Labour Market. In Scott et al. [604], pages 99120. A review of economic research on the labor market for nurses in the U.K., with some notes on studies using U.S. data. [202] Randall P. Ellis and Thomas G. McGuire. Hospital Response to Prospective Payment: Moral Hazard, Selection, and Practice-Style Eects. Journal of Health Economics, 15(3):25777, June 1996. Abstract: In response to a change in reimbursement incentives, hospitals may change the intensity of services provided to a given set of patients, change the type (or severity) of patients they see, or change their market 74

share. Each of these three responses, which the authors dene as a moral hazard eect, a selection eect, and a practice-style eect, can inuence average resource use in a population. The authors develop and implement a methodology for disentangling these eects using a panel data set of Medicaid psychiatric discharges in New Hampshire. They also nd evidence for the form of quality competition hypothesized by D. Dranove (1987). [203] Glenn Ellison and Sara Fisher Ellison. Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration. Working paper, MIT, Cambridge, March 2000. Abstract: The paper examines the behavior of pharmaceutical incumbents in the period just before they lose patent protection. Because the strategic incentive to deter entry is absent in markets which are so small or large as to make entry deterrence unnecessary or impossible, it is proposed that one way to look for evidence that rms are inuenced by a desire to deter entry is to investigate whether behavior is nonmonotonic in the size of the market. The data contain advertising, product proliferation and pricing information for a sample of drugs which lost patent protection between 1986 and 1992. Among the ndings consistent with an entry deterrence model are that incumbents in markets of intermediate size are the most likely to reduce detail advertising and to increase the proliferation of presentations in the year before patent expiration. [204] Sara Fisher Ellison, Iain Cockburn, Zvi Griliches, and Jerry Hausman. Characteristics of Demand for Pharmaceutical Products: An Examination of Four Cephalosporins. RAND Journal of Economics, 28(3):42646, Autumn 1997. Abstract: The authors model demand for four cephalosporins and compute own- and cross-price elasticities between branded and generic versions of the four drugs. The authors model demand as a multistage budgeting problem and they argue that such a model is appropriate to the multistage nature of the purchase of pharmaceutical products, in particular the prescribing and dispensing stages. The authors nd quite high elasticities between generic substitutes and also signicant elasticities between some therapeutic substitutes. [205] Sara Fisher Ellison and Judith K. Hellerstein. The Economics of Antibiotics: An Exploratory Study. In Triplett [668], pages 11843. The authors argue that the price growth of antibiotics has been very modest over the last decade (p. 133). They note that antibiotic use involves both a positive externality (reduced risk of transmission of infectious diseases) and a negative one (increased antimicrobial resistance). They present a model illustrating how the positive and negative externalities. . . may. . . reinforce one another and reduce incentives to innovate


(p. 134). They note that increases in managed care may have mixed eects on the externalities. [206] Manfred Erbsland, Walter Ried, and Volker Ulrich. Health, Health Care, and the Environment. Econometric Evidence from German Micro Data. Health Economics, 4(3):16982, MayJune 1995. Reprinted in Andrew Jones and Owen ODonnell, Econometric Analysis of Health Data (New York: Wiley 2002), pp. 2536. Abstract: The paper develops and applies a Grossman-style health production model set up in discrete time to explain the impact of environmental pollution on the demand for both health and health care. In order to introduce the environment, our analysis takes changes in environmental conditions to inuence the rate at which an individuals stock of health depreciates. While the theoretical part of our paper also contains a discussion of the full model, we restrict our empirical analysis to a submodel which is known as the pure investment model. This is because the other submodel, the pure consumption model, implies a rather implausible case of satiation with respect to the individuals preferences. Our empirical ndings are based on data taken from the German Socio-economic Panel. The stock of health capital and environmental pollution are treated as latent variables and estimated using a Linear Covariance Structures model. The quality of the environment turns out to be an important determinant of health capital. From the point of view of health economics, improvements in environmental conditions can be interpreted as preventive measures. In terms of prevention, public policies designed to protect the environment also yield signicant health eects. As regards health care demand the inuence is not clearcut, i.e., one cannot necessarily expect a reduction in resource use. [207] Jeanette Ives Erickson, Lauren J. Holm, and Lee Chelminiak. Keeping the Nursing Shortage from Becoming a Nursing Crisis. Journal of Nursing Administration, 34(2):8387, February 2004. Abstract: Healthcare organizations are experiencing an unprecedented shortage of qualied nurses. How can we increase our understanding of how the potential labor pool views the nursing profession and identify recruitment themes to encourage young people and adult career switchers to choose a career in nursing? The authors discuss the results of a study that was conducted to gain a better understanding of the dynamics of career selection among these two target groups and identify what types of communication would motivate young people and career switchers to be drawn to the nursing profession. [208] Alfredo G. Esposto. Contractual Integration of Physician and Hospital Services in the U.S. Journal of Management and Governance, 8(1):4969, 2004.


Abstract: Using a binary-choice, probabilistic model, this study analyzes data covering the institutional and market characteristics of 759 hospitals in 81 metropolitan statistical areas in the United States to understand why many of them have chosen to contractually integrate with physician and physician group practices. The results support the theory that the contractual integration of physician and hospital services in the U.S. during the 1990s occurred in response to market pressures to circumvent the transaction costs of monitoring physician utilization of hospital resources. They also support the views of Robinson (1997) and Shortell (1997) that the nature of the coordination, the governance structure, and the part to which market mechanisms play are largely determined by the demands for coordination from the market served by the hospital, the capabilities of the hospital to pull physicians into integration arrangements, and the historical context and constraints binding the hospitals decision making. [209] Henry S. Farber and Michelle J. White. Medical Malpractice: An Empirical Examination of the Litigation Process. RAND Journal of Economics, 22(2):199217, summer 1991. Abstract: New data on medical malpractice claims against a single hospital in which a direct measure of the quality of medical care is available are used to investigate the roles of the negligence rule and incomplete information in the dispute settlement process in medical malpractice. The authors nd that the quality of medical care (negligence) is an extremely important determinant of defendants medical malpractice liability. More generally, they nd that the data are consistent with a model in which plaintis are poorly informed ex ante about whether there has been negligence, le suit to gather information, and either drop the case if they nd that negligence was unlikely or settle for a positive payo if they nd that negligence was likely. The authors also nd that the cases are resolved earlier in the litigation process when the parties are more certain, one way or the other, about the likelihood of negligence. [210] Siri Fauli and Geir Thue. Economic Consequences of Near-Patient Test Results: The Case of Tests for the Helicobacter Pylori Bacterium in Dyspepsia. European Journal of Health Economics, 9(3):22128, August 2008. Abstract: We have developed a model for economic evaluation related to the diagnostic accuracy (sensitivity and specicity) of near patient tests used in oce laboratories, as opposed to using hospital-based tests. Bloodsample based tests to detect the bacterium Helicobacter Pylori (HP) are useful in diagnosing peptic ulcer, and suitable to illustrate the model. First, general practitioners initial management plans for a dyspeptic patient are elucidated using a paper vignette survey. Based on survey results, and medical literature, a decision tree is constructed to visualize expected costs and outcomes resulting from using three dierent HP tests. Tests included are two rapid tests for use in general practice, and one hospital laboratory test for comparison. The tests had dierent sensitivities and 77

specicities. Then a cost-eectiveness analysis is undertaken from a societal perspective. Finally we use sensitivity analyses to model the decision uncertainty. Estimating for a follow-up period of 120 days, the rapid test with lower sensitivity and specicity than the hospital HP test is costeective because the test result is available immediately. Further, in general practice, the rapid test with the highest sensitivity is signicantly cost eective compared to the test with the highest specicity when the willingness to pay for each dyspepsia-free day exceeds E42.6. When deciding whether a laboratory analysis should be analyzed in the oce laboratory or not, it is important to consider both the diagnostic accuracy of the tests and waiting time for the alternative hospital laboratory result. [211] Eberhard Feess and Sonja Ossig. Reimbursement Schemes for Hospitals, Malpractice Liability, and Intrinsic Motivation. International Review of Law and Economics, 27(4):42341, December 2007. Abstract: We develop a simple multi-task principal-agent model to analyze the interplay between optimal reimbursement schemes for hospitals and liability rules (basic model). We then extend our model and assume that the hospital is intrinsically motivated to exert positive eort for quality and cost reduction. This eort, however, is biased towards quality. Moreover, the intrinsic motivation may be crowded out by monetary incentives. In such a setting, we nd that a pure prospective payment system (PPS) that has become widespread in recent years can only be optimal in the unlikely case where malpractice liability holds hospitals fully responsible for expected harm. For other cases, we conrm the prejudice that PPS may lead to ineciently low quality. Then, the traditional fee-forservice (FFS) system is superior if the intrinsic motivation is high and relatively little biased towards quality, whereas mixed systems should be chosen otherwise. Our model sheds light on why countries like the USA with a tough liability system haven been less reluctant to switch from FFS to PPS than Germany, for instance. [212] Roger D. Feldman, editor. American health care: Government, market processes, and the public interest. Transaction, New Brunswick, N.J., 2000. Abstract: Thirteen papers examine current conditions in health care in America and make a case for considering markets as an alternative to public regulation or expenditure. Papers focus on the genesis and development of medicare (Ronald Hamowy); the 1996 health care legislation (Charlotte Twight); making room for medical savings accounts in the U.S. health care system (Gail A. Jensen); freedom of contract (Clark C. Havighurst); hospital regulation and antitrust paradoxical policies (Barbara A. Ryan); the antidiscrimination principle in health care (Richard A. Epstein); state health care reform (Michael A. Morrisey); regulation of the pharmaceutical industry (Ronald W. Hansen); the FDAs advertising restrictions (Paul H. Rubin); exploring free market certication of medical 78

devices (Noel D. Campbell); physician fees and price controls (H. E. Frech III); the changing role of licensure in promoting incentives for quality in health care (Shirley V. Svorny); and traditional and radical alternatives in liability reforms (Patricia M. Danzon). [213] Martin Feldstein. Balancing the Goals of Health Care Provision. working paper 12279, National Bureau of Economic Research, Cambridge, Mass., 2006. Abstract: A desirable system for providing and nancing health care would achieve three goals: (1) preventing the deprivation of care because of a patients inability to pay; (2) avoiding wasteful spending; and (3) allowing care to reect the dierent tastes of individual patients. Although it is not possible to realize fully all three of these goals, they can condition and inform the design of a good system for nancing health care. This paper discusses the application of these goals in more detail and use them to consider a reform of the system of Health Savings Accounts that was enacted as part of the 2003 Medicare legislation and, separately, the challenge posed by the very expensive treatments for rare diseases that are becoming more common. [214] Amy Finkelstein. Minimum Standards, Insurance Regulation and Adverse Selection: Evidence from the Medigap Market. Journal of Public Economics, 88(12):251547, December 2004. Abstract: This paper examines the implications of minimum standards for insurance markets. I study the imposition of binding minimum standards on the market for voluntary private health insurance for the elderly. The central estimates suggest that the introduction of the standards was associated with an 8 percentage point (25%) decrease in the proportion of the population with coverage in the aected market, with no evidence of substitution toward other, unregulated sources of insurance coverage. To explore possible factors contributing to the impact of the minimum standards, I develop comparative static predictions of the impact of imposing minimum standards in an insurance market with adverse selection. The observed changes in market equilibrium associated with the minimum standards are broadly consistent with these predictions, providing evidence of the existence of adverse selection in this insurance market. More importantly, they suggest that the presence of adverse selectionwhich in principle may provide an economic rationale for minimum standardsin practice may have exacerbated the declines in insurance coverage associated with the minimum standards. [215] Amy Finkelstein, Erzo F. P. Luttmer, and Matthew J. Notowidigdo. Approaches to Estimating the Health State Dependence of the Utility Function. Technical report, MIT, afink/publications, 2009. forthcoming American Economic Review Papers and Proceedings.


[216] Amy Finkelstein and Robin McKnight. What Did Medicare Do? The Initial Impact of Medicare on Mortality and Out of Pocket Medical Spending. Journal of Public Economics, 92(7):164468, July 2008. Abstract: We study the impact of the introduction of one of the major pillars of the social insurance system in the United States: the introduction of Medicare in 1965. Our results suggest that, in its rst 10 years, the establishment of universal health insurance for the elderly had no discernible impact on elderly mortality. However, we nd a substantial reduction in the elderlys exposure to out of pocket medical expenditure risk. Specically, we estimate that the introduction of Medicare was associated with a 40% decline in out of pocket spending for the top quartile of the out of pocket spending distribution. A stylized expected utility framework suggests that the welfare gains from such reductions in risk exposure alone may be sucient to cover almost two-fths of the costs of Medicare. These ndings underscore the importance of considering the direct insurance benets from public health insurance programs, in addition to any indirect benets from an eect on health. [217] Michael Finus. Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges. International Review of Environmental and Resource Economics, 2(1):2967, 2008. Abstract: In recent years, the number of publications that analyze the formation and stability of international environmental agreements (IEAs) using the method of game theory has sharply increased. This paper reports on some recent results that shall demonstrate the usefulness but also the limitation of game theory for the analysis of IEAs. It restricts attention to the class of non-cooperative membership models and focuses on the relation between dierent designs and the success of IEAs. Results are illustrated for the climate change problem with the empirical Stability of Coalitions (STACO) model developed by Dellink et al. (2004). Subsequently, some features of actual treaty-making not considered with this model are discussed with reference to the literature and their importance for future research is highlighted. [218] Steen Flessa. Where Eciency Saves Lives: A Linear Programme for the Optimal Allocation of Health Care Resources in Developing Countries. Health Care Management Science, 3(3):24967, June 2000. Abstract: Morbidity and mortality are directly inuenced by the available health care budget. In addition, the optimal allocation of this scarce resource to the dierent strata of the health care system depends on the health care priorities. This paper presents a linear programming model in order to analyse the impact of changes of the health care budget and the goal system of the health care system on the optimal allocation to preventive and curative medicine. The model demonstrates that the current resource allocation in developing countries is inecient. This calls for a 80

new emphasis on preventive medicine and primary care in the political processes in developing countries. [219] Sherman Folland, Allen C. Goodman, and Miron Stano. The Economics of Health and Health Care. Prentice Hall, Upper Saddle River, NJ, second edition, 1997. [220] Organization for Economic Cooperation and Development. A DiseaseBased Comparison of Health Systems: What is Best and at What Cost? Organization for Economic Cooperation and Development, Paris, 2003. Abstract: Nineteen papers and a roundtable panel discussion from an OECD workshop held in June 2002. Presents ndings from, and addresses issues relevant to, an OECD cross-country comparative study of the treatments, costs, and outcomes of three diseases that particularly aect the elderly. Papers discuss the Ageing-Related Diseases (ARD) project; characteristics of health systems and their inuence on the treatment, costs, and outcomes of ischemic heart disease; approaches to stroke treatment and care in OECD countries; the possible impact of clinical, economic, and regulatory factors on patterns of breast cancer care and survival rates across countries; the comparison of health care systems from the diseasespecic perspective; why dierent countries spend dierent amounts on health care; a framework for evaluating medical care systems; the integration of cost-of-disease studies into purchasing power parities; long-term projections of public expenditure on health and long-term care for EU member states and the future impact of aging populations on public budgets; an ARD perspective on population aging, health expenditure, and treatment; data needed for research and policy in aging societies; the link between technology and health expenditure; a perspective from the TECH Global Research Network on the relationship between health policies, medical technology trends, and outcomes; how health technology assessment, regulation, and planning aect the diusion of technology in health care systems; comparable measures of population health with a focus on OECD countries; progress made in collecting health outcome information in the ARD project; an ARD perspective on the performance of health systems; health information in Australia and the implications for the health system monitoring; and the value of international comparisons and the potential of surveys to add a missing perspective. [221] Jon M. Ford and David L. Kaserman. Certicate-of-Need Regulation and Entry: Evidence from the Dialysis Industry. Southern Economic Journal, 59(4):78391, April 1993. Abstract: Recent debate on the economic eects of certicate-of-need regulation questions whether this policy represents a binding constraint on entry and expansion decisions. The authors examine this issue empirically by focusing on entry into the dialysis industry over the decade of the 1980s. An attractive feature of their study is that the unique data


available for this industry enable them to employ two alternative and theoretically appealing measures of entry. The authors ndings indicate that certicate-of-need regulation has signicantly retarded new rm entry and total capacity expansion in this industry, thereby restricting supply and fostering increased levels of industry concentration [222] Dana A. Forgione, Thomas E. Vermeer, Krishnamurthy Surysekar, John A. Wrieden, and Catherine A. Plante. The impact of DRG-based payment systems on quality of health care in OECD countries. Journal of Health Care Finance, 31(1):4154, fall 2004. Abstract: Ever since DRG-based payment systems were rst introduced in the United States in 1983, the medical community has expressed concern about the potential impact of these price control systems on the quality of care. Several research studies have examined the impact of DRG-based payment systems on the quality of care within a single state in the United States, or within a specic country. We have not identied any attempts in the literature to examine the impact of DRG-based payment systems on the quality of health care across dierent countries. In this article we contribute to the debate by (1) providing a unique identication of DRG adoption status for each of 35 countries, (2) rening an international case mix index, and (3) applying it to examine whether DRG-based payments impact the quality of health care across national and cultural boundaries. We nd some evidence for Organization for Economic Cooperation and Development countries that, compared with non-adopters, adoption of DRG-based payment systems is associated with faster hospital case mix increases and slower quality gains with respect to patient mortality from surgical and medical misadventures. [223] Gary M. Fournier and Ellen S. Campbell. Indigent Care as Quid Pro Quo in Hospital Regulation. Review of Economics and Statistics, 79(4):66973, November 1997. Abstract: Hospitals expend considerable resources each year to provide health care to the poor. Why do some hospitals voluntarily take on a disproportionate burden of this care? The authors view is that the burdened hospitals are not simply altruistic. They are indirectly compensated for this expense with legal protections against competition under certicateof-need (CON) regulation. The authors test this hypothesis in a recursive model, explaining which hospitals are likely to win CON approval. The results indicate that, controlling for the endogeneity of indigent care, regulators in Florida systematically awarded licenses to hospitals providing greater amounts of care to the poor. [224] Gary M. Fournier and Melayne Morgan McInnes. Medical Board Regulation of Physician Licensure: Is Excessive Malpractice Sanctioned? Journal of Regulatory Economics, 12(2):11326, September 1997.


Abstract: This paper considers the deterrent eect that self-regulation has on a patients propensity to sue under malpractice law. A model of tortdriven self regulation is developed and its implications are examined using data on the disciplinary actions of the Florida Medical Board and data on closed malpractice claims. Doctors who in 19871991 generated abnormal rates of malpractice claims had a higher rate of disciplinary actions in the following period 19921995. Signicantly, the evidence suggests that the Board may also be more likely to discipline older physicians and noncertied practitioners, perhaps in response to special interests of industry members. [225] Gary M. Fournier and Melayne Morgan McInnes. The Case for Experience Rating in Medical Malpractice Insurance: An Empirical Evaluation. Journal of Risk and Insurance, 68(2):25576, June 2001. Abstract: Experience rating is largely absent from medical malpractice insurance contracts. This article presents evidence that physician risk differences persist, and it develops an empirical model for experience rating with a semi-parametric estimator. Estimating the model using claims history data from Florida, the authors obtain improved prediction of individual claims over several years and provide a detailed picture of the incidence of surcharges under experience rating. This evidence suggests that an experience rating system would be feasible and would greatly reduce the subsidization across physician risk types that exists under most current medical malpractice insurance contracts. [226] Gary M. Fournier and Melayne Morgan McInnes. The Eects of Managed Care on Medical Referrals and the Quality of Specialty Care. Journal of Industrial Economics, 50(4):45773, December 2002. Abstract: This paper analyzes the role of referrals in the provision of surgical services. Primary physicians in managed care control patient access to specialists, while referrals in traditional insurance plans are less constrained. The traditional, fee-for-service insurance market is shown to achieve appropriate incentives for high quality care. In contrast, physicians with bad reputations may not lose HMOs referrals, owing to dierences in incentives to cut costs. Empirically, we nd that managed care may protect a physician whose reputation has been damaged by providing a source of referrals when shunning occurs in the FFS sector following a malpractice claim. [227] Richard G. Frank and Gaynor Martin. Organizational Failure and Transfers in the Public Sector: Evidence From an Experiment in the Financing of Mental Health Care. Journal of Human Resources, 29:10825, 1994. Keywords: health economics [228] H. E. Frech, III. Physician Fees and Price Controls. Working Papers in Economics 02/95, Department of Economics, University of California, Santa Barbara, January 1995. 83

Abstract: Many health care reform plans, including the Clinton Plan, have included price controls. The imposition of price controls is often hidden by the use of euphemisms like bans on balancing billing, or global budgeting. Governmental price controls at any level create major problems and impose large hidden costs through subtle nonprice rationing and changes in quality. This paper analyzes these hidden costs and contrasts governmental price controls with supercially similar features in some competing private health insurance plans. [229] A. Myrick Freeman III. Valuing Environmental Health Eects an Economic Perspective. Environmental and Resource Economics, 34(3):34763, July 2006. Abstract: This paper provides an overview of some of the issues involved in comparing benet-cost analysis and cost-eectiveness analysis based on quality-adjusted life-years as alternative approaches to assessing environmental policies that aect human health. It concludes that: (i) although QALYs have the advantage of reecting policy impacts on both health status and longevity in a single scalar measure, they are not consistent with utility theory unless individuals preferences satisfy some restrictive conditions; (ii) they do not capture other important aspects of the valuation of changes in mortality and morbidity; (iii) cost-eectiveness analysis based on QALYs as a measure of eectiveness omits non-health related effects of environmental policy; and (iv) it leaves unanswered the important question of what level of environmental regulation is appropriate. [230] Bruce J. Fried and Laura M. Gaydos, editors. World Health Systems: Challenges and Perspectives. Health Administration Press, Chicago, 2002. Covers twenty-eight countries. [231] Howard Frumkin, editor. Environmental Health: From Global to Local. Jossey-Bass, San Francisco, 2005. The book includes short passages on economics in connection with energy production (ch. 15), pediatric environmental disease (ch. 28), and environmental health policy (ch. 33). [232] Amiram Gafni. Economic Evaluation of Health-care Programmes: Is CEA Better than CBA? Environmental and Resource Economics, 34(3):407 418, July 2006. Abstract: It has been noted earlier that during the same period that the contingent valuation (CV) method evolved and became the most commonly used method of valuing environmental projects, the development in health economics was instead been towards cost-eectiveness analysis (CEA). Recently there has been a growing interest in the use of CEA, where QALYs (quality-adjusted life-years) are used as a measure of eectiveness, as the method of evaluation for environmental projects. The purpose of this paper is to answer the question is CEA a superior method 84

to CBA (both theoretically and empirically) to provide information to decision makers for use in decisions on resource allocation in health. The paper deals with the following topics: the underlying theoretical foundation for CEA; is CEA free of income distribution considerations?; is QALY a superior measure to WTP?; the usefulness of incremental CE ratio (ICER) to determine resource allocation. The paper concludes that there is neither theoretical nor practical support for the claim about the superiority of CEA. [233] Esther Gal-Or. Optimal Reimbursement and Malpractice Sharing Rules in Health Care Markets. Journal of Regulatory Economics, 16(3):23765, November 1999. Abstract: When health care sponsors such as HMOs or PPOs can use utilization reviews in order to indicate to the provider what type of treatment to administer to the patient based upon a diagnosis that is established by the provider, it is possible to implement the rst best levels of investment in cost control eorts and in aggressiveness of treatment. The implementation of the rst best requires the utilization of the prospective reimbursement rule accompanied by the removal of all malpractice liabilities from the provider. In contrast, when the type of treatment cannot be enforced by the payer, implementation of the rst best is not feasible if the payer places a higher weight on the welfare of consumers than that of providers in its objective function. In this case, the reimbursement scheme deviates from the prospective rule, and the provider assumes liability to part of the cost incurred by society as a result of unsuccessful medical outcomes. When the payer can enforce treatment only partially by establishing bounds on the range of acceptable treatments, a minimal acceptable standard will be established and the outcome will be an intermediate case between the above two extremes. [234] Alan M. Garber, editor. Frontiers in Health Policy Research, volume 1, Cambridge, MA, 1998. MIT Press. Keywords: health economics [235] Alan M. Garber, editor. Frontiers in Health Policy Research, volume 2, Cambridge, Mass., 1999. National Bureau of Economic Research, MIT Press. [236] Alan M. Garber, Charles I. Jones, and Paul Romer. Insurance and Incentives for Medical Innovation. Forum for Health Economics and Policy, 9(2), 2006. Abstract: This paper studies the interactions between health insurance and the incentives for innovation. Although we focus on pharmaceutical innovation, our discussion applies to other industries producing novel technologies for sale in markets with subsidized demand. Standard results in the growth and productivity literatures suggest that rms in many industries may possess inadequate incentives to innovate. Standard results in 85

the health literature suggest that health insurance leads to the overutilization of health care. Our study of innovation in the pharmaceutical industry emphasizes the interaction of these incentives. Because of the large subsidies to demand from health insurance, limits on the lifetime of patents and possibly limits on monopoly pricing may be necessary to ensure that pharmaceutical companies do not possess excess incentives for innovation. [237] Alan M. Garber and Charles E. Phelps. Future Costs and the Future of Cost-Eectiveness Analysis. Journal of Health Economics, 27(4):81921, July 2008. Subjects: Allocative Eciency; Cost-Benet Analysis; Health: Government Policy; Regulation; Public Health [238] Alan M. Garber and Jonathan Skinner. Symposium: Health Care: Is American Health Care Uniquely Inecient? Journal of Economic Perspectives, 22(4):2750, fall 2008. Abstract: The U.S. health system has been described as the most competitive, heterogeneous, inecient, fragmented, and advanced system of care in the world. In this paper, we consider two questions: First, is the U.S. healthcare system productively ecient relative to other wealthy countries, in the sense of producing better health for a given bundle of hospital beds, physicians, nurses, and other factor inputs? Second, is the United States allocatively ecient relative to other countries, in the sense of providing highly valued care to consumers? For both questions, the answer is most likely no. Although no country can claim to have eliminated ineciency, the United States has high administrative costs, fragmented care, and stands out with regard to heterogeneity in treatment because of race, income, and geography. The U.S. healthcare system is also more likely to pay for diagnostic tests, treatments, and other forms of care before eectiveness is established and with little consideration of the value they provide. A number of proposed reforms that are designed to ameliorate shortcomings of the U.S. healthcare system, such as quality improvement initiatives and coverage expansions, are unlikely by themselves to reduce expenditures. Addressing allocative ineciency is a far more dicult task but central to controlling costs. [239] U.-G. Gerdtham, M. Johannesson, L. Lundberg, and D. Isacson. The Demand for Health: Results from New Measures of Health Capital. European Journal of Political Economy, 15(3):50121, September 1999. Abstract: This paper estimates a Grossman model of demand for health. We measure health status on a 0 (dead) to 1 (full health) cardinal scale by the rating scale method and the time trade-o method. We also use a categorical measure of overall health status commonly used in quality of life measurements. To estimate the demand for health equations, the


Tobit technique is used for the rating scale and time trade-o health measure. The ordered probit model is used for the categorical health measure. The demand for health decreases with the price of medical care, age, overweight, smoking and living alone, and increases with income, education and the level of sporting activities. [240] Ulf-G. Gerdtham and Bengt Jnsson. International Comparisons of Health o Expenditure. In Culyer and Newhouse [152], chapter 1, pages 1153. Abstract: Comparisons of aggregate health expenditure across dierent countries have become popular over the last three decades as they permit a systematic investigation of the impact of dierent institutional regimes and other explanatory variables. Over the years, several regression analyses based on cross-section and panel data have been used to explain the international dierences in health expenditure. A common result of these studies is that aggregate income appears to be the most important factor explaining health expenditure variation between countries and that the size of the estimated income elasticity is high and even higher than unity which in that case indicates that health care is a luxury good. Additional results indicates, for example, that the use of primary care gatekeepers lowers health expenditure and also that the way of remunerating physicians in the ambulatory care sector appears to inuence health expenditure; capitation systems tend to lead to lower expenditure than fee-for-service systems. Finally, we also list some issues for the future. We demand more eorts on theory of the macroeconomic analysis of health expenditure, which is underdeveloped at least relative to the macroeconometrics of health expenditure. We also demand more replications based on updated data and methods that seeks to unify the many diering results of previous studies. [241] Ulf-G. Gerdtham and Mickael Lthgren. Health System Eects on Cost o Eciency in the OECD Countries. Applied Economics, 33(5):64347, April 2001. Abstract: This paper investigates the eects of dierent health systems on cost eciency in inpatient health care among the OECD countries. The results indicate that public contract systems are more ecient and that public integrated systems are less ecient than public reimbursement systems. [242] Paul J. Gertler. Subsidies, Quality, and Regulation in the Nursing Home Industry. Working Paper 1691, National Bureau of Economic Research, Cambridge MA, August 1985. Abstract: This paper analyzes the impact of the Medicaid patient subsidy and Certicate of Need (CON) cost containment programs on nursing home behavior. The analysis is complicated by the fact the both proprietary and not for prot nursing homes exist, and by the problem that quality is not directly observed. Medicaid pays the nursing homes for 87

the care of the nancially indigent by directly reimbursing nursing homes at a predetermined rate. As a result, nursing homes can price discriminate between patients who nance their care privately and patients whose care is nanced by Medicaid. Nevertheless, nursing homes are required to provide the same quality to both types of patients. Typically, Medicaid reimbursement rates are set by a cost plus method, where the reimbursement per patient is equal to average cost plus some return referred to as the Medicaid plus factor. Our results show that Medicaid policy makers face a trade-o between quality and the access of poor to nursing home care. Specically, we nd that increases in the Medicaid plus factor cause nursing homes to reduce quality and substitute Medicaid patients for private pay patients. These quality dierences can be quite large. In fact, in our sample, we nd that homes who receive high Medicaid plus factors provide hundreds of thousands of dollars less in goods and services than homes who receive average Medicaid plus factors, ceteris paribus. CON attempts to control nursing home expenditures by limiting the supply of beds with capacity constraints and entry barriers. Our analysis shows that CON policy makers are forced to a tradeo containing the size of the industry (and therefore total Medicaid payments) against quality and access of the poor to nursing home care. Specically, we nd that the capacity constraints and the reduced competition from the entry barriers lead to lower quality and fewer Medicaid patients receiving care. [243] John Geweke, Gautam Gowrisankaran, and Robert J. Town. Bayesian Inference for Hospital Quality in a Selection Model. Econometrica, 71(4):121538, July 2003. Abstract: This paper develops new econometric methods to infer hospital quality in a model with discrete dependent variables and nonrandom selection. Mortality rates in patient discharge records are widely used to infer hospital quality. However, hospital admission is not random and some hospitals may attract patients with greater unobserved severity of illness than others. In this situation the assumption of random admission leads to spurious inference about hospital quality. This study controls for hospital selection using a model in which distance between the patients residence and alternative hospitals are key exogenous variables. Bayesian inference in this model is feasible using a Markov chain Monte Carlo posterior simulator, and attaches posterior probabilities to quality comparisons between individual hospitals and groups of hospitals. The study uses data on 74,848 Medicare patients admitted to 114 hospitals in Los Angeles County from 1989 through 1992 with a diagnosis of pneumonia. It nds the smallest and largest hospitals to be of the highest quality. There is strong evidence of dependence between the unobserved severity of illness and the assignment of patients to hospitals, whereby patients with a high unobserved severity of illness are disproportionately admitted to high quality hospitals. Consequently a conventional probit model leads to inferences about quality that are markedly dierent from those in this studys selection model. 88

[244] Kurt D. Gillis and David W. Lee. Medicare, Access, and Physicians Willingness to Accept New Medicare Patients. Quarterly Review of Economics and Finance, 37(3):579603, fall 1997. Abstract: This paper examines the importance of Medicare reimbursement and other factors in determining physicians willingness to accept new Medicare patients. A simple two-period, two-payer model is developed where prot maximizing physicians draw new patients from queues of each payer type, and are constrained to treat established patients that return for care. Under these assumptions, both current and future reimbursement are related to the decision to accept new Medicare patients, the impact of the latter depending on the turnover in patient load. The empirical results suggest that physicians responses to current and expected future reimbursement dier by specialty. [245] Boyd H. Gilman. Hospital Response to DRG Renements: The Impact of Multiple Reimbursement Incentives on Inpatient Length of Stay. Health Economics, 9(4):27794, June 2000. Abstract: Recent research has warned that the introduction of Diagnosis Related Groups (DRGs) based on hospital treatment decisions will lead to an increase in the rate of marginal procedures and to a resumption of high medical expenditure growth rates. This paper explores the often contradictory eects of the multiple reimbursement incentives created by renements to the Prospective Payment System (PPS) (principally, the introduction of procedure-based DRGs) on hospital resource allocation. Three eects are examined in the paper: (i) the change in primary or payment-related procedures owing to marginal reimbursement incentives; (ii) the change in secondary or non-payment-related services owing to average price incentives; and (iii) the change in average severity of both medical and surgical admissions. The model suggests that the anticipated positive eect of marginal reimbursement incentives on overall hospital resource use may be oset by several factors, most notably the lower average payment incentives of non-procedural DRGs. [246] Xavier Gin, Dean Karlan, and Jonathan Zinman. e Put Your Money Where Your Butt Is: A Commitment Savings Account for Smoking Cessation. Technical report, Yale University, sort=topic&detail=Health&ap=academic, February 2008. Abstract: We designed and tested a voluntary commitment product to help smokers quit smoking in the Philippines. Individuals who sign a Committed Action to Reduce and End Smoking (CARES) contract deposit money into a savings account and agree to let the bank forfeit their entire balance to charity if they fail a urine test for nicotine and cotinine six months later. Bank marketers oered the product by approaching smokers in public places. Marketers administered a short survey, provided a standard pamphlet with information on smokings harmful eects and 89

how to quit, and then made one of three randomly assigned oers: (i) CARES; (ii) aversive cues: graphic, pocket-sized pictures of the deleterious health eects of smoking, modeled on Canadas cigarette packaging mandate; (iii) no intervention (control group). 11 percent of individuals oered CARES accepted. Six months after marketing, the bank marketing team returned and administered urine tests to participants from all three groups. Subjects oered CARES were 3.1 percentage points more likely to pass the test than the control group (a 38.8 percent increase); this intentto-treat eect rises to 4.3 percentage points for those who reported in the baseline survey that they wanted to quit smoking at some point in their lives. Treatment-on-the-treated estimates suggest that those who signed a CARES commitment were 29 and 33 percentage points more likely to pass the test than the control group. [247] Paul B. Ginsburg. Can Hospitals and Physicians Shift the Eects of Cuts in Medicare Reimbursement to Private Payers? Health Aairs, pages Web Exclusives W34729, October 2003. Abstract: Leaders of health insurance companies, hospital systems, and physician organizations believe that when Medicare and Medicaid reduce payment rates to hospitals or physicians, these providers respond by raising prices to private insurers to oset a portion of the loss in revenue. This would mean that payment reductions in public programs contribute to increasing premiums for private insurance. But on both theoretical and empirical grounds, economists have been skeptical about the existence of this cost shifting. I show that more realistic models of the behavior of hospitals and physicians than exist in basic economics texts provide a conceptual basis for cost shifting. [248] Antonio Giurida and Hugh Gravelle. Measuring Performance in Primary Care: Econometric Analysis and DEA. Applied Economics, 33(2):16375, February 2001. Abstract: We use data from the Health Service Indicators database to compare dierent methods of measuring the performance of English Family Health Services Authorities (FHSAs) in providing primary care. A variety of regression and data envelopment analysis methods are compared as summary eciency measures of individual FHSA performance. The correlation of the rankings of FHSAs across DEA and regression methods, across two years of data and across three dierent specications of the technology of primary care are examined. Eciency scores are highly correlated within variants of the two methods, and across years for a given method. Inter method correlations are smaller and correlations across different specications of the primary care production process are negligible and sometime negative. [249] Jon Gjerde, Sverre Grepperud, and Snorre Kverndokk. On Adaptation and the Demand for Health. Applied Economics, 37(11):12831301, June 2005. 90

Abstract: The purpose of this paper is to analyse the impacts of adaptation to failing health. This is done by integrating adaptation processes in a Grossman type of pure consumption model. Model simulations show that adaptation aects the health variables by lowering the incentives to invest in health, as well as smoothing the optimal health stock path over the life cycle. Whether or not the risk of mortality is an object of choice has important eects when studying adaptation, as well as for the joint development of the health variables. [250] William A. Glaser. Health Insurance in Practice: International Variations in Financing, Benets, and Problems. Jossey-Bass, San Francisco, 1991. Abstract: Describes how countries other than the United States have transformed voluntary and private health insurance into stable systems of social protection for their entire populations. Summarizes the basic forms of health care nancing and the principal characteristics of health insurance systems. Examines the philosophies underlying social protection systems and private commercial insurance. Describes the evolution of obligatory social insurance in the various countries and shows how the United States tries to promote alternative private methods to achieve the same ends. Discusses the organization of health insurance in countries with comprehensive programs. Examines the nancing of statutory and private health insurance, summarizing the variations in the social security payroll tax systems; considering the issue of altering or replacing payroll taxes; describing the at rate premium systems used by private insurance companies; and explaining the use of government subsidies and interfund transfers. Describes the benets covered by statutory health insurance and private health insurance in all countries, covering physician services, hospital care, pharmaceutical drugs, dentistry, mental health, long-term care, and the addition of new acute-care benets. Considers cost containment methods. Summarizes the principal eects of statutory universal health insurance on services, utilization, and health, and discusses recent proposals for reform. Describes a statutory health insurance system for the United States that is based on the experiences of other developed countries. [251] Sherry Glied. Managed Care. In Culyer and Newhouse [152], chapter 13, pages 70753. Managed care plans have existed in the U.S. since 1849. However, they did not grow rapidly until quite recently.... As late as 1980, just 5% of Americans were enrolled in managed care plans (p. 718). In contrast, managed care has grown dramatically since the early 1980s (p. 708). The causes of this rapid growth are not rmly established but may involve managed cares relative success in responding to underlying market failures in the health care system (p. 708). Many studies suggest that managed care plans reduce the rate of health care utilization somewhat. Less evidence exists on their eect on overall health care costs and cost growth (p. 708). 91

[252] Sherry Glied and Joshua Gra Zivin. How Do Doctors Behave When Some (but Not All) of Their Patients Are in Managed Care? Journal of Health Economics, 21(2):33753, March 2002. Abstract: Most physicians today treat a variety of patients within their practices where a variety of insurance arrangements co-exist. In this paper, we propose several theoretical explanations for physician treatment patterns when the patient population is heterogeneous at the practice level. Data from the 199396 National Ambulatory Medical Care Survey (NAMCS) are used to test how practice level managed care penetration aects treatment intensity. Practice composition has strong eects on treatment. Visit duration appears to be constant across patients within a practice, while medications prescribed appear to be converging as managed care penetration increases. [253] Steven Globerman, Hart Hodges, and Aidan Vining. Canadian and the United States Health Care Systems Performance and Governance: Elements of Convergence. Applied Health Economics and Health Policy, 1(2):7588, 2002. Abstract: International comparisons of the organisation and performance of health care sectors are increasingly informing policy makers about potential policies relating to health care. Politicians, academics and critics in both the United States and Canada have compared and contrasted the health care systems in the two countries. Public debate tends to emphasise the dierences between the US and Canadian health care systems. But, dramatic dierences between the organisation and performances of health care systems of the two countries would be surprising given that most elements of divergence have only emerged in the last fty years, and that health systems tend to be driven by the same basic economic problems. This paper provides an overview of the main economic eciency issues that must be addressed by health care delivery systems, as well as statistical and related evidence on both input usage and output performance of the two health care systems. While Canada clearly spends less on health care, it is dicult to conclude that Canada has a more ecient health care system than the United States. In particular, the US population puts greater demands on its national health care system owing to a combination of behavioural patterns and socio-economic disparities that contribute to much higher rates of violent accidents, as well as specic diseases and other health problems. Also, the stylized representation of the US system as being market-driven and the Canadian system as being centrally controlled is, increasingly, inept. Both systems are evolving toward bureaucratic models that rely more on internal competition than market competition for governance. In this respect, economic forces are nudging both systems towards a convergence of structure and performance. [254] Timo Goeschl and Timothy Swanson. The Interaction of Dynamic Problems and Dynamic Policies. In Laxminarayan [387]. 92

The authors argue that a market economy relying on patents to motivate R&D is ill-equipped to cope with drug resistant pathogens and pesticide resistant pests. [255] Marthe R. Gold, Joanna E. Siegal, Louise B. Russell, and Milton C. Weinstein, editors. Cost-Eectiveness in Health and Medicine. Oxford University Press, New York, 1996. This book summarizes the discussions and recommendations of the Panel on Cost-Eectiveness in Health and Medicine, a group of 13 nongovernment scientists and scholars..., convened by the U.S. Public Health Service in 1993 (p. xvii). [256] Steven M. Goldman and James Lightwood. Cost Optimization in the SIS Model of Infectious Disease with Treatment. Topics in Economic Analysis and Policy, 2(1), 2002. Abstract: We consider the intertemporal social optimization problem of minimizing the present value of the costs incurred from both disease and treatment. Though the analysis is complicated by the analytical failure of concavity, we are able to substantially characterize both the long run equilibria and the adjustment paths. The cost minimizing program is shown to exhibit decreased levels of treatment at higher disease levels. The socially optimal program is compared to individually rational behavior and the ineciencies in private behavior from the infection externality are shown to cause increases in the equilibrium rate of infection. [257] Donald A. Goldmann, Robert A. Weinstein, Richard P. Wenzel, Ofelia C. Tablan, Richard J. Duma, Robert P. Gaynes, James Schlosser, and William J. Martone. Strategies to Prevent and Control the Emergence and Spread of Antimicrobial-Resistant Microorganisms in Hospitals. A Challenge to Hospital Leadership. Journal of the American Medical Association, 275(3):23440, January 17 1996. Abstract: OBJECTIVETo provide hospital leaders with strategic goals or actions likely to have a signicant impact on antimicrobial resistance, outline outcome and process measures for evaluating progress toward each goal, describe potential barriers to success, and suggest countermeasures and novel improvement strategies. PARTICIPANTSA multidisciplinary group of experts was drawn from the following areas: hospital epidemiology and infection control, infectious diseases (including graduate training programs), clinical practice (including nursing, surgery, internal medicine, and pediatrics), pharmacy, administration, quality improvement, appropriateness evaluation, behavior modication, practice guideline development, medical informatics, and outcomes research. Representatives from appropriate federal agencies, the Joint Commission on Accreditation of Healthcare Organizations, and the pharmaceutical industry also participated. EVIDENCEPublished literature, guidelines, expert opinion, and practical experience regarding eorts to improve an93

tibiotic utilization and prevent and control the emergence and dissemination of antimicrobial-resistant microorganisms in hospitals. CONSENSUS PROCESSParticipants were divided into two quality improvement teams: one focusing on improving antimicrobial usage and the other on preventing and controlling transmission of resistant microorganisms. The teams modeled the process a hospital might use to develop and implement a strategic plan to combat antimicrobial resistance. CONCLUSIONSTen strategic goals and related process and outcome measures were agreed on. The ve strategic goals to optimize antimicrobial use were as follows: optimizing antimicrobial prophylaxis for operative procedures; optimizing choice and duration of empiric therapy; improving antimicrobial prescribing by educational and administrative means; monitoring and providing feedback regarding antibiotic resistance; and dening and implementing health care delivery system guidelines for important types of antimicrobial use. The ve strategic goals to detect, report, and prevent transmission of antimicrobial resistant organisms were as follows: to develop a system to recognize and report trends in antimicrobial resistance within the institution; develop a system to rapidly detect and report resistant microorganisms in individual patients and ensure a rapid response by caregivers; increase adherence to basic infection control policies and procedures; incorporate the detection, prevention, and control of antimicrobial resistance into institutional strategic goals and provide the required resources; and develop a plan for identifying, transferring, discharging, and readmitting patients colonized with specic antimicrobial-resistant pathogens. [258] Paula Gonzalez. Should Physicians Dual Practice Be Limited? An Incentive Approach. Health Economics, 13(6):50524, June 2004. Abstract: We develop a principal-agent model to analyze how the behavior of a physician in the public sector is aected by his activities in the private sector. We show that the physician will have incentives to over-provide medical services when he uses his public activity as a way of increasing his prestige as a private doctor. The health authority only benets from the physicians dual practice when it is interested in ensuring a very accurate treatment for the patient. Our analysis provides a theoretical framework in which some actual policies implemented to regulate physicians dual practice can be addressed. In particular, we focus on the possibility that the health authority oers exclusive contracts to physicians and on the implications of limiting physicians private earnings. [259] Joseph Gottfried and Frank A. Sloan. The Quality of Managed Care: Evidence from the Medical Literature. Law and Contemporary Problems, 65(4):10338, autumn 2002. This article examines the empirical evidence, drawn from the medical literature, pertaining to the safety of managed care practices (p. 104). Although generalists, who occupy a privileged position as gatekeepers in many MCOs [Managed Care Organizations], are less procient than 94

specialists in the latter s areas of expertise, this fact does not appear to translate into worse specialty care for patients in managed care plans (pp. 13637). Scientic evidence suggests that managed care is as safe as the system it has replaced, its product as t for popular consumption as traditional, less aordable indemnity insurance (p. 137). [260] David C. Grabowski, Robert L. Ohsfeldt, and Michael A. Morrisey. The Eects of CON Repeal on Medicaid Nursing Home and Long-Term Care Expenditures. Inquiry, 40(2):14657, summer 2003. Abstract: Certicate-of-need (CON) and construction moratorium laws are used widely by states as a potential mechanism for constraining Medicaid nursing home expenditures. However, there is only limited empirical work examining whether these policies are eective at lowering Medicaid spending. Using aggregate state-level data from 1981 through 1998, this study found that states that repealed their CON and moratorium laws had no signicant growth in either nursing home or long-term care Medicaid expenditures. In the context of declining occupancy rates within the nursing home market, this study provides strong evidence that states have little to fear in terms of increased expenditures with the repeal of CON and moratorium laws. [261] Darren Grant, McInnes, and Melayne Morgan. Malpractice Experience and the Incidence of Cesarean Delivery: A Physician-Level Longitudinal Analysis. Inquiry, 41(2):17088, summer 2004. Abstract: This study examines the inuence of malpractice claims on the practice behavior of a panel of obstetricians in Florida during the period 19921995 to determine whether physicians respond to malpractice events by performing more Cesareans, consistent with the notion that Cesarean sections are employed as defensive medicine. Findings indicate that clinical events resulting in claims that lead to substantial indemnity payments have a signicant, modest eect on physician practice behavior: physicians experiencing those claims increase their risk-adjusted Cesarean rates by about one percentage point. Malpractice experience does not appear to aect patient mix, but claims with large payouts may aect patient volume. [262] Hugh Gravelle, Mark Dusheiko, and Matthew Sutton. The Demand for Elective Surgery in a Public System: Time and Money Prices in the UK National Health Service. Journal of Health Economics, 21(3):42349, May 2002. Abstract: We construct a model of the admission process for patients from general practices for elective surgery in the UK National Health Service. Public patients face a positive waiting time, but a zero money price. Fundholding practices faced a positive money price for each patient admitted. The model is tested with data on general practice admission rates for cataract procedures in an English Health Authority. Admission rates 95

are negatively related to waiting times and distance to hospital. Practices respond to nancial incentives as predicted by the model: fundholding practices have lower admission rates than non-fundholders and respond dierently to changes in waiting times and patient characteristics. [263] William Greene. Distinguishing between Heterogeneity and Ineciency: Stochastic Frontier Analysis of the World Health Organizations Panel Data on National Health Care Systems. Health Economics, 13(10):959 80, October 2004. Abstract: The most commonly used approaches to parametric (stochastic frontier) analysis of eciency in panel data, notably the xed and random eects models, fail to distinguish between cross individual heterogeneity and ineciency. This blending of eects is particularly problematic in the World Health Organizations (WHO) panel data set on health care delivery, which is a 191 country, 5-year panel. The wide variation in cultural and economic characteristics of the worldwide sample produces a large amount of unmeasured heterogeneity in the data. This study examines several alternative approaches to stochastic frontier analysis with panel data, and applies some of them to the WHO data. A more general, exible model and several measured indicators of cross country heterogeneity are added to the analysis done by previous researchers. Results suggest that there is considerable heterogeneity that has masqueraded as ineciency in other studies using the same data. [264] Richard Grieve, Richard Nixon, and Simon G. Thompson. Bayesian Hierarchical Models for Cost-Eectiveness Analyses that Use Data from Cluster Randomized Trials. Medical Decision Making, 30(2):163175, MarchApril 2010. Abstract: Cost-eectiveness analyses (CEA) may be undertaken alongside cluster randomized trials (CRTs) where randomization is at the level of the cluster (for example, the hospital or primary care provider) rather than the individual. Costs (and outcomes) within clusters may be correlated so that the assumption made by standard bivariate regression models, that observations are independent, is incorrect. This study develops a exible modeling framework to acknowledge the clustering in CEA that use CRTs. The authors extend previous Bayesian bivariate models for CEA of multicenter trials to recognize the specic form of clustering in CRTs. They develop new Bayesian hierarchical models (BHMs) that allow mean costs and outcomes, and also variances, to dier across clusters. They illustrate how each model can be applied using data from a large (1732 cases, 70 primary care providers) CRT evaluating alternative interventions for reducing postnatal depression. The analyses compare cost-eectiveness estimates from BHMs with standard bivariate regression models that ignore the data hierarchy. The BHMs show high levels of cost heterogeneity across clusters (intracluster correlation coecient, 0.17). Compared with standard regression models, the BHMs yield substantially increased un96

certainty surrounding the cost-eectiveness estimates, and altered point estimates. The authors conclude that ignoring clustering can lead to incorrect inferences. The BHMs that they present oer a exible modeling framework that can be applied more generally to CEA that use CRTs. [265] Jane F. Grin, Joseph W. Hogan, Jay S. Buechner, and Tricia M. Leddy. The Eect of a Medicaid Managed Care Program on the Adequacy of Prenatal Care Utilization in Rhode Island. American Journal of Public Health, 89(4):497501, April 1999. Abstract: Objectives. The purpose of this study was to determine whether adequacy of prenatal care utilization improved after the implementation of a Medicaid managed care program in Rhode Island. Methods. Rhode Island birth certicate data (19931995; n = 37,021) were used to analyze pre- and post-program implementation changes in adequacy of prenatal care utilization. Logistic regression models were used to characterize the variation in prenatal care adequacy as a function of both time and the various covariates. Results. Adequacy of prenatal care utilization for Medicaid patients improved signicantly after implementation of the program, from 57.1% to 62.1% (odds ratio [OR] = 1.2, 95% condence interval [CI] = 1.1, 1.3). After the program was implemented, Medicaid patients who went to private physicians oces for prenatal care were 1.4 times as likely as before to receive adequate prenatal care (OR = 1.4, 95% CI = 1.2, 1.7). Conclusions. Unlike many other Medicaid expansions for pregnant women, the Rite Care program in Rhode Island has resulted in signicant improvement in adequacy of prenatal care utilization for its enrollees. This improvement was due to specic program interventions that addressed and changed organizational and delivery system barriers to care. [266] Susan C. Grin, Helen L. A. Weatherly, Gerry A. Richardson, and Mike F Drummond. Methodological Issues in Undertaking Independent CostEectiveness Analysis for NICE: The Case of Therapies for ADHD. European Journal of Health Economics, 9(2):13745, May 2008. Abstract: This paper outlines methodological challenges encountered in producing an independent economic evaluation for the National Institute for Health and Clinical Excellence (NICE) to inform its technology appraisal process. The analysis used to highlight these challenges is a recent evaluation of pharmacological treatments for attention decit hyperactivity disorder (ADHD). The NICE reference case for economic evaluation is compared with the methods necessary to complete an evaluation given the evidence base for ADHD. The primary analysis deviated from NICE methods guidelines most noticeably in the time horizon. Identifying appropriate utility data was challenging, and the results were sensitive to the values used. Issues found in this evaluation are common to many technology appraisals. Although challenging to undertake, economic evaluation in disease areas such as ADHD has great potential to add value, making the limitations of the data explicit, combining available evidence in 97

a systematic and transparent framework and identifying future research needs. [267] Shawna Grosskopf, Dimitris Margaritis, and V. Valdmanis. Nurse Productivity and Wages. New Zealand Economic Papers, 24:7386, 1990. Abstract: In this paper we analyze the hospital market for nursing services. We address two issues: (1) whether the hospital market for nursing services is monopsonistic, and (2) whether registered nurses are overemployed relative to licensed practical nurses. Our empirical technique is based on the estimation of a Shephard type distance function requiring only data on input and (multiple) output quantities. Following Fare and Grosskopf (forthcoming) we apply a dual Shephards lemma to the estimated distance function to retrieve shadow prices of nursing services for a sample of nonprot hospital operating in California in 1983. Comparison of observed wages to our estimated shadow prices suggests that there is some evidence of monopsony power with respect to registered nurses and some evidence of relative overemployment of registered to license practical nurses. [268] Michael Grossman. The Human Capital Model. In Culyer and Newhouse [152], chapter 7, pages 348408. Grossman reviews and defends his 1972 model of health as a form of human capital. The assumptions are in the Becker tradition: individuals are rational, face simple environments, are mathematically adept, and optimize over long horizons. The derivations are elliptical and at least one claim seems to be a typo; thus this is not the place to look to learn the model. Grossman and others in the eld seem uncertain about how to handle length of life. Length of life is supposed to be an endogenous variable in the model, yet discounted income and expenditure ows in the full wealth constraint and discounted marginal benets in the rst-order conditions appear to be summed over a xed life time (p. 356). More damaging to the models usefulness, it is dicult to obtain sharp predictions concerning the eects of changes in exogenous variables in a mixed model in which the stock of health yields both investment and consumption benets (p. 367). Grossman concentrates on a pure investment model to get some predictions, but oers no justication (aside from convenience) for neglecting consumption benets. Grossman replies to criticism in Zweifel and Breyers text. He summarizes a survey by Grossman and Kaestner (1997) that found years of formal schooling to be the most important correlate of good health (pp. 395-6) and cited evidence suggestive of causality running from education to health. He suggests using longitudinal databases to sort out the relationships among health, education, and time preference. [269] Stephen G. Grubaugh and Rexford E. Santerre. Comparing the Performance of Health Care Systems: An Alternative Approach. Southern Economic Journal, 60(4):103042, April 1994. 98

Abstract: This paper provides an empirical methodology to compare the relative performance of various health care systems. The methodology is used to compare the performance of the U.S. health care system to the health care systems in other OECD countries. The empirical results suggest that infant mortality and national health care expenditures would both be higher if the United States adopted the health care system in the typical OECD country. [270] Jon Gruber, John Kim, and Dina Mayzlin. Physician Fees and Procedure Intensity: The Case of Cesarean Delivery. Journal of Health Economics, 18(4):47390, August 1999. Abstract: While there is a large literature investigating the response of treatment intensity to Medicare reimbursement dierentials, there is much less work on this question for the Medicaid program. The answers for Medicare may not apply in the Medicaid context, since a smaller share of a physicians patients will be Medicaid insured, so that income eects from fee changes may be dominated by substitution eects. The authors investigate the eect of Medicaid fee dierentials on the use of Cesarean delivery over the period 198892. They nd, in contrast to the backward-bending supply curve implied by the Medicare literature, that larger fee dierentials between Cesarean and normal childbirth for the Medicaid program leads to higher Cesarean delivery rates. In particular, the authors nd that the lower fee dierentials between Cesarean and normal childbirth under the Medicaid program than under private insurance can explain between one half and three-quarters of the dierence between Medicaid and private Cesarean delivery rates. Their results suggest that Medicaid reimbursement reductions can cause real reductions in the intensity with which Medicaid patients are treated. [271] Jonathan Gruber. Covering the Uninsured in the United States. Journal of Economic Literature, 46(3):571606, September 2008. Abstract: One of the major social policy issues facing the United States in the rst decade of the twenty-rst century is the large number of Americans lacking health insurance. This article surveys the major economic issues around covering the uninsured. I review the facts on insurance coverage and the nature of the uninsured; explore explanations for why the United States has such a large, and growing, uninsured population; and discuss why we should care if individuals are uninsured. I then examine policy options to address the problem of the uninsured, beginning with a discussion of the key issues and available evidence and then turning to estimates from a micro-simulation model of the impact of alternative interventions to increase insurance coverage. [272] Jonathan Gruber and Samuel A. Kleiner. Do Strikes Kill? Evidence from New York State. Working Paper 15855, National Bureau of Economic Research, w15855.pdf, 2010. 99

Abstract: Concerns over the impacts of hospital strikes on patient welfare led to substantial delay in the ability of hospitals to unionize. Once allowed, hospitals unionized rapidly and now represent one of the largest union sectors of the U.S. economy. Were the original fears of harmful hospital strikes realized as a result? In this paper we analyze the eects of nurses strikes in hospitals on patient outcomes. We utilize a unique dataset collected on nurses strikes over the 1984 to 2004 period in New York State, and match these strikes to a restricted use hospital discharge database which provides information on treatment intensity, patient mortality and hospital readmission. Controlling for hospital specic heterogeneity, patient demographics and disease severity, the results show that nurses strikes increase in-hospital mortality by 19.4% and 30-day readmission by 6.5% for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity. This study provides some of the rst analytical evidence on the eects of health care strikes on patients, and suggests that hospitals functioning during nurses strikes are doing so at a lower quality of patient care. [273] Jonathan Gruber and Michael Lettau. How Elastic Is the Firms Demand for Health Insurance? Journal of Public Economics, 88(7-8):127393, July 2004. Abstract: We investigate the impact of tax subsidies on the rms decision to oer insurance, and on conditional rm spending on insurance. We do so using the micro-data underlying the Employment Cost Index, which has a major advantage for this exercise: the matching of very high quality compensation data with information on a sample of workers in the rm. We nd that, overall, there is a moderately sized elasticity of insurance oering with respect to after-tax prices -0.25), and a larger elasticity of insurance spending (-0.7). We also nd that the elasticities are driven primarily by small rms, for whom the elasticity is larger. And we nd that there is signicant value added to this employer-based data: replicating methods from standard micro-data sources in our data lead to misleading estimates of these key parameters. Our simulation results suggest that major tax reform could lead to an enormous reduction in employer-provided health insurance spending. [274] Jonathan Gruber and Robin McKnight. Why Did Employee Health Insurance Contributions Rise? Journal of Health Economics, 22(6):10851104, November 2003. Abstract: We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully nanced by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of four factors suggested by the theory. We nd that there was a large impact of falling tax rates, 100

rising eligibility for insurance through the Medicaid system, rising medical costs, and increased managed care penetration. Overall, this set of factors can explain more than one-half of the rise in employee premiums over the 19821996 period. [275] Josstein Grytten, Fredrik Carlsen, and Irene Skau. The Income Eect and Supplier Induced Demand: Evidence from Primary Physician Services in Norway. Applied Economics, 33(11):145567, September 2001. Abstract: A much debated issue within the health economic literature is whether physicians can induce demand for their services. The relationship between physicians nonpractice income and supply of primary physician services in Norway is examined. It is argued that, if inducement exists, physicians with a low nonpractice income who work in municipalities where competition for patients is high, compensate for lack of patients by inducing demand. This model is adapted to the institutional setting of the Norwegian primary physician services, where there is a xed fee schedule. The analyses were performed on a large set of data, encompassing all primary care physicians in Norway who are remunerated per item of treatment. Data on output in practice were merged with information about nonpractice income from the tax forms of the physician and her/his spouse. In municipalities with high physician density, nonpractice income had no eect on the number of consultations per physician, or on the number of treatment items per consultation. The results are interpreted as evidence against the inducement hypothesis. [276] Jostein Grytten, Fredrik Carlsen, and Irene Skau. Primary Physicians Response to Changes in Fees. European Journal of Health Economics, 9(2):11725, May 2008. Abstract: The study examines how the service production of primary physicians in Norway is inuenced by changes in fees. The data represent about 2,650 fee-for-service physicians for the years 19952000. We constructed a variable that made it possible to estimate income eects of fee changes on service levels. Service production was measured by the number of consultations per physician, the number of laboratory tests per consultation and the proportion of consultations lasting more than 20 min. Our main nding is that fee changes have no income eect on service production. Our results imply that fee regulation can be an eective means of controlling physicians income, and therefore government expenditure, on primary physician services. [277] O. David Gulley and Rexford E. Santerre. The Eect of Public Policies on Nursing Home Care in the United States. Eastern Economic Journal, 29(1):93104, winter 2003. Abstract: Given demographic trends, public policies in the future may be aimed at stimulating the availability of nursing home care in the U.S. This paper estimates how certicate of need laws, Medicaid reimbursement 101

rates, and state corporate income tax rates aect the availability of nursing home care in markets throughout the U.S. The results indicate that the Medicaid reimbursement rate directly aects the availability of nursing home care. The ndings also suggest that the state corporate tax rate inversely inuences the provision of nursing care. Finally, the availability of nursing care is not aected by the presence of certicate of need laws. [278] Usha Gupta. Valuation of Urban Air Pollution: A Case Study of Kanpur City in India. Environmental and Resource Economics, 41(3):31526, November 2008. Abstract: This study estimates the monetary benets to individuals from health damages avoided if air pollution is reduced in the urban industrial city of Kanpur in India. A notable feature of this study is that it uses data from weekly health-diaries collected for three seasons. For measuring monetary benets, the study considers two major components of health cost that is incurred due to adverse eects of air pollution on health i.e., the loss in wages due to workdays lost from work and the expenditure incurred on mitigating activities. The study estimates that a representative working individual from Kanpur would gain Rs. 165.47 per year if air pollution were reduced to a safe level. The extrapolated annual benets for the entire population in the city are Rs. 224.55 million. [279] Maria-Jose Gutierrez. Dynamic Ineciency in an Overlapping Generation Economy with Pollution and Health Costs. Journal of Public Economic Theory, 10(4):56394, August 2008. Abstract: We analyze an overlapping generations model in which pollution arises, in an accumulatively way, from production. Householders do not care directly about the environment, but pollution leads them to incur health costs when they are elderly. We show that the presence of pollution means that the economy is more likely to be dynamically inecient. For these cases we analyze two kinds of tax scheme: one based on production taxes and the other based on capital and wage taxes. We show how to design both schemes to put the economy into the golden rule allocation. We also show that under the production tax scheme young and elderly agents pay less taxes (or receive more transfers) than under the capital and wage tax system. [280] Susan G. Haber and Janet B. Mitchell. Access to Physicians Services for Vulnerable Medicare Beneciaries. Inquiry, 36(4):44560, 19992000. Abstract: This article examines whether changes in physician reimbursement under the Medicare Fee Schedule (MFS) had dierential impacts on access to care for vulnerable and nonvulnerable Medicare beneciaries. The quasi-experimental research design takes advantage of cross-sectional dierences in the magnitude of the MFS impact on payments. We selected a stratied random sample to ensure adequate representation of vulnerable group members and constructed service-specic measures of the MFS 102

payment change. While we found few eects on access attributable to the MFS, we did nd substantial utilization gaps between vulnerable and nonvulnerable subpopulations for primary care services, as well as for highcost procedures during episodes of care for acute myocardial infarctions. [281] J. Hadley. Physician Participation in Medicaid: Evidence from California. Health Services Research, 14(4):26680, Winter 1979. Abstract: The objective of this paper is to investigate physician participation in the Medicaid program. In particular, how sensitive is the physicians involvement with Medicaid to variations in Medicaid reimbursements? How important are fee levels in the private market? What is the impact of ination on the costs of physicians inputs, particularly if the Medicaid fee remains relatively constant? These questions are explored through an empirical analysis of data from the California Medicaid program. Two aspects of physician participation form the focus of the study: 1) the percentage of physicians participating in Medicaid in a given county and 2) the average number of nonaged, Medicaid patients treated by each participating physician. Information on these variables and on Medicaid fees and private charges come from Medicare and Medicaid claims records for more than 3,000 physicians. The most signicant result of the study is the rearmation of the importance of the amounts of both private charges and Medicaid payments in determining participation rates and average Medicaid case loads per participating physician. Both dependent variables are, as expected, inversely related to physicians average billed revenue per patient and are positively related to average Medicaid payments per patient. In addition, it appears that the long-run impact of a change in billed revenue is signicantly larger in absolute value than a corresponding change in the amount that Medicaid is willing to pay. [282] Jack Hadley. Monitoring the Impact of Medicares Physician Payment Reform. Inquiry, 27(4):30406, Winter 1990. [283] Jack Hadley and James D. Reschovsky. Medicare Fees and Physicians Medicare Service Volume: Beneciaries Treated and Services per Beneciary. International Journal of Health Care Finance and Economics, 6(2):13150, June 2006. Abstract: Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and nancial incentives aect physicians fee-for-service Medicare service volume. We nd that Medicare fees are positively related to both the number of beneciaries treated (eta = 0.12 to 0.61) and service intensity (eta = 1.04 to 1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the eective Medicare fee. Finally, several market factors appear to inuence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicares fee-for-service program. 103

[284] Akihito Hagihara, Minako Nishi, and Koichi Nobutomo. Standard of Care and Liability in Medical Malpractice Litigation in Japan. Health Policy, 65(2):11927, August 2003. Abstract: Although the incidence of medical malpractice litigation is increasing in Japan, it remains unclear whether medical malpractice litigation gives doctors and hospitals, an economic incentive to provide highquality medical care by requiring that they compensate patients for harm caused by negligence. Therefore, to evaluate whether the medical malpractice litigation system contributes to the delivery of high-quality medical care, we rst analyzed the decisions made in medical malpractice cases between 1986 and 1998 in ten district courts (n = 421). We found the following results: (1) the probability that patients received compensation and the amount of compensation received, increased with the level of negligence, for all injury severity levels; (2) the signicant predictors that a case would be decided in favor of the patient were the patients legal basis (P = 0.00) and the severity of injury (P = 0.02). Although, it seems that Japanese medical malpractice litigation gives doctors an economic incentive to avoid delivering substandard medical care, since both the severity of injury and negligence were signicant predictors, medical litigation in Japan might in fact corrupt the compensation process by creating an adversarial atmosphere. [285] Robert W. Hahn. In Defense of the Economic Analysis of Regulation. AEI Press, Washington, D.C., 2005. Abstract: Defends the use of economic analysis, including cost-benet analysis, as a tool in regulatory decision making. Provides a review of the main critiques found in the legal literature aimed at the alleged misuse or abuse of regulatory scorecards and economics in assessing the impact of environmental, health, and safety regulation. Responds to criticisms leveled at two studies estimating the costs and benets of a range of government regulations. Identies some of the key contributions that regulatory scorecards and economic analysis have made to the understanding of policies and regulations aimed at improving the environment, health, and safety. Identies areas where the critics of economic analysis of regulation make some good points. Hahn is cofounder and Executive Director of the AEIBrookings Joint Center for Regulatory Studies and a resident scholar at the American Enterprise Institute. No index. [286] Philip A Haile and Rebecca M Stein. Managed Care Incentives and Inpatient Complications. Journal of Economics and Management Strategy, 11(1):3779, spring 2002. Abstract: Managed care organizations control costs through restrictions on patient access to specialized services, oversight of treatment protocols, and nancial incentives for providers. We investigate possible eects of such practices on the care patients receive by studying frequencies of in-hospital complications. We nd signicant dierences in complication 104

rates between managed care and fee-for-service patients. We investigate the sources of this variation by comparing probabilities of complications among patients with dierent types of managed care coverage and patients treated in dierent hospitals. For several patient categories, the dierences in outcomes we nd appear to arise not from dierential treatment of patients within hospitals or from heterogeneity in patients, but from variations in care across hospitals that tend to treat patients with dierent insurance types. [287] Mark A. Hall. The Death of Managed Care: A Regulatory Autopsy. Journal of Health Politics, Policy and Law, 30(3):42752, June 2005. Abstract: On the heels of widespread patient protection legislation in the states, the managed care industry abandoned or greatly scaled back the core elements of gate-keeping, utilization management, and nancial incentives, which are the very targets of this legislation. This article explores whether, and to what extent, the industrys abrupt change in course can be attributed to these laws. Based on extensive interviews with key informants in six representative states, the article concludes that these laws were not the primary driver of changes in managed care practices. However, patient protection laws interacted with other social and market forces, through complex forms of feedback and reinforcement, to bring about more thoroughgoing change than would have otherwise occurred. [288] Robert E. Hall and Charles I. Jones. The Value of Life and the Rise in Health Spending. Quarterly Journal of Economics, 122(1):3972, February 2007. Over the past half century, Americans spent a rising share of total economic resources on health and enjoyed substantially longer lives as a result. Debate on health policy often focuses on limiting the growth of health spending. We investigate an issue central to this debate: Is the growth of health spending a rational response to changing economic conditions notably the growth of income per person? We develop a model based on standard economic assumptions and argue that this is indeed the case. Standard preferencesof the kind used widely in economics to study consumption, asset pricing, and labor supplyimply that health spending is a superior good with an income elasticity well above one. As people get richer and consumption rises, the marginal utility of consumption falls rapidly. Spending on health to extend life allows individuals to purchase additional periods of utility. The marginal utility of life extension does not decline. As a result, the optimal composition of total spending shifts toward health, and the health share grows along with income. In projections based on the quantitative analysis of our model, the optimal health share of spending seems likely to exceed 30 percent by the middle of the century. [289] Timothy J. Halliday. Heterogeneity, State Dependence and Health. Econometrics Journal, 11(3):499516, November 2008. 105

Summary: We investigate the evolution of health over the life-cycle. We allow for two sources of persistence: unobserved heterogeneity and state dependence. Estimation indicates that there is a large degree of heterogeneity. For half the population, there are modest degrees of state dependence. For the other half of the population, the degree of state dependence is near unity. However, this may be the result of a high frequency of people in our data who never exit healthy states, potentially resulting in a failure to pin down the state dependence parameter for this segment of the population. We conclude that individual characteristics that trace back to early adulthood and before can have far reaching eects on health. [290] Barton H. Hamilton. HMO Selection and Medicare Costs: Bayesian MCMC Estimation of a Robust Panel Data Tobit Model with Survival. In Jones and ODonnell [339], pages 217227. Summary: The fraction of US Medicare recipients enrolled in health maintenance organizations (HMOs) has increased substantially over the past 10 years. However, the impact of HMOs on health care costs is still hotly debated. In particular, it is argued that HMOs achieve cost reduction through cream-skimming and enrolling relatively healthy patients. This paper develops a Bayesian panel data tobit model of HMO selection and Medicare expenditures for recent US retirees that accounts for mortality over the course of the panel. The model is estimated using Markov Chain Monte Carlo (MCMC) simulation methods, and is novel in that a multivariate t-link is used in place of normality to allow for the heavy-tailed distributions often found in health care expenditure data. The ndings indicate that HMOs select individuals who are less likely to have positive health care expenditures prior to enrolment. However, there is no evidence that HMOs disenrol high cost patients. The results also indicate the importance of accounting for survival over the panel, since high mortality probabilities are associated with higher health care expenditures in the last year of life. [291] James K. Hammitt. Review of: Risk and reason: Safety, law, and the environment. Journal of Economic Literature, 42(2):51213, June 2004. Excerpt: University of Chicago law professor Cass Sunstein presents a strong argument for the use of benet-cost analysis (BCA) to inform environmental health and safety regulation. In contrast to the conventional economic argument for BCA, which emphasizes social choice and the Kaldor-Hicks compensation test, Professor Sunstein emphasizes the value of BCA as a practical tool for preventing systematic errors that result from cognitive limits and social factors. In Professor Sunsteins view, individual and social judgments about health and safety risks are adversely aected by a variety of cognitive heuristics and other factors, as described by Daniel Kahneman, Paul Slovic, Amos Tversky, and others. Moreover, political responses to public concerns about risks may be driven by politicians incentive to compete in claiming credit, which leads them 106

to demonstrate their commitment to reducing particular environmental or health risks without considering broader eects of the policies.... Overall, this volume provides a good overview of many of the problems in environmental health and safety regulation and the potential for BCA to improve matters, from an economic, political, and legal perspective. It should be easily accessible to non-specialists, as it includes signicant background material and supplementary appendices. The volume will be of less interest to readers interested in technical aspects of BCA, such as methods for estimating the monetary value of reducing health risks, the appropriate discount rate, or the inuence of tax-interaction eects on social costs. [292] Nick Hanley. The Economics of Nitrate Pollution. European Review of Agricultural Economics, 17(2):12951, 1990. Abstract: Nitrogen is essential to plant growth and, yet, excessive levels of nitrates in soil can cause problems of environmental pollution. In this paper, the author rst considers the nitrogen cycles, tracing the movements of nitrogen to and from soils. The problems of excessive nitrate levels are then outlined, being eects on human health and eutrophication of water courses. Nitrate pollution is represented using an externality framework. The paper then addresses the costs and benets of controlling nitrogen use in agriculture. Cost estimates are presented and the various control options spelled out. Benet estimates are more problematical, but some ndings are presented for both human health eects and eutrophication. [293] Korrina Hansen. The United States Nursing Market and its Market Structure in the 1980s. PhD thesis, University of Rochester, 1992. Abstract: Nursing shortages have been a common and perplexing problem in U.S. health care since World War II. Monopsony in the labor market of nurses has been one of the most popular explanations for these shortages. In this dissertation, taking two dierent structural approaches directly from economic theory, I test for the existence of noncompetitive elements in the nursing market. I rst present a general nonlinear supply-demand model that includes both competition and monopsony as subcases. Bresnahan (1982) suggested a test for monopoly power in product markets. I develop an analogous test for monopsony in factor markets and apply it to nursing. Under monopsony, the equilibrium wage equation depends upon the marginal factor cost curve. A nonlinear interaction term in the equilibrium wage equation exactly describes this dependence. Under competition this term disappears. Testing for the presence of this nonlinear interaction is therefore a valid test for the null of competition. I apply this test to a cross section of 564 U.S. hospitals in 1988, and cannot reject competition in the nursing market. The system is reestimated separately for urban and rural hospitals. The coecient for the nonlinear eect in the equilibrium wage equation is again very small and insignicantly different from zero for both subsamples. I extend this work by separately testing for dierent forms of oligopsony (Cournot, Bertrand, Stackelberg) 107

in the registered and practical nurses labor markets in California in the 1980s. With a model similar to Sullivan (1989) I estimate best response functions, and in particular the inverse of the elasticity of supply for individual hospitals, using information on neighboring hospitals (quantity of nurses employed, wages and caseload). I nd in both markets a very elastic labor supply facing individual hospitals and hence little evidence of monopsony power regardless of the form of oligopsony assumed. The two factors are also found to be very good substitutes on both the supply and demand side. I estimate an elasticity of substitution between RNs and LVNs near innity. So, with both approaches I nd very little, if any, monopsony power in the nursing market. Thus, if shortages are a real phenomenon, we need other factors to explain their presence. [294] Bernd Hansjrgens. Economic Valuation through Cost-Benet Analysis u Possibilities and Limitations. Toxicology, 205(3):24152, December 2004. Abstract: The economic approach used to evaluate eects on human health and the environment centres around cost-benet analysis (CBA). Thus, for most economists, economic valuation and CBA are one and the same. However, the question of the possibilities and limitations of costbenet analysis is one of the most controversial aspects of environmental research. In this paper, the possibilities and limitations of CBA are analysed. This is done not only by explaining the central elements of CBA, but also by commenting on criticism of it. What becomes clear is that CBA is not only a mere mechanism of monetarisation, but a heuristic model for the whole process of valuation. It can serve as a guideline for collecting the necessary data in a systematic way. The limits of CBA can be mainly seen in the non-substitutability of essential goods, irreversibility, long-term eects and inter-generational fairness. [295] Kara Hanson, Barbara McPake, Pamela Nakamba, and Luke Archard. Preferences for Hospital Quality in Zambia: Results from a Discrete Choice Experiment. Health Economics, 14(7):687701, July 2005. Abstract: This study reports on the results of a discrete choice experiment undertaken in Zambia to assess the factors inuencing the demand for hospital care in Zambia, in particular the role of (perceived) quality and trade-os between price and quality. Valuations of quality were evaluated for the treatment of two acute medical conditions, cerebral malaria in adults and acute pneumonia in children. Marginal utilities and willingnessto-pay for attributes of quality of hospital care were estimated, together with the inuence of socioeconomic characteristics on these valuations and the extent of non-linearities in valuations of time and money. We nd the technical quality of care, as represented by the thoroughness of examination, to be the most important quality attribute, followed by sta attitudes and drug availability. Valuations of examination thoroughness increase with increasing socioeconomic status. The disutility of cost was found to decrease with higher socioeconomic status, as was the value of 108

drug availability. The implications of the ndings for Zambian hospital sector reforms are discussed. [296] Alvin E. Headen, Jr. Wage, Returns to Ownership, and Fee Responses to Physician Supply. Review of Economics and Statistics, 72(1):3037, February 1990. Abstract: The labor and entrepreneurial components of reported physician net income are separated in an analysis of input and output market performance. A wage equation, corrected for selectivity bias, is estimated for employee physicians and the results indicate that the performance of the labor market for primary care physicians is consistent with competitive theory. The parameters are used to predict opportunity wage rates for self-employed physicians. Dierences between net income per hour and the predictions indicate that 16 percent of net income from practice is attributable to entrepreneurship. Evidence of negative selectivity into employee status is also found. [297] Anthony Johnson Hedley, Chit-Ming Wong, Thuan Quoc Thach, Stefan Ma, Tai-Hing Lam, and Hugh Ross Anderson. Cardiorespiratory and AllCause Mortality After Restrictions on Sulphur Content of Fuel in Hong Kong: An Intervention Study. Lancet, 360:164652, November 23, 2002. Abstract: BACKGROUND: In July, 1990, a restriction was introduced over one weekend that required all power plants and road vehicles in Hong Kong to use fuel oil with a sulphur content of not more than 0.5% by weight. This intervention led to an immediate fall in ambient sulphur dioxide (SO2). We assessed the eect of this intervention on mortality over the next 5 years. METHODS: Changes in trends in deaths were estimated by a Poisson regression model of deaths each month between 1985 and 1995. Changes in seasonal deaths immediately after the intervention were measured by the increase in deaths from warm to cool season. We also estimated the annual proportional change in number of deaths before and after the intervention. We used age-specic death rates to estimate person-years of life gained. FINDINGS: In the rst 12 months after introduction of the restriction, a substantial reduction in seasonal deaths was noted, followed by a peak in the cool-season death rate between 13 and 24 months, returning to the expected pattern during years 3-5. Compared with predictions, the intervention led to a signicant decline in the average annual trend in deaths from all causes (2.1%; p=0.001), respiratory (3.9%; p=0.0014) and cardiovascular (2.0%; p=0.0214) diseases, but not from other causes. The average gain in life expectancy per year of exposure to the lower pollutant concentration was 20 days (females) to 41 days (males). INTERPRETATION: Pollution resulting from sulphur-rich fuels has an eect on death rates, especially respiratory and cardiovascular deaths. The outcome of the Hong Kong intervention provides direct evidence that control of this pollution has immediate and long-term health benets. 109

[298] James W. Henderson. Health Economics and Policy. South-Western College Publishing, Cincinnati, 1999. Keywords: health economics [299] Jason Henderson. Obesity: Americas Economic Epidemic. The Main Street Economist: Commentary on the Rural Economy, 1(2):15, 2006. [300] Carmen Herrero and Juan D. Moreno-Ternero. Estimating Production Costs in the Economic Evaluation of Health Care Programs. Health Economics, 18(1):2135, January 2009. Abstract: We propose a method for calculating the production costs of an intervention in a manner that accounts for dierences in productive eort. This method could be used within a cost-eectiveness analysis framework in the evaluation of new medical technologies, pharmaceuticals, treatment programs, or public health interventions. We apply it to show evidence in favor of implementing a newborn screening program to detect congenital hearing impairment. [301] Anthony Heyes. The Economics of Vocation or Why is a Badly Paid Nurse a Good Nurse? Discussion Paper 2003-04, Royal Holloway College, London, November 2003. Abstract: Given the longstanding shortage of nurses in many jurisdictions, why couldnt nursing wages be raised to attract more people into the profession? We tell a story in which the status of nursing as a vocation implies that increasing wages reduces the average quality of applicants attracted. The underlying mechanism accords with the notion that increasing wages might attract the wrong sort of people into the profession and highlights an (in)eciency wage mechanism, particular to vocations, which makes wages sticky upwards. The analysis has implications for job design in vocation-based sectors such as nursing and teaching. [302] John Hicks, P. K. Basu, Heather Latham, Graham Tyson, Megan Daniel, and Richard B. Sappey. Crossing the Great Divide: A Case Study of a Regional Nursing Labour Market in the Central West of New South Wales. Australian Bulletin of Labour, 36(1):84102, 2010. Abstract: This study contributes to the labour market research into nurse shortage in an Australian regional context. It indicates that supply decisions are inuenced by family circumstances, attachment to regional life and characteristics of the profession, particularly the emphasis on caring. Aspects of nursing work, particularly workloads and working with competent people (as opposed to autonomy and career prospects), and conditions of work, particularly wages, protection from violence and exibility of working time are more able to be aected by government and management. The study also suggests that a strict approach to employment and work organisation tends to follow traditional medical treatment assumptions and lead to unnecessary cultural and systemic inexibility. 110

Generational conict (older and younger nurses) overlaid by opposition to the current system of nurse education (hospital-based and universitybased) emerge as additional problems impacting on the participation of nurses. [303] Barry T. Hirsch and Edward J. Schumacher. Monopsony Power and Relative Wages in the Labor Market for Nurses. Journal of Health Economics, 14(4):44376, October 1995. This paper examines the thesis that monopsony power is an important determinant of wages in nursing labor markets. Using data from the 198593 Current Population Surveys, measures of relative nurse/non-nurse wage rates for 252 labor markets are constructed. Contrary to predictions from the monopsony model, no positive relationship exists between relative nursing wages and hospital density or market size. Nor is support found for the presence of monopsony power based on evidence on union wage premiums, slopes of experience proles, or the mix of registered nurse to total hospital employment. [304] Barry T. Hirsch and Edward J. Schumacher. Classic Monopsony or New Monopsony? Searching for Evidence in Nursing Labor Markets. Discussion Paper 1154, IZA, Bonn, May 2004. Abstract: The market for hospital registered nurses (RNs) is often oered as an example of classic monopsony, while a new monopsony literature emphasizes rm labor supply being upwardsloping for reasons other than market structure. Using data from several sources, we explore the relationship between wages and measures of classic and new monopsony. Micro wage data for 19932002 provide little evidence of classic monopsonistic outcomes in the long run, the relative wages of RNs in 240 U.S. labor markets being largely uncorrelated with market size or employer concentration. A short-run relationship is found, with RN wages declining in markets with increased hospital system concentration. Measures of new monopsony use data on mobility to proxy inverse supply elasticities. No relationship is found between these measure and nursing wages, but evidence supporting new monopsony is found for women elsewhere in the labor market. RNs display greater inter-employer mobility than do women (or men) in general. Two conclusions follow. First, evidence of upward sloping labor supply need not imply monopsonistic outcomes. Second, nursing should not be held up as a prototypical example of monopsony. [305] Vivian Ho. Certicate of Need, Volume, and Percutaneous Transluminal Coronary Angioplasty Outcomes. American Heart Journal, 147(3):442 448, March 2004. Abstract: Background: Florida seeks high hospital volumes for percutaneous transluminal coronary angioplasty (PTCA) by enforcing certicate


of need (CON) laws, whereas California has no such laws. This study compares the volume-outcome relation for PTCA in Florida and California. Methods: The relation between the number of PTCA procedures performed at hospitals and the rate of inhospital bypass graft surgery and death for 292,457 patients in Florida and 390,880 patients in California between 1988 and 1998 was examined with descriptive statistics and logistic regressions. Results: In 1988, the mean hospital PTCA volumes in Florida (237) and California (218) were not signicantly dierent (P = .44). By 1998, Florida hospital volumes were signicantly larger (724 vs 389, P < .001). Logistic regressions indicate that higher log (volume) was associated with lower mortality and urgent bypass grafting rates in both Florida and California during the sample period. Regression estimates indicate that a California hospital with the mean 1998 PTCA volume of 389 procedures had a predicted inpatient mortality rate of 1.4% and urgent bypass grafting rate of 2.2%. If the PTCA volume was raised to the 1998 Florida mean of 724 procedures, the inpatient mortality rate would not fall, although urgent bypass grafting rates were predicted to fall to 2.0%. Conclusions: Florida CON laws were associated with higher average PTCA volumes relative to California hospitals, where no such laws exist. Because a higher PTCA volume was associated with moderately better outcomes, CON may be marginally eective in improving outcomes for PTCA. Future studies should revisit this hypothesis with data from several states. [306] Vivian Ho. Does Certicate of Need Aect Cardiac Outcomes and Costs? International Journal of Health Care Finance and Economics, 6(4):300 324, December 2006. Abstract: Several U.S. states enforce Certicate 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 benets of CON regulations require careful reconsideration. [307] Jerey S. Hoch and Jerey D. Blume. Measuring and Illustrating Statistical Evidence in a Cost-Eectiveness Analysis. Journal of Health Economics, 27(2):47695, March 2008. Abstract: Recently, there has been much interest in using the costeectiveness acceptability curve (CEAC) to measure the statistical evidence of cost-eectiveness. The CEAC has two well established but fundamentally dierent interpretations: one frequentist and one Bayesian. As an alternative, we suggest characterizing the statistical evidence about 112

cost-eectiveness using the likelihood function (the key element of both approaches). Its interpretation is neither dependent on the sample space nor on the prior distribution. Moreover, the probability of observing misleading evidence is low and controllable, so this approach is justiable in the traditional sense of frequentist long-run behaviour. We propose a new graphic for displaying the evidence about cost-eectiveness and explore the strengths of likelihood methods using data from an economic evaluation of a Program in Assertive Community Treatment (PACT). [308] John Holahan, Suresh Rangarajan, and Matthew Schirmer. Medicaid Managed Care Payment Rates in 1998: New Survey Data Show Twofold Variation in What States Pay Managed Care Plans. Health Aairs, 18(3):21727, May-June 1999. Abstract: This paper reports on a new survey of state Medicaid managed care payment rates. We collected rate data for Medicaids Aid to Families with Dependent Children (AFDC)/Temporary Assistance for Needy Families (TANF) and poverty-related populations and made adjustments to make the data comparable across states. The results show a slightly more than twofold variation in capitation rates among states, caused primarily by fee-for-service spending levels and demographics. There is a very low correlation between the variation in Medicaid capitation rates among states and the variations in Medicares adjusted average per capita cost. The data are not sucient to answer questions about the adequacy of rates but should help to further policy discussions and research. [309] Bruce Hollingsworth. The Measurement of Eciency and Productivity of Health Care Delivery. Health Economics, 17(10):110728, October 2008. Abstract: The measurement of eciency and productivity of health service delivery has become a small industry. This is a review of 317 published papers on frontier eciency measurement. The techniques used are mainly based on non-parametric data envelopment analysis, but there is increasing use of parametric techniques, such as stochastic frontier analysis. Applications to hospitals and other health care organizations and areas are reviewed and summarised, and some meta-type analysis undertaken. Cautious conclusions are that public provision may be potentially more ecient than private, in certain settings. The paper also considers conceptualizations of eciency, and points to dangers and opportunities in generating such information. Finally, some criteria for assessing the use and usefulness of eciency studies are established, with a view to helping both researchers and those assessing whether or not to act upon published results. [310] Bruce Hollingsworth and John Wildman. The Eciency of Health Production: Re-estimating the WHO Panel Data Using Parametric and Nonparametric Approaches to Provide Additional Information. Health Economics, 12(6):493504, June 2003.


Abstract: The World Health Report 2000 focuses on the performance of health-care systems around the globe. The report uses eciency measurement techniques to create a league table of health-care systems, highlighting good and bad performers. Eciency is measured using panel data methods. This paper suggests that the WHOs estimation procedure is too narrow and that contextual information is hidden by the use of one method. This paper uses and validates a range of parametric and nonparametric empirical methods to measure eciency using the WHO data. The rankings obtained are compared to the WHO league table and we demonstrate that there are trends and movements of interest within the league tables. We recommend that the WHO broaden its range of techniques in order to reveal this hidden information. [311] Tor Helge Holmas. Keeping Nurses at Work: A Duration Analysis. Health Economics, 11(6):493503, September 2002. Abstract: A shortage of nurses is currently a problem in several countries, and an important question is therefore how one can increase the supply of nursing labour. In this paper, we focus on the issue of nurses leaving the public health sector by utilising a unique data set containing information on both the supply and demand side of the market. To describe the exit rate from the health sector we apply a semi-parametric hazard rate model. In the estimations, we correct for unobserved heterogeneity by both a parametric (Gamma) and a non-parametric approach. We nd that both wages and working conditions have an impact on nurses decision to quit. Furthermore, failing to correct for the fact that nurses income partly consists of compensation for inconvenient working hours results in a considerable downward bias of the wage eect. [312] John B. Horowitz and H. Brian Moehring. How Property Rights and Patents Aect Antibiotic Resistance. Health Economics, 13(6), June 2004. Abstract: Antibiotic resistance tends to increase when a patent on an antibiotic expires. Since other companies can now sell the antibiotic, more of the antibiotic is produced and prices fall. Because the benets of reducing current production go to other rms, pharmaceutical companies will have little concern about future resistance. This open-access problem causes excessive antibiotic use and resistance problems in the future. Extending patents is one solution. However, a pharmaceutical company that has patent protection on a drug that is cross-resistant may have little concern about future resistance. This is because when people use completely dierent antibiotics which cause bacteria to become resistant to the original antibiotic, then the benets of reducing current production go to other companies. A single buyer such as national health insurance or private health insurance may also have an incentive to reduce antibiotic resistance since they bear the future cost of future resistance. However, insurance coverage reduces the price that patients pay at the margin and thus the patients are likely to use more antibiotics. National health insur114

ance policies may even set the price of antibiotics so low that resistance problems are created even when the patent is in eect. [313] David Howard, Ralph Cordell, John E. McGowan, Jr., Randall M. Packard, R. Douglas Scott II, and Steven L. Solomon. Measuring the Economic Costs of Antimicrobial Resistance in Hospital Settings: Summary of the Centers for Disease Control and Prevention-Emory Workshop. Clinical Infectious Diseases, 33(9):157378, November 2001. Abstract: Health systems administrators and clinicians need rened calculations of the attributable cost of infections due to drug-resistant microorganisms to develop and assess cost-eective prevention strategies that deal with these infections. To date, however, eorts to provide this information have yielded widely variable and often conicting estimates. This lack of reproducibility is largely attributable to problems in study design and in the methods used to identify and measure costs. Addressing these methodological issues was the focus of a workshop that included participants from a broad range of backgrounds, including economics, epidemiology, health care management, health care outcomes research, and clinical care. This workshop summary presents the advantages and disadvantages of various research designs as well as particular methodological issues related to the measurement of the economic cost of resistance in health care settings. Suggestions are made for needed common denitions and approaches, study areas for future research are considered, and priority investigations are identied. [314] David H. Howard. Resistance-Induced Antibiotic Substitution. Health Economics, 13(6):58595, June 2004. Summary: In many cases, physicians prescribe antibiotics without knowing whether an individual patient is infected with a susceptible or resistant pathogen. As the proportion of resistant organisms in a community increases, physicians substitute away from older-inexpensive drugs to newer, more expensive agents as rst line therapy. This paper explores the implications of resistance-induced antibiotic substitution for epidemiological models to predict future resistance levels, eorts to measure the health care costs associated with resistance, and policies to improve physicians antibiotic prescribing decisions. The extent of resistance-induced substitution in outpatient settings is documented using a data set consisting of observations on initial physician oce visits for otitis media in the US. Controlling for new product introductions and price increases, per prescription antibiotic spending increased by 22% between 1980 and 1996, corresponding to a steep increase in resistance levels over the same period. [315] David H. Howard and Kimberly J. Rask. The Impact of Resistance on Antibiotic Demand in Patients with Ear Infections. In Laxminarayan [387], pages 11933.


Noting thatonce the rate of resistance to a particular antibiotic reaches a critical level, physicians will cease to use it, instead prescribing its closest substitute, the authors endeavor to measure empirically the impact of resistance on physicians drug choice (p. 119). They conclude that resistance, by inducing physicians to switch to more expensive antibiotics, increased annual antibiotic spending for for ear infections by about 20% in 1997 and 1998 (p. 120). [316] Michael Hoy, Fabienne Orsi, Franois Eisinger, and Jean Paul Moatti. c The Impact of Genetic Testing on Healthcare Insurance. Geneva Papers on Risk and Insurance: Issues and Practice, 28(2):20321, April 2003. Abstract The article discusses the potential impact of the diusion of genetic testing on healthcare insurance markets. It refers to the theoretical approaches respectively proposed by Rothschild and Stiglitz (1976) and Wilson (1977, 1980) about insurance market equilibrium with adverse selection due to asymmetries of information about individual risks. The article shows that, in such contexts, a market equilibrium can be reached either on the basis of separating contracts discriminating between risk levels or of pooling unique contracts based on the average risk in the population, and that the choice of this alternative depends on an empirical parameter: the eective proportion of high-risk individuals in the population. An application to the case of genetic risk of breast cancer, the most emblematic advance in practical application of genetic testing in recent years, conrms that, due to the limited incidence of the gene mutations associated with a higher risk in the general female population, a pooling equilibrium would be obtained. These results suggest that current alarmist claims that diusion of genetic tests in medical practice will inevitably increase adverse selection and ineciencies in health insurance systems if the use of this information to establish insurance contracts is banned (either because compulsory universal health insurance excludes separating contracts by essence, or by current legislation banning the use of genetic testing by private insurers) are rather overstatements. [317] Bryan J. Hubbell. Implementing QALYs in the Analysis of Air Pollution Regulations. Environmental and Resource Economics, 34(3):365384, July 2006. Abstract: In recent years, there has been growing interest in costeectiveness analysis for environmental regulations using quality-adjusted life years as the measure of eectiveness. This paper explores the implications of the QALY approach for measuring the impacts of air pollution regulations, with an example using the U.S. Environmental Protection Agencys Heavy Duty Engine/Diesel Fuel regulations. The paper also examines the issues surrounding the potential use of QALY measures in cost-benet analysis for air pollution regulations. Key ndings are that, compared with a cost-benet approach, the QALY framework gives more weight to reductions in incidence of chronic disease relative to reductions 116

in premature mortality risk, especially when the mortality risk reductions occur in older populations. In addition, use of monetized QALYs in cost-benet analysis is not recommended, due to fundamental dierences in the theoretical grounding of the dierent measures. However, application of monetized QALYs based on age-specic willingness to pay (WTP) for mortality risk reductions gives very similar results to typical cost-benet analysis for mortality risk reductions, as opposed to using values for QALYs based on non-age specic WTP. The paper concludes that in cases where mortality provide the majority of a regulations impacts, QALY based cost-eectiveness analysis and WTP based cost-benet analysis may not dier in their conclusions. However, in cases where morbidity or non-health outcomes are signicant, cost-eectiveness and cost-benet analysis may result in dierent evaluations of the eciency of the regulation. Keywords: air pollution; cost-eectiveness; QALY; valuation; mortality; morbidity [318] John Hudson. Generic Take-up in the Pharmaceutical Market Following Patent Expiry: A Multi-Country Study. International Review of Law and Economics, 20(2):20521, June 2000. Analyzing the pharmaceutical markets in Germany, Japan, the U.K., and the U.S., the author nds that the larger the market, the greater is the probability of both generic entry and the subsequent impact on original brand sales. [319] Wallace Human, Sonya K. Human, Abebayehu Tegene, and Kyrre Rickertsen. The Economics of Obesity-Related Mortality Among High Income Countries. Research paper, Iowa State University, Department of Economics, paper_12604_06021.pdf, 2006. Abstract: This paper establishes the econometric underpinning of an aggregate household health production function and an aggregate household heath supply function for developed countries. The conceptual model builds on productive household models for health. A pooled time series cross sectional model of obesity-related mortality is tted to annual data for 18 high income countries over 19712001. In the health production function, we show that obesity-related mortality is related to diet, socialized medicine, and trend dominated factors such as medical knowledge and technology. In the health supply function, we show that cheap food increases obesity-related mortality and a modest level of socialized medicine reduces it. The results for labor market variables imply that individuals who are in the labor force burn more calories in their daily activities than do those who do not work in the market and have lower obesity-related mortality. [320] A. C. Hui and S. M. Wong. Relation between Sulphur Dioxide Concentration and All-Cause Mortality. Lancet, 361(9359):78788, March 2003.


This letter to the editor questions the contribution of sulfur dioxide abatement to mortality reduction reported in [297]. The authors draw attention to a confounding variable: increases in public health expenditure. [321] Richard W. Hurd. Equilibrium Vacancies in a Labor Market Dominated by Non-Prot Firms: The Shortage of Nurses. Review of Economics and Statistics, 55(2):23440, May 1973. [322] Jeremiah Hurley. An Overview of the Normative Economics of the Health Sector. In Culyer and Newhouse [152], chapter 2, pages 55118. More thoughtful and interesting than some Handbook chapters, but inconclusive, as essays in normative economics tend to be. [323] Mark A. Hurwitz and Richard E. Caves. Persuasion or Information? Promotion and the Shares of Brand Name and Generic Pharmaceuticals. Journal of Law and Economics, 31(2):299320, October 1988. [324] Masako Ii and Yasushi Ohkusa. Price Sensitivity of the Demand for Medical Services for Minor Ailments: Econometric Estimates Using Information on Illnesses and Symptoms. Japanese Economic Review, 53(2):154 66, June 2002. Abstract: This paper examines the choice of health care for minor ailments in Japan. Acute and serious illnesses are excluded from the purview of the analysis; it is minor ailments, dened as illnesses that are not chronic or not serious, that constitute the focus of this paper. Empirical results show that, if the new medical insurance reform plan were to increase the coinsurance rate by 10% both for those insured and their dependants, national medical costs would be reduced by 158 billion yen, and the demand for over-the-counter (OTC) medicine would be increased by 15 billion yen in the case of minor ailments. [325] Interagency Task Force on Antimicrobial Resistance. A Public Health Action Plan to Combat Antimicrobial Resistance. Part 1: Domestic Issues., 2001. The Task Force (a U.S. agency created in 1999) here describes eighty-four action items arranged in four focus areas: surveillance, prevention and control, research, and product development. [326] Interagency Task Force on Antimicrobial Resistance. Draft Executive Summary, Second Annual Progress Report, Implementation of A Public Health Action Plan to Combat Antimicrobial Resistance. Part 1: Domestic Issues., June 2003. Notes that Part II of the Action Plan, focusing on global issues, is under development. Reports on steps taken on the domestic front to advance surveillance, prevention and control, research, and product development.


[327] Kazuhiro Ishikawa, Masato Yamamoto, Donald T. Kishi, and Toshitaka Nabeshima. New Prospective Payment System in Japan. American Journal of Health-System Pharmacists, 62:161719, August 2005. The authors report that the Japanese Ministry of Health, Labor, and Welfare introduced a prospective payment system in 2003 in 82 hospitals. Called the Diagnosis Procedure Combination (DPC) system, it recognizes 2335 categories of diagnoses and disorders. Reimbursement is determined by a set number of points per day for each category, length of stay (LOS), and a rating for each hospital (p. 1617). The system is applied only to cases that are considered to require routine general inpatient care; more complicated, higher-cost cases are excluded (p. 1617). After a LOS exceeds the average by 2 standard deviations, the DPC system reverts to fee for service reimbursement (p. 1619). [328] Sardar M. N. Islam and Christine Suet Yee Mak. Normative Health Economics. Palgrave Macmillan, New York, 2006. After discussing the limitations of traditional cost benet analysis, the book summarizes a new approach (developed by the rst author) to welfare economics in general and cost benet analysis in particular and applies it to Australias Pharmaceutical Benets Scheme. [329] Christopher Jackson, Nicky Best, and Sylvia Richardson. Hierarchical Related Regression for Combining Aggregate and Individual Data in Studies of Socio-Economic Disease Risk Factors. Journal of the Royal Statistical Society: Series A (Statistics in Society), 171(1):15978, 2008. Abstract: To obtain information about the contribution of individual and area level factors to population health, it is desirable to use both data collected on areas, such as censuses, and on individuals, e.g. survey and cohort data. Recently developed models allow us to carry out simultaneous regressions on related data at the individual and aggregate levels. These can reduce ecological bias that is caused by confounding, model misspecication or lack of information and increase power compared with analysing the data sets singly. We use these methods in an application investigating individual and area level sociodemographic predictors of the risk of hospital admissions for heart and circulatory disease in London. We discuss the practical issues that are encountered in this kind of data synthesis and demonstrate that this modelling framework is suciently exible to incorporate a wide range of sources of data and to answer substantive questions. Our analysis shows that the variations that are observed are mainly attributable to individual level factors rather than the contextual eect of deprivation. [330] Rowena Jacobs and Maria Goddard. Trade-Os in Social Health Insurance Systems. International Journal of Social Economics, 29(1112):86175, 2002.


Abstract: This paper examines some of the key features of social health insurance systems by drawing on experiences in Germany, Switzerland, France and The Netherlands. These countries have all implemented a variety of reforms, including some competition between health insurers in order to meet some of their health care objectives. The paper highlights some of the strengths and weaknesses inherent in these systems and how they perform on a number of criteria and suggests a number of trade-os which policymakers will have to grapple with to attain some of their (often competing) health system goals of eciency, choice, solidarity and equity. This paper should provide useful information for countries with health care systems in transition or those considering adopting aspects of social health insurance systems. [331] Rowena Jacobs, Peter C. Smith, and Andrew Street. Measuring Eciency in Health Care: Analytic Techniques and Health Policy. Cambridge University Press, Cambridge, 2006. Abstract: Oers a balanced critique of the current state of the art of eciency analysis as applied to health care. Provides a general introduction to the context and principles underlying the development of eciency analysis. Explores stochastic frontier analysis and data envelopment analysis. Assesses their major weaknesses from a policy perspective. Presents some tentative proposals for complementary analytic approaches. Summarizes the current state of the art in eective regulation of health care. Jacobs is Research Fellow, and Street is Senior Research Fellow, at the Centre for Health Economics, the University of York. Smith is Professor of Economics at the University of York. Author and subject indexes. [332] D. T. Janerich, W. D. Thompson, L. R. Varela, P. Greenwald, S. Chorost, C. Tucci, M. B. Zaman, M. R. Melamed, M. Kiely, and M. F. McKneally. Lung Cancer and Exposure to Tobacco Smoke in the Household. New England Journal of Medicine, 323(10):632636, 1990. Abstract: BACKGROUND. The relation between passive smoking and lung cancer is of great public health importance. Some previous studies have suggested that exposure to environmental tobacco smoke in the household can cause lung cancer, but others have found no eect. Smoking by the spouse has been the most commonly used measure of this exposure. METHODS. In order to determine whether lung cancer is associated with exposure to tobacco smoke within the household, we conducted a population-based casecontrol study of 191 patients with histologically conrmed primary lung cancer who had never smoked and an equal number of persons without lung cancer who had never smoked. Lifetime residential histories including information on exposure to environmental tobacco smoke were compiled and analyzed. Exposure was measured in terms of smoker-years, determined by multiplying the number of years in each residence by the number of smokers in the household. RESULTS. Household exposure to 25 or more smoker-years during child120

hood and adolescence doubled the risk of lung cancer (odds ratio, 2.07; 95 percent condence interval, 1.16 to 3.68). Approximately 15 percent of the control subjects who had never smoked reported this level of exposure. Household exposure of less than 25 smoker-years during childhood and adolescence did not increase the risk of lung cancer. Exposure to a spouses smoking, which constituted less than one third of total household exposure on average, was not associated with an increase in risk. CONCLUSIONS. The possibility of recall bias and other methodologic problems may inuence the results of case-control studies of environmental tobacco smoke. Nonetheless, our ndings regarding exposure during early life suggest that approximately 17 percent of lung cancers among nonsmokers can be attributed to high levels of exposure to cigarette smoke during childhood and adolescence. [333] Heather Janiszewski Goodin. The Nursing Shortage in the United States of America: an Integrative Review of the Literature. Journal of Advanced Nursing, 43(4):33550, August 2003. The author states that four main areas were identied as the major contributors to the nursing shortage in the USA: the aging RN workforce; declining enrollment; the changing work climate; and the poor image of nursing. Solutions to the shortage followed similar themes to the contributing factors and encompassed four main areas: exploring recruitment eorts; exploring retainment eorts; improving the image of nursing; and supporting legislation that helps to rectify the shortage. [334] Fanny Janssen, Anton E. Kunst, and Johan P. Mackenbach. Association between Gross Domestic Product throughout the Life Course and OldAge Mortality across Birth Cohorts: Parallel Analyses of Seven European Countries, 195099. Social Science & Medicine, 63(1):23954, July 2006. Abstract: Mortality levels of national populations have often been studied in relation to levels of gross domestic product (GDP) at time of death. Following the life course perspective, we assessed whether old-age mortality levels for subsequent cohorts are dierentially associated with GDP levels prevailing at dierent ages of the cohorts. We used all-cause & cause-specic mortality data by sex, age at death (6599), year at death (1950-1999), & year of birth (18651924) for Denmark, England & Wales, Finland, France, the Netherlands, Norway, & Sweden. Trends in national GDP per capita between 1865 & 1999 were reconstructed from historical national accounts data. Through Poisson regression analyses, we determined for each country both univariate & multivariate associations across ve-year birth cohorts between mortality & GDP levels prevailing at time of death, & at earlier ages of the cohorts (i.e. 05, 619, 2049, & 5064). For the subsequent cohorts, levels of GDP at time of death were strongly inversely associated with all-cause mortality, especially among women, & among men in England & Wales, Finland, & France. In most countries, stronger associations were observed with GDP levels prevailing at earlier 121

ages of the cohorts. After control for GDP at time of death, these associations remained. An independent association of GDP at earlier ages of the cohort was also observed for cause-specic mortality. The associations were negative for ischaemic heart diseases, cerebrovascular diseases, & stomach cancer. They were positive for prostate cancer, breast cancer, COPD (women), & lung cancer (women). GDP prevailing at ages 2049 (men) & ages 5064 (women) had the largest associations with old-age mortality. These ndings suggest an independent, mostly negative eect of GDP prevailing at earlier ages of subsequent cohorts on old-age mortality. Socio-economic circumstances during adulthood & middle age seem more important in determining old-age mortality trends than those during infancy or childhood. [335] Jonathan C. Javitt, James B. Rebitzer, and Lonny Reisman. Information Technology and Medical Missteps: Evidence from a Randomized Trial. Journal of Health Economics, 27(3):585602, May 2008. Abstract: We analyze the eect of a decision support tool designed to help physicians detect and correct medical missteps. The data comes from a randomized trial of the technology on a population of commercial HMO patients. The key ndings are that the new information technology lowers average charges by 6% relative to the control group. This reduction in resource utilization was the result of reduced in-patient charges (and associated professional charges) for the most costly patients. The rate at which identied issues were resolved was generally higher in the study group than in the control group, suggesting the possibility of improvements in care quality along measured dimensions and enhanced diusion of new protocols based on new clinical evidence. [336] Anupam B. Jena and Tomas J. Philipson. Cost-Eectiveness Analysis and Innovation. Journal of Health Economics, 27(5), September 2008. Abstract: While cost-eectiveness (CE) analysis has provided a guide to allocating often scarce resources spent on medical technologies, less emphasis has been placed on the eect of such criteria on the behavior of innovators who make health care technologies available in the rst place. A better understanding of the link between innovation and cost-eectiveness analysis is particularly important given the large role of technological change in the growth in health care spending and the growing interest of explicit use of CE thresholds in leading technology adoption in several Westernized countries. We analyze CE analysis in a standard market context, and stress that a technologys cost-eectiveness is closely related to the consumer surplus it generates. Improved CE therefore often clashes with interventions to stimulate producer surplus, such as patents. We derive the inconsistency between technology adoption based on CE analysis and economic eciency. Indeed, static eciency, dynamic eciency, and improved patient health may all be induced by the cost-eectiveness of the technology being at its worst level. As producer appropriation of the 122

social surplus of an innovation is central to the dynamic eciency that should guide CE adoption criteria, we exemplify how appropriation can be inferred from existing CE estimates. For an illustrative sample of technologies considered, we nd that the median technology has an appropriation of about 15%. To the extent that such incentives are deemed either too low or too high compared to dynamically ecient levels, CE thresholds may be appropriately raised or lowered to improve dynamic eciency. [337] Gail A. Jensen, Stephen J. Spurr, Derek A. Weycker, and Maria Bulycheva. Physicians and the Risk of Medical Malpractice: The Role of Prior Litigation in Predicting the Future. Quarterly Review of Economics and Finance, 39(2):26789, summer 1999. Abstract: This article examines the role of a physicians prior experience in medical malpractice litigation in the resolution of current malpractice claims. We rst use probability theory to show that if physicians are heterogeneous in the quality of care they practice, then a record of malpractice liability makes it more likely that the physician provides care of relatively low quality, and that if a malpractice claim is led, it is more likely that the physician was in fact negligent in this case, and that the claim will be paid. We then show that this last result, which is testable, holds up when we analyze the resolution of medical malpractice claims led in Michigan over the period 1982 to 1989. We nd that malpractice liability, whether from an out-of-court settlement or through verdict of a court or arbitration panel, is signicantly more likely when the defendant has a poor prior litigation record. The defendants litigation record is also positively and signicantly related to the amount of a settlement payment, but not to an award made through trial or arbitration. [338] Sergi Jimenez-Martin, Jose M. Labeaga, and Maite Martinez-Granado. Latent Class versus Two-Part Models in the Demand for Physician Services across the European Union. Health Economics, 11(4):30121, June 2002. Abstract: Using three waves of data from the European Community Household Panel, this paper estimates demand for physician services equations for 12 European countries. We focus on the selection of the most appropriate econometric specication for visits to general practitioners and to specialists among two-part and latent class models. The distinction between the demand of services from these two types of physicians allows us to distinguish cases in which two-part perform better than latent class models, evidence which is dierent from previous ndings in the literature. The results suggest that latent class models are more appropriate than two-part models to estimate general practitioners utilisation while the opposite is found for visits to the specialists. [339] Andrew Jones and Owen ODonnell, editors. Econometric Analysis of Health Data. John Wiley & Sons, Ltd., Chichester, West Sussex, 2002.


Papers from Health Economics. [340] Charles I. Jones. Why Have Health Expenditures as a Share of GDP Risen So Much? University of California (Berkeley) working paper, October 2002. Abstract: Aggregate health expenditures as a share of GDP have risen in the United States from about 5 percent in 1960 to nearly 14 percent in recent years. Why? This paper explores a simple explanation based on technological progress. Medical advances allow diseases to be cured today, at a cost, that could not be cured at any price in the past. When this technological progress is combined with a Medicare-like transfer program to pay the health expenses of the elderly, the model is able to reproduce the basic facts of recent U.S. experience, including the large increase in the health expenditure share, a rise in life expectancy, and an increase in the size of health-related transfer payments as a share of GDP. [341] Simon Andrew Jones, Mark Patrick Joy, and Jon Pearson. Forecasting Demand of Emergency Care. Health Care Management Science, 5(4):297 305, November 2002. Abstract: This paper describes a model that can forecast the daily number of occupied beds due to emergency admissions in an acute hospital. Out of sample forecasts 32 day days in advance, have an RMS error of 3% of the mean number of beds used for emergency admissions. We nd that the number of occupied beds due to emergency admissions is related to both air temperature and PHLS data on inuenza like illnesses. We nd that a period of high volatility, indicated by GARCH errors, will result in an increase in waiting times in the A&E Department. Furthermore, volatility gives more warning of waiting times in A&E than total bed occupancy. [342] Theodore J. Joyce, Michael Grossman, and Fred Goldman. An Assessment of the Benets of Air Pollution Control: The Case of Infant Health. Journal of Urban Economics, 25(1):3251, January 1989. Abstract: This paper contains estimates of the impacts of air pollutants on race-specic neonatal mortality rates based on data for heavily populated counties of the U.S. in 1977. Unlike previous research in this area, these estimates are obtained from a well specied behavioral model of the production of health, which is estimated with the appropriate simultaneous equations techniques. The results suggest that sulfur dioxide is the dominant air pollutant in newborn survival outcomes. There is also evidence that an increase in sulfur dioxide raises the neonatal mortality rate by raising the percentage of low-birth weight births. Based on marginalwillingness-to-pay computations, we estimate that the benets of a 10 percent reduction in sulfur dioxide levels range between $54 million and $1.09 billion in 1977 dollars. [343] James S. Juana, N. Narayana, and Christopher Mupimpila. Estimating Household Expenditure on Malaria Interventions in Western Sierra Leone: 124

A Contingent Valuation Approach. International Journal of Environment and Development, 1(1):6781, June 2004. Abstract: Malaria is a major killer disease in Sierra Leone. Though various methods of intervention exist, the disease still has high morbidity and mortality rates, because the majority of the vulnerable people cannot aord recommended interventions from the formal health sector. This study investigates how households willingness to pay (WTP) for malaria interventions varies with their socio-economic characteristics such as income, level of education, nearness to a formal health facility, age and household size. This is achieved through econometric analyses, which rst develops scenarios on WTP for preventing and curing malaria, and then proceeds to assess the socio-economic determinants of households valuation of malaria interventions. The results indicate that people with higher income are willing to pay higher amounts for malaria interventions than those with low income. The results also indicate that the average willingness to pay for malaria prevention is higher than that for malaria cure. Based on these ndings, the study recommends appropriate health policy measures to address the high morbidity and mortality rates in the country. [344] David R. Just. Behavioral Economics, Food Assistance, and Obesity. Agricultural and Resource Economics Review, 35(2):20920, October 2006. Abstract: While there is mixed evidence of the impact of food assistance programs on obesity, there is general agreement that the food-insecure are at higher risk of obesity and obesity-related diseases. Food assistance programs, originally designed to overcome a lack of available food, now need to confront a very dierent problem: how to provide for the food-insecure while encouraging healthy lifestyles. This paper examines the potential to address these competing needs using traditional economic policies (manipulating information or prices) versus policies engaging behavioral economics and psychology. [345] David R. Just, Lisa Mancino, and Brian Wansink. Could Behavioral Economics Help Improve Diet Quality for Nutrition Assistance Program Participants? Economic Research Report 43, U.S. Department of Agriculture, Economic Research Service, ERR43/, June 2007. Abstract: As obesity has come to the forefront of public health concerns, there is growing interest in nding ways to guide consumers food choices to be more benecial for their long-term health. About one in ve Americans participates in at least one nutrition assistance program sponsored by the U.S. Department of Agriculture. This study uses behavioral economics, food marketing, and psychology to identify possible options for improving the diets and health of participants in the Food Stamp Program, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), and the National School Lunch and School Breakfast Programs.


[346] Robert Kaestner and Jose Guardado. Medicare Reimbursement, Nurse Stang, and Patient Outcomes. Journal of Health Economics, 27(2):339 61, March 2008. Abstract: There is widespread concern about the quality of health care in the US, and the eect of provider payments on the quality of care is an important and unsettled issue in this debate. The critical question is whether changes in provider payments aect health. To date there is relatively little research on this question. Here, we present evidence of the eect of plausibly exogenous changes in Medicare reimbursementcaused by geographical reclassicationon hospital stang (nurses) and patient outcomes. We nd that changes in Medicare reimbursement levels of approximately 10% have no meaningful eect on hospital use of resources or patient outcomes. [347] Nanak Kakwani, Adam Wagsta, and Eddy Van Doorslaer. Socioeconomic Inequalities in Health: Measurement, Computation, and Statistical Inference. Journal of Econometrics, 77:87103, 1997. Keywords: health economics, socioeconomic inequality, concentration index, standard errors [348] Mari Kan and Wataru Suzuki. The Demand for Medical Care in Japan: Initial Findings from a Japanese Natural Experiment. Applied Economics Letters, 13(5):27377, April 2006. Abstract: This study examines the eect of the 1997 increase in the coinsurance rate for household heads on the demand for medical care and estimates the price elasticity of demand using the change as a natural experiment. It analyses both outpatient and inpatient utilization by using health insurance claim data from 111 insurance associations. A dierencesin-dierences type estimator is employed with household heads as the treatment group and dependents as the control group. This represents the rst comprehensive analysis of medical care demand in Japan using a natural experiment. The results indicate a price elasticity of outpatient care ranging from -0.05 to -0.06 but no signicant eects on inpatient care of the increase in cost sharing. The price elasticity for outpatient care is lower than those from previous studies that have used observational comparisons of individuals in Japan and also smaller than those derived from a randomized experiment in the USA. [349] T. Kankaanranta and P. Rissanen. The Labor Supply of Registered Nurses in Finland: The Eect of Wages and Working Conditions. European Journal of Health Economics, 10(2):16778, May 2009. Abstract: Many countries report, to varying degrees, of suering from a shortage of nurses. We examined both pecuniary and non-pecuniary factors that may be associated with nurses labor supply. We approximated a classical labor supply model and calculated the wage elasticities of hours of work and participation. Even though the wage elasticity was quite small, 126

the eect on the hours supplied was signicant. However, wages alone may not suciently increase the labor supply from the current stock of nurses; other elements, such as contractual conditions, seem to play an important role as well. [350] H. Gilbert Katz, David A.; Welch. Discounting in Cost-Eectiveness Analysis of Healthcare Programmes. PharmacoEconomics, 3(4):27685, April 1993. [351] Emmett B. Keeler, Glenn Melnick, and Jack Zwanziger. Title The Changing Eects of Competition on Non-prot and For-Prot Hospital Pricing Behavior. Journal of Health Economics, 18(1):6986, January 1999. Abstract: Has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by oering their doctors high-quality services to a price war for the patients of payors? This paper uses time-series, cross-sectional methods on California hospital discharge data from 1986-94 to show the association of hospital prices with measures of market concentration changed steadily over this period, with prices now higher in less competitive areas, even for nonprot hospitals. Regression results are used to simulate the price impact of hypothetical hospital mergers. [352] Thomas Kemp. The Stem Cell Debate: A Veblenian Perspective. Journal of Economic Issues, 38(2):42128, June 2004. Kemp notes that stem cell research originated in the U.S. but now is constrained there by regulations reecting religious doctrine. Meanwhile, China and other countries where religion exerts little inuence on policy may be catching up or overtaking the U.S. in stem cell research. Kemp sees this experience as an instance of Veblens theory of technological transfer from countries with imbecile institutions to countries with more receptive cultures. [353] Peter Kemper, Ha T. Tu, James D. Reschovsky, and Elizabeth Schaefer. Insurance Product Design and Its Eects: Trade-Os along the Managed Care Continuum. Inquiry, 39(2):10117, summer 2002. Abstract: This paper uses 19961997 Community Tracking Study data to analyze the eects of dierent insurance product designs on service use, access, and consumer assessments of care for nonelderly people with employer-sponsored insurance. Product types are dened by features including use of networks, gatekeeping, capitation, and group/sta model delivery systems. The study found no evidence of dierences across product types in unmet need or delayed care or use of hospitals, surgery, or emergency rooms. At the same time, dierent product designs present purchasers with a clear trade-o between paying more out of pocket and encountering more administrative barriers to care. In addition, an increasing proportion of consumers report dissatisfaction with choice of physicians and low trust in physicians as one moves along the managed care 127

continuum from unmanaged to heavily managed products. The existence of a trade-o between out-of-pocket costs and administrative barriers to care means that some forms of regulation run the risk of reducing choices available to consumers. [354] Don Kenkel. Using Estimates of the Value of a Statistical Life in Evaluating Consumer Policy Regulations. Journal of Consumer Policy, 26(1):1 21, March 2003. Abstract: This paper is a critical review of current practice for the economic evaluation of the life-saving benets of U.S. consumer policy regulations. Selected evaluations conducted by the U.S. Environmental Protection Agency, the Economic Research Service of the U.S. Department of Agriculture, and the U.S. Food and Drug Administration are briey reviewed. The standard approach to placing a dollar value on the life-saving benets of regulations is based on societal willingness to pay for mortality risk reductions, conveniently summarized as the value of a statistical life (VSL). The paper proposes a common-sense rule for improving current practice: Dierent agencies reducing similar health risks for similar populations should use consistent estimates of the VSL, but each agency should use VSL estimates that are specic to the health risk and population affected by its regulations. Developing VSL estimates that vary by cause of death and that reect dierences in willingness to pay due to age, income, and risk preferences poses a challenge for both the research community that generates VSL estimates and policymakers. [355] Don Kenkel. WTP- and QALY-Based Approaches to Valuing Health for Policy: Common Ground and Disputed Territory. Environmental and Resource Economics, 34(3):419437, July 2006. Abstract: This paper discusses links between two approaches to the value of health: the willingness to pay approach of environmental economics and the quality-adjusted life year approach of health economics. The approaches are used in cost-benet and cost-eectiveness analyses of health interventions. Despite fundamental dierences in the decision contexts and conceptual foundations of the two approaches, in current practice they are likely to lead to similar policy decisions. The paper also shows how research on the quality-adjusted life year (QALY) can be used to ll in gaps in the willingness to pay literature. The paper sketches a simple model that shows how to QALY-fy the value of a statistical life; i.e., how to combine QALY estimates with estimates of the value of a statistical life to estimate willingness to pay for morbidity risks. Keywords: cost-benet analysis; cost-eectiveness analysis; willingness to pay; QALY [356] Donald S. Kenkel. Prevention. In Culyer and Newhouse [152], chapter 31, pages 16751720. Abstract: Prevention ranges from medical decisions such as vaccinations and clinical preventive services delivered during periodic health examina128

tions to private health lifestyle decisions such as regular exercise and nonsmoking. The aim of this chapter is to provide an overview of economic issues that cut across a variety of prevention decisions. After discussing what prevention means, the chapter reviews some basic theoretical insights about prevention from human capital models and insurance models. Consumer or household behavior receives most of the attention, partly because there is not an identiable industry that produces prevention viewed broadly. The chapter next explores market failures that might lead to too little prevention from a societal perspective: ex ante moral hazard from health insurance, externalities from vaccinations, lack of consumer information, and the public good aspects of prevention-related research and development. Health economics provides some conceptual and empirical arguments for policies to encourage prevention. However, the economic perspective often remains quite dierent from the perspective of many public health professionals who are strong advocates of prevention. With that distinction in mind, the chapter then turns to policy-relevant questions of whether prevention can reduce total medical expenditures, and the eectiveness of policy interventions to encourage prevention. The chapter concludes with some reections on what economics has oered and can oer to prevention research. [357] Daniel Kessler and Mark McClellan. Designing Hospital Antitrust Policy to Promote Social Welfare. In Garber [235], chapter 3, pages 5375. The authors nd that competition among hospitals before 1991 led to higher costs and lower rates of adverse health outcomes for elderly Americans with heart disease; but, after 1990, competition led both to substantially lower costs and substantially lower rates of adverse outcomes. Thus, after 1990, hospital competition unambiguously improves both patient well-being and overall social welfare. Increasing HMO enrollment over the sample period partially explains the dramatic change in the impact of hospital competition; hospital competition is unambiguously welfare improving throughout the sample period in geographic areas with abovemedian HMO enrollment rates.... The eect of an interquartile change in competitiveness on expenditures and outcomes is much greater for areas moving to or from the most and least competitive quartiles than for areas moving between the second and third quartiles. The authors propose that these ndings be used by antitrust policy makers to help determine which hospital mergers should be allowed. [358] Daniel P. Kessler and Mark B. McClellan. Do Doctors Practice Defensive Medicine? Quarterly Journal of Economics, 111(2):35390, May 1996. Abstract: Defensive medicine is a potentially serious social problem: if fear of liability drives health care providers to administer treatments that do not have worthwhile medical benets, then the current liability system may generate ineciencies much larger than the costs of compensating malpractice claimants. To obtain direct empirical evidence on this ques129

tion, we analyze the eects of malpractice liability reforms using data on all elderly Medicare beneciaries treated for serious heart disease in 1984, 1987, and 1990. We nd that malpractice reforms that directly reduce provider liability pressure lead to reductions of 5 to 9 percent in medical expenditures without substantial eects on mortality or medical complications. We conclude that liability reforms can reduce defensive medical practices. [359] Daniel P. Kessler and Mark B. McClellan. The Eects of Malpractice Pressure and Liability Reforms on Physicians Perceptions of Medical Care. Working Paper 6346, National Bureau of Economic Research, Cambridge, Massachusetts, January 1998. Abstract: Understanding how and why liability laws and liability reforms alter the medical treatment decision-making process is central to reforming the U.S. malpractice liability system. Based on analysis of the American Medical Association Socioeconomic Monitoring System survey, the authors present four ndings. First, physicians from states enacting liability reforms that directly reduce malpractice pressure experience lower growth over time in malpractice claims rates and in real malpractice insurance premiums. Second, physicians from reforming states report significant relative declines in the perceived impact of malpractice pressure on practice patterns. Third, individual physicians personal experiences with the malpractice system are a key determinant of the perceived importance of defensive medicine. Fourth, the impact of individual physicians claims experience on perceptions is smaller in reforming than in nonreforming states. These results suggest that reforms aect physicians attitudes by reducing the probability of a liability system encounter and by changing the experience of being sued. [360] Daniel P. Kessler and Mark B. McClellan. How Liability Law Aects Medical Productivity. Journal of Health Economics, 21(6):93155, November 2002. Abstract: Previous research suggests that direct reforms to the liability systemreforms designed to reduce the level of compensation to potential claimantsreduce medical expenditures without important consequences for patient health outcomes. We extend this research by identifying the mechanisms through which reforms aect the behavior of health care providers. Although we nd that direct reforms improve medical productivity primarily by reducing malpractice claims rates and compensation conditional on a claim, our results suggest that other policies that reduce the time spent and the amount of conict involved in defending against a claim can also reduce defensive practices substantially. In addition, we nd that malpractice pressure has a more signicant impact on diagnostic rather than therapeutic treatment decisions. Our results provide an empirical foundation for simulating the eects of untried malpractice re-


forms on health care expenditures and outcomes, based on their predicted eects on the malpractice pressure facing medical providers. [361] Daniel P. Kessler and Mark B. McClellan. Malpractice Law and Health Care Reform: Optimal Liability Policy in an Era of Managed Care. Journal of Public Economics, 84(2):17597, May 2002. Abstract: Because fee-for-service health insurance insulates providers from the costs of treatment decisions, it may lead to defensive medicine precautionary treatment with minimal expected medical benet administered out of fear of legal liability. By giving providers higher-powered incentives, managed care may aect optimal liability policy. Among elderly Medicare beneciaries with heart disease in 19841994, we nd that liability-reducing tort reforms reduce defensive practices in areas with high and low managed care enrollment, but that managed care and liability reform are substitutes. We consider some implications of these results for the current debate over the appropriateness of extending malpractice liability to managed care organizations. [362] Samer A. Kharroubi, John E. Brazier, Jennifer Roberts, and Anthony OHagan. Modelling SF-6D Health State Preference Data Using a Nonparametric Bayesian Method. Journal of Health Economics, 26(3):597 612, May 2007. Abstract: This paper reports on the ndings from applying a new approach to modelling health state valuation data. The approach applies a nonparametric model to estimate SF-6D health state utility values using Bayesian methods. The data set is the UK SF-6D valuation study where a sample of 249 states dened by the SF-6D (a derivative of the SF-36) was valued by a representative sample of the UK general population using standard gamble. The paper presents the results from applying the nonparametric model and comparing it to the original model estimated using a conventional parametric random eects model. The two models are compared theoretically and in terms of empirical performance. The paper discusses the implications of these results for future applications of the SF-6D and further work in this eld. [363] Ahmed W. Khwaja. Health Insurance, Habits and Health Outcomes: Moral Hazard in a Dynamic Stochastic Model of Investment in Health. In Levine and Zame [401]. Abstract: This paper develops and estimates a life cycle dynamic stochastic discrete choice model of individual decisions about health insurance, exercise, smoking, alcohol consumption and medical treatment in a Grossman (1972) type framework where health is human capital. The estimated model is used to examine the eects of potential changes in health insurance coverage on health outcomes and individual behaviors over the life cycle. In particular the model is used to determine the moral hazard associated with the provision of health insurance on medical treatment and 131

habits like smoking and alcohol consumption. The model is estimated using data on 3671 males from the Health and Retirement Study. The estimated model ts the data well, which amounts to a test of an extended version of the full Grossman model, further justifying the use of health as human capital models to explain individual health investment decisions. In one counter factual experiment that simulates the provision of comprehensive health insurance coverage with no out of pocket medical costs it is found that the proportion of individuals consuming alcohol rises up to 0.4% compared to the baseline simulations. Smoking rates show a small rise of up to 0.5%. The proportion of individuals seeking medical treatment increases by up to 49% while health outcomes improve negligibly (up to 0.06%). In a second experiment that simulates the withdrawal of subsidized medical care wherein all medical treatment is out of pocket the simulations reveal that the proportion of individuals consuming alcohol falls by up to 0.3%. Smoking rates fall by up to 0.6%. The proportion of individuals seeking medical care falls by up to 95% with an associated drop in life cycle health outcomes of as much as 0.9%. The two extreme experiments taken together provide bounds on the extent of moral hazard and suggest that there is little reason to believe that there exists a signicant moral hazard problem associated with the provision of subsidized medical care on habits like smoking and alcohol consumption. Similarly the eects of large changes in health insurance on health outcomes are small. On the contrary as found previously (e.g. Manning et al., 1987) there is considerable moral hazard in the provision of health insurance on demand for medical care. [364] Jacques Ngoie Kibambe and Steven F. Koch. DEA Applied to a Gauteng Sample of Public Hospitals. South African Journal of Economics, 75(2):35168, June 2007. Abstract: The research presented in this paper provides an analysis of the delivery of a few health care services by the public sector in Gauteng, South Africa. The data for the study was especially dicult to collect, suggesting the need for hospital level data information systems, as well as sta who are trained to analyze the information collected. The empirical results from the analysis suggest that services provided by small-scale medical facilities waste fewer resources, while medical centres oering more technical services, such as surgeries, also appear to deliver medical services more eciently. [365] G. Kobelt and B. Jonsson. The Burden of Rheumatoid Arthritis and Access to Treatment: Outcome and Cost-Utility of Treatments. European Journal of Health Economics, 8(Supplement 2):S95106, January 2008. Abstract: Within the series of articles investigating the burden of rheumatoid arthritis (RA), this paper reviews the methods used for economic assessment of the RA treatments by HTA agencies and other bodies involved in cost-eectiveness analysis and the current status of the eld. The overall 132

methods, as well as the challenges, of cost-eectiveness analysis in RA are common to all chronic progressive diseases where much of the treatment benet is delayed, while costs occur immediately. Also, as in all disabling diseases, much of the costs occur outside the health-care system, due to the rapid loss of work capacity and the need for informal care in the later stages of the disease. Thus, it is essential to adopt a long-term view and consider costs from the perspective of society, rather than the health-care service, to increase the relevance of the results for policy making. [366] Cagatay Koc. The Eects of Uncertainty on the Demand for Health Insurance. Journal of Risk and Insurance, 71(1):4161, March 2004. Abstract: This article analyzes the eects of uncertainty and increases in risk aversion on the demand for health insurance using a theoretical model that highlights the interdependence between insurance and health care demand decisions. Two types of uncertainty faced by the individuals are examined. The rst one is the uncertainty in the consumers pretreatment health and the second is the uncertainty surrounding the productivity of health care. Comparative statics results are reported indicating the impact on the demand for insurance of shifts in the distributions of pretreatment health and productivity of health care in the form of rst-order stochastic dominance, Rothschild-Stiglitz mean-preserving spreads, and second-order stochastic dominance. The demand for insurance increases in response to a Rothschild-Stiglitz increase in risk in the distribution of the pretreatment health provided that the health production function is in a special class and the price elasticity of health care is nondecreasing in the pretreatment health. Provided also that the demand for health care is own-price inelastic, the same conclusion is obtained when the uncertainty is about the productivity of health care. [367] Cagatay Koc. A Theoretical Rationale for an Inelastic Demand for Health Care. Economics Letters, 82(1):914, January 2004. Abstract: This paper provides a theoretical rationale for the empirical nding that the demand for health care is inelastic. Using Wagsta [Bull. Econ. Res. 38 (1986) 93] version of Grossman [J. Polit. Econ. 80 (1972) 223] human capital model of the demand for health, the paper develops a criterion to identify restrictions on the basics of the model (i.e., on the utility and health production functions) for the purpose of realizing an inelastic demand for health care. [368] Ikuho Kochi, Bryan Hubbell, and Randall Kramer. An Empirical Bayes Approach to Combining and Comparing Estimates of the Value of a Statistical Life for Environmental Policy Analysis. Environmental and Resource Economics, 34(3):385406, July 2006. Abstract: An empirical Bayes pooling method is used to combine and compare estimates of the value of a statistical life (VSL). The data come from 40 selected studies published between 1974 and 2002, containing 197 133

VSL estimates. The estimated composite distribution of empirical Bayes adjusted VSL has a mean of $5.4 million and a standard deviation of $2.4 million. The empirical Bayes method greatly reduces the variability around the pooled VSL estimate. The pooled VSL estimate is inuenced by the choice of valuation method, study location, and union status of sample but not to the source of data on occupational risk or the consideration of non-fatal risk injury. Keywords: value of a statistical life (VSL); empirical Bayes estimate; environmental policy; health policy; contingent valuation method; hedonic wage method [369] Gary Koop, Jacek Osiewalski, and Mark F. J. Steel. Bayesian Eciency Analysis through Individual Eects: Hospital Cost Frontiers. Journal of Econometrics, 76:77105, 1997. [370] Gary Koop and Lise Tole. Measuring the Health Eects of Air Pollution: To What Extent Can We Really Say That People Are Dying from Bad Air? Journal of Environmental Economics and Management, 47(1):3054, January 2004. Abstract: Estimation of the eects of environmental impacts is a major focus of current theoretical and policy research in environmental economics. Such estimates are used to set regulatory standards for pollution exposure; design appropriate environmental protection and damage mitigation strategies; guide the assessment of environmental impacts; and measure public willingness to pay for environmental amenities. It is a truism that the eectiveness of such strategies depends crucially on the quality of the estimates used to inform them. However, this paper argues that in respect to at least one area of the empirical literaturethe estimation of the health impacts of air pollution using daily time series dataexisting estimates are questionable and thus have limited relevance for environmental decision-making. By neglecting the issue of model uncertaintyor which models, among the myriad of possible models researchers should choose from to estimate health eectsmost studies overstate condence in their chosen model and underestimate the evidence from other models, thereby greatly enhancing the risk of obtaining uncertain and inaccurate results. This paper discusses the importance of model uncertainty for accurate estimation of the health eects of air pollution and demonstrates its implications in an exercise that models pollution-mortality impacts using a new and comprehensive data set for Toronto, Canada. The main empirical nding of the paper is that standard deviations for air pollution-mortality impacts become very large when model uncertainty is incorporated into the analysis. Indeed they become so large as to question the plausibility of previously measured links between air pollution and mortality. Although applied to the estimation of the eects of air pollution, the general message of this paperthat proper treatment of model uncertainty critically determines the accuracy of the resulting estimatesapplies to many studies that seek to estimate environmental eects.


[371] Gary Koop and Lise Tole. An Investigation of Thresholds in Air PollutionMortality Eects. Environmental Modelling & Software, 21(12):1662 1673, December 2006. Abstract: In this paper we introduce and implement new techniques to investigate threshold eects in air pollution-mortality relationships. Our key interest is in measuring the dose-response relationship above and below a given threshold level where we allow for a large number of potential explanatory variables to trigger the threshold eect. This is in contrast to existing approaches that usually focus on a single threshold trigger. We allow for a myriad of threshold eects within a Bayesian statistical framework that accounts for model uncertainty (i.e. uncertainty about which threshold trigger and explanatory variables are appropriate). We apply these techniques in an empirical exercise using daily data from Toronto for 19921997. We investigate the existence and nature of threshold effects in the relationship between mortality and ozone (O3 ), total particulate matter (PM) and an index of other conventionally occurring air pollutants. In general, we nd the eects of the pollutants we consider on mortality to be statistically indistinguishable from zero with no evidence of thresholds. The one exception is ozone, for which results present an ambiguous picture. Ozone has no signicant eect on mortality when we exclude threshold eects from the analysis. Allowing for thresholds we nd a positive and signicant eect for this pollutant when the threshold trigger is the average change in ozone two days ago. However, this signicant eect is not observed after controlling for PM. Keywords: Threshold air pollution-mortality eects; Bayesian model averaging; PM; O3 [372] Janos Kornai. The Soft Budget Constraint Syndrome in the Hospital Sector. International Journal of Health Care Finance and Economics, 9(2):11735, June 2009. Abstract: This study applies the theory and the conceptual framework of the soft budget constraint (SBC) to the hospital sector. The rst part deals solely with hospitals in state ownership, but the study moves later onto the problems of ownership relations as well. The question posed is why the SBC phenomenon is so general in the hospital sector (including specialist outpatient clinics and diagnostic or nursing establishments that operate as separate units). The study contains several references to Hungarian experience, but the subject is of a more general nature. The SBC phenomenon is not conned to the Hungarian hospital sector, nor to the socialist system, nor as a vestige of socialism during post-socialist transformation. Soft budget constraints inevitably develop in the hospital sector, even in capitalist market economies. [373] Lisi Krall. The Rise and Fall of Customary Wage Dierentials among Nursing Personnel in US Hospitals: 19561985. Cambridge Journal of Economics, 19(3):40519, June 1995.


Abstract: Between 1956 and 1985, the employment of registered nurses (RNs) relative to other nursing personnel rose despite constant relative wages among RNs, licensed practical nurses, and nurses aides. Over this thirty-year period, hospital management proclaimed chronic shortages of RNs. Economists have used monopsonistic models to explain the persistence of these shortages. As an alternative to the monopsonistic model, this paper presents an institutional argument for why hospital management sought to maintain relative wages among classes of nursing personnel while at the same time successfully raising the relative use of RNs through a variety of nonwage inducements and manipulations of RN supply. [374] Lisi Krall and Mark J. Prus. Institutional Changes in Hospital Nursing. Journal of Economic Issues, 29(1):6782, March 1995. Abstract: Recent analyses of the nursing shortage claim that monopsonistic market structure depresses the wages of RNs relative to other hospital workers and leads to the substitution of RNs for other less skilled hospital personnel such as LPNs and Aides. We argue that this explanation is inadequate for understanding the increased utilization of RNs in hospitals since the late 1960s on both logical and empirical grounds. We oer an alternative explanation rooted in historical and institutional change. Specically, our analysis focuses on changes in the internal organization of hospital nursing which were responses to organizational ineciencies, cost containment pressures, changes in the complexity and intensity of patient care, as well as changes in management strategies. [375] Brent Kreider and Steven C. Hill. Partially Identifying Treatment Eects with an Application to Covering the Uninsured. Sta general research papers, Iowa State University, Department of Economics, 12296_05013.pdf, 2005. Abstract: We extend the nonparametric literature on partially identied probability distributions and treatment eects. We then use our analytical results to bound the impact of universal health insurance on provider visits and medical expenditures. Our approach accounts for uncertainty about the reliability of self-reported insurance status as well as uncertainty created by unknown counterfactuals. As part of the contribution, we provide sharp bounds on the conditional mean of a random variable for the case that a binary conditioning variable is subject to arbitrary endogenous measurement error. Using data from the 1996 Medical Expenditure Panel Survey (MEPS), we construct health insurance validation data for a nonrandom portion of the sample based on insurance cards, policy booklets, and follow-back interviews with employers and insurance companies. Under relatively weak verication and monotonicity assumptions, we estimate that monthly per capita provider visits under universal coverage would rise by no more than four-tenths of a visit (a 9% change) across the


nonelderly population and that per capita expenditures would rise by less than 15%. [376] Fred Kuchler, Abebayehu Tegene, and J Michael Harris. Taxing Snack Foods: Manipulating Diet Quality or Financing Information Programs? Review of Agricultural Economics, 27(1):420, spring 2005. Abstract: This paper investigates consumers likely response to a proposed tax on snack foods that addresses public health issues generated by rising U.S. obesity rates. We estimate demands for particular snack foods and show they are price inelastic after accounting for quality variation. We calculate impacts of a range of ad valorem taxes on the demand for salty snack food. The impacts on dietary quality are small, and negligible at the lower tax rates. If taxes were earmarked for funding information programs, as several proponents suggest, taxes would generate a revenue stream the public health community could use for nutrition education. [377] Charlotte Kumaranayake, Lilani; Watts. HIV/AIDS Prevention and Care Interventions in Sub-Saharan Africa: An Econometric Analysis of the Costs of Scaling-Up. South African Journal of Economics, 68(5):101232, December 2000. Abstract: This paper examines estimated costs of scaling-up HIV/AIDS interventions for 34 sub-Saharan African countries. Econometric methods explore the relationship between costs and scale. Decreasing returns to scale are found when coverage is scaled up to levels of 25 per cent for prevention, care and treatment activities alone. Further diseconomies of scale are found when scaling-up the entire package of interventions. This suggests the interactive eect between prevention, care and treatment and diseconomies of scope given the existing levels of infrastructure. Without substantial investments in infrastructure increasing the scale of these interventions will lead to increasing ineciencies and higher average costs. [378] Lilani Kumaranayake. The Role of Regulation: Inuencing Private Sector Activity within Health Sector Reform. Journal of International Development, 9(4):64149, June 1997. [379] Lilani Kumaranayake and Charlotte Watts. Resource Allocation and Priority Setting of HIV/AIDS Interventions: Addressing the Generalized Epidemic in Sub-Saharan Africa. Journal of International Development, 13(4):45166, May 2001. Abstract: The endemic nature of HIV/AIDS in Africa has led to substantial activity to intensify action in SSA over the past two years. There has been both a reallocation of resources towards HIV/AIDS and wide scale eorts at mobilizing additional resources to scale up HIV/AIDS prevention and care interventions. Despite eorts to rapidly mobilize resources, priority-setting among the various interventions remains a central issue, with broad debates about how resources should be allocated, and particular concern about treatment and the availability of drugs. In this paper, 137

we discuss the range of interventions which are commonly implemented for HIV /AIDS and the debate around priority-setting, in settings where the HIV epidemic is centralised. [380] Gail P. Laing and Alfred W. Rademaker. Married Registered Nurses Labour Force Participation. Canadian Journal of Nursing Research, 22(1):2138, spring 1990. Using 1985 data for Saskatchewan, the authors nd that wages had no signicant eect on married RNs labor force participation or hours. [381] Darius Lakdawalla and Tomas Philipson. The Growth of Obesity and Technological Change: A Theoretical and Empirical Examination. Working Paper 8946, National Bureau of Economic Research, Cambridge, Mass., 2002. Abstract: This paper provides a theoretical and empirical examination of the long-run growth in weight over time. We argue that technological change has induced weight growth by making home- and marketproduction more sedentary and by lowering food prices through agricultural innovation. We analyze how such technological change leads to unexpected relationships among income, food prices, and weight. Using individual-level data from 1976 to 1994, we then nd that such technologybased reductions in food prices and job-related exercise have had significant impacts on weight across time and populations. In particular, we nd that about forty percent of the recent growth in weight seems to be due to agricultural innovation that has lowered food prices, while sixty percent may be due to demand factors such as declining physical activity from technological changes in home and market production. [382] Philip J. Landrigan, Clyde B. Schechter, Jerey M. Lipton, Marianne C. Fahs, and Joel Schwartz. Environmental Pollutants and Disease in American Children: Estimates of Morbidity, Mortality, and Costs for Lead Poisoning, Asthma, Cancer, and Developmental Disabilities. Environmental Health Perspectives, 110(7):7218, March 2002. Abstract: In this study, we aimed to estimate the contribution of environmental pollutants to the incidence, prevalence, mortality, and costs of pediatric disease in American children. We examined four categories of illness: lead poisoning, asthma, cancer, and neurobehavioral disorders. To estimate the proportion of each attributable to toxins in the environment, we used an environmentally attributable fraction (EAF) model. EAFs for lead poisoning, asthma, and cancer were developed by panels of experts through a Delphi process, whereas that for neurobehavioral disorders was based on data from the National Academy of Sciences. We dene environmental pollutants as toxic chemicals of human origin in air, food, water, and communities. To develop estimates of costs, we relied on data from the U.S. Environmental Protection Agency, Centers for Disease Control and Prevention, National Center for Health Statistics, the 138

Bureau of Labor Statistics, the Health Care Financing Agency, and the Practice Management Information Corporation. EAFs were judged to be 100% for lead poisoning, 30% for asthma (range, 1035%), 5% for cancer (range, 210%), and 10% for neurobehavioral disorders (range, 520%). Total annual costs are estimated to be $54.9 billion (range $48.864.8 billion): $43.4 billion for lead poisoning, $2.0 billion for asthma, $0.3 billion for childhood cancer, and $9.2 billion for neurobehavioral disorders. This sum amounts to 2.8 percent of total U.S. health care costs. This estimate is likely low because it considers only four categories of illness, incorporates conservative assumptions, ignores costs of pain and suering, and does not include late complications for which etiologic associations are poorly quantied. The costs of pediatric environmental disease are high, in contrast with the limited resources directed to research, tracking, and prevention. [383] Julia Lane and Stephan Gohmann. Shortage or Surplus: Economic and Noneconomic Approaches to the Analysis of Nursing Labor Markets. Southern Economic Journal, 61(3):64453, January 1995. Abstract: The current health care debate focuses attention on resource allocation through cost containment. Policymakers can view this allocation from an economic or noneconomic standpoint with deep divisions in both analysis and recommendations. This paper compares and contrasts the dierences in the two approaches using the nursing labor market as an example. The authors demonstrate that economists and medical professionals are likely to disagree on even fundamental denitions, such as where a shortages of nurses exists, and that this leads to substantive differences in policy suggestions. [384] Kenneth M. Langa and Elliot J. Sussman. The Eect of Cost-Containment Policies on Rates of Coronary Revascularization in California. New England Journal of Medicine, 329(24):178489, December 9 1993. BACKGROUND: Lower rates of use of resources have been reported for the treatment of hospitalized patients covered by Medicaid than for privately insured patients. Cost-containment policies may exacerbate such dierences in the use of hospital resources. We studied patients with ischemic heart disease who received care at nonfederal hospitals in California in 1983 (the year a Medicaid cost-containment program was implemented), in 1985, or in 1988. Within this sample of patients, we compared the rates of coronary revascularization (coronary-artery bypass surgery or coronary angioplasty) among patients covered by Medicaid, patients with private insurance covering fee-for-service care, and patients enrolled in a health maintenance organization (HMO). METHODS: Logistic-regression models were used to determine adjusted odds ratios for the use of coronary revascularization procedures in patients with dierent types of insurance, with control for demographic, clinical, and hospital characteristics. The study samples were made up of 49,167 patients in 1983, 47,809 in 1985, and 139

44,631 in 1988. RESULTS. The frequency of revascularization increased in all three insurance groups from 1983 to 1988, but it did so much faster in the fee-for-service and HMO groups than in the Medicaid group. Patients with private fee-for-service insurance were 1.66 times as likely as Medicaid patients to undergo revascularization in 1983 (P < 0.01), 2.01 times as likely in 1985 (P < 0.01) and 2.33 times as likely in 1988 (P < 0.01). Patients enrolled in HMOs were 0.96 times as likely as Medicaid patients to undergo revascularization in 1983 (P < 0.05), 1.23 times as likely in 1985 (P < 0.01), and 1.53 times as likely in 1988 (P < 0.01). CONCLUSIONS: The frequency of coronary revascularization in California in 1983 was nearly twice as high for patients with private fee-for-service insurance as for patients enrolled in HMOs or for Medicaid recipients. The implementation that year of stringent cost-control measures by Medicaid may explain the slower increase in the frequency of revascularization over ve year among Medicaid recipients as compared with patients in the fee-for-service and HMO groups. Dierent incentives in fee-for-service and HMO practice may explain the lower frequency of revascularization among patients enrolled in HMOs, although the rates of increase for these two groups were about the same from 1983 to 1988. [385] Lon N. Larson. Cost Determination and Analysis. In Bootman et al. [72], chapter 3, pages 4459. [386] Mariel S. Lavieri and Martin L. Puterman. Optimizing Nursing Human Resource Planning in British Columbia. Health Care Management Science, 12(2):11928, June 2009. Abstract: This paper describes a linear programming hierarchical planning model that determines the optimal number of nurses to train, promote to management and recruit over a 20 year planning horizon to achieve specied workforce levels. Age dynamics and attrition rates of the nursing workforce are key model components. The model was developed to help policy makers plan a sustainable nursing workforce for British Columbia, Canada. An easy to use interface and considerable exibility makes it ideal for scenario and What-If? analyses. [387] Raman Laxminarayan, editor. Battling Resistance to Antibiotics and Pesticides: An Economic Approach. Resources for the Future, Washington, DC, 2003. The book is divided into three parts: I. Issues of optimal management of resistance; II. The Impact of Resistance; III. The behavior of rms [388] Ramanan Laxminarayan and Gardner M. Brown. Economics of Antibiotic Resistance: A Theory of Optimal Use. Discussion Paper 00/36, Resources for the Future,, September 2000. Abstract: In recent years bacteria have become increasingly resistant to antibiotics, leading to a decline in the eectiveness of antibiotics in treat-


ing infectious disease. This paper uses a framework based on an epidemiological model of infection in which antibiotic eectiveness is treated as a nonrenewable resource. In the model presented, bacterial resistance (the converse of antibiotic eectiveness) develops as a result of selective pressure on nonresistant strains due to antibiotic use. When two antibiotics are available, the optimal proportion and timing of their use depends on the dierence between the rates at which bacterial resistance to each antibiotic evolves and on the dierences in their pharmaceutical costs. Standard numerical techniques are used to illustrate cases for which the analytical problem is intractable. [389] Ramanan Laxminarayan and Gardner M. Brown. Economics of Antibiotic Resistance: A Theory of Optimal Use. Journal of Environmental Economics and Management, 42:183206, September 2001. Abstract: In recent years bacteria have become increasingly resistant to antibiotics, leading to a decline in the eectiveness of antibiotics in treating infectious disease. This paper uses a framework based on an epidemiological model of infection in which antibiotic eectiveness is treated as a nonrenewable resource. In the model presented, bacterial resistance (the converse of antibiotic eectiveness) develops as a result of selective pressure on nonresistant strains due to antibiotic use. When two antibiotics are available, the optimal proportion and timing of their use depends on the dierence between the rates at which bacterial resistance to each antibiotic evolves and on the dierences in their pharmaceutical costs. Standard numerical techniques are used to illustrate cases for which the analytical problem is intractable. [390] Ramanan Laxminarayan and Martin L. Weitzman. On the Implications of Endogenous Resistance to Medications. Journal of Health Economics, 21(4):70918, July 2002. Abstract: Uniform treatment guidelines are often used in medicine to ensure that all physicians prescribe a safe, ecacious, and cost-eective drug in treating a medical condition. The main message of this paper is that a policy of uniform treatment based on the standard cost-eectiveness criterion may be inappropriate when drug resistance is endogenous, and selection pressure imposed by the use of any single drug (antibiotic, antiviral, or antimalarial) leads sooner or later to the evolution of resistance (by bacteria, viruses, or parasites) to that drug. The paper shows that a mixed treatment policy of multiple drug use is generally desirable, and characterizes analytically the conditions under which it is optimal. [391] Ramanan Laxminarayan and Martin L. Weitzman. Value of Treatment Heterogeneity for Infectious Diseases. In Laxminarayan [387], pages 6375. The authors argue that uniform treatment guidelines. . . may be undesirable when drug resistance is endogenous. In the case of infectious diseases,


selection pressure imposed by the use of any single drug. . . sooner or later leads to the evolution of resistance. . . to that drug (p. 63). [392] Julian Le Grand. The Giants of Excess: a Challenge to the Nations Health. Journal of the Royal Statistical Society: Series A (Statistics in Society), 171(4):843856, 2008. Abstract: Sir William Beveridge in his famous report wanted to eliminate the ve giants of want, squalor, idleness, ignorance and disease: the giants of too little. However, the problems facing welfare states are more the giants of too much: the giants of excess. For health in particular, excessive behaviours of various kinds contribute signicantly to the major sources of morbidity and mortality in our society, including cancer, heart disease, stroke, diabetes and kidney and liver diseases. There are few good theories about why individuals engage in excess behaviours. But it is clear that one of the main problems that face both individuals and the government or other agencies tasked with improving health is that the costs of most unhealthy activities impact in the future, whereas the benets from them occur in the present. Policies have to be developed that either bring some of the costs from unhealthy activities (or the benets from healthy ones) back from the future, or reduce some of the benets from unhealthy activities (or reduce the costs of healthy ones) in the present. To avoid the danger of the nanny state, they should also not impact too greatly on individual freedom or autonomy. Promising ideas that meet these criteria, which are derived from the philosophy of libertarian paternalism, include smoking permits and exercise hours. [393] Lung-Fei Lee, Mark R. Rosenzweig, and Mark M. Pitt. The Eects of Improved Nutrition, Sanitation, and Water Quality on Child Health in High-Mortality Populations. Journal of Econometrics, 77:20935, 1997. [394] Robert H. Lee. Future Costs in Cost Eectiveness Analysis. Journal of Health Economics, 27(4):80918, July 2008. Abstract: This paper resolves several controversies in CEA. Generalizing [Garber, A. M., Phelps, C. E., 1997. Economic foundations of costeectiveness analysis. Journal of Health Economics 16 (1), 1-31], the paper shows accounting for unrelated future costs distorts decision making. After replicating [Meltzer, D., 1997. Accounting for future costs in medical cost-eectiveness analysis. Journal of Health Economics 16 (1), 33-64] quite dierent conclusion that unrelated future costs should be included in CEA, the paper shows that Meltzers ndings result from modeling the budget constraint as an annuity, which is problematic. The paper also shows that related costs should be included in CEA. This holds for a variety of models, including a health maximization model. CEA should treat costs in the manner recommended by Garber and Phelps.


[395] Mathieu Lefebvre, Tim Coelli, and Pierre Pestieau. On the Convergence of Social Protection Performance in the European Union. CESifo Economic Studies, 56(2):300322, June 2010. Abstract: In this article, we use data on ve social inclusion indicators (poverty, inequality, unemployment, education, and health) to assess and compare the performance of 15 European welfare states (EU15) over a 12-year period from 1995 to 2006. Aggregate measures of performance are obtained using index number methods similar to those employed in the construction of the widely used Human Development Index. These are compared with alternative measures derived from data envelopment analysis methods. The inuence of methodology choice and the assumptions made in scaling indicators upon the results obtained is illustrated and discussed. We then analyse the evolution of performance over time, nding evidence of some convergence in performance and no sign of social dumping. [396] Keith B. Leer. Persuasion or Information? The Economics of Prescription Drug Advertising. Journal of Law and Economics, 24(1):4574, April 1981. [397] Evelyn L. Lehrer and William D. White. Comment on Hospital Market Structure and the Return to Nursing Education. Journal of Human Resources, 22(4):60708, fall 1987. The authors criticize Booton and Lane (1985) for inappropriate choice of control variables, resulting in collinearity and downward bias in the estimated return to education. [398] Michael P. Leiter, Santiago Gascon, and Begona Martinez-Jarreta. Value Congruence, Burnout, and Culture: Similarities and Contrasts for Canadian and Spanish Nurses. In Antoniou et al. [24], pages 24151. [399] Leslie Lenert, Jonathan Treadwell, and Carolyn Schwartz. Associations Between Health Status and Utilities Implications for Policy. Medical Care, 37(5):479489, May 1999. Abstract: Background. If shape of a persons utility function is associated with his health status, as is predicted by Prospect Theory, the use of utilities from the healthy could result in de facto discrimination against the sick. Objectives. To determine if patients utilities for hypothetical states and for their current health were associated with their health status. Design. A cross-sectional study of the health and values of patients with depressive illnesses. Setting. Patients from three large primary care practices with various medical illnesses complicated by symptoms of depression. Measures. Short-Form 12 health status measurements, standard gamble, and visual analog scale preference measurements for patients current health and for three hypothetical states. Results. One hundred and forty nine patients enrolled in the study and 139 patients completed the


survey. Utilities for the best and worst states were similar across dierent levels of health status; however, standard gamble utilities for intermediate health states were higher for patients in poorer health than patients in better health (P = 0.019), suggesting utility functions with radically dierent shapes. Utilities for patients current health were also associated with their health status. Patients in poor health tended to overvalue their current health relative to the most similar hypothetical state; whereas, patients in good health tended undervalue their current health state (P = 0.036). Conclusions. In patients with depressive illnesses, there were signicant interactions between health and values, that were consistent with the predictions of Prospect Theory, and that could result in systematic under valuation of the health eects of treatments that primarily benet more severely patients ill. [400] Carl Leukefeld, T. K. Logan, David Farabee, Deena Watson, Hugh Spalding, and Richard Purvis. Drug Dependency and HIV Testing among State Prisoners. Population Research and Policy Review, 18(1-2):5569, April 1999. Abstract: HIV and drug use are higher among prisoners than the general US population. This study examines drug dependency/use and dierences between prisoners who volunteered for HIV testing and those who did not in a less densely populated state. It was hypothesized that prisoners who volunteered for an HIV test were engaged in more drug use and other risky behaviors than those who did not. Survey data were collected from 600 randomly selected inmates (567 males and 33 females) from 15 state prisons. Subjects were male (95%), white (63%), never married (43%), and 44% volunteered for an HIV test since entering prison. Ninety-two percent of inmates met DSM criteria for drug dependence in their lifetime. Those who volunteered for HIV testing were 2.6 times more likely to ever have used PCP; 1.5 times more likely to ever have used cocaine; 1.4 times more likely to ever have had a problem with drugs; 1.3 times more likely to have used opiates, and 1.6 times more likely to report having been sexually or physically abused. Implications for interventions are discussed. [401] David K. Levine and William Zame, editors. Proceedings of the 2002 North American Summer Meetings of the Econometric Society,, 2002. [402] Steven D. Levitt and Jack Porter. How Dangerous Are Drinking Drivers? Journal of Political Economy, 109(6):11981237, December 2001. Abstract: We present a methodology for measuring the risks posed by drinking drivers that relies solely on readily available data on fatal crashes. The key to our identication strategy is a hidden richness inherent in twocar crashes. Drivers with alcohol in their blood are seven times more likely to cause a fatal crash; legally drunk drivers pose a risk 13 times greater than sober drivers. The externality per mile driven by a drunk driver is


at least 30 cents. At current enforcement rates the punishment per arrest for drunk driving that internalizes this externality would be equivalent to a ne of $8,000. [403] Bengt Liljas, Goran S. Karlsson, and Nils-Olov Stalhammar. On Future Non-medical Costs in Economic Evaluations. Health Economics, 17(5):57991, May 2008. Abstract: Economic evaluation in health care is still an evolving discipline. One of the current controversies in cost-eectiveness analysis regards the inclusion or exclusion of future non-medical costs (i.e. consumption net of production) due to increased survival. This paper examines the implications of a symmetry rule stating that there should be consistency between costs included in the numerator and utility aspects included in the denominator. While the observation that no quality-adjusted life year (QALY) instruments explicitly include consumption and leisure seems to give support to the notion that future non-medical costs should be excluded when QALYs are used as the outcome measure, a better understanding of what respondents actually consider when reporting QALY weights is required. However, the more fundamental question is whether QALYs can be interpreted as utilities. Or more precisely, what are the assumptions needed for a general utility model also including consumption and leisure to be consistent with QALYs? Once those assumptions are identied, they need to be experimentally tested to see whether they are at least approximately valid. Until we have answers to these areas for future research, it seems premature to include future non-medical costs. [404] Chung-cheng Lin. The Shortage of Registered Nurses in Monopsony: A New View from Eciency Wage and Job-Hour Models. American Economist, 46(1):2935, Spring 2002. Abstract: It has been argued that a monopsonist would like to hire more workers at the equilibrium wage that he or she oers. The labor market equilibrium in monopsony is therefore characterized by reported vacancies. This property is claimed to be perfectly consistent with the persistent shortage of registered nurses. By using the famous Solow (1979) eciency wage monopsony model and a job-hour monopsony model, this paper examines the validity of this argument. It is shown that a monopsonist may not report vacancies since the labor market equilibrium in monopsony may be in a state of excess labor supply. As a consequence, the theoretical explanation of the shortage of registered nurses must be found beyond the simple textbook monopsony model. [405] Magnus Lindelow. Health as a Family Matter: Do Intra-household Education Externalities Matter for Maternal and Child Health? Journal of Development Studies, 44(4):56285, April 2008. Abstract: This paper is concerned with the role of education as a determinant of health care choices. The central premise of the paper is that util145

isation of health services is determined not solely by an individuals own education, but rather by a notion of eective education, which incorporates the educational attainment of other household members. The paper sets out a general framework for representing intra-household education externalities, and proposes a number of specic hypotheses concerning the way in which the education of dierent household members aects health care choices. These hypotheses are tested on data from Mozambique, focusing on maternity services, child immunisations, and child malnutrition. We draw four major conclusions from the analysis. First, while maternal education seems to be the education variable of primary importance for the health service and malnutrition variables under consideration, the education of other household members does have a signicant and sometimes large eect. This is true not only for the spouse, but also the education of other individuals residing in the household. Second, the analysis suggests that while the education of the person (non-spouse) in the household with the highest level of education is important, the level of education of additional household members does not, as a rule, aect the use of services or child health outcomes. Third, the data provide no evidence of a gender dierence in education externalities. Fourth, we examine the merits of two alternative representations of the education externality, but are unable to conclude unambiguously in favour of one specication over the other. [406] Richard C. Lindrooth, Edward C. Norton, and Barbara Dickey. Provider Selection, Bargaining, and Utilization Management in Managed Care. Economic Inquiry, 40(3):34865, July 2002. Abstract: Managed care controls cost through a combination of provider selection, bargaining, and utilization management. Provider selection will reduce expenditures if patients are funneled to ecient providers. Bargaining will reduce expenditures through lower rates. Utilization management will reduce expenditures if providers reduce treatment intensity due to monitoring. We estimate that about 30% of the reduction in inpatient expenditures in a mental health carve-out was due to provider selection, 5% was due to bargaining, and the remaining 65% was due to utilization management. We nd that both the provider selection and utilization management eects were likely to be welfare improving. [407] Davina C. Ling, Ernst R. Berndt, and Margaret K. Kyle. Deregulating Direct-to-Consumer Marketing of Prescription Drugs: Eects on Prescription and Over-the-Counter Product Sales. Journal of Law and Economics, 45(2, part 2):691723, October 2002. Abstract: This paper examines the impact and interrelationships between direct-to-consumer (DTC) and physician-oriented marketing on the sales composition of the prescription (Rx) and over-the-counter (OTC) versions of antiulcer and heartburn medications. To understand better the implications for competition of the 1997 Food and Drug Administrations policies regarding DTC marketing, as well as recent Rx-to-OTC switch 146

approvals, we also examine the relationship between order-of-entry eects and marketing intensities. We nd spillover eects of marketing for Rx drugs on same-brand OTC versions of the drugs. We also nd that the ratio of cumulative marketing intensity (cumulative marketing eorts divided by cumulative sales) in the OTC segment increases monotonically with order of entry. Our regression results show that various marketing demand elasticities depend on order of entry. Our ndings document the importance of nonprice competition in the OTC drug market and suggest that the recent deregulation of Rx DTC marketing enhances rivalry and facilitates competition. [408] Charles R. Link. Labor Supply Behavior of Registered Nurses: Female Labor Supply in the Future? In Ronald G. Ehrenberg, editor, Research in Labor Economics, volume 13, pages 287320. JAI Press, Greenwich, Conn., 1992. Using U.S. data, the author estimates labor supply responses of female registered nurses (RNs) for the period 19601988 (p. 287). He nds evidence that wage increases are unlikely to provide a low cost way of eliciting greater hours from the stock of currently working RNs.. . . Furthermore, the total elasticity of hours with respect to the RN wage over the. . . 1980s has ranged from 0 to 0.43 (p. 31213). However, he notes that increases in RN wages may lead to an increase in annual admissions into nursing programs. . . and thus. . . an overall increase in the number of trained RNs (p. 313). He estimates the elasticity of admissions into B.S. and associate degree programs with respect to starting RN salaries to be 1.05 and 1.3. [409] Charles R. Link and John H. Landon. Monopsony and Union Power in the Market for Nurses. Southern Economic Journal, 41(4):64959, April 1975. [410] Charles R. Link and Russell F. Settle. Labor Supply Responses of Married Professional Nurses: New Evidence. Journal of Human Resources, 14(2):25666, spring 1979. [411] Charles R. Link and Russell F. Settle. Financial Incentive and Labor Supply of Married Professional Nurses: an Economic Analysis. Nursing Research, 29(4):23843, August 1980. Abstract: The extent to which the supply of nursing services would increase in response to higher nurse compensation and other employment inducements, as the topic pertains to married nurses, was investigated. Higher wages, it was found, probably would not be eective in providing more nursing services but would, indeed, have the opposite eectof reducing the number of hours worked by registered nurses. [412] Charles R. Link and Russell F. Settle. A Simultaneous-Equation Model of Labor Supply, Fertility and Earnings of Married Women: The Case of Registered Nurses. Southern Economic Journal, 47(4):97789, April 1981. 147

[413] Charles R. Link and Russell F. Settle. Wage Incentives and Married Professional Nurses: A Case of Backward-Bending Supply? Economic Inquiry, 19(1):14456, January 1981. Using data from the 1970 U.S. census, the authors nd that the estimated supply functions for married RNs in each age cohort exhibit a high degree of wage inelasticity. Several cohorts are either on or approaching the backward bending portions of their . . . supply curves. [414] Charles R. Link and Russell F. Settle. Labor Supply Responses of Licensed Practical Nurses: A Partial Solution to a Nurse Shortage? Journal of Economics and Business, 37(1):4957, February 1985. Using data from the 1970 U.S. census, the authors nd that the wage elasticities of supply for married LPNs generally exceed 1. [415] B. C. Liu. Sulfur Dioxide and Mortality Damage: A Benet/Cost Analysis. Mathematical Social Sciences, 1(3):30722, May 1981. Abstract: The author rst attempts to estimate an average mortality determination function using an average dose-response function that has been established statistically between sulfur dioxide and excess mortality in U.S. metropolitan areas in which sulfur dioxide exceeds certain threshold levels. An attempt is made to estimate quantitatively the economic value of premature mortality caused by sulphur dioxide. Finally, a comparison is made between the costs of the damage caused by this pollution and the cost of pollution control eorts. [416] Chuan-Fen Liu. Line Authority for Nurse Stang and Costs for Acute Inpatient Care. Inquiry, 46(3):33951, fall 2009. Abstract: There is little empirical evidence evaluating the eects of recent, widespread changes in nurse executive roles and nursing management structures on the costs of patient care. This retrospective cross-sectional study examined the relationship between line authority for nurse stang and patient care costs (total, nursing, and non-nursing cost) using data from 124 Department of Veterans Aairs (VA) medical centers. After controlling for patient, facility, and market characteristics, nursing line authority was signicantly associated with lower nursing cost per admission. Our results provide some evidence that a reduction in nursing line authority may adversely impact nursing costs. [417] Liqun Liu, Andrew J. Rettenmaier, and Thomas R. Saving. Longevity Bias in Cost-Eectiveness Analysis. Health Economics, 17(4):52334, April 2008. Abstract: We use a simple lifetime utility maximization model to study the problem of medical resource allocation. This model leads to a welfare specication with a QALY (quality-adjusted life-year) component that captures an individuals preferences over both life expectancy and health


status. The goal of medical cost-eectiveness analysis (CEA) is characterized as maximizing the QALY measure for a given total medical expenditure. We show that the CEA with such a goal has a longevity bias: the CEA-based division of a given total medical expenditure between extending life and improving health gives the former a larger share than is called for by welfare maximization. [418] George Loewenstein. Out of Control: Visceral Inuences on Behavior. Organizational Behavior and Human Decision Processes, 65(3):272292, March 1996. Abstract: Understanding discrepancies between behavior and perceived self-interest has been one of the major, but largely untackled, theoretical challenges confronting decision theory from its infancy to the present. People often act against their self-interest in full knowledge that they are doing so; they experience a feeling of being out of control. This paper attributes this phenomenon to the operation of visceral factors, which include drive states such as hunger, thirst and sexual desire, moods and emotions, physical pain, and craving for a drug one is addicted to. The dening characteristics of visceral factors are, rst, a direct hedonic impact (which is usually negative), and second, an eect on the relative desirability of dierent goods and actions. The largely aversive experience of hunger, for example, aects the desirability of eating, but also of other activities such as sex. Likewise, fear and pain are both aversive, and both increase the desirability of withdrawal behaviors. The visceral factor perspective has two central premises: First, immediately experienced visceral factors have a disproportionate eect on behavior and tend to crowd out virtually all goals other than that of mitigating the visceral factor. Second, people underweigh, or even ignore, visceral factors that they will experience in the future, have experienced in the past, or that are experienced by other people. The paper details these two assumptions, then shows how they can help to explain a wide range of phenomena: impulsivity and selfcontrol, drug addiction, various anomalies concerning sexual behavior, the eect of vividness on decision making, and certain phenomena relating to motivation and action. [419] George Loewenstein, Troyen Brennan, and Kevin G. Volpp. Asymmetric Paternalism to Improve Health Behaviors. Journal of the American Medical Association, 298(20):24152417, November 2007. Abstract: Insights from behavioral economics can contribute to solutions for public health problems such as medication nonadherence and sedentary lifestyles that have challenged clinicians and public health professionals for years. In this commentary, we identify some key decision biases that ordinarily lead to self-harming behavior and show how they can be exploited in interventions to instead promote healthy behaviors.


[420] Bernard I. Logan. Evaluating Public Policy Costs in Rural Development Planning: The Example of Health Care in Sierra Leone. Economic Geography, 61(2):14457, April 1985. Abstract: Rural Development Planning in Less Developed Countries, especially in Africa has followed a pattern since colonial times that concentrates public service facilities in urban administrative centers. In many of these countries most of the population lives in rural areas. Public facility location at urban administrative centers may therefore have associated social welfare costs. There is a need to explore the possibility of locating public services at centers that are more accessible to a wider population. The analysis in this study compares a distribution of rural health care facilities proposed by the government of Sierra Leone against a distribution that is achieved through location-allocation planning. The results show that rural development planning would be more successful if a shift is made from the administrative network to a careful analysis of the actual distribution of the target population for a particular service. [421] Lynn Lotas, Cheryl McCahon, Joan Kavanagh, Michelle Dumpe, Maureen Talty, Kathleen Knittel, , and Cheryl OMalley. The Other Nursing Shortage: A Regional Collaboration to Address the Shortage of Nursing Faculty. Policy, Politics, & Nursing Practice, 9(4):25663, November 2008. Abstract: A regional collaborative of one major hospital system and nine schools of nursing has addressed the critical shortage of nursing faculty in Northeast Ohio. This model of institutional collaboration is preparing expert nurse clinicians from the hospital nursing sta to assume clinical faculty roles in regional schools of nursing while maintaining their primary role as clinical sta. The model included the development of a recruitment campaign, a uniform application process, an online database, faculty orientation programs, and continuing faculty development opportunities. Currently, more than 240 clinical nursing sta have applied for the program. Two faculty orientation sessions were attended by more than 100 prospective faculty. Additionally, the rst continuing faculty development workshop was attended by more than 170 current and prospective nursing faculty. Now in its third year of implementation, the project is expanding its scope to include a broader base of regional partners and to address the issue of sustainability. [422] John W. Lynch, George A. Kaplan, and Sarah J. Shema. Cumulative Impact of Sustained Economic Hardship on Physical, Cognitive, Psychological, and Social Functioning. New England Journal of Medicine, 337(26):18891895, 1997. Abstract: Background Although the relation between low income and poor health is well established, most previous research has measured income at only one time. Methods We used income information collected in 1965, 1974, and 1983 from a representative sample of adults in Alameda 150

County, California, to examine the cumulative eect of economic hardship (dened as a total household income of less than 200 percent of the federal poverty level) on participants who were alive in 1994. Results Because of missing information, analyses were based on between 1081 and 1124 participants (median age, 65 years in 1994). After adjustment for age and sex, there were signicant graded associations between the number of times income was less than 200 percent of the poverty level (range, 0 to 3) and all measures of functioning examined except social isolation. As compared with subjects without economic hardship, those with economic hardship in 1965, 1974, and 1983 were much more likely to have diculties with independent activities of daily living (such as cooking, shopping, and managing money) (odds ratio, 3.38; 95 percent condence interval, 1.49 to 7.64), activities of daily living (such as walking, eating, dressing, and using the toilet) (odds ratio, 3.79; 95 percent condence interval, 1.32 to 9.81), and clinical depression (odds ratio, 3.24; 95 percent condence interval, 1.32 to 7.89) in 1994. We found little evidence of reverse causation that is, that episodes of illness might have caused subsequent economic hardship. Conclusions Sustained economic hardship leads to poorer physical, psychological, and cognitive functioning. [423] Ching-to Albert Ma and Thomas G. McGuire. Network Incentives in Managed Health Care. Journal of Economics and Management Strategy, 11(1):135, spring 2002. Abstract: This paper introduces a theory of network incentives in managed health care. Participation in the plans network confers an economic benet on providers; in exchange, the plan expects compliance with its protocols. The network sets a target for the number of outpatient visits in an episode of care. A provider failing to satisfy the target may be penalized by the plans attempt to direct patients to other providers within its network. There is an equilibrium in which every provider in the network uses the target. We test the theory by observing behavior of providers before and after the introduction of managed mental health care in a large, employed population. Managed care consisted of price reductions, utilization review, and creation of a network. Quantity per episode of care fell sharply after initiation of managed care. We identify a network eect in our empirical work. The results indicate that in this case, network incentives account for most of the quantity reduction due to managed care. [424] James Macinko, Barbara Stareld, and Leiyu Shi. The Contribution of Primary Care Systems to Health Outcomes within Organization for Economic Cooperation and Development (OECD) Countries, 19701998. Health Services Research, 38(3):83165, June 2003. Abstract: OBJECTIVE: To assess the contribution of primary care systems to a variety of health outcomes in 18 wealthy Organization for Economic Cooperation and Development (OECD) countries over three decades. DATA SOURCES/STUDY SETTING: Data were primarily de151

rived from OECD Health Data 2001 and from published literature. The unit of analysis is each of 18 wealthy OECD countries from 1970 to 1998 (total n = 504). STUDY DESIGN: Pooled, cross-sectional, time-series analysis of secondary data using xed eects regression. DATA COLLECTION/EXTRACTION METHODS: Secondary analysis of publicuse datasets. Primary care system characteristics were assessed using a common set of indicators derived from secondary datasets, published literature, technical documents, and consultation with in-country experts. PRINCIPAL FINDINGS: The strength of a countrys primary care system was negatively associated with (a) all-cause mortality, (b) all-cause premature mortality, and (c) cause-specic premature mortality from asthma and bronchitis, emphysema and pneumonia, cardiovascular disease, and heart disease (p < 0.05 in xed eects, multivariate regression analyses). This relationship was signicant, albeit reduced in magnitude, even while controlling for macro-level (GDP per capita, total physicians per one thousand population, percent of elderly) and micro-level (average number of ambulatory care visits, per capita income, alcohol and tobacco consumption) determinants of population health. CONCLUSIONS: (1) Strong primary care system and practice characteristics such as geographic regulation, longitudinality, coordination, and community orientation were associated with improved population health. (2) Despite health reform eorts, few OECD countries have improved essential features of their primary care systems as assessed by the scale used here. (3) The proposed scale can also be used to monitor health reform eorts intended to improve primary care. [425] Ottar Maestad and Ole Frithjof Norheim. Eliciting Peoples Preferences for the Distribution of Health: A Procedure for a More Precise Estimation of Distributional Weights. Journal of Health Economics, 28(3):57077, May 2009. Abstract: In order to incorporate distributional concerns into costeectiveness analysis, it would be useful to elicit distributional weights that express peoples valuation of marginal health gains at various levels of health. Distributional preferences are commonly elicited either through a person trade o (PTO) or a gain trade o (GTO) technique. An inherent problem of the GTO is that it is based on the valuation of non-marginal health gains. In practice, many contributions using the PTO also focus on non-marginal health gains. This paper demonstrates that the failure to distinguish appropriately between marginal and non-marginal health gains may lead to seriously misleading estimates of distributional weights. Moreover, the paper proposes a methodology for utilising information obtained through non-marginal analysis more eciently in order to obtain more reliable estimates of distributional weights. The methodology was successfully applied in an empirical study of age weights.


[426] Christine Brown Mahoney. The Labor Supply of Nurses: a Self-Selection Approach. PhD thesis, University of Minnesota, 1991. Abstract: The shortage of registered nurses has been a recurrent feature of the US health care industry and future shortages are expected due to demographic aging. It is critical to better understand the factors underlying both demand and supply. This study investigates the determinants of the labor supply of registered nurses which is the outcome of three decisions: (1) work in the labor market, (2) work as a nurse rather than in another occupation, and (3) how many hours of labor to supply. These decisions must be considered jointly, which previous literature has failed to do. The eects of individual productivity (human capital) characteristics such as type of nursing degree, additional degree beyond rst nursing degree, experience in nursing, health status, and wage; demographic characteristics such as age, sex, marital status, presence and age of children, husbands income, and non-labor income; and community level variables such as whether residence is urban or rural, and unemployment rate in county of residence have been used to explain both hours worked and labor force participation. Previous studies have made policy recommendations to aect nurse labor supply based on biased estimates of parameters and, perhaps, misspecied models. Current econometric methodology that corrects for this self-selection was used to provide unbiased parameter estimates to inform policy. The single greatest determinant of the choice to remain in the nurse labor force is wages. As nurses wages increase, the probability of remaining in nursing increases dramatically. The presence of children decreases the probability of working as a nurse; however, the presence of preschool children signicantly increases the probability of working as a nurse after accounting for presence of children. This eect can be attributed to the ability of women with preschool children to maintain their attachment to the labor force without working full time. The numerous part time jobs available in nursing make this possible. Those individuals with preschool children work fewer hours than others. Individuals with an associate degree are more likely to work as a nurse than those with diploma, baccalaureate, or masters degrees in nursing. Rural nurse license holders are more likely to work as nurses; this may reect the constrained choice of jobs in rural as opposed to urban areas. These ndings suggest possible policy options. It appears that increasing wages would increase the supply of individuals available in the nurse labor market. If government monies are to be used to fund nurse education in hopes of alleviating the current shortage, it appears most ecient to fund associate (2) year programs. Provision of easily accessible, adequate daycare may increase the number of hours those individuals with preschool children work. [427] Sothitorn Mallikamas. Short Run Labor Supply of Registered Nurses. Dissertation, University of Wisconsin, 1990. Abstract: We study the short-run labor supply behavior of registered nurses in the U.S.A., using data from the National Sample Surveys of 153

Registered Nurses in 1984 and 1988. In the short run, registered nurses are viewed as deciding: (1) whether to work in nursing, (2) whether to work full-time or part-time, (3) whether to work in hospitals or nonhospitals, (4) how many hours to work per week, and (5) on the specialty in nursing if they work in hospitals. We nd that both the wage rate and the autonomy of nursing jobs are important factors determining whether to work in nursing and are crucial policy incentives to increase the supply of registered nurses. Moreover, the autonomy incentive policy will lead to substantial cost saving. The wage rate is also an important factor inuencing the choice of full-time vs. part-time and the choice of hospital vs. nonhospital and can be an important policy instrument to increase the labor supply of nurses. This study shows that health policy makers need a more specic policy target in deciding whether to increase the labor supply of registered nurses: (1) in only the hospital sector, or (2) in the overall nursing eld. Deciding on these two dierent policy goals requires a cost-eective policy design. Increasing the labor supply in hospitals requires an increase in the wage rate for full-time positions in hospitals. However, increasing the supply in overall nursing requires an increase in the wage rate for full-time positions in both hospitals and nonhospitals. The autonomy incentive is a less important factor than the wage rate and is not as eective in attracting nurses to work full-time or in hospitals as it is in drawing nurses to work in nursing. We nd that both the wage rate and the autonomy do not explain hours of work for part-timers and hospital specialty choice. [428] Lisa Mancino. Americans Food Choices: The Interaction of Information, Intentions, and Convenience. PhD thesis, University of Minnesota, 2003. Abstract: This study analyzes the economic factors behind Americans increased awareness of the benets of a healthy lifestyle coupled with their concurrent increased incidence of obesity. It incorporates elements of behavioral economics into a consumer demand model where long-term health objectives and short-term situational factors drive individuals food choices. The resulting theoretical model predicts that when individuals are hungrier, busier, and consume food away from home, their information about health and nutrition has a smaller impact on their actual food choices. Another result is that the food choices of individuals who have higher opportunity costs, are less informed about health and nutrition, or consume more food prepared away from home will be more adversely aected by short-term situational factors such as perceived hunger. The value of this model is it explicitly identies elements that increase demand for immediate gratication and induce behaviors contrary to ones long run health objectives. To validate the theoretical model, this study uses the 1994-1996 Continuing Survey of Food Intake by Individuals (CSFII) and the companion Diet and Health Knowledge Survey (DHKS). Empirical Results: Individuals who had a longer interval between meals, skipped breakfast, or classied a greater share of their eating occasions 154

as meals were signicantly more likely to consume more fat, calories, and protein at each eating occasion. They were also signicantly more likely to have a lower quality diet. As individuals increased the share of meals consumed from fast food or full service restaurants, they signicantly increased consumption of fat, calories, and protein. They signicantly decreased consumption of carbohydrates and overall diet quality. Individuals who had more accurate perceptions of their own diet quality or put more importance on diet quality were less likely to consume foods high in fat or calories. The eect of information on diet quality was estimated to be signicantly smaller as the interval between meals increased. The eect of information on diet quality was signicantly lower for individuals who consumed more of their meals away from home. The eect of information on overall diet quality was signicantly lower for individuals who worked more hours in one week. Recommendation: Encourage food retailers to increase the convenience of relatively more healthful foods or improve the nutrient content of convenient foods. Encourage consumers to control the interval between meals. Encourage consumers to take more active control over their own food choices by planning ahead and providing themselves with healthier food options. Focus nutrition campaigns on those aspects of information that have the most inuence over observed behavior: importance and perception. Provide nutritional information on foods prepared away from home to reduce the discrepancy between perceived and actual diet quality. [429] Kenneth G. Manton, XiLiang Gu, and Vicki L. Lamb. Long-Term Trends in Life Expectancy and Active Life Expectancy in the United States. Population and Development Review, 32(1):81105, March 2006. Abstract: Changes in life expectancy and in active life expectancy may have eects on the scal integrity of both the Social Security and Medicare programs. Analysis of the scal stability of these programs shows that the most serious problem may be the growth of Medicare expenditures projected to surpass, in about 2024, Social Security costs. This is aggravated by the associated rapid growth of the Medicaid program. To understand how the growth of Medicare, Medicaid, and Social Security might be correlated, we present estimates of changes in life expectancy and active life expectancy from 1935 to 1999 and then project those values to 2080. How the correlation of life expectancy and active life expectancy changes over time, and by age, may provide insights into how increased health care expenditures, if eective in changing health in the elderly, could modify the age structure of the labor force and the availability of human capital. [430] Catherine A. Marco. Pharmaceutical Advertising in Emergency Departments. Academic Emergency Medicine, 11(4):40104, April 2004. Abstract: OBJECTIVES: Promotion of prescription drugs represents a growing source of pharmaceutical marketing expenditures. This study was undertaken to identify the frequency of items containing pharmaceutical 155

advertising in clinical emergency departments (EDs). METHODS: In this observational study, emergency physician on-site investigators quantied a variety of items containing pharmaceutical advertising present at specied representative times and days, in clinical EDs. RESULTS: Measurements were obtained by 65 on-site investigators, representing 22 states. Most EDs in this study were community EDs (87% community and 14% university or university aliate), and most were in urban settings (50% urban, 38% suburban, and 13% rural). Investigators measured 42 items per ED (mean = 42; median = 31; interquartile range of 14-55) containing pharmaceutical advertising in the clinical area. The most commonly observed items included pens (mean 15 per ED; median 10), product brochures (mean 5; median 3), stethoscope labels (mean 4; median 2), drug samples (mean 3; median 0), books (mean 3.4), mugs (mean 2.4), and published literature (mean 3.1). EDs with a policy restricting pharmaceutical representatives in the ED had signicantly fewer items containing pharmaceutical advertising (median 7.5; 95% CI = 0 to 27) than EDs without such a policy (median 35; 95% CI = 27 to 47, p = 0.005, nonparametric Wilcoxon twosample test). There were no dierences in quantities of pharmaceutical advertising for EDs in community compared with university settings (p = 0.5), rural compared with urban settings (p = 0.3), or annual ED volumes (p = 0.9). CONCLUSIONS: Numerous items containing pharmaceutical advertising are frequently observed in EDs. Policies restricting pharmaceutical representatives in the ED are associated with reduced pharmaceutical advertising. [431] Patricia Marino, Anne-Gaelle Le Corroller, Thao Palangi, Maud Janvier, e Michel Fabbro, Laurent Molinier, Thierry Delozier, Alain Livartowski, Jean-Paul Moatti, and Patrice Viens. Can Sequential Administration Minimise the Cost of High Dose Chemotherapy? An Economic Assessment in Inammatory Breast Cancer. PharmacoEconomics, 21(11):807818, 2003. Abstract: To evaluate the potential cost savings of using sequential high dose chemotherapy (HDC), with granulocyte colony-stimulating factor (lgrastim) and stem cell support, rather than single course administration of HDC with bone marrow transplantation (BMT) or peripheral blood stem cell transplantation (PBSCT). According to our results, economic arguments cannot be used against the widespread use of sequential HDC for patients with IBC. However, further economic evaluations based on overall and disease-free survivals alongside a randomised clinical trial are still needed to denitively establish the cost eectiveness of sequential administration of HDC. [432] Tami L. Mark and Jore Swait. Using Stated Preference and Revealed Preference Modeling to Evaluate Prescribing Decisions. Health Economics, 13(6):56373, June 2004. Abstract: The use of stated preference analyses to evaluate choice of health care products has been growing in recent years. This paper shows 156

how revealed preference data can be enriched with stated preference data and highlights the relative advantages of revealed and stated preference data. The techniques were applied to a study of determinants of physicians prescriptions of alcoholism medications. Analyses were conducted on the relationship between physicians perceptions of existing alcoholism medication attributes and their prescribing rates of those medications. Analyses were also conducted on physicians decisions to prescribe hypothetical alcoholism medications with varying attributes such as ecacy, side eects, compliance, mode of action, and price. Finally, analyses were conducted on the combined stated and revealed preference data. Joint estimation suggests that parameters from the revealed and stated preference data are equal, up to scale. Joint analyses highlight how stated preference data can be used to estimate parameters for attributes that are not observed in the marketplace, that do not vary in the marketplace, or that are highly collinear with other attributes in actual markets. [433] M. Susan Marquis and Martin R. Holmer. Alternative Models of Choice under Uncertainty and Demand for Health Insurance. Review of Economics and Statistics, 78(3):42127, August 1996. Abstract: The authors test a standard expected utility model and alternative models about how people evaluate risky prospects using data about individuals preferences among health insurance plans. A model that assumes people evaluate gains and losses relative to a reference rather than nal outcomes, treat gains and losses asymmetrically, and process certain and uncertain outcomes separately provides a better t than the standard utility model. These ndings suggest inertia in health insurance plan choice and that individuals are more responsive to decreases than to increases in the price of insurance. [434] Andrea Marshall, Lucinda J. Billingham, and Stirling Bryan. Can We Aord to Ignore Missing Data in Cost-Eectiveness Analyses? Editorial. European Journal of Health Economics, 10(1):13, February 2009. [435] Anne B. Martin, Lekha Whittle, Stephen Heer, Mary Carol Barron, Andrea Sisko, and Benjamin Washington. Health Spending by State of Residence, 19912004. Health Aairs, 26(6):w651w663, September 2007. web exclusive. Abstract: Diering trends in health spending by state underlie national spending trends. To shed light on the complexities of health spending patterns among state residents, we present updated per capita health spending estimates by state of residence for 19911998 and new estimates for 19992004, and we oer summaries of trends exhibited during these time periods. These statistics provide the opportunity for further analysis, such as examination of variations in state-level spending in Medicare, Medicaid, and total personal health care spending, which can yield new perspectives on recent state health spending trends and provide context for policy discussions. 157

[436] Leah J. Martin, Murray Fyfe, Kathryn Dore, Jane A. Buxton, Franklin Pollari, Bonnie Henry, Dean Middleton, Raq Ahmed, Frances Jamieson, Brue Ciebin, Scott A. McEwen, Jerey B. Wilson, and the MultiProvincial Salmonella Typhimurium Case-Control Study Steering Committee. Increased Burden of Illness Associated with AntimicrobialResistant Salmonella Enterica Serotype Typhimurium Infections. Journal of Infectious Diseases, 189(3):37784, February 1 2004. Abstract: This study investigated the burden of illness associated with 440 cases of Salmonella enterica serotype Typhimurium infection identied in Canada between December 1999 and November 2000. We categorized case subjects infections by denitive phage type 104 (DT104) and antimicrobial-resistance patterns. These variables were then investigated as risk factors for hospitalization. Hospitalization was more likely to occur among case subjects whose infections were resistant to at least ampicillin, chloramphenicol and/or kanamycin, streptomycin, sulphamethoxazole, and tetracycline (R-type AK/CSSuT; odds ratio [OR], 2.3; P=.003), compared with case subjects with AK/CSSuT-susceptible infections, and among case subjects with non-DT104 R-type AKSSuT infections (OR, 3.6; P=.005), compared with case subjects with non-DT104 AKSSuTsusceptible infections. In contrast, hospitalization rates did not dier between case subjects with DT104 infections and case subjects with nonDT104 infections or between case subjects with DT104 R-type ACSSuT infections and case subjects with DT104 ACSSuT-susceptible infections. We estimated that 57% of the hospitalizations among AK/CSSuT case subjects and 72% of the hospitalizations among non-DT104 AKSSuT case subjects were attributable to the resistance patterns of the infections. [437] Felix Masiye. Investigating Health System Performance: An Application of Data Envelopment Analysis to Zambian Hospitals. BMC Health Services Research, 7(58):111, April 2007. http://www.pubmedcentral. Abstract: Background: Zambia has recently articulated an ambitious national health program designed to meeting health-related MDGs. Public expectations are high and Zambia continues to receive signicant resources from global and bilateral donors to support its health agenda. Although the lack of adequate resources presents the most important constraint, the eciency with which available resources are being utilised is another challenge that cannot be overlooked. Ineciency in producing health care undermines the service coverage potential of the health system. This paper estimates the technical eciency of a sample of hospitals in Zambia. Methods: Eciency is measured using a DEA model. Vectors of hospital inputs and outputs, representing hospital expended resources and output proles respectively, were specied and measured. The data were gathered from a sample of 30 hospitals throughout Zambia. The model estimates an eciency score for each hospital. A decomposition of technical eciency into scale and congestion is also provided. Results: Results show that 158

overall Zambian hospitals are operating at 67% level of eciency, implying that signicant resources are being wasted. Only 40% of hospitals were ecient in relative terms. The study further reveals that the size of hospitals is a major source of ineciency. Input congestion is also found to be a source of hospital ineciency. Conclusion: This study has demonstrated that ineciency of resource use in hospitals is signicant. Policy attention is drawn to unsuitable hospital scale of operation and low productivity of some inputs as factors that reinforce each other to make Zambian hospitals technically inecient at producing and delivering services. It is argued that such evidence of substantial ineciency would undermine Zambias prospects of achieving its health goals. [438] Robert T. Masson and S. Wu. Price Discrimination for Physician Services. Journal of Human Resources, 9(1):6379, winter 1974. The authors develop a combined monopoly-charity theory of the pricing behavior of physicians. If price and quality information is costly, prot-maximizing physicians will charge rich patients more than poor ones. Charitable physicians will treat very poor patients at prices below marginal cost (p. 78). [439] K. M. Matawie and A. Assaf. Bayesian and DEA Eciency Modeling: An Application to Hospital Foodservice Operations. Journal of Applied Statistics, 37(5-6):94553, May-June 2010. Abstract: The signicant impact of health foodservice operations on the total operational cost of the hospital sector has increased the need to improve the eciency of these operations. Although important studies on the performance of foodservice operations have been published in various academic journals and industrial reports, the ndings and implications remain simple and limited in scope and methodology. This paper investigates two popular methodologies in the eciency literature: Bayesian stochastic frontier analysis (SFA) and data envelopment analysis (DEA). The paper discusses the statistical advantages of the Bayesian SFA and compares it with an extended DEA model. The results from a sample of 101 hospital foodservice operations show the existence of ineciency in the sample, and indicate signicant dierences between the average eciency generated by the Bayesian SFA and DEA models. The ranking of eciency is, however, statistically independent of the methodologies. [440] Michelle L. Mayer, Sally C. Stearns, Edward C. Norton, and R. Gary Rozier. The Eects of Medicaid Expansions and Reimbursement Increases on Dentists Participation. Inquiry, 37(1):3344, Spring 2000. Abstract: North Carolina Medicaid increased nominal Medicaid reimbursement to dentists 23% from 1988 to 1991 and doubled enrollment through eligibility expansions from 1985 to 1991. Using Medicaid claims data and panel data techniques, this analysis investigates the eect of these policy changes on the probability that a dentist participated in 159

Medicaid, and on the number of Medicaid children seen per provider per quarter. The results suggest that eligibility expansions and reimbursement rate increases were only marginally eective in increasing access to dental services for the Medicaid population. [441] Inge Mayeres and Denise Van Regemorter. Modelling the Health Related Benets of Environmental Policies and Their Feedback Eects: A CGE Analysis for the EU Countries with GEM-E3. Energy Journal, 29(1):135 50, 2008. Abstract: A number of recent studies on taxation in the presence of externalities in a second-best framework consider the implications of taking into account the feedback eects of environmental quality. This paper explores by means of GEM-E3, a computable general equilibrium model for the EU countries, the importance of the feedback eects of the health related benets from an environmental policy. The modelling framework implemented in GEM-E3 allows for three channels through which the feedback can occur: a decrease in medical expenditure, an increase in the consumers available time and an increase of labour productivity in the production sectors. The results show that the explicit modelling of the health related eect of air pollution on consumers and producers allows for a more precise evaluation of the impact of environmental policies on private consumption and employment. Relative to the included benets the feedback eects are large. However, in terms of global eect, the impacts of the feedback are small, compared to the standard GEM-E3 model where the health related benets are evaluated ex-post [442] A. Maynard. Pricing, Demanders, and the Supply of Health Care. International Journal of Health Services, 9(1):12133, 1979. Abstract: This paper is divided into three substantive sections. In the rst section the conventional neoclassical paradigm is augmented by consideration of the agency relationship in which the physician is considered not only as the agent who controls the supply of health care, but also as the decision maker who articulates demand because patients forgo this role and rely on expert advice. The next section is concerned with the eects of pricing on consumer demand and draws on the available empirical evidence to present estimates of price elasticity, cross elasticity, and other characteristics of the choice process. This analysis is completed by integrating the agency relationship into the discussion and arguing that if the policy objectives are expenditure containment and greater eciency in resource utilization, the price mechanism should be used to aect the behavior of the primary demander and the supplier: the physician. In the nal section the implications of this analysis are discussed in the contexts of two competing perspectives: the liberal market perspective and the collective needology perspective, and an attempt is made to distinguish some of the characteristics of the two views of the world.


[443] John W. Mayo and Deborah A. McFarland. Regulation, Market Structure, and Hospital Costs. Southern Economic Journal, 55(3):55969, January 1989. Abstract: The bevy of articles on hospital costs that have appeared during the past decade have left many issues surrounding the role of regulation and market structure on hospital costs unresolved. The purpose of this paper is to shed some light on the impact that certicate-of-need regulation and market structure have had on hospital costs. Using a more general theoretical approach and a novel data set, the research indicated that, in recent years, certicate-of-need regulation has acted to constrain hospital bed growth and hospital costs, while market concentration acts, ceteris paribus, to increase rm costs. [444] Clyde B. McCoy, Lisa R. Metsch, H. Virginia McCoy, and Shenghan Lai. A Gender Comparison of HIV and Drug Use across the Rural-Urban Continuum. Population Research and Policy Review, 18(1-2):7187, April 1999. Abstract: Despite the central role of women drug users in escalating AIDS statistics, there is still a limited number of studies that examine the roles of gender and drug use type in HIV seroprevalence. This lacuna in the research literature has led to signicant gaps in researchers understanding of how and to what extent women may dier in their drug-using and HIV risk behaviors compared to their better-studied male counterparts. This study, derived from a sample of 3,555 out-of-treatment drug users residing in three South Florida urban and rural communities, attempts to compare the drug usage and needle and sexual risk behaviors of male and female drug users that put them at risk for HIV infection. The overall seropositivity rate for women drug users was 26.5% compared to 19.5% for their male counterparts. Results of multivariate analyses indicate that females compared to males were 1.4 times more likely to be HIV seropositive. Risk behaviors associated with this elevated seropositivity include living arrangements, homeless status, drug use, sexual trading behaviors, and history of STDs. Furthermore, there was a strong linear relationship between drug use type and HIV seroprevalence among women drug users. Compared to those who were neither crack smokers nor injectors of illicit drugs, those who were crack smokers only were 2 times more likely to be HIV seropositive, while those who were both crack smokers and injectors were 5 times more likely to be HIV seropositive, and those who were injectors only were 6 times more likely to be HIV seropositive. These ndings indicate that among women, drug abuse and its associated risk behaviors, increase the vulnerability of this population for HIV and thus render them an extremely important priority population on which to focus HIV prevention and public health eorts and programs. [445] Daniel McFadden. Free Markets and Fettered Consumers. American Economic Review, 96(1):529, March 2006.


The author rst reviews behavioral evidence on consumer decisionmaking and its eects on market outcomes and attitudes toward markets and then focuses on consumer choices under the Medicare Part D prescription drug program (p. 6). He nds that although 70.6% of the eligible population makes the basic decision (enroll now or defer enrollment) in a manner consistent with minimizing the expected present value of out of pocket costs, many who enroll have diculty in picking an appropriate plan. In particular, many consumers have diculty choosing among plans to ne-tune their prescription drug coverage, and do not seem to be informed about or attuned to the insurance feature of Part D plans (p. 23). He concludes that what the Part D market, and other market privatization initiatives, need is a component of Thaler and Sunsteins (2003) libertarian paternalism, in which understanding consumers limitations, helping consumers to help themselves, and convincing them that the market will serve their interests are intrinsic parts of mechanism design (p. 23). [446] John E. McGowan, Jr. Economic Impact of Antimicrobial Resistance. Emerging Infectious Diseases, 7(2):28692, March-April 2001. Abstract: One reason antimicrobial-drug resistance is of concern is its economic impact, which aects physicians, patients, health-care administrators, pharmaceutical producers, and the public. Measurement of cost and economic impact of programs to minimize antimicrobial-drug resistance is imprecise and incomplete. Studies to describe and evaluate the problem will have to employ new methods and be of large scale to produce information that is broadly applicable. [447] Jr. McGregory, Richard C., M. Scott Niederjohn, and James Peoples. Do Part-Time/Full-Time Compensation Dierentials for Nurses Vary between the Private and Public Sector? Applied Economics, 41(4-6):53746, February-March 2009. Abstract: This study examines whether, compared to their private sector counterparts, public sector health care employers are at a disadvantage using part-time (PT) nurses to lower labour costs. Findings reveal a lack of a PT wage dierential. Public and private sector PT nurses are less likely to receive health care and pension coverage compared with full-time (FT) nurses. Yet, these PT/FT nonwage compensation coverage dierentials do not vary across sectors. The nonwage ndings are interpreted as suggesting that public sector health care employers are just as likely as private sector health care employers to benet from cost savings associated with lower nonwage coverage for PT nurses. [448] Alistair McGuire, Paul Fenn, and Kenneth Mayhew. Providing Health Care: The Economics of Alternative Systems of Finance and Delivery. Oxford University Press, Oxford, 1994. Keywords: health economics 162

[449] Barbara McPake, Lilani Kumaranayake, and Charles Normand. Health Economics: An International Perspective. Routledge, New York, 2002. [450] Barbara McPake and Caroline Machray. International Comparisons of Health Sector Reform: Towards a Comparative Framework for Developing Countries. Journal of International Development, 9(4):62129, June 1997. [451] Robert W. Mead and Victor Brajer. Protecting Chinas Children: Valuing the Health Impacts of Reduced Air Pollution in Chinese Cities. Environment and Development Economics, 10(6):74568, December 2005. Abstract: As China advances its overall program of economic development, many Chinese cities consistently suer from unhealthy levels of air pollution. One of the groups most aected is children. This paper provides some quantication regarding the extent of various morbidity costs upon children in portions of urban China. Using China-based health-eects and valuation studies, the authors project, and value in dollar gures, the number of averted cases of childhood colds, bronchitis, asthma, and respiratory-related hospital visits resulting from a lowering of air pollution levels. The results indicate that these child morbidity benets may be substantial, with a mid-range value of nearly $3.5 billion over the period 2002-2011. [452] Robert W. Mead and Victor Brajer. Environmental Cleanup and Health Gains from Beijings Green Olympics. China Quarterly, 194:27593, June 2008. Abstract: In announcing its bid for the 2008 Summer Olympics, Beijing chose a Green Olympics theme to indicate that hosting the Olympic Games would serve as a catalyst for environmental improvements and sustainable development. With the Olympics now just a short time away, it is appropriate to examine the citys cleanup progress to date. This article does so, and also quanties some of the health benets of these cleanup activities, placing an economic value on the gains. Results for air pollution cleanup indicate an economic gain of nearly 50 billion yuan over a ten-year period, with a potential annual gain of 3.5 billion yuan for reaching air quality standards. Water pollution results suggest a potential annual gain of another 2.6 billion yuan. [453] Glenn Melnick, Emmett Keeler, and Jack Zwanziger. Market Power and Hospital Pricing: Are Nonprots Dierent? Health Aairs, 18(3):16773, May-June 1999. Abstract: Dramatic changes in hospitals operating environments are leading to major restructuring of hospital organizations. Hospital mergers and acquisitions are increasing each year, and conversions by hospitals to different forms of ownership also are continuing apace. Such changes require policymakers and regulators to develop and implement policies to ensure that consumers interests are protected. An important consideration in


this process is the impact on the price of hospital care following such transactions. This paper reviews empirical evidence that mergers that reduce competition will lead to price increases at both merging hospitals and their competitors, regardless of ownership status. We show that nonprot and government hospitals have steadily become more willing to raise prices to exploit market power and discuss the implications for antitrust regulators and agencies that must approve nonprot conversions. [454] David Meltzer, Jeanette Chung, and Anirban Basu. Does Competition under Medicare Prospective Payment Selectively Reduce Expenditures on High-Cost Patients? RAND Journal of Economics, 33(3):44768, autumn 2002. Abstract: Competition and prospective payment have been widely used to control health care costs but may together provide incentives to selectively reduce expenditures on high-cost relative to low-cost users. We use patient discharge and hospital nancial data from California to examine the eects of competition on costs for high- and low-cost admissions in the 12 largest Diagnosis-Related Groups before and after the Medicare Prospective Payment System (PPS). We nd that competition increased costs before PPS, but that this eect decreased afterward, especially in patients with the highest costs. We conclude that competition and PPS selectively reduced spending among the most expensive patients and that careful assessment of these patients outcomes is important. [455] Robert Mendelsohn. Environmental Economics and Human Health. Environmental Health Perspectives, 110(3):A11819, March 2002. In this editorial Mendelsohn discusses environmental economics contributions to controlling pollution and thus promoting health. He concludes that by weighing the benets of more control against the cost of abatement, economists have sought a balanced approach for society. Economists have also advocated the wise use of scientic information by building integrated assessment models from all relevant disciplines. Finally, economists have worked hard to give the government tools that promote ecient abatement programs. All of these eorts are designed to make our pollution control programs more eective so they deliver an adequately safe environment at the lowest possible cost (p. A119). [456] Terri J. Menke. The Eect of Chain Membership on Hospital Costs. Health Services Research, 32(2):17796, June 1997. OBJECTIVE: To compare the cost structures of hospitals in multihospital systems and independently owned hospitals. DATA SOURCES: The American Hospital Associations Annual Survey from 1990 for data on hospital costs and attributes. Area characteristics came from the Area Resource File, and the Medicare case-mix index came from the Health Care Financing Administration. Data on wages are from the Bureau of the Census State and Metropolitan Area Data Book. The Guide to Hospital 164

Performance from HCIA, Inc. provided data on quality of care. STUDY DESIGN: Separate cost functions were estimated for chain and independent hospitals. Hybrid translog cost functions included measures of outputs, input prices, and hospital and area characteristics. The estimation method accounted for the simultaneous determination of costs and chain membership, and for any nonrandom selection of hospitals into chains. Several economic cost measures were calculated to compare the cost structures of the two types of hospitals. DATA EXTRACTION METHODS: Data from all sources were merged at the hospital level to form the study sample. PRINCIPAL FINDINGS: Hospitals in multihospital systems were less costly than independently owned hospitals. Among independent hospitals, for-prots had the highest costs. There were no statistically significant dierences in costs by ownership among chain members. Economies of scale were enjoyed in both types of hospitals only at high volumes of output, while economies of scope occurred at all volumes for chain hospitals, but only at low and medium volumes for independent hospitals. CONCLUSIONS: This study provides support for the idea that growth of the multihospital system sector can provide a market solution to the problem of constraining costs. It does not, however, support the property rights theory that proprietary hospitals are more ecient than nonprot hospitals. [457] Ajit M. Menon, Aparna D. Deshpande, George M. Zinkhan, and Matthew Perri III. A Model Assessing the Eectiveness of Direct-toConsumer Advertising: Integration of Concepts and Measures from Marketing and Healthcare. International Journal of Advertising, 23(1):91, 2004. Abstract: The advertising of prescription medications directly to consumer (DTC advertising) has become a familiar practice in the USA. As with all advertising spending, key questions include: how eective is this advertising?; what are the best ways to measure advertising eectiveness? This paper identies key eectiveness measures that are appropriate for the unique situation of DTC advertising, and presents these measures in a unied framework. In addition, it briey describes candidate predictors of DTC ad eectiveness. In an attempt to gain a better understanding of DTC advertising, the paper integrates concepts and measures from the elds of marketing and healthcare. [458] Anna Merino-Castell. Demand for Pharmaceutical Drugs: A Choice o Modelling Experiment. Working paper, Department of Economics and Business, Universitat Pompeu Fabra, 2003. Available at Abstract: Despite the importance of supplier inducement and brand loyalty in the drug purchasing process, little empirical evidence is to be found with regard to the inuence that these factors exert on patients decisions. Under the new scenario of easier access to information, patients are be165

coming more demanding and even go as far as questioning their physicians prescription. Furthermore, new regulation also encourages patients to adopt an active role in the decision between brand-name and generic drugs. Using a stated preference model based on a choice survey, I have found evidence of how signicant physicians prescription and pharmacists recommendation become throughout the drug purchase process and, to what extent, brand loyalty inuences the nal decision. As far as we are aware, this paper is the rst to explicitly take consumers preferences into account rather than focusing on the behavior of health professionals. [459] Joshua P. Metlay, Judy A. Shea, Linda B. Crossette, and David A. Asch. Tensions in Antibiotic Prescribing: Pitting Social Concerns Against the Interests of Individual Patients. Journal of General Internal Medicine, 17(2):8794, February 2002. Abstract: BACKGROUND: To reduce the prevalence of antibioticresistant bacteria in the community, physicians must optimize their use of antibiotics. However, optimal use from the perspective of the community (reserving newer agents for future use) is not always consistent with optimal use from the perspective of the individual patient (prescribing newer, broader agents). OBJECTIVES: To identify preferred patterns of antibiotic prescribing for patients with community-acquired pneumonia (CAP), measure explicit attitudes toward antibiotics and antibiotic resistance, and determine the relationship between these prescribing patterns and attitudes. DESIGN: Cross-sectional anonymous mail survey. PARTICIPANTS: National random sample of 400 generalist physicians (general internal medicine and family practice) and 429 infectious diseases specialists. MEASUREMENTS: Rank ordering of antibiotic preferences for a hypothetical outpatient with CAP and reasons for antibiotic selection. Endorsement of attitudes regarding antibiotic prescribing decisions and resistance. RESULTS: Both generalists and infectious diseases specialists were more likely to prefer newer, broader drugs for the treatment of CAP compared to older agents still recommended by national guidelines. Physicians rated the issue of contributing to antibiotic resistance lowest among 7 determinants of their choices. CONCLUSIONS: Despite national guidelines and increasing public awareness, the public health concern of contributing to the problem of antibiotic resistance does not exert a strong impact on physician prescribing decisions for CAP. Future eorts to optimize antibiotic prescribing decisions will need to consider options for increasing the impact of public health issues on the patient-oriented decisions of individual physicians. [460] Lisa R. Metsch, Clyde B. McCoy, James M. Shultz, J. Bryan Page, Elizabeth Philippe, and Carolyn McKay. Gender Comparisons of Injection Drug Use Practices in Shooting Galleries. Population Research and Policy Review, 18(1-2):10117, 1999.


Abstract: Previous research studies and anecdotal evidence portray shooting galleries as locales that place injection drug users at great risk for HIV infection, drug use and violence. Collectively, these studies highlight the need to intervene with injectors who frequent shooting galleries. However, few researchers have studied an often-forgotten risk groupwomen injecting drug users who frequent shooting galleriesand compared their risk behaviors to their male counterparts. To address this gap in the research literature and to evaluate the functionality of the shooting gallery as a setting for HIV prevention, we collected data on risk practices from 201 injectors (101 men and 100 women) who were recruited from eight shooting galleries in Miami, Florida. Results indicate that, compared with men, women injectors engaged in a similar variety and frequency of injection risk behaviors and had more shooting companions. While only minor gender dierences were apparent, relatively few injectorsmale or femaleadhered to current recommendations for needle hygiene practices. Needle hygiene practices existed equally among injectors of both sexes, however very few adhered to current recommendations. Furthermore, contrary to common images of shooting galleries, use of other drugs was infrequently reported, episodes of violence or victimization were uncommon, and sexual contact almost never occurred. Operators of shooting galleries, both men and women, indicated their willingness to participate in HIV prevention eorts. Implications of these ndings for HIV intervention indicate that (1) there is a great need to intervene with both men and women IDUs who frequent shooting galleries and that (2) shooting galleries can be an optimal setting for HIV prevention. [461] Edward Miguel and Michael Kremer. Worms: Education and Health Externalities in Kenya. Working Paper 40, The Center for Labor Economics, University of California, Department of Economics, July 2001. Abstract: Intestinal helminthsincluding hookworm, roundworm, schistosomiasis, and whipworminfect more than one-quarter of the worlds population. A randomized evaluation of a project in Kenya suggests that school-based mass treatment with de-worming drugs reduced school absenteeism in treatment schools by one quarter. Gains are especially large among the youngest children. De-worming is found to be cheaper than alternative ways of boosting school participation. By reducing disease transmission, de-worming creates substantial externality health and school participation benets among untreated children in the treatment schools and among children in neighboring schools. These externalities are large enough to justify fully subsidizing treatment. We do not nd evidence that de-worming improves academic test scores. Existing experimental studies, in which treatment is randomized among individuals in the same school, nd small and insignicant de-worming treatment eects on education; however, these studies underestimate true treatment eects if de-worming creates positive externalities for the control group and reduce reduces treatment group attrition. 167

[462] Edward Miguel and Michael Kremer. Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities. Econometrica, 72(1):159217, January 2004. Abstract: Intestinal helminthsincluding hookworm, roundworm, whipworm, and schistosomiasisinfect more than one-quarter of the worlds population. Studies in which medical treatment is randomized at the individual level potentially doubly underestimate the benets of treatment, missing externality benets to the comparison group from reduced disease transmission, and therefore also underestimating benets for the treatment group. We evaluate a Kenyan project in which school-based mass treatment with deworming drugs was randomly phased into schools, rather than to individuals, allowing estimation of overall program eects. The program reduced school absenteeism in treatment schools by one-quarter, and was far cheaper than alternative ways of boosting school participation. Deworming substantially improved health and school participation among untreated children in both treatment schools and neighboring schools, and these externalities are large enough to justify fully subsidizing treatment. Yet we do not nd evidence that deworming improved academic test scores. [463] Dragan Miljkovic and Daniel Mostad. Obesity and Low-Carb Diets in the United States: A Herd Behavior Model. Agribusiness, 23(3):42134, summer 2007. Abstract: We propose that consumer herding is a plausible explanation of the popularity of low-carb diets in the United States. This proposition was empirically tested using per capita consumption of both broilers and eggs as proxies of the popularity of low-carb diets. Results conrm that people do not always make (perfectly) rational choices, even when a good signal or correct information is available to them. Instead, they choose to do what everyone else is doing. In addition, we could not conclusively determine that an increase in media reports about low-carb diets led to further increase in the popularity of low-carb diets. [464] Amalia R. Miller. The Impact of Midwifery-Promoting Public Policies on Medical Interventions and Health Outcomes. Advances in Economic Analysis & Policy, 6(1):article 6, October 2006. Abstract: This paper measures the impact of midwifery-promoting public policies on maternity care in the United States, using national Vital Statistics data on births spanning 1989-1999. State laws mandating insurance coverage of midwifery services are associated with an 18-percentage rise in midwife-attended births. The laws did not decrease rates of cesarean deliveries or lead to consistent eects on maternal mortality or Apgar scores. They did, however, lead to a statistically signicant drop in neonatal deaths. Divergence between OLS and natural experiment es-


timates suggests that women are selecting into provider groups based on unobserved preferences and health. [465] Thaddeus Miller, Virginia A. Rauh, Sherry A. M. Glied, Dale Hattis, Andrew Rundle, Howard Andrews, and Frederica Perera. The Economic Impact of Early Life Environmental Tobacco Smoke Exposure: Early Intervention for Developmental Delay. Environmental Health Perspectives, 114(10):15851588, October 2006. Abstract: BACKGROUND AND OBJECTIVES: Early-life exposure to environmental tobacco smoke (ETS) can result in developmental delay as well as childhood asthma and increased risk of cancer. The high cost of childhood asthma related to ETS exposure has been widely recognized; however, the economic impact of ETS-related developmental delay has been less well understood. METHODS AND RESULTS: The Columbia Center for Childrens Environmental Health (CCCEH) has reported adverse eects of prenatal ETS exposure on child development in a cohort of minority women and children in New York City (odds ratio of developmental delay = 2.36; 95% condence interval 1.224.58). Using the environmentally attributable fraction (EAF) approach, we estimated the annual cost of one aspect of ETS-related developmental delay: Early Intervention Services. The estimated cost of these services per year due to ETS exposure is > $50 million per year for New York City Medicaid births and $99 million per year for all New York City births. CONCLUSION: The high annual cost of just one aspect of developmental delay due to prenatal exposure to ETS provides further impetus for increased prevention eorts such as educational programs to promote smoke-free homes, additional cigarette taxes, and subsidizing of smoking cessation programs. [466] Barbara Mintzes, Morris L. Barer, Richard L. Kravitz, Armine Kazane jian, Ken Bassett, Joel Lexchin, Robert G. Evans, Richard Pan, and Stephen A. Marion. Inuence of Direct to Consumer Pharmaceutical Advertising and Patients Requests on Prescribing Decisions: Two Site Cross Sectional Survey. British Medical Journal, 324(7332):27879, 2 February 2002. The authors surveyed primary care doctors and their patients in California and British Columbia. They found that patients who requested a prescription were more likely to receive it than those who did not. Physicians were more likely to show ambivalence about a prescription requested by a patient than one not requested. [467] Sam Mirmirani, H. C. Li, and Joseph A. Ilacqua. Health Care Eciency In Transition Economies: An Application Of Data Envelopment Analysis. International Business & Economics Research Journal, 7(2):4755, February 2008. Abstract: Health care costs are a nancial burden for developing and transition economies which have experienced a faster growing demand 169

on their health care systems while aiming to improve eciency. As costs become more complex, attention has shifted to the eciency of an entire system. Through system-wide assessments, countries with higher health care eciency can be identied. These systems can be replicated to allow provision of good care at lower costs. Data Envelopment Analysis is used to measure health care eciencies and to discuss policy implications. [468] Sam Mirmirani and Richard N. Spivack. Nursing Shortage Crisis in New England: A Test of Supply and Demand Model. Rivista Internazionale di Scienze Economiche e Commerciali, 39(4):32540, April 1992. [469] David N. Mishol. The Medicaid Reimbursement Program and Reported Nursing Care in the Massachusetts Long-Term Industry. PhD thesis, Boston College, 1999. [470] Janet B. Mitchell and Jerry Cromwell. Impact of Medicare Payment Reductions on Access to Surgical Services. Health Services Research, 30(5):63755, December 1995. Abstract: Under OBRA-87, Medicare reduced payments for 11 surgical procedures. A xed eects regression method was used to determine the impact of these payment reductions on access to care for potentially vulnerable Medicare beneciaries: joint Medicaid-eligibles, blacks, and the very old. Our results suggest that volume responses by surgeons to payment changes under the Medicare Fee Schedule may be smaller than HCFAs original estimates. Nevertheless, both access and quality of care should continue to be closely monitored. [471] Jean M. Mitchell and Jack Hadley. Eects of Managed Care Market Penetration on Physicians Labor Supply Decisions. Quarterly Review of Economics and Finance, 39(4):491511, Winter 1999. Abstract: This paper examines data from a 1991 representative survey of physicians under the age of 45 to evaluate the eects of HMO enrollment growth and the changing demographic composition of the physician work force on physicians choice of practice setting and annual hours of work. The results indicate that HMO market penetration has a signicant negative eect on the probability of self-employment for all physicians and the sub-samples of both specialists and generalists. Furthermore, increasing HMO market share has a signicant negative eect on annual hours of work of all physicians and generalists but has only negligible eects on the work eort of specialists. It is predicted that a 100% increase in HMO market share decreases the probability of being self-employed by 23.5% for all physicians, 28% for specialists, and 21% among generalists. [472] Lee R. Mobley. Estimating Hospital Market Pricing: An Equilibrium Approach Using Spatial Econometrics. Regional Science and Urban Economics, 33(4):489516, 2003.


Abstract: This paper models hospital market pricing using price response curves estimated from California data, using spatial econometrics. This approach has not been exploited previously in the health economics literature. In our theoretical model, we show how the slope of the reaction function reects hospital specialization, and how equilibrium prices are impacted by shifts in the reaction function. We posit that managed care penetration, hospital market structure, and/or eciency eects including the presence of excess capacity in the industrydetermine the position and slope of the reaction function. We then examine empirically how these things impacted equilibrium prices. [473] H. Naci Mocan, Erdal Tekin, and Jerey S. Zax. The Demand for Medical Care in Urban China. World Development, 32(2):289304, February 2004. Abstract: The link between health and productivity on the one hand, and the growing demand for health services and the shortage of funds to nance the health care system on the other hand pose a major challenge for developing countries. This paper uses a data set that consists of detailed characteristics of 6,407 urban households from Peoples Republic of China to investigate the determinants of the demand for medical care. A twopart model and a discrete factor model are used in the estimation. Income elasticity is around 0.3, indicating medical care is a necessity. Medical care demand is price inelastic, and price elasticity is larger in absolute value for poorer households. This suggests that while total revenue from provision of health care can be increased by raising the price of care in the inelastic segment of the demand curve, this would increase the inequality in access to medical care. [474] Maurice L. Moett and Alok Bohara. Hospital Quality Oversight by the Joint Commission on the Accreditation of Healthcare Organizations. Eastern Economic Journal, 31(4):62947, fall 2005. The authors conclude that Joint Commission surveys provide an incentive to hospitals to improve processes of care for the period leading up to an inspection but this incentive gets eliminated after the inspection occurs (p. 646). [475] Elias Moreno, Francisco Javier Giron, Francisco Jose Vazquez-Polo, and Miguel A. Negrin. A Bayesian Net Benet Approach to Cost-Eectiveness Analysis in Health Technology Assessment. International Journal of the Economics of Business, 16(3):32345, November 2009. Abstract: The economic literature on cost-eectiveness analysis in the context of decisions by health technology assessment agencies assumes as the quantity of interest a linear combination of the mean of the sampling distribution of the eectiveness and the cost. We argue that this is not always reasonable. Our reasons for this assertion are that (i) treatments are compared on the basis of mean values, and for some useful models the mean of the distribution of the cost, which is conditional on the available 171

data, does not exist, and (ii) even for models for which the mean does exist, it might not constitute an accurate reection of the distribution. This paper presents a general Bayesian cost-eectiveness analysis of a single treatment, where the quantity of interest is the distribution, conditional on the data, of the net benet. This approach permits a natural extension to several treatments, which enables us to make a statistical comparison. Illustrations with treatment comparisons for real and simulated data are given. [476] Fiona M. Scott Morton. Barriers to Entry, Brand Advertising, and Generic Entry in the US Pharmaceutical Industry. International Journal of Industrial Organization, 18(7):1085104, October 2000. The author concludes that brand advertising is not a barrier to entry by generic rms into the US pharmaceutical market. [477] Elias Mossialos. Citizens Views on Health Care Systems in the 15 Member States of the European Union. Health Economics, 6(2):10916, March April 1997. Abstract: This paper provides an initial analysis of a Eurobarometer survey on citizens views on health care systems which was conducted in the 15 European Union Member States in 1996. It examines and discusses citizens satisfaction with the running of health care, their views towards major health care reforms and attitudes on health care spending. [478] Dana B. Mukamel and William D. Spector. The Competitive Nature of the Nursing Home Industry: Price Mark Ups and Demand Elasticities. Applied Economics, 34(4):41320, March 2002. Abstract: Nursing home markets are likely to deviate from a competitive structure because of limitations on entry imposed by Certicate of Need (CON) regulations and the potential for product dierentiation along such attributes as location, religious aliation and quality. This paper investigates the structure of nursing home markets in New York State by calculating price mark ups and residual private pay demand elasticities. It shows that the residual demand elasticity is bound by estimates based on price mark ups above marginal costs and above Medicaid rates. This approach allows estimation of demand elasticities in all markets, whether or not CON regulations constrain bed supply. Mean price elasticities (in absolute value) calculated for nursing homes in New York State in 1991 ranged from 3.46 to 3.85. [479] Murat K. Munkin and Pravin K. Trivedi. Bayesian Analysis of a SelfSelection Model with Multiple Outcomes Using Simulation-Based Estimation: An Application to the Demand for Healthcare. Journal of Econometrics, 114(2):197220, June 2003. Abstract: This paper studies a self-selection model with discrete and continuous outcomes and a treatment variable. The treatment variable is 172

endogenous to the two outcome variables. The approach of the paper is fully parametric and Bayesian. The Bayes factor is calculated with the Savage-Dickey density ratio and used for model selection. The model is applied to two dierent micro data sets, the 19871988 National Medical Expenditure Survey and the 1996 Medical Expenditure Panel Survey. The paper studies the eect of managed care and fee-for-service type of private insurance on the demand for healthcare. It also compares the eects of private insurance and Medicaid in covering health care expenses of elderly Americans. [480] Alistair Munro. Economics and Biological Evolution. Environmental and Resource Economics, 9(4):42949, June 1997. Abstract: The employment of insecticides raises the relative tness of resistant insects; the use of antibiotics applies selection pressure in favour of resistant strains of bacteria; lower limits on sh net mesh size raises the advantages of smaller adults. These are some of the many examples of the unintended impact of human activity upon biological evolution. Often this evolution has economic signicance as it does in the examples quoted. This paper examines some of the principles involved and provides a preliminary analysis of the extent to which the economically optimal inducement of evolution diers from that arising when changes in selection pressures are not anticipated. [481] Germano Mwabu, Joseph Wangombe, and Benjamin Nganda. The Demand for Medical Care in Kenya. African Development Review/Revue Africaine de Developpement, 15(2-3):43953, December 2003. Abstract: We use a quantile regression method to analyse the demand eects of user fees over the entire distribution of visits in a sample of rural and urban populations controlling for other covariates of interest, notably income and demographics. We nd that the negative eects of fees on attendance dier across the visit quantiles, with the smallest eects being felt at higher quantiles. The main contribution of the paper is to show the non uniform eects of fees at dierent points of the visits distribution, in contrast to the average eect computed using the OLS method. The policy implications of the ndings are briey discussed. [482] Abdelhak Nassiri and Lise Rochaix-Ranson. Lore de services medicaux: Analyse sur donnees de panel dune experience naturelle au Quebec. (Physicians Services Supply: A Panel Data Approach of a Manual Experiment in Quebec. With English summary.). Revue dEconomie Politique, 110(4):54170, JulyAugust 2000. [483] Rodolfo M. Nayga, Jr. Schooling, Health Knowledge and Obesity. Applied Economics, 32(7):81522, June 2000. Abstract: The connection between schooling and health is well documented. An important empirical issue that needs to be examined, however,


is whether schoolings eects are due to individual health knowledge differences. This empirical study examines this issue with an increasingly important health indicator, obesity. Since provision of health knowledge is a major tool of public agencies promoting health, this empirical study uses a new direct measure of health knowledge to test this hypothesis. The results show that knowledge is inversely related to the probability that an individual is obese. Schoolings eects on relative weight and the probability of being obese are explained by dierences in knowledge. This result may imply that schoolings eect on the allocative eciency of the household production of health is the main reason schooling is linked to health behaviour. The result also may imply that the most eective method of health education is to highlight the disease element of poor dietary habits and health. More importantly, the simulations conducted suggest positive returns to knowledge based on improvements in the probability estimates. [484] Joseph P. Newhouse. Do Unprotable Patients Face Access Problems? Health Care Financing Review, 11(2):3342, winter 1989. Abstract: Tests were conducted to determine whether implementation of the prospective payment system caused access problems for patients with an above-average likelihood of being unprotable. Since implementation, patients in diagnosis-related groups that are, on average, unprotable are not more likely to be transferred. However, they are more likely to be found in hospitals of last resort (the only evidence from these tests indicating access problems). Outlier patients are not more likely to be found in lastresort hospitals. The access issue will continue to bear scrutiny, but there is not as yet evidence that it is a serious problem. [485] Joseph P. Newhouse. Reimbursing Health Plans and Health Providers: Eciency in Production versus Selection. Journal of Economic Literature, 34(3):123663, September 1996. Abstract: The tradeo between an insurers or medical providers incentives to select good risks and to produce eciently is governed by the supply-price analog to the demand-price tradeo between moral hazard and risk aversion. Under a variety of models the optimum supply price is a mixture of capitation and fee-for-service payments. Empirical literature shows that pure capitation payment leaves strong incentives for selection that are acted upon. The presence of contracting costs in a RothschildStiglitz model means a limited pooling equilibrium can exist and that poor risks will not be at their preferred outcome. [486] Joseph P. Newhouse et al. Managed Care: An Industry Snapshot. Inquiry, 39(2):20720, fall 2002. Abstract: Together with the American Association of Health Plans (AAHP), we surveyed health maintenance organizations (HMOs) in 1998 to characterize their basic structure and management strategies. The ndings show that more than half of HMO enrollees belong to plans that 174

contract with primary care physician (PCP) groups on a predominantly capitated basis. Such plans tend to be larger and to contract with large physician groups. Thirty percent to 40% of enrollees are in plans that delegate utilization and network management to physician groups paid by capitation, but plans almost never delegate these functions to groups paid by fee-for-service. Plans tend to retain quality assurance functions irrespective of whether they use fee-for-service or capitation as a basis for physician payment. The autonomy of PCPs to order tests and procedures varies with the test and procedure. [487] Sean Nicholson. The Eect of Federal Policy on Hospital Care for the Poor. Health Care Systems Department, Wharton School, May 1998. The author reports that the federal government instituted the Medicare Disproportionate Share Hospital (DSH) program in 1986 to promote hospital care for poor persons.... Ironically, the structure of the DSH payment formula may increase the supply of hospital care to Medicaid beneciaries but reduce the supply of hospital care to uninsured poor persons. The author estimates the price elasticity of supply of hospital services to Medicaid patients to be 0.35. [488] Sean Nicholson and David Song. The Incentive Eects of the Medicare Indirect Medical Education Policy. Journal of Health Economics, 20(6):909 33, November 2001. Abstract: Medicare provided teaching hospitals with US $5.9 billion in supplemental graduate medical education (GME) payments in 1998. These payments distort input and output prices and provide teaching hospitals with incentives to hire residents, close beds, and admit more Medicare patients. The structure of the GME payment policy creates substantial variation in input and output prices between teaching hospitals. We examine the extent to which hospitals responded to these nancial incentives using a panel data set of 3900 hospitals, including over 900 teaching hospitals. We nd that teaching hospitals did hire residents and close beds in response to the Medicare policy, but did not increase Medicare admissions or alter their use of registered nurses (RNs). [489] Muriel Niederle and Alvin E. Roth. Unraveling Reduces Mobility in a Labor Market: Gastroenterology with and without a Centralized Match. Journal of Political Economy, 111(6):134252, December 2003. Abstract: The entry-level market for American gastroenterologists was organized by a centralized clearinghouse from 1986 to 1996. Before, and since, it has been conducted via a decentralized market in which appointment dates have unraveled to well over a year before the start of employment. We nd that, both before and after the years in which the centralized clearinghouse was used, gastroenterologists are less mobile and more likely to be employed at the same hospital in which they were internal medicine residents than when the clearinghouse was in use. This suggests 175

that the clearinghouse not only coordinates the timing of appointments but also increases the scope of the market, compared to a decentralized market with early appointments. [490] Richard M. Nixon, David Wonderling, and Richard D. Grieve. Nonparametric Methods for Cost-Eectiveness Analysis: The Central Limit Theorem and the Bootstrap Compared. Health Economics, 19(3):31633, March 2010. Abstract: Cost-eectiveness analyses (CEA) alongside randomised controlled trials commonly estimate incremental net benets (INB), with 95% condence intervals, and compute cost-eectiveness acceptability curves and condence ellipses. Two alternative non-parametric methods for estimating INB are to apply the central limit theorem (CLT) or to use the non-parametric bootstrap method, although it is unclear which method is preferable. This paper describes the statistical rationale underlying each of these methods and illustrates their application with a trial-based CEA. It compares the sampling uncertainty from using either technique in a Monte Carlo simulation. The experiments are repeated varying the sample size and the skewness of costs in the population. The results showed that, even when data were highly skewed, both methods accurately estimated the true standard errors (SEs) when sample sizes were moderate to large (n > 50), and also gave good estimates for small data sets with low skewness. However, when sample sizes were relatively small and the data highly skewed, using the CLT rather than the bootstrap led to slightly more accurate SEs. We conclude that while in general using either method is appropriate, the CLT is easier to implement, and provides SEs that are at least as accurate as the bootstrap. [491] Charles Normand. Choosing and Funding a Health Care Program in the Transition. In Zeljko Bogetic and Arye L. Hillman, editors, Financing Government in the Transition: Bulgaria: The Political Economy of Tax Policies, Tax Bases, and Tax Evasion., Regional and Sectoral Studies, pages 22542. World Bank, Washington, D.C., 1995. [492] Edward C. Norton, Courtney Harold Van Houtven, Richard C. Lindrooth, Sharon-Lise Normand, and Barbara Dickey. Does Prospective Payment Reduce Inpatient Length of Stay? Health Economics, 11(5):37787, July 2002. Abstract: A change in payment mechanism for inpatient care from per diem to per episode creates two incentivesa marginal and an average price eectto change length of stay. The decrease in marginal price per day to zero should reduce the length of stay, while an increase in average price per inpatient stay should increase the length of stay. This study uses data from a natural experiment to estimate both marginal and average price elasticities, and to test whether the length of stay falls after the introduction of prospective payment in a sample of 8509 severely mentally


ill patients. We estimate that the marginal price elasticity is zero, but the average price elasticity is between 0.16 and 0.20. The results were generally robust for short- and long stayers, and for persons admitted early and late after the change in payment mechanism. The model controlled for hospital xed eects and individual random eects. [493] Margaret J. Nowak and Alison C. Preston. Can Human Capital Theory Explain Why Nurses Are So Poorly Paid? Australian Economic Papers, 40(2):23245, June 2001. Abstract: This paper uses Australian Census data to examine the earnings of female professionals. Comparisons are made between Registered Nurses (RNs), Teachers, Social Professionals, Health Professionals and Business Professionals. Wage decompositions show that RNs earn signicantly less than other female Professionals and that the observed dierentials can not be explained by dierences in human capital endowments. The evidence presented is strongly suggestive of monopsonist or oligopsonist power in the setting of nurse wageswith a manifestation being persistent labour market disequilibrium. Changing the relative reward structure for nurses may help address the on-going nursing shortage in Australia, although further research in this area is called for. [494] Gary N. Nugent, Ann Hendricks, Linda Nugent, and Marta L. Render. Value for Taxpayers Dollars: What VA Care Would Cost at Medicare Prices. Medical Care Research and Review, 61(4):495508, December 2004. Abstract: Critics charge that Veterans Health Administration (VA) medical centers are inecient and the cost of veteran health care would be reduced if VA purchased care for its patients directly from private-sector providers. This analysis compares VA medical care expenditures with estimates of total payments under a hypothetical Medicare fee-for-service payment system reimbursing providers for the same counts of each service VA medical centers provided in scal 1999. At six study sites, hypothetical payments were more than 20 percent greater than actual budgets. Nationally, this represented more than $3 billion in 1999 and more than $5 billion in 2003. Data limitations suggest the estimate is conservative. Less than half of the dierence is due to VAs low pharmacy costs. The study demonstrates the potential savings to patients and taxpayers of the VA health care system. [495] John A. Nyman. Prospective and Cost-Plus Medicaid Reimbursement, Excess Medicaid Demand, and the Quality of Nursing Home Care. Journal of Health Economics, 4(3):23759, September 1985. Abstract: It is hypothesized that the Medicaid reimbursement payment discourages quality nursing home care in markets with excess demand. It is also suggested that an increase in the prospective payment or an increase in the return on capital portion of a retrospective cost-plus payment decreases the quality provided when there is excess demand. Finally, it is 177

argued that excess demand destroys a costless signal of quality, namely, the degree of excess capacity in a home, making it harder for uninformed consumers to make accurate choices and resulting in markets showing the characteristics of adverse selection. These hypotheses are analyzed using Wisconsin data from the 1979 Annual Survey of Nursing Homes and a cost/quality study data set. The data clearly support these 3 theories, although the support for the rst 2 seems to be stronger than the support for the 3rd. [496] John A. Nyman. The Eect of Competition on Nursing Home Expenditures under Prospective Reimbursement. Health Services Research, 23(4):55574, October 1988. Abstract: The for-prot nursing homes incentive to minimize costs has been maligned as a major cause of the quality problems that have traditionally plagued the nursing home care industry. Yet, prot-maximizing rms in other industries are able to produce products of adequate quality. In most other industries, however, rms are constrained from reducing costs to the point where quality suers by the threat of losing business to competing rms. In the nursing home industry, competition for patients often does not exist because of the shortage of nursing home beds. As a result, one would expect that nursing homes located in areas where there is excess demand would spend less on patient care than homes located where the bed supply is relatively abundant. This hypothesis is tested using Wisconsin data from 1983. It is found that, in counties with relatively tight bed supplies, an additional empty bed in all the homes in the county will force each home to increase expenditures by $.62 per day for each patient in the home. Overall, the average nursing home located in underbedded markets would spend $5.12 more per patient day or about $240,000 more annually (in 1983 dollars) if it were located in a market where it was forced to compete for patients. The implications for public policy are discussed. [497] John A. Nyman. The Theory of Demand for Health Insurance. Stanford University Press, Palo Alto, 2002. Publishers description: Why do people buy health insurance? Conventional theory holds that people purchase insurance because they prefer the certainty of paying a small premium to the risk of getting sick and paying a large medical bill. Conventional theory also holds that any additional health care that consumers purchase because they have insurance is not worth the cost of producing it. Therefore, economists have promoted policiescopayments and managed careto reduce consumption of this additional, seemingly low-value care. This book presents a new theory of consumer demand for health insurance. It holds that people purchase insurance to obtain additional income when they become ill. In eect, insurance companies act to transfer insurance premiums from those who remain healthy to those who become ill. This additional income gener178

ates purchases of additional high-value care, often allowing sick persons to obtain life-saving care that they could not otherwise aord. Regarding risk, the new theory relies on empirical studies showing that consumers actually prefer the risk of a large loss to incurring a smaller loss with certainty. Therefore, if consumers purchase insurance, it is not because they desire to avoid risk. Instead, the new theory suggests consumers simply pay a premium when healthy in exchange for a claim on additional income (eected when insurance pays for the medical care) if they become ill. Health insurance is substantially more valuable to the consumer under the new theory. The new theory moreover implies that copayments and managed carecentral health policies of the last 30 yearswere directed at solving problems that largely did not exist. Because these policies either reduced the amount of income transferred to ill persons or limited access to valuable health care, they may have done more harm than good. The new theory also provides a solid theoretical justication for insuring the uninsured and for implementing national health insurance. [498] Robert L. Obenchain. ICE Preference Maps: Nonlinear Generalizations of Net Benet and Acceptability. Health Services and Outcomes Research Methodology, 8(1):156, March 2008. Abstract: The Net Benet (NB) approach to Incremental CostEectiveness (ICE) statistical inference uses a linear function (map) to assign a real valued, numerical preference score to every point on the 2dimensional ICE plane. We argue that coherent ICE preferences satisfy four intuitive axioms and propose a 2-parameter family of maps that satisfy these axioms and provide highly realistic generalizations of NB. For example, nonlinear maps do not require that returns-to-scale be linear (constant) or that willingness-to-pay (W T P ) and willingness-to-accept (W T A) are both equal to the shadow price of health, . In fact, all of our maps have the property that = W T P W T A. With held xed, this geometric mean relationship shows that W T A must decrease when W T P increases and vice versa. This relationship thus provides not only a polar angular measure of the size of Bernies Kink, W T P < W T A, but also the theoretical basis for Buckinghams ALICE curve generalization of acceptability. Finally, we argue that uncertainty about economic preferences expressed by varying can totally swamp the statistical uncertainty in patient level data expressed by a wedge-shaped, bootstrap ICE condence region that does not depend upon in the sense that it is equivariant under changes in . [499] Bernie J. OBrien, K. Gertsen, Andrew R. Willan, and L. A. Faulkner. Is There a Kink in Consumers Threshold Value for Cost-Eectiveness in Health Care? Health Economics, 11(2):17580, March 2002. Abstract: BACKGROUND: A reproducible observation is that consumers willingness-to-accept (WTA) monetary compensation to forgo a program is greater than their stated willingness-to-pay (WTP) for the 179

same benet. Several explanations exist, including the psychological principle that the utility of losses weighs heavier than gains. We sought to quantify the WTP-WTA disparity from published literature and explore implications for cost-eectiveness analysis accept-reject thresholds in the south-west quadrant of the cost-eectiveness plane (less eect, less cost). METHODS: We reviewed published studies (health and non-health) to estimate the ratio of WTA to WTP for the same program benet for each study and to determine if WTA is consistently greater than WTP in the literature. RESULTS: WTA/WTP ratios were greater than unity for every study we reviewed. The ratios ranged from 3.2 to 89.4 for environmental studies (n=7), 1.9 to 6.4 for health care studies (n=2), 1.1 to 3.6 for safety studies (n=4) and 1.3 to 2.6 for experimental studies (n=7). CONCLUSIONS: Given that WTA is greater than WTP based on individual preferences, should not societal preferences used to determine cost-eectiveness thresholds reect this disparity? Current convention in cost-eectiveness analysis is that any given accept-rejection criterion (e.g. $50 k/QALY gained) is symmetrica straight line through the origin of the cost-eectiveness plane. The WTA-WTP evidence suggests a downward kink through the origin for the south-west quadrant, such that the selling price of a QALY is greater than the buying price. The possibility of kinky cost-eectiveness decision rules and the size of the kink merits further exploration. [500] Daryl B. OConnor, Fiona Jones, Mark Conner, Brian McMillan, and Eamonn Ferguson. Eects of Daily Hassles and Eating Style on Eating Behavior. Health Psychology, 27(1 supplement):S20S31, January 2008. Abstract: OBJECTIVE: This study investigated the daily hassles-eating behavior relationship and its moderators in a naturalistic setting. DESIGN: A multilevel diary design was used to examine day-to-day withinperson eects of daily hassles on eating behavior (N = 422), together with the individual and simultaneous inuence of potential moderating variables. MAIN OUTCOME MEASURES: Daily diary reports of betweenmeal snacking, fruit and vegetable consumption and perceived variations in daily food intake. RESULTS: The results showed daily hassles were associated with increased consumption of high fat/sugar snacks and with a reduction in main meals and vegetable consumption. Ego-threatening, interpersonal and work-related hassles were associated with increased snacking, whereas, physical stressors were associated with decreased snacking. The overall hassles-snacking relationship was signicantly stronger and more positive at high compared to low levels of restraint, emotional eating, disinhibition, external eating and in females and obese participants. Simultaneous consideration of these moderators indicated that emotional eating was the pre-eminent moderator of the hassles-snacking relationship. CONCLUSION: Daily hassles were associated with an increase in unhealthy eating behavior. These changes may indicate an important indirect pathway through which stress inuences health risk. 180

[501] Anja Olbrich. Heterogeneous Physicians, Lawsuit Costs, and the Negligence Rule. International Review of Law and Economics, 28(1):7888, March 2008. Abstract: Real-world observations of negligent and defensive medicine challenge malpractice liability. Based on a principal-agent model with two types of physicians I show that lawsuit costs aect the patients decision to sue and the physicians level of care under the negligence rule, leading to a separated equilibrium in care. Given these conditions, punitive damages allow for a pooled equilibrium where all physicians exert rst-best care. If courts cannot use punitive damages, a second-best solution arises with an optimal negligence standard that deviates from rst-best care. [502] Anja Olbrich. The Optimal Negligence Standard in Health Care under Supply-Side Cost Sharing. International Journal of Health Care Finance and Economics, 8(2):7385, June 2008. Abstract: This paper elaborates on the optimal negligence standard in a world where physicians choose their level of care subject to erroneous court judgements and to the degree of supply-side cost sharing. Uncertain liability in malpractice lawsuits leads physicians to provide excessive and insucient care, which results in a loss of social welfare. The standard that maximizes welfare depends on the cost share: under traditional, close to full cost reimbursement it is lower than the rst-best level of care, while under substantial supply-side cost sharing it increases and may even exceed the rst best. [503] Reed Neil Olsen. The Reform of Medical Malpractice Law: Historical Perspectives. American Journal of Economics and Sociology, 55(3):257 75, July 1996. Abstract: The major stimulus for the extensive, state level, reform of medical malpractice during the past two decades was the widespread belief in a malpractice crisis. The perception of a crisis arose in the 1960s largely because of what was viewed as sudden and dramatic increases in the malpractice liability of physicians. However, historical data demonstrate that the common perception that physician liability increased suddenly and dramatically beginning in the 1960s is incorrect. Since malpractice reform has been based upon the false premise that the medical malpractice liability system, previously working smoothly, was in disarray, the soundness of much of the malpractice reform which has occurred in the past two decades is questioned. [504] Mary K. Olson. Firm Characteristics and the Speed of FDA Approval. Journal of Economics and Management Strategy, 6(2):377401, summer 1997. Abstract: This paper empirically examines the eect of rm-specic characteristics on the length of time required by the Food and Drug Administration (FDA) to review and approve new-drug applications between 1990 181

and 1992. The approach treats regulatory decisions as endogenous and explains the variation in regulatory behavior as a function of dierences that exist between rms and drugs. Results show that, controlling for drugspecic characteristics, regulators respond to rm-specic characteristics when evaluating new drug applications. For instance, rms that are less diversied and more R&D-intensive receive shorter review times for their new-drug applications than more diversied and less R&D-intensive rms. The reason is that most rm characteristics signal information to reviewers about either rm reputation or application quality. This information reduces reviewers uncertainty about approving a dangerous or ineective drug and leads to faster review times. The results suggest that regulators respond to the heterogeneities among rms in the pharmaceutical market in systematic ways. [505] Mary K. Olson. Regulatory Reform and Bureaucratic Responsiveness to Firms: The Impact of User Fees in the FDA. Journal of Economics and Management Strategy, 9(3):36395, fall 2000. Abstract: This paper examines the impact of user fees on the speed of newdrug review and on the responsiveness of FDA reviewers to pharmaceutical rms. User fees are expected to alter FDA behavior and responsiveness to pharmaceutical rms because they give regulators a nancial incentive to process more new-drug applications and because they convey information to regulators that may reduce type I error. The analysis examines the variation in FDA review times for new drugs approved between 1990 and 1995 as a function of dierences that exist among rms and drugs. Specically, it compares estimates of regulator responsiveness to several rm and drug characteristics before and after the introduction of user fees. The results show that user fees produced a signicant change in FDA behavior. Regulators have become less responsive to the dierences among rms since the introduction of user fees, which suggests that the reform has led to more equity in the new-drug review process. In addition, the FDA has expedited the review of new drugs, especially the most therapeutically novel drugs, which suggests that politicians have been fairly successful in designing a reform to realign regulatory incentives in the FDA. [506] Mary K. Olson. Pharmaceutical Policy Change and the Safety of New Drugs. Journal of Law and Economics, 45(2):61542, October 2002. Abstract: Policy reforms in the Food and Drug Administration (FDA) have led to substantial increases in the speed of new-drug review. While data show that FDA review times for new drugs have fallen as much as 50 percent, other data show that several new drugs have been withdrawn from the market for safety reasons. This urry of new-drug withdrawals raises a question. Have increases in the speed of new-drug review had an adverse eect on new-drug safety? This analysis uses adverse drug reaction (ADR) data from the FDAs Spontaneous Reporting System to examine this question. Specically, ADR counts for newly approved drugs 182

are estimated as a function of drug characteristics, patient characteristics, and regulatory factors (such as the speed of new-drug review) using negative binomial regression analysis. The primary result is that reductions in new-drug review times are associated with increases in both ADRs requiring hospitalization and ADRs resulting in death. [507] Liam ONeill. Multifactor Eciency in Data Envelopment Analysis with an Application to Urban Hospitals. Health Care Management Science, 1:1927, 1998. Keywords: health economics, data envelopment analysis, hospitals [508] Zeynep Or. Exploring the Eects of Health Care on Mortality across OECD Countries. Occasional Papers 46, OECD, Paris, 2000. Abstract: Two of the most important questions facing health policy makers in OECD countries are: (i) whether the increasing sums of money devoted to health care are yielding commensurate value in terms of improvements in health status; (ii) and whether dierent ways of nancing and delivering health careand, hence, health care reformsmake a difference to health. This paper explores the eect of variations in the volume of health care and in certain characteristics of health systems on mortality across 21 OECD countries over the past 25 years, after controlling for certain other determinants of health status. It builds on previous research on the determinants of health outcomes in OECD countries (Or, 2000). In contrast to the earlier work, it concentrates on a non-monetary measure of health care supply number of doctors to avoid a number of measurement issues. It also uses a range of summary measures of mortality to assess the performance of health care systems and incorporates a number of judgmental variables to capture some basic characteristics of health care nancing. Given the received wisdomthat the marginal productivity of medical care is close to zero in industrialised countries the results are surprising and encouraging for health care reforms. They suggest that over the past 25 years, increasing doctor numbers have been strongly and signicantly associated with lower mortality, after allowing for other determinants of health status for which we have data. In addition, the results suggest that the relative importance of the determinants varies with the type of mortality. [509] Organisation for Economic Co-operation and Development. OECD Environmental Performance Reviews: United States. Organisation for Economic Co-operation and Development, Paris, 2005. Abstract: Reviews the environmental performance of the United States as part of a cycle of reviews directed at promoting sustainable development. Examines the progress made since the previous review in 1996 and the extent to which the countrys domestic objectives and international commitments regarding the environment are being met. Addresses air management, including regional pollution; the regulation of existing power 183

plants; the implementation of hazardous air pollutant controls; and the curbing of emissions from road transport. Considers water management, including water quality issues; getting water prices right; western water management sustainability; and river basin management. Discusses nature and biodiversity management, including managing endangered species in a megadiverse country; wetland protection; controlling invasive species; and pressures on national parks. Explores the environmental-economic interface, including decoupling environmental pressures from economic growth; partnerships for sustainable development; more cost-eective environmental management; and smart growth and browneld development. Discusses the environmental-social interface, including environmental justice; tribes environmental self-destruction; access to environmental information; availability of environmental information; and environmental education and awareness. Examines health and environment, including the environmental burden of disease; chemical exposure from water and food supplies; safeguarding childrens environmental health; and natures pathways to health. Addresses international cooperation, including radioactive waste management in the Arctic; climate change; marine pollution and resource management; trade and environmental integration; development assistance; and cooperation with Canada and Mexico. No index. [510] Organisation for Economic Co-operation and Development. Economic Valuation of Environmental Health Risks to Children. Organisation for Economic Co-operation and Development, Paris, 2006. Abstract: Explores the economic valuation of environmental health risks to children. Introduces the conceptual issues involved in valuing the benets of environmental health risk reduction to children. Provides an overview of the risk dierences between children and adults. Examines the potential sources of dierences between adults and children in terms of valuation. Surveys the literature on parents willingness to pay for protection of their childrens health and provides new empirical estimates from a study of skin cancer. Discusses issues involved in inferring the economic value of childrens health from estimates of the value of adult health. Raises several problematic points when considering discounting childrens health. Examines possible eects of economic uncertainties on the valuation of environmental health risks to children. Considers application of two methodsquality-adjusted life years and willingness to payto the valuation of environmental risks to children. Proposes a comparison of the various techniques that exist for valuing health and health outcomes, assessing their strengths and limitations, more particularly in the context of valuation of health risks to children. No index. [511] Lars Peter sterdal. Person Trade-os in QALY and DALY Models. Technical report, University of Copenhagen, July 2006. Available from 184

Abstract: A considerable literature has argued for the use of person tradeos to estimate the quality-adjustment factor in Quality-Adjusted Life Years (QALY). A similar practice is followed by the WHO to estimate the disability weights used in calculation of Disability-Adjusted Life Years (DALY) for assessment of region- and disease-specic burden of disease. This paper argues that QALY (and DALY) models based on person tradeo scores almost always violate the Pareto principle. [512] Bart D. Ostro, Hien Tran, and Jonathan I. Levy. The Health Benets of Reduced Tropospheric Ozone in California. Journal of the Air & Waste Management Association, 56(7):10071021, July 2006. Abstract: Californians are exposed daily to concentrations of ozone (O3 ) that are among the highest in the United States. Recently, the state adopted a new 8-hr ambient standard of 0.070 ppm, more stringent than the current federal standard. The new standard is based on controlled human studies and on dozens of epidemiologic studies reporting associations between O3 at current ambient levels and a wide range of adverse health outcomes. Clearly, the new O3 standards will require further reductions in the precursor pollutants and additional expenditures for pollution control. Therefore, it is important to quantify the incremental health benets of moving from current conditions to the new California standard. In this paper, a standard methodology is applied to quantify the health benets associated with O3 concentration reductions in California. O3 concentration reductions are estimated using ambient monitoring data and a proportional rollback approach in which changes are specic to each air basin, and control strategies may impact concentrations both below and above the standard. Health impacts are based on published epidemiologic studies, including O3 -related mortality and morbidity, and economic values are assigned to these outcomes based on willingness-to-pay and cost-of-illness studies. Central estimates of this research indicate that attaining the California 8-hr standard, relative to current concentrations, would result in annual reductions of 630 cases of premature mortality, 4200 respiratory hospital admissions, 660 pediatric emergency room visits for asthma, 4.7 million days of school loss, and 3.1 million minor restricted activity days, with a median estimated economic value of dollar 4.5 billion. Sensitivity analyses indicate that these ndings are robust with respect to exposure assessment methods but are inuenced by assumptions about the slope of the concentration-response function in threshold models and the magnitude of the O3 -mortality relationship. Although uncertainties exist for several components of the methodology, these results indicate that the benets of reducing O3 to the California standard may be substantial and that further research on the shape of the O3 -mortality concentrationresponse function and economic value of O3 -related mortality would best reduce these uncertainties. [513] Yasar A. Ozcan. Physician Benchmarking: Measuring Variation in Prac-


tice Behavior in Treatment of Otitis Media. Health Care Management Science, 1(1):517, September 1998. Abstract: The study uses Data Envelopment Analysis (DEA) to analyze physician practice behavior and develops measures of physician practice eciency as a basis for improving productivity and reducing costs in otitis media treatment. Other objectives include determining geographic variations in practice patterns for otitis media, and the impact of inecient practice patterns on the cost of treatment of otitis media. Only 46 (28.8%) of the 160 physicians were classied as ecient. Average total cost of an episode by ecient providers was $357.03 and $492.06 for inecient providers. By restricting particular inputs and outputs, and directing all physicians to treat otitis media through a balanced primary care model, physicians would be able to provide the same quality care at an average savings of 23.7% per ecient and 4.4% per inecient provider. Descriptors: Analysis of Health Care Markets [514] Yasar A. Ozcan. Health Care Benchmarking and Performance Evaluation: An Assessment Using Data Envelopment Analysis (DEA). International Series in Operations Research and Management Science. Springer, New York, 2008. Abstract: Applies the analytical framework of data envelopment analysis (DEA) methodology to provide health care administrators with specic benchmarking tools for performance evaluation. Discusses evaluation of performance in health care; performance measurement using DEA; returns to scale models; multiplier models; nonoriented and measure specic models; longitudinal (panel) evaluations using DEA; eectiveness and other models of DEA; hospital applications; physician practice and diseasespecic applications; nursing home applications; health maintenance organization applications; home health agency applications; applications for other health care organizations; and other DEA applications at hospital settings. Includes a CD-ROM that contains DEA Frontier software. Ozcan is Professor of Health Administration at Virginia Commonwealth University. Index. [515] Emre Ozdenoren, Stephen Salant, and Dan Silverman. Willpower and the Optimal Control of Visceral Urges. Technical report, University of Michigan,, 2006. Abstract: Common intuition and experimental psychology suggest that the ability to self-regulate, willpower, is a depletable resource. We investigate the behavior of an agent who optimally consumes a cake (or paycheck or workload) over time and who recognizes that restraining his consumption too much would exhaust his willpower and leave him unable to manage his consumption. Unlike prior models of self-control, a model with willpower depletion can explain the increasing consumption sequences observable in high frequency data (and corresponding laboratory ndings),


the apparent links between unrelated self-control behaviors, and the altered economic behavior following imposition of cognitive loads. At the same time, willpower depletion provides an alternative explanation for a taste for commitment, intertemporal preference reversals, and procrastination. Accounting for willpower depletion thus provides a more unied theory of time preference. It also provides an explanation for anomalous intratemporal behaviors such as low correlations between health-related activities. [516] Meri Paavola, Erkki Vartiainen, and Ari Haukkala. The Eects of Parental and Own Socioeconomic Status. European Journal of Public Health, 14(4):41721, December 2004. Abstract: Background: The aim of the study was to examine the eects of parental socioeconomic status, own socioeconomic status and social mobility upon the development of smoking from adolescence to adulthood. Methods: Subjects were the participants of the North Karelia Youth Project study from six schools in Eastern Finland. At the baseline in 1978 they were 13 year-olds (n=903) and in the last of the six surveys in 1993 they were 28-year-olds. The parents were studied in 1978 and 1980. The association between smoking and socioeconomic status was measured by education, occupation and income in adolescence and adulthood, and social mobility was measured by the dierence between parental and own education. Results: In general, parental socioeconomic status was not signicantly associated with the subjects smoking in adolescence or adulthood. Own socioeconomic status measured at the age of 21 and 28 was strongly related to smoking. Those who were most educated in adulthood had smoked the least already from the age of 13. Social mobility was not signicantly associated with smoking. Conclusion: The study stresses the importance of own socioeconomic status in relation to smoking, but parental socioeconomic status or social mobility does not have direct eects on smoking. Socioeconomic dierences in smoking should be understood as an important determinant for health inequalities. [517] Stephen Page. How Physicians Organizations Compete: Protectionism and Eciency. Journal of Health Politics, Policy and Law, 29(1):75105, February 2004. Abstract: This article develops a framework that distinguishes four types of competitive strategies that physicians organizations can adopt in their interactions with health plans. Two types of strategies protect physicians incomes and autonomy from incursion and control by insurers; the other two enhance the eciency of health care markets by controlling costs and embedding physicians caregiving in a community of professionals. The mix of strategies that each organization adopts at any given time depends on the market conditions and regulatory policies it faces, as well as its organizational capacity. The article reviews recent developments in the eld that indicate that todays markets and regulations create nei187

ther the pressures nor the capacity for physicians organizations to adopt strategies that enhance eciency. The managed care backlash has led to a relaxation of pressures to control costs, and the lack of a business case for quality has discouraged embedded caregiving. These developments instead have encouraged and enabled physicians organizations to adopt strategies that protect their members from the bargaining power and micromanagement of health plans. The article therefore proposes changes in purchasing and regulatory policies to alter the pressures and improve the capacity of physicians organizations to pursue eciency and eschew protectionism. [518] Kristian S. Palda. The Measurement of Cumulative Advertising Eects. Prentice Hall, Englewood Clis, 1964. A seminal attempt to assess the dynamic response of sales to advertising, using time series data for Lydia E. Pinkham Medicine Company. Paldas preferred specication involved a Koyck distributed lag. [519] L. Paringer. Medicare Assignment Rates of Physicians: Their Responses to Changes in Reimbursement Policy. Health Care Financing Review, 1(3):7589, Winter 1980. Abstract: A physicians Medicare assignment rate is one measure of his or her willingness to participate in the Medicare program. The assignment rate reects the proportion of services provided to Medicare beneciaries for which the physician accepts the Medicare reasonable fee as payment in full. Generally, Medicare reasonable fees are lower than the payment which a physician receives from providing the same service to a private patient or to a Medicare patient who is not treated on assignment. Because Medicare eligibles not treated on an assigned basis are nancially liable for the dierence between the physicians charge and the Medicare reasonable fee, the assignment rate is an indication of the out-of-pocket costs borne by Medicare eligibles. One factor which may aect the willingness of physicians to accept patients on assignment is the dierence between the reimbursement which he or she may receive in the private market and the fee received from treating Medicare eligibles on assignment; Throughout this paper we assume that the physicians private price or billed charge is equivalent to the level of reimbursement received from treating privately insured patients and Medicare non-assigned patients. Since the level of reimbursement is generally no greater than the billed charge and may be less, this assumption may overstate the actual reimbursement received by the physician. In all instances, reimbursement refers to the aggregate amount received by the physician from all sources for a given service. The lower a physicians Medicare reasonable fee relative to the private market fee the less willing he/she may be to participate in Medicare assignment. This paper examines the eect of changes in Medicare reimbursement on the assignment rates of physicians. It also predicts Medicare assignment rates under a policy option which would increase Medicare reasonable fees to the level of prevailing fees. 188

[520] Carl Parker and Bill Rickman. Economic Determinants of the Labor Force Withdrawal of Registered Nurses. Journal of Economics and Finance, 19(1):1726, spring 1995. Abstract: This study examines two outows that aect the labor supply of Registered Nurses (RNs), nurses leaving the profession to pursue a non-nursing occupation and employed nurses withdrawing from the labor force. Using pooled CPS data for 198090, a probit model is specied to estimate economic inuences on the labor-force-withdrawal decisions of RNs. Evaluating the estimated probit function for dierent sets of RN characteristics yields dierent probability estimates of labor-force withdrawal. The results suggest that, although relatively few RNs leave the nursing profession to seek non-nursing occupations, a signicant number withdraw, at least temporarily, from the labor force. The wage rate, other family income, presence of children, and full-time/part-time work status have a signicant inuence on the withdrawal decision. [521] Carl D. Parker and Bill D. Rickman. The Labor Force Re-entry Decision of Registered Nurses. Journal of Economics, 22(1):7379, 1996. Abstract: Previous research from CPS data suggests a signicant withdrawal rate of RNs from the labor market on an annual basis. Using data from the 1988 National Sample Survey of Registered Nurses, a probit model is specied to estimate economic inuences on the labor force reentry decisions of RNs who have previously quit their jobs. Evaluating the estimated probit function for dierent sets of RN characteristics yields probability estimates of labor force re-entry. The results estimate a fairly large return ow of RNs to the labor force. The wage rate, other family income, and marital status have a signicant inuence on the re-entry decision. [522] Dominika Anna Parry Dziegielewska and Robert Mendelsohn. Valuing Air Quality in Poland. Environmental and Resource Economics, 30(2):131 163, February 2005. Abstract: In this study we estimate how much Polish citizens would be willing to pay to harmonize Polish air pollution standards with EU standards. We conduct a contingent valuation of all damage components using a system of dichotomous choice questions. This system approach helps to avoid embedding problem and to identify protest voters. We compare estimates from a set of single logit models with a generalized estimating equations (GEE) model, which provides more parsimonious and ecient estimates. Although, health remains very important, our respondents valued mortality less than the literature but morbidity much more. Damages to ecosystems and cultural heritage compose 1316% of the total value and their omission by the literature seriously underestimates total benets. Overall, the results suggest that Poland values the benets of pollution control much less than the wealthier EU suggesting harmonization should be postponed and conditioned on economic prosperity. 189

[523] Mark V. Pauly. The Rational Nonpurchase of Long-term-Care Insurance. Journal of Political Economy, 98(1):15368, February 1990. Abstract: Only a tiny fraction of the nonpoor population currently purchases private insurance coverage against long-term-care costs. Studies generally attribute the failure to purchase private coverage to unawareness by potential purchasers of the benets of coverage and a misperception that Medicare currently covers long-term care. The author explores alternative reasons for failure to purchase coverage by well-informed, expected utility-maximizing, risk-averse individuals for whom long-term care is associated with a large increase in mortality and for whom family members represent an alternative source of care. There may be no demand for long-term-care insurance, even if it is made available at actuarially fair premiums, because the main consequence of coverage is to enhance the expected value of ones estate. [524] Paul Pecorino. Should the US Allow Prescription Drug Reimports from Canada? Journal of Health Economics, 21(4):699708, 2002. Abstract: As a result of public outrage over lower prescription drug prices in Canada, Congress passed legislation that would allow these drugs to be imported into the US. The lower Canadian prices reect price regulation. Opponents of allowing these imports have argued that the US will import Canadian price controls and that prots of pharmaceutical companies will be hurt. In this paper, a model is developed in which a good sold in the foreign country is subject to a negotiated price which is determined in a Nash bargaining game. When imports back into the home country are allowed, this negotiated price also becomes the domestic price. This causes the home rm to make fewer price concession in the Nash bargaining game. Home rm prots are found to rise under the reimport regime for both of the demand functions analyzed in this paper. [525] Janet D. Perlo, Phillip Kletke, and James W. Fossett. Which Physicians Limit Their Medicaid Participation, and Why. Health Services Research, 30(1, part 1):726, April 1995. Abstract: Surveys conducted in 19901993 were pooled to form a sample of 4,188 Medicaid-participating oce-based physicians. Respondents were classied as accepting all Medicaid patients or as limiting their Medicaid participation. Descriptive statistics are used to examine dierences between these groups with respect to selected personal, practice, community, and reimbursement variables. Logistic regression analysis is used to identify factors associated with physicians accepting all Medicaid patients or limiting their Medicaid participation in some way. Increases in Medicaid reimbursement aimed at primary care physicians or those in undeserved areas may convert limited participants into full participants and, in so doing, improve the access of Medicaid eligibles to care. The increases in payment level needed to increase the proportion of physicians partic-


ipating fully would be substantial, however, and may not be politically feasible. [526] John J. Perry. The Rise and Impact of Nurse Practitioners and Physician Assistants on Their Own and Cross-Occupation Incomes. Contemporary Economic Policy, 27(4):491511, October 2009. Abstract: There has been a dramatic increase in the authority granted to nurse practitioners (NP) and physician assistants (PA). This expanded authority has changed who can provide health-care services and has weakened the control physicians have traditionally held over the provision of medical services. These changes in regulation have varied by occupation, state, and year and provide variation that can be exploited to empirically measure the individual and collective impacts of changes in NP authority and PA authority on practitioner incomes. It is found that changes in NP and PA regulatory authority do impact the labor markets of all three practitioner categories. NPs having greater practice authority brings physician incomes down, has dierential impacts on PA incomes, and improves their own earnings, other factors held constant. PAs having increased authority has a downward eect on NP earnings, a positive impact on physician income, and little impact on their own incomes. [527] Paolo Pertile. An Extension of the Real Option Approach to the Evaluation of Health Care Technologies: The Case of Positron Emission Tomography. International Journal of Health Care Finance and Economics, 9(3):31732, September 2009. Abstract: This paper aims to incorporate option values into the economic evaluation of positron emission tomography (PET). The installation of this equipment requires a substantial capital outlay, while uncertainty, especially regarding the possibility of new applications, is relevant, because the evidence available is still insucient. Treating the number of examinations to provide as a stochastic variable, the cost-eectiveness analysis is extended to include the value of exibility both with respect to the timing of investment and to the size of the project. The threshold values of the stochastic variable that ensure the cost-eectiveness of a PET scan according to this approach are obtained as a function of the value of the incremental eectiveness. [528] Mark A. Peterson, editor. Healthy Markets? The New Competition in Medical Care. Duke University Press, Durham, NC, 1998. Abstract: Revised and updated versions of twelve previously published papers, originally presented at a conference sponsored by the Journal of Health Politics, Policy and Law in May 1996, assess the contemporary American health care system and how it is changing. Papers consider whether markets can produce a socially desirable health system (Thomas Rice); the redistributive agenda behind market-based health care reform


(Robert G. Evans); reason and power in the managed medical marketplace (Gary S. Belkin); the reconguration of the doctor as businessman, implications for the practice of medicine and the doctor-patient relationship, and the political uses of cultural myths in the health care system (Deborah A. Stone); the dynamics of market-level change (Paul B. Ginsburg); care, cost, and coverage in the changing health system (Kenneth E. Thorpe); business strategies after the downfall of national health care reform (Cathie Jo Martin); managed care and Medicare reform (Jonathan B. Oberlander); insights from health care reforms in Oregon and Tennessee for low-income populations using the Medicaid program (Marsha Gold); the implications of social learning for three market-related health policy issues (Mark A. Peterson); U.S. health policy innovation and crossnational learning (Lawrence D. Brown); and how American health care arrived at its present state and its future direction (Theodore R. Marmor). Contributors include economists and other public policy and health system analysts. [529] Charles E. Phelps. Health Economics. Addison-Wesley, Reading, Massachusetts, third edition, 2003. A text aimed at undergraduate and graduate students in economics, business, public health, and public policy. [530] Tomas Philipson. Economic Epidemiology and Infectious Diseases. In Culyer and Newhouse [152], chapter 33, pages 17611799. Notes that as the prevalence of a disease increases, so do incentives to protect oneself against exposuree.g., by getting vaccinated or using condoms. If people respond to these incentives, (a) epidemics will be self limiting, (b) diseases will be hard to eradicate because when their prevalence falls, incentives to protect against exposure will fall, (c) the cost of a disease will include not only morbidity and mortality but also costs of avoidance, (d) public health programs that reduce prevalence will also reduce incentives to protect against exposure and hence be less eective than naively expected. Contains many casually motivated dierential equations and a modest amount of data. [531] Tomas J. Philipson and Richard A. Posner. The Long-Run Growth in Obesity as a Function of Technological Change. Working Paper 7423, National Bureau of Economic Research, Cambridge, Mass., 1999. Abstract: This paper analyzes the factors contributing to the worldwide long-run rise in obesity and the eects of public interventions on its continued growth. The growth of obesity in a population results from an increase in calorie consumption relative to physical activity. Yet in developed countries, obesity has grown with modest rises in calorie consumption and with a substantial increase in both dieting and recreational exercise. We consider the economic incentives that give rise to a growth in obesity


by stimulating intake of calories while discouraging the expending of calories on physical activity. We argue that technological change provides a natural interpretation of the long-run growth in obesity despite a rise in dieting and exercise, that it predicts that the eect of income on obesity falls with economic development, and that it implies that the growth in obesity may be self-limiting. [532] Tomas J. Philipson and Eric Sun. Is the Food and Drug Administration Safe and Eective? Journal of Economic Perspectives, 22(1):85102, winter 2008. The authors draw two conclusions: (1) Given the existence of regulatory oversight through the FDA, there may be a case for a product liability exemption for manufacturers of new drugs and medical productsat least as related to tasks already well-regulated by the FDA. (2) Because of the speed-safety trade-o in the review process, the dynamically optimal level of safety is lower than the statically optimal one (p. 99). [533] V. L. Phillips. Nurses Labor Supply: Participation, Hours of Work, and Discontinuities in the Supply Function. Journal of Health Economics, 14(5):56782, December 1995. Abstract: This paper presents the results of a formal labor supply model for nurses in Great Britain. It corrects for misspecication and sample selection bias which aected earlier research on womens labor supply generally in the United Kingdom and tests for the existence of discontinuities in the supply curve of nurses. Estimates of labor-market participation elasticities with respect to the wage rate, nonlabor income, and to the costs incurred through work are reported for nurses, qualied and unqualied. Participation is found to be highly responsive to wage changes and some discontinuity is found in the supply function. [534] Gabriel Picone, Shin-Ye Chou, and Frank Sloan. Are For-Prot Hospital Conversions Harmful to Patients and to Medicare? Rand Journal Economics, 33(3):50723, autumn 2002. Abstract: We examine how changes in hospital ownership to and from for-prot status aect quality and Medicare payments per hospital stay. We hypothesize that hospitals converting to for-prot ownership boost post acquisition protability by reducing dimensions of quality not readily observed by patients and by raising prices. We nd that 12 years after conversion to for-prot status, mortality of patients, which is dicult for outsiders to monitor, increases while hospital protability rises markedly and stang decreases. Thereafter, the decline in quality is much lower. A similar decline in quality is not observed after hospitals switch from for-prot to government or private nonprot status. [535] Gabriel Picone, Martin Uribe, and R. Mark Wilson. The Eect of Uncertainty on the Demand for Medical Care, Health Capital and Wealth. Journal of Health Economics, 17(2):17185, April 1998. 193

Abstract: The authors analyze the eect of the uncertainty of the incidence of illness on the demand for medical care and on the accumulation of health capital and wealth over the retirement years. They use a simplied version of a dynamic Grossman household production model to characterize patterns of an individuals precautionary behavior. Elderly individuals respond to uncertainty by smoothing their expected utility over time by making specic patterns of purchases of medical care and consumption. The authors examine these patterns for individuals with dierent degrees of risk aversion. [536] Steven D. Pizer, Austin B. Frakt, and Roger Feldman. Predicting Risk Selection Following Major Changes in Medicare. Health Economics, 17(4):45368, April 2008. Abstract: The Medicare Modernization Act of 2003 created several new types of private insurance plans within Medicare, starting in 2006. Some of these plan types previously did not exist in the commercial market and there was great uncertainty about their prospects. In this paper, we show that statistical models and historical data from the Medicare Current Beneciary Survey can be used to predict the experience of new plan types with reasonable accuracy. This lays the foundation for the analysis of program modications currently under consideration. We predict market share, risk selection, and stability for the most prominent new plan type, the stand-alone Medicare prescription drug plan (PDP). First, we estimate a model of consumer choice across Medicare insurance plans available in the data. Next, we modify the data to include PDPs and use the model to predict the probability of enrollment for each beneciary in each plan type. Finally, we calculate mean-adjusted actual spending by plan type. We predict that adverse selection into PDPs will be substantial, but that enrollment and premiums will be stable. Our predictions correspond well to actual experience in 2006. [537] Andrew J. Plantinga and Stephanie Bernell. A Spatial Economic Analysis of Urban Land Use and Obesity. Journal of Regional Science, 45(3):473, August 2005. Abstract: We analyze an urban spatial model to examine the possible link between urban land use and obesity. Households maximize utility dened over housing, weight, and food subject to a xed time budget allocated to commuting, calorie expenditure, and work. Our model explains the observed correspondence between high obesity rates and low development densities, but implies that these are determined endogenously in a spatial market equilibrium. We study the sorting of residents by attributes such as income, initial weight, and weight preferences, and examine the impacts on weight and density of urban design modications that lower the costs of calorie expenditure. [538] Daniel Polsky, Jalpa A. Doshi, Jose Escarce, Willard Manning, Susan M. Paddock, Liyi Cen, and Jeannette Rogowski. The Health Eects of Medi194

care for the Near-Elderly Uninsured. Working Paper 12511, National Bureau of Economic Research,, Cambridge, Mass., 2006. Abstract: We study how the trajectory of health for the near-elderly uninsured changes upon enrolling into Medicare at the age of 65. We nd that Medicare increases the probability of the previously uninsured having excellent or very good health, decreases their probability of being in good health, and has no discernable eects at lower health levels. Surprisingly, we found Medicare had a similar eect on health for the previously insured. This suggests that Medicare helps the relatively healthy 65 year olds, but does little for those who are already in declining health once they reach the age of 65. The improvement in health between the uninsured and insured were not statistically dierent from each other. The stability of insurance coverage aorded by Medicare may be the source of the health benet suggesting that universal coverage at other ages may have similar health eects. [539] Daniel Polsky and Sean Nicholson. Why Are Managed Care Plans Less Expensive: Risk Selection, Utilization, or Reimbursement? Journal of Risk and Insurance, 71(1):2140, March 2004. Abstract: This article develops a new method of decomposing the cost dierence between HMO and non-HMO plans into observed risk selection, unobserved risk selection, utilization dierences, and dierences in provider reimbursement rates. We implement this method using a large national sample of employer-sponsored health insurance enrollees from the Community Tracking Study Household Survey. We nd no evidence that HMO plans attract a disproportionate share of low-risk enrollees; the US$188 dierence between HMO and non-HMO medical expenditures per enrollee can be explained by the relatively low provider reimbursement rates paid by HMO plans. This indicates there may be little need for employers to risk adjust insurance premiums or otherwise restrict employee choice of plan types. [540] Jose-Luis Pinto Prades. Is the Person Trade-O a Valid Method for Allocating Health Care Resources? Health Economics, 6:7181, 1997. Keywords: health economics, QALYs, person trade-os, health status measurement [541] John F. Prescott. Antimicrobial Drugs: Miracle Drugs or Pig Feed? Advances in Pork Production, 11:3745, 2000. The author notes that antibiotics are used in livestock not only to treat infections but also (and more commonly) as growth promoters and disease prophylactics. The U.S. National Research Council has estimated that banning non-therapeutic use of antibiotics in food animals would add $5-$10 a year to the cost of food for each United States citizen (p. 40). Concentrating on the eects of a European growth promoter, avoparcin, and its role in selecting for vancomycin resistant enterococci (VRE) (p. 195

37), the author nds evidence that use of avoparcin increased human infection with VRE and banning it in 1999 reduced the occurrence of VRE in both animals and humans (p. 40). In Sweden and Denmark withdrawal of growth promotional antimicrobials has apparently had negligible eects productivity and has reduced vaccine and medical costs of pig production (pp. 43-44). [542] Carol Propper, Simon Burgess, and Katherine Green. Does Competition between Hospitals Improve the Quality of Care? Hospital Death Rates and the NHS Internal Market. Journal of Public Economics, 88(7-8):124772, July 2004. Abstract: Payer-driven competition has been widely advocated as a means of increasing eciency in health care markets. The 1990s reforms to the UK health service followed this path. We examine whether competition led to better outcomes for patients, as measured by death rates after treatment following heart attacks. Using data that until 1999 were not publicly available in any form on hospital level death rates, we nd that the relationship between competition and quality of care appears to be negative. Greater competition is associated with higher death rates, controlling for patient mix and other observed characteristics of the hospital and the catchment area for its patients. However, the estimated impact of competition is small. [543] Annette Prss-Ustn and Carlos F. Corvaln. Preventing Disease through u u a Healthy Environments. Towards an Estimate of the Environmental Burden of Disease. World Health Organization, Geneva, 2006. Abstract: How much disease could be prevented through better management of our environment? The environment inuences our health in many ways through exposures to physical, chemical and biological risk factors, and through related changes in our behaviour in response to those factors. To answer this question, the available scientic evidence was summarized and more than 100 experts were consulted for their estimates of how much environmental risk factors contribute to the disease burden of 85 diseases. This report summarizes the results globally, by 14 regions worldwide, and separately for children. The evidence shows that environmental risk factors play a role in more than 80% of the diseases regularly reported by the World Health Organization. Globally, nearly one quarter of all deaths and of the total disease burden can be attributed to the environment. In children, however, environmental risk factors can account for slightly more than one-third of the disease burden. These ndings have important policy implications, because the environmental risk factors that were studied largely can be modied by established, cost-eective interventions. The interventions promote equity by beneting everyone in the society, while addressing the needs of those most at risk. [544] Jaume Puig-Junoy. Measuring Health Production Performance in the OECD. Applied Economics Letters, 5(4):25559, April 1998. 196

Abstract: This paper contributes to the estimation of the best practice frontier in health production in the OECD countries at the aggregate level, in the tradition of the concept of health production function originally developed by Grossman. Estimates of technical eciency for the OECD countries, decomposed into their components of pure technical eciency and scale eciency, using a nonparametric method (Data Envelopment Analysis) are presented. In a two-stage approach, dierences in eciency scores are attributed to environmental factors using a stochastic censored regression model. [545] Maury R. Randall and David Y. Suk. Higher Life Expectancy at Lower Cost: Countries Which Outperform the United States. Global Journal of Business Research, 3(2):117129, 2009. Abstract: In this paper, we identify countries that have better outcomes than the United States with respect to life expectancy. Using this sample of countries, relationships between the life expectancy outcomes and health care costs are examined, and we also test whether the extent of public nancing has a signicant impact on the results. In addition, the study compares the availability of important health care resources, such as doctors, nurses, hospital beds, and medical equipment to the amount of funds allocated to health care. We conclude with a brief review of policies and system changes that might increase resource availability and eciency in the United States. [546] Inas Rashad. Structural Estimation of Caloric Intake, Exercise, Smoking, and Obesity. Working Paper 11957, National Bureau of Economic Research,, Cambridge, Mass., 2006. Abstract: The escalating rate of obesity in the US highlights the importance of understanding the causes for this rise. In this paper I employ the First, Second, and Third National Health and Nutrition Examination Surveys to estimate a structural model of the determinants of adult obesity. To control for the potential endogeneity of some explanatory variables, such as caloric intake (adjusted for activity level) and smoking, a set of reduced form equations for these outcomes is estimated simultaneously with the obesity equation. To identify each equation, I use an array of state-level characteristics as instrumental variables. Trends in these variables shed light on the sources of the rapid increase in obesity since 1980. [547] Vincenzo Rebba and Dino Rizzi. Measuring Hospital Eciency through Data Envelopment Analysis When Policy-Makers Preferences Matter: An Application to a Sample of Italian NHS Hospitals. Politica Economica, 23(3):23357, December 2007. Abstract: In this paper we show how both the choice of specic constraints on output weights (in accordance with health care policy-makers preferences) and the consideration of exogenous variables outside the control of hospital management (and linked to past policy-makers decisions) 197

can aect the measurement of hospital technical eciency using the data envelopment analysis (DEA). Considering these issues, the DEA method is applied to measure the eciency of 85 (public and private) hospitals in Veneto, a Northern region of Italy. The empirical analysis allows us to verify the role of weight restrictions and of demand in measuring the eciency of hospitals operating within a National Health Service (NHS). We nd that the imposition of a lower bound on the virtual weight of acute care discharges weighted by case-mix (in order to consider policy-maker objectives) reduces average hospital eciency. Moreover, we show that, in many cases, low eciency scores are attributable to external factors, which are not fully controlled by the hospital management. Finally, we show that accredited private hospitals exhibit a higher level of total ineciency than public ones: for-prot hospitals are mostly characterised by scale ineciency, while non-prot hospitals are aected by dierent sources of ineciency. Most of the hospitals in Veneto are too small in relation to their output levels (i.e., are characterised by IRS) and this problem of scale ineciency characterises mainly the accredited private hospitals. This result indicates that private hospitals are considered important within regional health care planning as providers of supplementary services integrating public supply, even though they operate at a sub-optimal scale. [548] Charles Alan Register and Edward R. Bruning. Prot Incentives and Technical Eciency in the Production of Hospital Care. Southern Economic Journal, 53(4):899914, April 1987. Abstract: Based on a combination of linear programming and regression techniques, it was determined that signicant technical eciency dierences did not exist between for-prot and nonprot hospitals in a nationwide sample of 457 hospitals. The sample included 300 non-prot, 121 for-prot, and 36 government hospitals during 1983. The method employed was to determine an eciency index for each hospital using linear programming and then to use this index as a dependent variable in a regression designed to explain existing dierences in eciency. Given sample matching, the result should not be extended to the population without care. [549] Uwe E. Reinhardt. The Economics of For-Prot and Not-for-Prot Hospitals. Health Aairs, 19(6):17886, November-December 2000. Abstract: This paper examines the economics of for-prot and not-forprot hospitals through the prism of capital acquisitions. The exercise suggests that of two hospitals that are equally ecient in producing health care, the for-prot hospital would have to charge higher prices than the not-for-prot hospital would, to break even on capital acquisitions. The reasons for this divergence are (1) the typically higher cost of equity capital that for-prot hospitals face; and (2) the income taxes they must pay. The paper recommends holding tax-exempt hospitals more formally ac198

countable for the social obligation they shoulder, in return for their tax preference. [550] Uwe E. Reinhardt, Peter S. Hussey, and Gerard F. Anderson. U.S. Health Care Spending In An International Context. Health Aairs, 23(3):1025, MayJune 2004. Abstract: Using the most recent data on health spending published by the Organization for Economic Cooperation and Development (OECD), this paper explores reasons why US health spending towers over that of other countries with much older populations. Prominent among the reasons are higher US per capita gross domestic product (GDP) as well as a highly complex and fragmented payment system that weakens the demand side of the health sector and entails high administrative costs. This article also examines the economic burden that health spending places on the US economy, and comments on attempts by US policymakers to increase the prices foreign health systems pay for US prescription drugs. At its core, the debate over health care, in the US as elsewhere, is less a pure macroeconomic issue than an exercise in the political economy of sharing. [551] Kyndaron Reinier, Mary Val Palumbo, Barbara McIntosh, Betty Rambur, Jane Kolodinsky, Laurie Hurowitz, and Takamaru Ashikaga. Measuring the Nursing Workforce: Clarifying the Denitions. Medical Care Research and Review, 62(6):74155, December 2005. Abstract: Numerous articles have addressed the causes and implications of the current nursing shortage. Little has been published, however, about how to measure the nursing workforce. This article presents (1) a review of denitions for common workforce indicators such as vacancy and turnoverrates and the relationship between these indicators and the need for nurses,(2) a review of the calculation of vacancy and turnoverrates in several statewide and national surveys, and (3) the results from the development and pilot test of a health care workforce survey for use in Vermont. The review indicates that in practice, no standard method is used despite attempts to standardize the calculation of vacancy and turnover rates. The Vermont pilot study results demonstrate that a richer prole of the health workforce can be obtained by using both standard workforce measures and more subjective questions to assess a statewide need for nurses. [552] Ade Renner, Jose M. Kirigia, Eyob A. Zere, Saidou P. Barry, Doris G. Kirigia, Cliord Kamara, and Lenity H. K. Muthuri. Technical Eciency of Peripheral Health Units in Pujehun District of Sierra Leone: a DEA Application. BMC Health Services Research, 5(77), December 14 2005. Abstract: BACKGROUND: The Data Envelopment Analysis (DEA) method has been fruitfully used in many countries in Asia, Europe and North America to shed light on the eciency of health facilities and programmes. There is, however, a dearth of such studies in countries in sub199

Saharan Africa. Since hospitals and health centres are important instruments in the eorts to scale up pro-poor cost-eective interventions aimed at achieving the United Nations Millennium Development Goals, decisionmakers need to ensure that these health facilities provide ecient services. The objective of this study was to measure the technical eciency (TE) and scale eciency (SE) of a sample of public peripheral health units (PHUs) in Sierra Leone. METHODS: This study applied the Data Envelopment Analysis approach to investigate the TE and SE among a sample of 37 PHUs in Sierra Leone. RESULTS: Twenty-two (59%) of the 37 health units analysed were found to be technically inecient, with an average score of 63% (standard deviation = 18%). On the other hand, 24 (65%) health units were found to be scale inecient, with an average scale eciency score of 72% (standard deviation = 17%). CONCLUSION: It is concluded that with the existing high levels of pure technical and scale ineciency, scaling up of interventions to achieve both global and regional targets such as the MDG and Abuja health targets becomes farfetched. In a country with per capita expenditure on health of about USD 7, and with only 30% of its population having access to health services, it is demonstrated that eciency savings can signicantly augment the governments initiatives to cater for the unmet health care needs of the population. Therefore, we strongly recommend that Sierra Leone and all other countries in the Region should institutionalize health facility eciency monitoring at the Ministry of Health headquarter (MoH/HQ) and at each health district headquarter. [553] James D. Reschovsky. The Demand for Post-Acute and Chronic Care in Nursing Homes. Medical Care, 36(4):47590, April 1998. Abstract: OBJECTIVES: Nursing homes provide care for persons with both post-acute and chronic conditions. In general, these two types of patients are associated with short and long stays, respectively. They also tend to be covered by dierent public or private insurance plans. The author investigated whether and how the demand for these two types of nursing home care dier. How alternative denitions of post-acute and chronic care nursing home stays aect estimates also was explored. METHODS: Data on a sample of elderly persons from the National Long-Term Care Channeling Demonstration was used. To account for market disequilibrium, demand was estimated using a bivariate probit with partial observability model. RESULTS: Dierences were found in the demand for the two types of nursing home care. For instance, economic factors and functional and cognitive limitations were relatively more important in the demand for nursing home care for chronic conditions. Further, chronic care patients appeared more likely to face problems of access into nursing homes. Classifying nursing home stays by payer, rather than by length of stay, captured expectations at admission and appeared to reect consumer behavior better. CONCLUSIONS: Dierentiating post-acute and chronic care nursing


home stays provides more meaningful information on consumer demand for nursing home care and will facilitate policy analysis in this area. [554] Jessica Wolpaw Reyes. Gender Preference and Equilibrium in the Imperfectly Competitive Market for Physician Services. Eastern Economic Journal, 34(3):32546, summer 2008. Abstract: I analyze how the imperfectly competitive market for obstetricians and gynecologists (ob-gyns) clears in the face of an excess demand for female ob-gyns. This excess demand arises because all ob-gyn patients are women, many women prefer a female ob-gyn, and only a small portion of ob-gyns are female. I nd that both money and non-money prices adjust: female ob-gyns charge higher fees and also have longer waiting times. Furthermore, institutional structure matters: waiting times adjust more when fees are inexible. In the end, female ob-gyns capture some but not all of the value of the preferred service they provide. [555] Thomas Rice. The Economics of Health Reconsidered. Health Administration Press, Chicago, 1998. [556] Je Richardson. Supply and Demand for Medical Care: Or, Is the Health Care Market Perverse? Australian Economic Review, 34(3):336 52, September 2001. Abstract: The argument that health market behavior is idiosyncratic is reviewed and evidence concerning supplier induced demand is presented. The theoretical basis and implications of this hypothesis are discussed. [557] Je Richardson, John Wildman, and Iain K. Robertson. A Critique of the World Health Organisations Evaluation of Health System Performance. Health Economics, 12(5):35566, May 2003. Abstract: The World Health Organisations (WHO) approach to the measurement of health system eciency is briey described. Four arguments are then presented. First, equity of nance should not be a criterion for the evaluation of a health system and, more generally, the same objectives and importance weights should not be imposed upon all countries. Secondly, the numerical value of the importance weights do not reect their true importance in the country rankings. Thirdly, the model for combining the dierent objectives into a single index of system performance is problematical and alternative models are shown to alter system rankings. The WHO statistical analysis is replicated and used to support the fourth argument which is that, contrary to the authors assertion, their methods cannot separate true ineciency from random error. The procedure is also subject to omitted variable bias. The econometric model for all countries has very poor predictive power for the subset of OECD countries and it is outperformed by two simpler algorithms. Country rankings based upon the model are correspondingly unreliable. It is concluded that, despite these problems, the study is a landmark in the evolution of system evaluation, but one which requires signicant revision. 201

[558] Barak D. Richman. Behavioral Economics and Health Policy: Understanding Medicaids Failure. Cornell Law Review, 90(3):70568, March 2005. Abstract: This article employs a behavioral economic analysis to understand why Medicaid has failed to improve the health outcomes of its beneciaries. It begins with a formal economic model of health care consumption and then systematically incorporates a survey of psychosocial variables to formulate explanations for persistent health disparities. This methodology suggests that consulting the literature in health psychology and intertemporal decision theoryempirical sources generally excluded from orthodox economic analysisprovides valuable material to explain certain ndings in health econometrics. More signicantly, the lessons from this behavioral economic approach generate useful policy considerations for Medicaid policymakers, who largely have neglected psychosocial variables in implementing a health insurance program that rests chiey on orthodox economic assumptions. The articles chief contributions include an expansion of the behavioral economic approach to include a host of variables in health psychology, a behavioral renement of empirical health economics, a behavioral critique of Medicaid policy, and a menu of suggested Medicaid reforms. [559] Julius B. Richmond and Rashi Fein. The Health Care Mess: How We Got into It and What It Will Take to Get Out. Harvard University Press, Cambridge, Mass., 2005. Abstract: Discusses the chasm between the scientic achievements of American medicine and the delivery failures of the American health care system, the historical development of American medicine, and challenges and policy options for attaining an equitable distribution of care while continuing scientic advances. Reviews developments from 1900 to 1965, covering the educational and scientic revolution that made medicine more eective and the consumer revolution involving the development and expansion of health insurance in the United States. Examines reactions over the period 196585 to the implementation of Medicare and Medicaid, discussing emerging tensions between regulation and market forces and the impact of the burgeoning health care sector on education for health professionals. Considers the entrepreneurial revolution and the expansion of for-prot institutions in the health sector over the period 19852005. Addresses progress in health and the role of public health over the same period. Discusses the challenges and opportunities the nation faces in medicine and medical education at the present time and the probability of important advances in medicine. Considers what can be done to increase equity in the delivery of medical care and presents a proposal for achieving universal health insurance. Richmond is founder of Head Start, former Surgeon-General under President Jimmy Carter, and the John D. MacArthur Professor of Health Policy, Emeritus, at Harvard University.


Fein is Professor of Medical Economics, Emeritus, at Harvard Medical School. Index. [560] Neil Rickman and Alistair McGuire. Regulating Providers Reimbursement in a Mixed Market for Health Care. Scottish Journal of Political Economy, 46(1):5371, February 1999. Abstract: Hospitals can be reimbursed for their costs in many ways. Several authors have investigated the eects of these reimbursement rules on physician incentives and, therefore, on the quantity of services provided to patients. A form of (linear) cost-sharing tends to emerge as the socially ecient reimbursement policy. The authors present a model of hospital reimbursement, based on Ellis and McGuire (1986). The new feature is that physicians can supply private health care services to a patient, as well as public sector ones; a common institutional arrangement in many health care systems. They investigate the optimal public sector reimbursement rule given that private market incentives must now be taken into account. Public sector cost-sharing remains socially ecient, but it is generally nonlinear: the precise details depend on whether public and private services are substitutes or complements and on the degree of social eciency achieved in the private sector. Other reimbursement schemes exhibit optimality properties not present in Ellis and McGuires work. [561] David Ridley. Payments, Promotion, and the Purple Pill., March 2004. Abstract: I estimate pharmaceutical demand using unique panel data that include rich variation in copayments, actual patient out-of-pocket spending, and controls for promotional spending. In the data, the copayments vary across time, across 85 insurance groups, and across drugs in the same therapeutic class in the same group in a given month. I nd that it is important to use copayment rather than price when estimating pharmaceutical demand. Furthermore, I nd that it is important to control for the eects of promotional spending when estimating copayment elasticitiesfailure to do so decreases the copayment elasticity by nearly 50 percent. [562] Regina T. Riphahn, Achim Wambach, and Andreas Million. Incentive Eects in the Demand for Health Care: A Bivariate Panel Count Data Estimation. Journal of Applied Econometrics, 18(4):387405, July-August 2003. Abstract: This paper contributes in three dimensions to the literature on health care demand. First, it features the rst application of a bivariate random eects estimator in a count data setting, to permit the ecient estimation of this type of model with panel data. Second, it provides an innovative test of adverse selection and conrms that high-risk individuals are more likely to acquire supplemental add-on insurance. Third, the estimations yield that in accordance with the theory of moral hazard, we 203

observe a much lower frequency of doctor visits among the self-employed, and among mothers of small children. [563] John A. Rizzo. Advertising and Competition in the Ethical Pharmaceutical Industry: The Case of Antihypertensive Drugs. Journal of Law and Economics, 42(1, part 1):89116, April 1999. Abstract: This paper uses data on the majority of name-brand antihypertensive drugs marketed in the United States during 198893 to test the hypothesis that advertising decreases the price elasticity of demand in the pharmaceutical industry. This is the rst study to directly estimate the eects of drug product promotion on the price elasticity of demand in this industry. We nd strong evidence of an advertising eect. In particular, detailing eorts (the salient means for product promotion in this industry) systematically lower price sensitivity. Given the inverse relationship between elasticity of demand and price, it is likely that consumers pay higher prices as a result of the advertising that occurs in this industry. Our ndings are thus consistent with Hurwitz and Caves, who nd evidence that advertising inhibits entry into this market but in contrast to earlier research that found no anticompetitive eect. [564] John A Rizzo. Are HMOs Bad for Health Maintenance? nomics, 14(11):111731, November 2005. Health Eco-

Abstract: This study examines the impact of Health Maintenance Organization (HMO) coverage on the provision of preventive medicine. We investigate whether any association reects selection eects on the part of patients and/or physicians or a causal impact of managed care itself. Causal eects may occur on the supply side or the demand side. Using a large national database of Medicare and non-Medicare patients, we investigate these issues for eight common preventive medical procedures. We nd that preventive care is substantially higher with HMO coverage than with traditional fee-for-service reimbursement. Our ndings also suggest that the impact of HMOs on preventive medicine is a causal one, and does not merely reect selection eects. Both supply-side (e.g. provider) and demand-side (e.g. patient) factors appear to play a role in the higher incidence of preventive care among HMO enrollees. Patient demand eects are stronger for simple treatments such as physicals, while supply-side effects seem to dominate for relatively complex preventive care procedures such as mammograms. [565] John A. Rizzo and David Blumenthal. Physician Labor Supply: Do Income Eects Matter? Journal of Health Economics, 13(4):43353, December 1994. Abstract: This paper estimates a model of physician labor supply, focusing on the impacts of wage and nonwage income. The authors nd evidence of signicant income eects. For male physicians, the income eect of a wage change on labor supply is negative, with an elasticity of -0.26. The pure 204

substitution eect of a wage change increases labor supply: a 1 percent increase in wages leads to a 0.49 percent increase in labor supply, controlling for income eects. The results also suggest that the labor supply decisions of females are more responsive to variations in their earnings than are those of males. [566] John A Rizzo and Richard J. Zeckhauser. Reference Incomes, Loss Aversion, and Physician Behavior. Review of Economics and Statistics, 85(4):90922, November 2003. Abstract: We examine the eects of reference income on the behavior of young male physicians. Using a unique panel of data, we relate physicians reference and actual incomes to their subsequent income growth. Reference income has a strong positive eect on subsequent income for physicians who are below their reference points, but not for physicians who are at or above their reference points. Loss aversion, which posits a kink in utility at the reference point, explains this puzzling pattern. Physicians respond strongly to shortfalls from the reference pointthey take unappealing actions to boost earningsbecause the marginal utility of income is steep in that range. Competing prominent theories, tested here, fail to explain these relationships. [567] John A. Rizzo and Richard J. Zeckhauser. Pushing Incomes to Reference Points: Why Do Male Doctors Earn More? Journal of Economic Behavior and Organization, 63(3):51436, 2007. Abstract: Why do female physicians earn less than their male counterparts? Data from the Young Physicians Survey yields an answer. Young male and female physicians respond dierently to the reference incomes (RIs) they state. Males (revealing prospect-theoretic preferences) respond strongly, particularly if below RIs. Females do not respond. Males also set higher RIs. That, combined with males greater responsiveness to RIs, fully explains the signicant gender gap in earnings and earnings growth rates. Together, productivity measures and prejudice play at most a modest role. To boost their incomes, males raise their hourly incomes, not their hours of work. [568] Harry V. Roberts. The Measurement of Advertising Results. Journal of Business, 20(3):13145, July 1947. A seminal study of advertising by two rival drug manufacturers. [569] James C. Robinson. Market Structure, Employment, and Skill Mix in the Hospital Industry. Southern Economic Journal, 55(2):31525, October 1988. Abstract: This paper examines the inuence of labor and product market structures on overall employment and on the substitution of high-skill for low-skill workers in 3,577 hospitals in 1982. Controlling for size and capacity utilization, patient mix, and other factors, hospitals in competitive 205

local markets hired substantially more registered nurses and non-nurse personnel but fewer licensed practical nurses than hospitals in concentrated local markets. These ndings testify to the importance of nonprice quality competition in hospital product markets and are consistent with monopsonistic behavior in hospital labor markets. [570] James C. Robinson. The Commercial Health Insurance Industry In An Era Of Eroding Employer Coverage. Health Aairs, 25(6):147586, November December 2006. Abstract: This paper analyzes the commercial health insurance industry in an era of weakening employer commitment to providing coverage and strengthening interest by public programs to oer coverage through private plans. It documents the willingness of the industry to accept erosion of employment-based enrollment rather than to sacrice earnings, the movement of Medicaid beneciaries into managed care, and the distribution of market shares in the employment-based, Medicaid, and Medicare markets. The protability of the commercial health insurance industry, exceptionally strong over the past ve years, will henceforth be linked to the budgetary cycles and political uctuations of state and federal governments. [571] Elina Ronnberg and Torbjorn Larsson. Automating the Self-Scheduling Process of Nurses in Swedish Healthcare: A Pilot Study. Health Care Management Science, 13(1):3553, 03 2010. Abstract: Hospital wards need to be staed by nurses round the clock, resulting in irregular working hours for many nurses. Over the years, the nurses inuence on the scheduling has been increased in order to improve their working conditions. In Sweden it is common to apply a kind of selfscheduling where each nurse individually proposes a schedule, and then the nal schedule is determined through informal negotiations between the nurses. This kind of self-scheduling is very time-consuming and does often lead to conicts. We present a pilot study which aims at determining if it is possible to create an optimisation tool that automatically delivers a usable schedule based on the schedules proposed by the nurses. The study is performed at a typical Swedish nursing ward, for which we have developed a mathematical model and delivered schedules. The results of this study are very promising and suggest continued work along these lines. [572] Pauline Vaillancourt Rosenau. Performance Evaluations of For-Prot and Nonprot U.S. Hospitals since 1980. Nonprot Management and Leadership, 13(4):40123, summer 2003. Abstract: This synthesis of studies examines whether the published literature shows an evidence-based consensus on performance dierences between private for-prot and nonprot hospitals in the United States


since 1980. The author systematically and comprehensively surveyed peerreviewed publications to clarify this question. The authors second objective was to learn what proportion of all research assessing for-prot and nonprot health care providers is devoted to hospitals compared to all other providers. The third goal was to discover how any trends in observed performance dierences among hospitals compare with trends among other provider types. Computerized bibliographic searches of all relevant databases yielded seventy-ve studies (ninety-three assessments) that compared the performance of for-prot and nonprot hospitals on four performance criteria: access, quality, cost or eciency, and amount of charity care. The author coded ndings on performance in one of three ways: for-prot superiority, nonprot superiority, or inconclusive. Most studies (60 percent) reported that nonprot hospitals have better relative performance than for-prot hospitals, clear evidence of their organizational eectiveness. Thirty-one percent were inconclusive, and 8 percent reported that for-prots were better. [573] Robert Rosenman and Daniel Friesner. Scope and Scale Ineciencies in Physician Practices. Health Economics, 13(11):10911116, November 2004. Abstract: Using a national data set, this paper looks at the eciency of physician practices, focusing on scopes of service by comparing single specialty groups and multispecialty groups. An analysis of eciency using DEA indicates that there are scope ineciencies from combining dierent types of providers into a single practice. Most of the ineciency is due to technical rather than allocative reasons. In addition, we nd that larger practices are able to capture eciencies of scope, but incur ineciencies of scale. [574] Robert Rosenman, Daniel Friesner, and Christopher Stevens. Do Health Care Providers Quality Discriminate: Empirical Evidence from Primary Care Outpatient Clinics. Eastern Economic Journal, 31(4):64970, fall 2005. The authors nd no evidence of quality discrimination among patients by community clinics in California (p. 660). [575] Robert Rosenman, Scott Goates, and Laura Hill. Participation in Universal Prevention Programs. Working Paper 200909, School of Economic Sciences, Washington State University, WP2009-09_UniversalPreventionProg.pdf, May 2009. Abstract: We analyze the decision to participate in community-based universal prevention programs through the framework of prospect theory, with family functionality, and related risk status, providing the reference point. We nd that participation probability depends on the relative ratios


of the weighting and valuation functions. Using data from the Strengthening Families Program and the Washington Healthy Youth Survey, we empirically test the implications of our model. We nd that family functionality aects the participation decision in complex and, in some cases, non-linear ways. We discuss the implication of these ndings for costeectiveness analysis, and suggest directions for further research. [576] Meredith B. Rosenthal. Risk Sharing and the Supply of Mental Health Services. Journal of Health Economics, 19(6):104765, November 2000. Abstract: This paper examines the eects of risk sharing with mental health providers in a managed care context. The results show that providers that received a xed payment per case reduced the number of outpatient visits by 2025%, compared with providers who continued to be paid for each visit. This eect was stronger for integrated group practices and providers with more intensive utilization review protocols. In addition, evidence was found that in a setting where providers serve multiple payers, the share of their total revenue derived from risk-sharing contracts is an important determinant of the magnitude of the supply response. [577] Meredith B. Rosenthal. Doughnut-Hole Economics. 23(6):12935, November-December 2004. Health Aairs,

Abstract: Both the recently enacted Medicare prescription drug benet and a new cohort of consumer-directed health benet models oer doughnut-shaped insurance coverage with large deductibles that begin around the mean annual spending for enrollees. These policies leave enrollees to bear more risk than policies with equal expected payouts that rely on rst-dollar deductibles. This risk to enrollees is substantial, given the skewed distribution of health care spending and the placement of the typical deductible. I consider alternative explanations for this new benet design trend and conclude that the desire to distribute tangible benets to the largest number of constituents is most plausible. [578] Meredith B. Rosenthal, Ernst R. Berndt, Julie M. Donohue, Arnold M. Epstein, and Richard G. Frank. Demand Eects of Recent Changes in Prescription Drug Promotion. Frontiers in Health Policy Research, 6:1 26, 2003. Examining direct-to-consumer advertising (DTCA) for brands in ve therapeutic classes of drugs, using monthly aggregate U.S. data from August 1996 through December 1999, the authors nd that 13 to 22 percent of the recent growth in prescription drug spending is attributable to the eects of DTCA (p. 1). [579] Meredith B. Rosenthal, Ernst R. Berndt, Julie M. Donohue, Richard G. Frank, and Arnold M. Epstein. Promotion of Prescription Drugs to Consumers. New England Journal of Medicine, 346:498505, February 14 2002.


Abstract: Background: Spending on prescription drugs is the fastest growing component of the health care budget. There is public concern about the possibility that direct-to-consumer advertising of prescription drugs will result in inappropriate prescribing and higher costs of care. Guidelines issued in 1997 by the Food and Drug Administration (FDA) regarding advertising to consumers through electronic media are considered by some to be responsible for unleashing a ood of direct-to-consumer advertising. Methods: Using data on spending for promotional purposes and sales of prescription drugs, we examined industrywide trends for various types of promotion. We also tracked the relation between promotional eorts and sales over time. Finally, we documented the variation in direct-toconsumer advertising among and within ve therapeutic classes of drugs and compared the variation in the intensity of such advertising with variation in the intensity of promotion to health care professionals. Results: Annual spending on direct-to-consumer advertising for prescription drugs tripled between 1996 and 2000, when it reached nearly $2.5 billion. Despite this increase, such advertising accounts for only 15 percent of the money spent on drug promotion and is highly concentrated on a subgroup of products. Within a therapeutic class, there is marked variation in the intensity of direct-to-consumer advertising, and the amount of such advertising for specic products uctuates over time. The initial surge in direct-to-consumer advertising preceded the 1997 FDA guidelines that claried the rules for electronic direct-to-consumer advertising, and thus the 1997 guidelines may not have been the most important reason for the overall increase. Conclusions: Although the use of direct-to-consumer advertising has grown disproportionately to other forms of promotion, it continues to account for a small proportion of total promotional eorts. Nevertheless, physicians must assist patients in evaluating health-related information obtained through direct advertising. [580] Robert Rowthorn and Gardner M. Brown. Using Antibiotics When Resistance is Renewable. In Laxminarayan [387], pages 4262. The authors develop a dynamic optimization model, using the following assumptions: Two antibiotics are available to treat two strains of infections. Each drug is eective for only one strain. Only one drug is used per patient at a time. . . , and the doctors do not know which strain the patient has (p. 42). The authors conclude that the fraction of the infected population treated by each antibiotic in the steady state varies inversely with the rate of spontaneous recovery (pp. 42-43). The steady state stock of infection is higher . . . for the strain with the higher marginal treatment cost (p. 54). [581] Niklas Rudholm. Economic Implications of Antibiotic Resistance in a Global Economy. Journal of Health Economics, 21(6):107183, November 2002.


Abstract: This paper concerns the economic implications of antibiotic resistance in a global economy. The global economy consists of several countries, where antibiotic consumption creates a stock of bacteria which is resistant to antibiotics. This stock aects the welfare in all countries because of the risk that resistant bacterial strains may be transmitted. The main purpose of the paper is to compare the socially optimal resource allocation with the allocation brought forward by the decentralized market economy. In addition, a dynamic Pigouvian tax designed to implement the globally optimal resource allocation is presented [582] L. B. Russell, J. E. Siegel, N. Daniels, M. R. Gold, B. R. Luce, and J. S. Mandelblatt. Cost-Eectiveness Analysis as a Guide to Resource Allocation in Health: Roles and Limitations. In Gold et al. [255], chapter 1, pages 324. Russell et al. argue that a societal perspective is appropriate for CEA. They discuss how CEA can be used as an aid to decision making and contrast CEA with other methods (p. 5). [583] Thomas A. Russo and James R. Johnson. Medical and Economic Impact of Extraintestinal Infections Due to Escherichia Coli: Focus on an Increasingly Important Endemic Problem. Microbes and Infection, 5(5):44956, April 2003. Abstract: Escherichia coli is probably the best-known bacterial species and one of the most frequently isolated organisms from clinical specimens. Despite this, underappreciation and misunderstandings exist among medical professionals and the lay public alike regarding E. coli as an extraintestinal pathogen. Underappreciated features include (i) the wide variety of extraintestinal infections E. coli can cause, (ii) the high incidence and associated morbidity, mortality, and costs of these diverse clinical syndromes, (iii) the pathogenic potential of dierent groups of E. coli strains for causing intestinal versus extraintestinal disease, and (iv) increasing antimicrobial resistance. In this era in which health news often sensationalizes uncommon infection syndromes or pathogens, the strains of E. coli that cause extraintestinal infection are an increasingly important endemic problem and underappreciated killers. Billions of health care dollars, millions of work days, and hundreds of thousands of lives are lost each year to extraintestinal infections due to E. coli. New treatments and prevention measures will be needed for improved outcomes and a diminished disease burden. [584] Matthew J. Ryan and Rhema Vaithianathan. Medical Insurance with Rank-Dependent Utility. Economic Theory, 22(3):68998, October 2003. Abstract: A well-known result in the medical insurance literature is that zero co-insurance is never second-best for insurance contracts subject to moral hazard. We replace the usual expected utility assumption with a


version of the rank-dependent utility (RDU) model that has greater experimental support. When consumers exhibit such preferences, we show that zero co-insurance may in fact be optimal, especially for low-risk consumers. Indeed, it is even possible that the rst-best and second-best contracts are identical. In this case, there is no market failure, despite the informational asymmetry. We argue that these RDU results are in better accord with the empirical evidence from US health insurance markets. [585] Ramon Sabes-Figuera, Jose Luis Segu, and Antoni Puig-Junoy, Jaumeand Torres. Inuence of Bacterial Resistances on the Eciency of Antibiotic Treatments for Community-Acquired Pneumonia. European Journal of Health Economics, 9(1):2332, February 2008. Abstract: The objective of this paper is to perform a cost-eectiveness analysis of the oral antibiotics used in Spain for the ambulatory treatment of community-acquired pneumonia. Our analysis takes into account the inuence of bacterial resistances on the cost-eectiveness ratio of antibiotic alternatives from the viewpoint of the public insurer. A deterministic decision analysis model is used to simulate the impact of treatment alternatives on both patients health and resource consumption. Amoxicillin 1 g may be the most ecient therapy for treating typical pneumonia, as long as the physician is able to discriminate clinically the aetiology of the process with a high degree of reliability. However, for those pathological pictures in which the aetiology cannot be discriminated clinically, and for those in which the consequences of incorrect diagnosis are serious according to clinical criteria, moxioxacin is the most eective and ecient option. [586] Thomas R. Sadler. Regulating Chemical Emissions with Risk-Based Environmental Taxation. International Advances in Economic Research, 6(2):287305, May 2000. Abstract: This paper develops a policy of risk-based environmental taxation for chemical emissions. A scoring index of chemical risk values for target pollutants rst takes into account potential human health risk and ecological risk. A common tax base called the risk unit, which reects the risk values from the scoring index, is then identied for individual pollutants. By determining the number of risk units for target emissions and levying a single tax rate on one risk unit, the risk-based tax system assigns a dierent pollution price to each chemical release. The policy sets rates according to marginal damage and provides target industry with permanent incentive for pollution abatement. By narrowing the gap between the marginal private cost and constrained marginal social cost of the chemical emission externality, the environmental tax system creates eciency gains. [587] David E. Sahn, Stephen D. Younger, and Garance Genicot. The Demand for Health Care Services in Rural Tanzania. Oxford Bulletin of Economics and Statistics, 65(2):24159, May 2003. 211

Abstract: This paper examines the pattern of health care demand in rural Tanzania. We distinguish between hospital and clinic based care, in both the public and private sector using a two-level nested multinomial logit model. Own price elasticities of demand for all health care options are high, although, less so for public clinics and dispensaries than other choices. However, there is a high degree of substitution between public and private care. Consequently, price increases or user fees will result in small a percentage of people opting for self-treatment. Another important contribution of this paper is that the quality of medical care has large eects on health demand. This applies to the quality and availability of doctors/nurses, drugs, and the clinic environment. [588] Richard B. Saltman and Sven-Eric Bergman. Renovating the Commons: Swedish Health Care Reforms in Perspective. Journal of Health Politics, Policy and Law, 30(1):25375, February-April 2005. Abstract: Recent reform experience in Sweden supports the premise that key dimensions of a countrys health care system reect the core social norms and values held by its citizenry. The fundamental structure of the Swedish health system has remained notably consistent over the past half century, that is, tax-based nancing and publicly operated hospitals. Yet on other, nearly as important, parameters, there has been substantial change, for example, the persistent pursuit for thirty years of a stronger primary care framework and the eort to allow patient choice of doctor, health center, and hospital within the publicly operated system. This particular combination of continuity and change has occurred as traditional Swedish values of jamlikhet (equality) and trygghet (security) have been challenged in an environment shaped by an aging population, changing medical technology, and Swedens integration into the European Single Market. This article explores the ongoing process of health system development in Sweden in the context of the countrys broader social and cultural characteristics. [589] Roxanne Salvatierra-Gonzlez, editor. Costo de la infeccin nosocomial en a o nueve pa de Amrica Latina (Cost of Hospital Infection in Nine Counses e tries of Latin America). Pan American Health Organization, Washington, D.C., 2003. Excerpts from summary: Hospital-acquired infections are a major cause of morbidity and mortality among people who are hospitalized; thus, they constitute a signicant social and economic burden both for patients and for the health system. Many of these infections are caused by microorganisms resistant to several antimicrobial drugs. . . . All the studies demonstrated that preventing hospital-acquired infection results in an improvement of medical care and a signicant cost reduction. For example, in one Guatemalan hospital, a case of nosocomial pneumonia associated with mechanical ventilation cost more than US$ 1,758 per case, or 2.5 times the cost of care for a patient who did not catch that infection. 212

[590] Rexford E. Santerre. The Inequity of Medicaid Reimbursement in the United States. Applied Health Economics and Health Policy, 1(1):2532, 2002. Describes Medicaid reimbursement variation across states, summarizes the Sloan et al. (1978) model of a rm selling in a dual market, and surveys fteen empirical studies, concluding at a 10% increase in the Medicaid reimbursement rate induces roughly at 3.9% increase in the number of health care providers participating in the Medicaid market and a 3.1% increase in the extent of Medicaid services provided by existing participants. [591] Rexford E. Santerre and Stephen P. Neun. Health Economics: Theories, Insights, and Industry Studies. Irwin, Chicago, 1996. [592] Nazmi Sari. Do Competition and Managed Care Improve Quality? Health Economics, 11(7):57184, October 2002. Abstract: In recent years, the US health care industry has experienced a rapid growth of managed care, formation of networks, and an integration of hospitals. This paper provides new insights about the quality consequences of this dynamic in US hospital markets. I empirically investigate the impact of managed care and hospital competition on quality using inhospital complications as quality measures. I use random and xed eects, and instrumental variable xed eect models using hospital panel data from up to 16 states in the 19921997 period. The paper has two important ndings: First, higher managed care penetration increases the quality, when inappropriate utilization, wound infections and adverse/iatrogenic complications are used as quality indicators. For other complication categories, coecient estimates are statistically insignicant. These ndings do not support the straightforward view that increases in managed care penetration are associated with decreases in quality. Second, both higher hospital market share and market concentration are associated with lower quality of care. Hospital mergers have undesirable quality consequences. Appropriate antitrust policies towards mergers should consider not only price and cost but also quality impacts. [593] Michael Sattinger. Alternative Models of the Market for Registered Nurses. Journal of Economics and Business, 28(1):5054, fall 1975. [594] F. M. Scherer. How US Antitrust Can Go Astray: The Brand Name Prescription Drug Litigation. International Journal of the Economics of Business, 4(3):23956, 1997. Abstract: This paper analyzes the substantive issues in a US antitrust case under which retail pharmacists alleged that drug manufacturers conspired to avoid granting the retailers discounts that were oered to health maintenance organizations (HMOs). The HMOs are viewed as an innovative means of delivering health care to consumers at lower cost. They elicited discounts by credibly threatening to exclude manufacturers drugs


unless price concessions were oereda strategy drug retailers were unable or unwilling to pursue. In challenging those discounts, the retail pharmacists pursued their traditional strategy of using governmental power to oppose innovations that squeezed their price /cost margins and reduced drug prices to consumers. The evidence of manufacturer conspiracy appears to have been ephemeral at best, and the litigation appears more likely to have reduced competition and consumer welfare than enhancing it. [595] F. M. Scherer. The Pharmaceutical Industry. In Culyer and Newhouse [152], chapter 25, pages 12971336. This is a useful survey but takes a rather uncritically laissez-faire view of safety and price regulation (pp. 1314-15, 1328-31) and is inconsistent about whether pharmaceutical competition is oligopolistic or monopolistically competitive (pp. 1320, 1328). [596] Carl J. Schramm, Steven C. Renn, and Brian Biles. Controlling Hospital Cost Ination: New Perspectives on State Rate Setting. Health Aairs, 1986. [597] Edward J. Schumacher. Relative Wages and Exit Behavior among Registered Nurses. Journal of Labor Research, 18(4):58192, fall 1997. Abstract: I examine the exit decision of registered nurses using the longitudinal data les generated by the March Current Population Surveys (CPS) from 1983 through 1994. By examining the wages of workers outside of nursing, a measure of the reservation wage is constructed and related to the decision to leave nursing, either for an alternative job or to exit employment. My results indicate that nurses respond to outside wage opportunities. A one standard deviation decrease in the dierence between the actual and predicted log wage results in an 8 percent increase in the exit of nurses. Secretaries, however, are shown to have a much greater sensitivity to outside wages due to the lower degree of occupation-specic training required for secretarial jobs. A similar increase in the wage gap for secretaries results in an 18 percent increase in turnover. RNs employed in hospitals, covered by a union contract, and employed in the public sector are relatively attached to the nursing profession. [598] Edward J. Schumacher. The Earnings and Employment of Nurses in an Era of Cost Containment. Industrial and Labor Relations Review, 55(1):11632, October 2001. Abstract: Previous research has shown that from the 1980s through the early 1990s, nurses enjoyed substantial wage and employment gains that stemmed, to some extent, from increased labor demand. Using individual data for 198898 to compare nurses fortunes with those of collegeeducated women and other workers in the health care industry, the author documents that nurses experienced a decline in real wages beginning in


the early 1990s, at the same time that the skill premium for RNs, as reected by the return to education and experience, was increasing. Changes in measured characteristics and their returns explain very little of the decline, consistent with the theory that the relative wage decrease was driven by a decline in the demand for RNs and increased cost constraints. The eects of HMO penetration are found to explain only a small part of the variation in wages across metropolitan statistical areas and across time. [599] Edward J. Schumacher and Barry T. Hirsch. Compensating Dierentials and Unmeasured Ability in the Labor Market for Nurses: Why Do Hospitals Pay More? Industrial and Labor Relations Review, 50(4):55779, July 1997. Abstract: Registered nurses (RNs) employed in hospitals realize a large wage advantage relative to RNs employed elsewhere. Cross-sectional estimates indicate a hospital RN wage advantage of roughly 20 percent. This paper examines possible sources of the hospital premium, a topic of some interest given the current shifting of medical care out of hospitals. Longitudinal analysis of Current Population Survey data for 1979-94 suggests that a third to a half of the advantage is due to unmeasured worker ability, and the authors conclude that the remainder of the advantage probably reects compensating dierentials for hospital disamenities. Supporting these conclusions is evidence that hospital RNs have higher cognitive ability and higher-quality job experience than non-hospital RNs, and indications that shift work accounts for roughly 10 percent of the hospital premium. [600] Alan Schwartz, Julie Goldberg, and Gordon Hazen. Prospect Theory, Reference Points, and Health Decisions. Judgment and Decision Making, 3(2):174180, February 2008. Abstract: In preventative health decisions, such as the decision to undergo an invasive screening test or treatment, people may be deterred from selecting the test because its perceived disutility relative to not testing is greater than the utility associated with prevention of possible disease. The prospect theory editing operation, by which a decision makers reference point is determined, can have important eects on the disutility of the test. On the basis of the prospect theory value function, this paper develops two approaches to reducing disutility by directing the decision Makers attention to either (actual) past or (expected) future losses that result in shifted reference points. After providing a graphical description of the approaches and a mathematical proof of the direction of their eect on judgment, we briey illustrate the potential value of these approaches with examples from qualitative research on prostate cancer treatment decisions. [601] Janet A. Schwartz and Gretchen B. Chapman. Are More Options Always Better? The Attraction Eect in Physicians Decisions about Medications. Medical Decision Making, 19(3):315323, JulySeptember 1999. 215

Abstract: Consumer choice research has shown that, contrary to normative theory, the introduction of an inferior alternative to an existing choice set can increase the likelihood that one of the original alternatives will be chosen. This phenomenon, the attraction eect, is relevant to physician decision making, particularly when the physician is in the role of a consumer who must make decisions about prescribing medications when a number of alternatives are available. To investigate the attraction effect in physician decision making, 40 internal medicine residents reviewed three patient cases (concerning depression, sinusitis, and vaginitis) and then chose the most appropriate medication for each patient. In some versions of the cases, two medication options were available. Other versions included a third medication (the decoy) that was inferior in every way to one of the original options (the target) but not to the other (the competitor). The results showed that addition of the decoy medication increased the likelihood of choosing the target medication. That is, the attraction eect does occur in physicians decisions about medications. Physicians should be aware of this bias when evaluating or suggesting several similarly attractive medications or treatment options for the same medical condition. [602] Maurice E. Schweitzer. The Construction of Mental Accounts in Benets Decision Making. Benets Quarterly, 15(1):526, 1999. Abstract: Mental accounting describes the psychological creation of separate accounts or budgets for categories of decisions. This process simplies complex budget decisions in ways that signicantly aect consumer behavior (Kahneman and Tversky 1981, 1984) and has been incorporated into economic theory (Shefrin and Thaler 1988). The impact of mental accounts on benets decisions is likely to be signicant. The creation of these accounts is context dependent, and prior work has demonstrated that the source and timing of payments aects the allocation of resources into mental accounts. Results from this work demonstrate that other normatively unimportant factors of the choice such as presentation order impact the construction of mental accounts. These results describe mental accounting biases within the context of health care benets and demonstrate that the construction of mental accounts is highly unstable and easily manipulated within this domain. [603] Stuart O. Schweitzer. Pharmaceutical Economics and Policy. Oxford University Press, New York, 1997. Contains eleven chapters, including one on marketing pharmaceuticals and one on the demand for pharmaceuticals. [604] Anthony Scott, Alan Maynard, and Robert Elliott, editors. Advances in Health Economics. John Wiley and Sons, Chichester, West Sussex, 2003. Twelve papers presented at a 2002 workshop marking the 25th anniversary of the Health Economics Research Unit in Aberdeen. 216

[605] Jean Ann Seago, Michael Ash, Joanne Spetz, Janet Coman, and Kevin Grumbach. Hospital Registered Nurse Shortages: Environmental, Patient, and Institutional Predictors. Health Services Research, 36(5):83152, October 2001. Abstract: Outcome variables included whether a hospital experienced a shortage in 1990, when many hospitals reported a nursing shortage, or whether a hospital reported a shortage in both 1990 and 1992. Predictor variables included environmental, patient, and institutional characteristics. Associations between predictor and outcome variables were investigated using probit analyses. Although some characteristics under the direct control of hospitals, such as nursing care delivery model, are associated with their reporting a shortage of nurses, shortage is also strongly associated with broader population characteristics such as minority communities and a public insurance payer mix. Awareness of these broader factors may help inform policies to improve the distribution of nurse supply. [606] Pedram Sendi. Bridging the Gap between Health and Non-health Investments: Moving from Cost-Eectiveness Analysis to a Return on Investment Approach across Sectors of Economy. ournal of Health Care Finance and Economics, 8(2):11321, 2008. Abstract: When choosing from a menu of treatment alternatives, the optimal treatment depends on the objective function and the assumptions of the model. The classical decision rule of cost-eectiveness analysis may be formulated via two dierent objective functions: (i) maximising health outcomes subject to the budget constraint or (ii) maximising the net benet of the intervention with the budget being determined ex post. We suggest a more general objective function of (iii) maximising return on investment from available resources with consideration of health and nonhealth investments. The return on investment approach allows to adjust the analysis for the benets forgone by alternative non-health investments from a societal or subsocietal perspective. We show that in the presence of positive returns on non-health investments the decision-makers willingness to pay per unit of eect for a treatment program needs to be higher than its incremental cost-eectiveness ratio to be considered cost-eective. [607] Samuel Y. Sessions and Philip R. Lee. A Road Map for Universal Coverage: Finding a Pass through the Financial Mountains. Journal of Health Politics, Policy and Law, 33(2):155197, April 2008. Abstract: Government already pays for more than half of U.S. health care costs, and nearly all universal health insurance proposals assume continued government involvement through tax subsidies and other means. The question of what specic taxes could be used to nance universal coverage is, however, seldom carefully examined, in part due to eorts by health care reform proponents to downplay tax issues. In this article we undertake such an examination. We argue that the challenges of relying on taxes for 217

universal coverage are even greater than is generally appreciated, but that they can nevertheless be met. A proposal to fund a universal health insurance voucher system with a value-added tax illustrates issues that would arise for tax-nanced plans in general and provides a broad framework for a bipartisan approach to universal coverage. We discuss signicant problems that such an approach would face and suggest solutions. We outline a long-term political and legislative strategy for enacting universal coverage that draws upon precedents set by comparable legislative initiatives, including tax reform and Medicare. The results are an improved understanding of the relationship between systemic health care nance reform and taxation and a politically realistic plan for universal coverage that employs undisguised taxes. [608] James W. Shaw, William C. Horrace, Stephen Joel Coons, and Ronald J. Vogel. The Productivity of Pharmaceuticals in Improving Health: An Analysis of the OECD Health Data. University of Arizona working paper,, 2002. This study/initiative was supported by an unrestricted educational grant from The Merck Company Foundation, the philanthropic arm of Merck & Co. Inc. Abstract: Although a number of studies have been done on health production functions, little attention has been given to pharmaceuticals as a separate input into the production of health. Building upon existing published work that contains some serious econometric aws, this paper uses a more correct specication and more recent data to estimate the eect of pharmaceutical expenditures on levels of health in the member countries of the Organization for Economic Cooperation and Development (OECD). In a sample of developed countries, we found that pharmaceutical consumption, as measured by the proportion of gross domestic product (GDP) allocated to pharmaceuticals, has a positive eect on total population life expectancy at various ages. The marginal eect of pharmaceutical consumption is greater than has been previously reported and appears to decline with increasing age. Our results suggest that policy makers in the U.S. interested in improving the health of the population would do well to increase the proportion of GDP spent on pharmaceuticals. [609] Yu-Chu Shen. The Eect of Financial Pressure on the Quality of Care in Hospitals. Journal of Health Economics, 22(2):24369, March 2003. Abstract: This paper examines the eect of nancial pressure on hospital quality, using health outcomes after treatment for acute myocardial infarction (AMI) as quality indicators. The nancial pressure variables are: scal pressure from the Prospective Payment System (PPS) for inpatient care, and changes in health maintenance organization (HMO) penetration at the county level. The study shows that both types of nancial pressures adversely aect short-term health outcomes, but do not aect patient survival beyond 1 year after patients hospital admissions. Furthermore, the 218

impact of HMO penetration appears to dier from that of Medicare payment changes for certain hospitals because HMO penetration encourages price competition. [610] Donald S. Shepard, Marilyn Daley, Grant A. Ritter, Dominic Hodgkin, and Richard H. Beinecke. Managed Care and the Quality of Substance Abuse Treatment. Journal of Mental Health Policy and Economics, 5(4):16374, December 2002. Abstract: Although Medicaid managed behavioral health care (MBHC) plans have generally reduced public sector spending, their impact on the quality of substance abuse (SA) treatment has not been established. Analyzing Massachusetts Medicaid claims using multivariate regression, this study compared spending and quality from scal years 1992 thru 1996 (one year prior to and 4 years after the carve out was implemented). Per episode SA spending decreased by 76% (-$2,773); access to 24-hour services overall increased by 38%, largely due to an expansion in the use of freestanding detoxication and acute residential services. Continuity improved by 73%. Nevertheless, rates of 7-day (+58%) and 30-day (+24%) readmissions (two areas of quality concern) increased signicantly, even after controlling for increases in disability status. The carve-out had mixed eects on the quality of substance abuse treatment. MBHCs should implement quality-monitoring programs to ensure that aggressive utilization management strategies do not compromise quality of care. [611] Jhih-Shyang Shih, Dallas Burtraw, Karen Palmer, and Juha Siikamaki. Air Emissions of Ammonia and Methane from Livestock Operations: Valuation and Policy Options. Discussion Paper, Resources for the Future, Washington, DC, 2006. Abstract: The animal husbandry industry is a major emitter of methane, which is an important greenhouse gas. The industry is also a major emitter of ammonia, which is a precursor of ne particulate matterarguably, the number-one environment-related public health threat facing the nation. We present an integrated process model of the engineering economics of technologies to reduce methane and ammonia emissions at dairy operations in California. Three policy options are explored: greenhouse gas oset credits for methane control, particulate matter oset credits for ammonia control, and expanded net metering policies to provide revenue for the sale of electricity generated from captured methane gas. Individually, any of these policies appears to be sucient to provide the economic incentive for farm operators to reduce emissions. We report on initial steps to fully develop the integrated process model that will provide guidance for policymakers. [612] Mark H. Showalter. Firm Behavior in a Market with Addiction: The Case of Cigarettes. Journal of Health Economics, 18:40927, 1999.


Keywords: health economics, rational addiction, myopic behavior [613] Mark H. Showalter and Norman K. Thurston. Taxes and Labor Supply of High-Income Physicians. Journal of Public Economics, 66(1):7397, October 1997. Abstract: The authors use the 198385 Physicians Practice Costs and Income Survey, supplemented with federal and state tax rates, to estimate the eect of variation in marginal tax rates on work hours for highincome physicians. They nd that self-employed physicians are much more sensitive to the marginal tax rate than would be suggested by previous labor-supply studies, while those who are employees have no discernible sensitivity to marginal tax rates. [614] Michael Shwartz, Suzanne Grisez Martin, DArpa Cooper, Greta M. Ljung, Bernadette J. Whalen, and Joseph Blackburn. The Eect of a Thirty Per Cent Reduction in Physician Fees on Medicaid Surgery Rates in Massachusetts. American Journal of Public Health, 71(4):37075, April 1981. Abstract: In this paper, we use an interrupted time series analysis to assess the eect of a 30 per cent reduction in the Medicaid reimbursement fee for physician services on the rate at which eight elective surgical procedures were performed in the Massachusetts Medicaid population. Tonsillectomy/adenoidectomy is the only procedure in which there was a statistically signicant decline in the rate of surgery in most areas of the state following the fee cut. There is some evidence of an increase in the rate of disc surgeries/spinal fusions. The rate of other procedures increased in some areas of the state and decreased in other areas in the period after the fee cut. [615] Luigi Siciliani. Estimating Technical Eciency in the Hospital Sector with Panel Data: A Comparison of Parametric and Non-parametric Techniques. Applied Health Economics and Health Policy, 5(2):99116, 2006. Abstract: Policy makers are increasingly interested in developing performance indicators that measure hospital eciency. These indicators may give the purchasers of health services an additional regulatory tool to contain health expenditure. Using panel data, this study compares dierent parametric (econometric) and non-parametric (linear programming) techniques for the measurement of a hospitals technical eciency. This comparison was made using a sample of 17 Italian hospitals in the years 1996-9. Highest correlations are found in the eciency scores between the non-parametric data envelopment analysis under the constant returns to scale assumption (DEA-CRS) and several parametric models. Correlation reduces markedly when using more exible non-parametric specications such as data envelopment analysis under the variable returns to scale assumption (DEA-VRS) and the free disposal hull (FDH) model. Correlation also generally reduces when moving from one output to two-output 220

specications. This analysis suggests that there is scope for developing performance indicators at hospital level using panel data, but it is important that extensive sensitivity analysis is carried out if purchasers wish to make use of these indicators in practice. [616] Holger Sieg. Estimating a Bargaining Model with Asymmetric Information: Evidence from Medical Malpractice Disputes. Journal of Political Economy, 108(5):100621, October 2000. Abstract: This article uses a unique data set on medical malpractice disputes in Florida to estimate the parameters of a bargaining game with asymmetric information. The main ndings of the article suggest that the bargaining game can replicate most of the qualitative and quantitative features of the data. The article also simulates alternative policy regimes to quantify the eects of possible tort reforms, such as imposing limits on contingency fees and caps on jury awards. [617] Charles Silver, Kathryn Zeiler, Bernard S. Black, David A. Hyman, and William M. Sage. Malpractice Payouts and Malpractice Insurance: Evidence from Texas Closed Claims, 1990-2003. Geneva Papers on Risk and Insurance: Issues and Practice, 33(2):17792, April 2008. Abstract: Using medical malpractice claims with payments of $25,000 or more that closed in Texas from 1990 to 2003, this study quanties physicians insurance limits and examines the connection between policy size and payments on claims. It nds that most physicians had less than $1 million (nominal) in coverage, that real policy size declined, that settlements at the policy limits were common, that payment size was stable or falling, and that payments above the policy limits were rare. It also nds that physicians rarely made out-of-pocket payments, suggesting the policy limits often cap recoveries, and that the frequency of out-of-pocket payments declined as policy size increased. Results are presented separately for perinatal physicians. [618] Elaine Silverman and Jonathan Skinner. Are For-Prot Hospitals Really Dierent? Medicare Upcoding and Market Structure. Working Paper 8133, National Bureau of Economic Research, Cambridge, MA, February 2001. Abstract: How do for-prot and not-for-prot hospitals dier? We consider one dimension: the shifting of a patients diagnostic related group (DRG) to one that yields a greater reimbursement from the Medicare system, also known as upcoding. Our empirical work focuses primarily on hospital admissions involving pneumonia and respiratory infections. Between 1989 and 1996, the incidence of the most expensive DRG (relative to all DRGs for pneumonia and respiratory infections) rose by 10 percentage points among stable not-for-prot hospitals, 23 percent among stable for-prot hospitals, and 37 percentage points among hospitals that had converted to for-prot status. There is some evidence that not-for-prot 221

hospitals operating in heavily for-prot markets were almost as likely to upcode as their for-prot brethren. [619] Elaine Silverman and Jonathan Skinner. Medicare Upcoding and Hospital Ownership. Journal of Health Economics, 23(2):36989, March 2004. Abstract: Many hospitals in the 1990s many hospitals were accused of upcoding patient diagnostic related groups (DRGs) to increase Medicare reimbursements. We nd that between 1989 and 1996, the percentage point share of the most generous DRG for pneumonia and respiratory infections rose by 10 points among not-for-prot hospitals, 23 points among forprot hospitals, and 37 points in hospitals converting to for-prot status. Not-for-prot upcoding was also higher in markets with a larger for-prot hospital share. Upcoding appears to reect both risk-taking by administrators and a closer alignment between the goals of the administration and the behavior of the clinical sta. [620] Kosali Ilayperuma Simon. Did Small-Group Health Insurance Reforms Work? Evidence from the March Current Population Survey 19921997. Paper presented to the 10th annual Health Economics Conference, Berkeley, 1999. Keywords: health economics, insurance [621] Patricia L. Sinnott, Vilija R. Joyce, and Paul G. Barnett. Preference Measurement in Economic Analysis. Guidebook. Technical report, VA Palo Alto, Health Economics Resource Center, Menlo Park, CA, 2007. The authors discuss methods for estimating quality-adjusted life years, preference weights for economic analysis, experience in VA clinical trials, and a recommended approach to selecting a preference assessment method and measure. [622] John Douglas Skatun. The Overprovision of Infectious Disease Medicine. Economics Letters, 80(1):6166, July 2003. Abstract: This paper demonstrates a so far ignored negative externality imposed by the provision of life prolonging drugs to infected carriers of infectious diseases. Private optimal usage tends to imply socially inecient over-provision of life enhancing infectious disease medication. [623] Frank Sloan, Janet Mitchell, and Jerry Cromwell. Physician Participation in State Medicaid Programs. Journal of Human Resources, 13(Supplement):21145, 1978. [624] Frank A. Sloan. Commercialism in Nonprot Hospitals. Journal of Policy Analysis and Management, 17(2):23452, spring 1998. Abstract: The private nonprot hospital is the dominant organizational form in the U.S. hospital industry. Various reasons have been advanced for its high market share. As hospitals undergo massive changes due in


large part to changes in payment practices, there is widespread concern that nonprot hospitals may become less committed to noncommercial activities. This may even be more likely when such hospitals convert to for-prot status. The empirical evidence indicates that, on average, hospitals of nonprot and for-prot ownership are similar in the provision of uncompensated care, the quality of care, and the adoption of technology. Conversion of a nonprot to for-prot status does not adversely aect the provision of uncompensated care on average. However, for-prots are more likely to be located in areas where consumers have the ability to pay for care. As hospital markets become more competitive and the opportunity for cross-subsidizing more unprotable, collective-good activities will become increasingly dicult. Support for such activities, if they are to exist, will have to come from explicit public subsidies. [625] Frank A. Sloan. Not-For-Prot Ownership and Hospital Behavior. In Culyer and Newhouse [152]. In contrast to for-prot hospitals, not-for-prot hospitals do not distribute prots to equity holders. In 1994 about 60 percent of community hospitals in the United States were private not-for-prot institutions, 28 percent were operated by government agencies, and only twelve percent were forprot rms. The smallness of the market share held by for-prot rms may be due in part to patients fears of being duped by them. Economists have modeled not-for-prot rms as maximizing some function increasing in the quantity and quality of medical care and in perks for the hospital sta and directors. Another approach would be to model the behavior of a not-for-prot hospital as the result of a game among stakeholders including physicians, employees, mangers, and community leaders. Empirical comparisons of the behavior of for-prot and not-for-prot hospitals have reached mixed conclusions. Overall, the evidence suggests that their behavior is similar, especially where competition between them is strong. [626] Frank A. Sloan, Gabriel A. Picone, Donald H. Taylor Jr., and Shin-Yi Chou. Does Where You Are Admitted Make a Dierence? An Analysis of Medicare Data. In Garber [235], pages 125. [627] Frank A. Sloan, Gabriel A. Picone, Donald H. Taylor Jr., and Shin-Yi Chou. Hospital Ownership and Cost and Quality of Care: Is There a Dimes Worth of Dierence? Journal of Health Economics, 20(1):121, January 2001. Abstract: Nonprot organizations may predominate when output quality is dicult to monitor. Hospital care has this characteristic. This study compared program cost and quality of care for Medicare patients hospitalized following onset of four common conditions by hospital ownership. Payments on behalf of Medicare patients admitted to for-prot hospitals during the rst 6 months following a health shock were higher than for


those admitted to other hospitals. With quality measured in terms of survival, changes in functional and cognitive status, and living arrangements, we found no dierences in outcomes by hospital ownership. [628] Frank A. Sloan and Somchai Richupan. Short-Run Supply Responses of Professional Nurses: A Microanalysis. Journal of Human Resources, 10(2):24157, spring 1975. Using U.S. data for 1960, the authors estimate the wage elasticity of labor supply to be about 2.8 for married nurses and .18 or .28 for single nurses, depending on whether annual or weekly hours are measured. [629] Frank A. Sloan and Bruce Steinwald. Hospital Labor Markets. D. C. Heath, Lexington, Massachusetts, 1980. Real wages paid by hospitals are positively related to third-party reimbursement, real personal income per capita, and statutory minimum wages, but negatively related to certicate-of-need laws. Surprisingly, these wages are not much inuenced by local unemployment rates. Evidence regarding monopsony power is inconclusive; that lower RN wages are observed in relatively small cities with a highly concentrated hospital sector may only mean that prices of goods and services are lower there (p. 133). [630] Frank A. Sloan and Bruce Steinwald. Insurance, Regulation, and Hospital Costs. D. C. Heath, Lexington, Massachusetts, 1980. Concludes that private health insurance coverage has stimulated hospital costs in general and input use in particular (p. 192) and that regulatory programs such as CON laws did not do much to contain hospital costs during the rst half of the 1970s(p. 193). [631] Michael Smart and Mark Stabile. Tax Credits and the Use of Medical Care. Working Paper 9855, National Bureau of Economic Research, Cambridge, 2003. Abstract: Several recent proposals have advocated using the income tax system to collect user fees to help fund the health care system. While there is a considerable amount of research investigating both how individuals respond to tax incentives for employer provided health insurance and on the eects of user fees payable at the point of service on the use of health care services, there is limited evidence on how individuals respond to tax incentives when these are not realized until taxes are paid. This paper uses existing exemptions in the Canadian tax code that allow individuals to deduct the cost of health care or health insurance from their taxable income in order to identify the tax price elasticity of demand for health care when price changes are realized at the end of the tax year. Our results suggest that despite not realizing the tax benet at the time of purchase, individuals are quite responsive to changes in the tax price of health care. Our elasticity estimates for a wide range of health care products are well 224

within the range of traditional price elasticity estimates, including in particular our estimates for prescription drugs. We also nd some evidence that suggests individuals trade o risk sharing through traditional insurance companies with risk sharing through the tax code. That is, as the tax price of health care decreases, individuals spend more on health care, but spend less on health insurance. [632] Kenneth D. Smith, Irma Perez-Johnson, and Judith Wooldridge. Uncertainty and Forecasting Local Health Professional Shortages. Population Research and Policy Review, 19(5):477503, October 2000. Abstract: We used a utilization-based scenario-forecasting model to assess the evidence for current and future imbalances between health professional supply and demand in Memphis-Shelby County, Tennessee. The scenarioforecasting model, based on qualitative information collected from local health industry leaders, was shaped and limited by the types of current local area data available. This paper discusses methods that may prove useful to applied demographers making forecasts, given uncertain system change and poor data. [633] Mickey C. Smith, E. M. Kolassa, Greg Perkins, and Bruce Siecker. Pharmaceutical Marketing: Principles, Environment, and Practice. Haworth Press, Binghamton, 2002. This nontechnical text notes that many companies set promotion expenditures as a specied percentage of the previous years or predicted future sales (p. 301). The percentage may be based on historical information (p. 301) or imitation of the leader in the industry (p. 302). [634] Peter Smith, editor. Measuring Up: Improving Health System Performance in OECD Countries. OECD, Paris, 2002. Proceedings of a November 2001 conference sponsored by the OECD and Health Canada. Papers examine aspects of measuring and managing the performance of health care systems. [635] Trenton Smith. Reconciling Psychology with Economics - Obesity, Behavioral Biology, and Rational Overeating. Working Paper 2006-4, School of Economic Sciences, Washington State University, edu/PDFFiles/WorkingPapers/Reconciling_TGSmith.pdf, 2006. Abstract: The modern phenomenon of obesity is an archetypal example of a behavior whose explanation simultaneously falls within the purview of psychology, economics, and the biological sciences. While psychologists and advocates of public health have long viewed overeating as a weakness or disease in need of treatment, economists have pointed out that like any other consumer behavior choices about diet and exercise can be viewed from the perspective of rational decision theory, subject to the inuence of variation in price and income but not necessarily as a problem in need of a solution. Recent advances in our understanding of the physiological 225

mechanisms by which genes inuence behavior in modern socioeconomic environments have begun to point the way to a resolution to this debate. Drawing inspiration from the scientic literature on the neuroendocrinology of energy homeostasis, this paper reviews the empirical determinants of obesity in light of the biologists notion that humans and other animals evolved the ability to store body fat as an optimal response to the presence of starvation risk. This approach yields a powerful theoretical foundation, capturing such features of obesity as dynamic inconsistency, genetic variation, susceptibility to pharmaceutical intervention, and variation by season, socioeconomic status, and degree of nancial security. It also provides a framework for reconciling the conict between behavioral (descriptive) and neoclassical (prescriptive) economics. [636] Trenton Smith, Christiana Stoddard, and Michael Barnes. Why the Poor Get Fat: Weight Gain and Economic Insecurity. Working Paper 2007-16, School of Economic Sciences, Washington State University, http://www., 2007. Abstract: Something about being poor makes people fat. Though there are many possible explanations for the income-body weight gradient, we investigate a promising but little-studied hypothesis: that economic insecurity acts as an independent cause of weight gain. We use data on working age men from the 1979 National Longitudinal Survey of Youth (NLSY79) to identify the eect of various measures of economic insecurity on weight gain. We nd in particular that over the 12-year period between 1988 and 2000, a one point (0.01) increase in the probability of becoming unemployed causes weight gain over this period to increase by about one pound, and each realized drop in annual income results in an increase of about 5.5 pounds. The mechanism also appears to work in reverse, with health insurance and government social safety net payments leading to smaller weight gains. [637] Trenton G. Smith. The McDonalds Equilibrium: Advertising, Empty Calories, and the Endogenous Determination of Dietary Preferences. Social Choice and Welfare, 23(3):383413, December 2004. Abstract: A comparison of accepted nutritional advice with actual American dietary practice suggests that many people fail to eat well in spite of well-documented health consequences. Popular culture often labels the worst oenders as lacking in xed-control and many blame the aggressive advertising campaigns of the fast-food and snack-food industries for manipulating consumers into poor diets, but these conclusions are not easily reconciled with a neoclassical approach to economic decision theory. This essay considers the consumers diet problem in light of emerging evidence from the medical and behavioral sciences. In particular, it is argued that human evolution in the distant past resulted in an elegant solution to this problem (of search for a suitable diet in an uncertain environment), which any neoclassical economist would recognize. In modern 226

environments, however, the signals that formerly provided information in the consumers search problem are subject to manipulation by foodproducing rms. Conrmation by molecular biologists that many human responses to these signals are rmly encoded in our genes suggests a need to re-evaluate the welfare economics of the food industry. [638] Crystal M. Smith-Spangler, Jessie L. Juusola, Eva A. Enns, Douglas K. Owens, and Alan M. Garber. Population Strategies to Decrease Sodium Intake and the Burden of Cardiovascular Disease. Annals of Internal Medicine, 152(8):48187, W17073, April 20 2010. Abstract: Background: Sodium consumption raises blood pressure, increasing the risk for heart attack and stroke. Several countries, including the United States, are considering strategies to decrease population sodium intake. Objective: To assess the cost-eectiveness of 2 population strategies to reduce sodium intake: government collaboration with food manufacturers to voluntarily cut sodium in processed foods, modeled on the United Kingdom experience, and a sodium tax. Design: A Markov model was constructed with 4 health states: well, acute myocardial infarction (MI), acute stroke, and history of MI or stroke. Data Sources: Medical Panel Expenditure Survey (2006), Framingham Heart Study (1980 to 2003), Dietary Approaches to Stop Hypertension trial, and other published data. Target Population: U.S. adults aged 40 to 85 years. Time Horizon: Lifetime. Perspective: Societal. Outcome Measures: Incremental costs (2008 U.S. dollars), quality-adjusted life-years (QALYs), and MIs and strokes averted. Results of Base-Case Analysis: Collaboration with industry that decreases mean population sodium intake by 9.5% averts 513 885 strokes and 480 358 MIs over the lifetime of adults aged 40 to 85 years who are alive today compared with the status quo, increasing QALYs by 2.1 million and saving $32.1 billion in medical costs. A tax on sodium that decreases population sodium intake by 6million and saves $22.4 billion over the same period. Results of Sensitivity Analysis: Results are sensitive to the assumption that consumers have no disutility with modest reductions in sodium intake. Limitation: Eorts to reduce population sodium intake could result in other dietary changes that are dicult to predict. Conclusion: Strategies to reduce sodium intake on a population level in the United States are likely to substantially reduce stroke and MI incidence, which would save billions of dollars in medical expenses. [639] Alan T Sorensen. Insurer-Hospital Bargaining: Negotiated Discounts in Post-deregulation Connecticut. Journal of Industrial Economics, 51(4):46990, December 2003. Abstract: This paper uses unique data from the state of Connecticut to examine discounting patterns in the states hospital industry for the years following deregulation (19951998). The data provide a rare opportunity to study payer-level dierences in negotiated discounts for hospital services. In addition to presenting descriptive evidence on how discounts vary 227

across payers, payer types and hospital types, this study uses matched revenue data to analyze and empirically estimate the economic determinants of discount magnitudes. Payer size appears to aect bargaining power, but the economic signicance of the eect is small. Much larger than the eect of payer size is the inuence of payers abilities to move market share by channeling patients to hospitals with which favorable discounts have been negotiated. [640] S. B. Soumerai and J. Avorn. Economic and Policy Analysis of UniversityBased Drug Detailing. Medical Care, 24(4):31331, April 1986. Abstract: The cost-eectiveness of quality assurance programs is often poorly documented, especially for innovative approaches. The authors analyzed the economic eects of an experimental educational outreach program designed to reduce inappropriate drug prescribing, based on a four-state randomized controlled trial (N = 435 physicians). Primary care physicians randomized into the face-to-face group were oered two individualized educational sessions with clinical pharmacists, lasting an average of 18 minutes each, concerning optimal use of three drug groups that are often used inappropriately. After the program, expenditures for target drugs prescribed by these physicians to Medicaid patients decreased by 13%, compared with controls (P = 0.002); this eect was stable over three quarters. Implementation of this program for 10,000 physicians would lead to projected drug savings (to Medicaid only) of $2,050,000, compared with resource costs of $940,000. Net savings remain high, even after adjustment for use of substitution medications. Although there was a ninefold dierence in average preintervention prescribing levels between the highest and lowest thirds of the sample, all groups reduced target drug expenditures at the same rate. Targeting of higher-volume prescribers would thus further raise the observed benet-to-cost ratio from approximately 1.8 to at least 3.0. Net benets would also increase further if non-Medicaid savings were added, or if the analysis included quality-of-care considerations. Although print materials alone may be marginally cost-eective, print plus faceto-face approaches oer greater net benets. The authors conclude that a program of brief, face-to-face detailing visits conducted by academic rather than commercial sources can be a highly cost-eective method for improving drug therapy decisions. Such an approach makes possible the enhancement of physicians clinical expertise without relying on restriction of drug choices. [641] Joanne Spetz. The Eects of Managed Care and Prospective Payment on the Demand for Hospital Nurses: Evidence from California. Health Services Research, 34(5):9931010, December 1999. OBJECTIVE: To examine the eects of managed care and the prospective payment system on the hospital employment of registered nurses (RNs), licensed practical nurses (LPNs), and aides. DATA SOURCES: Hospital-level data from Californias Oce of Statewide Health Planning 228

and Development (OSHPD) Hospital Disclosure Reports from 1976/1977 through 1994/1995. Additional information is extracted from OSHPD Patient Discharge Data. STUDY DESIGN: Multivariate regression equations are used to estimate demand for nurses as a function of wages, hospital output, technology level, and ownership. Separate equations are estimated for RNs, LPNs, and aides for all daily services and for medical-surgical units. Instrumental variables are used to correct for the endogeneity of wages, and xed eects are included to control for unobserved dierences across hospitals. PRINCIPAL FINDINGS: HMOs are associated with a lower use of LPNs and aides, and HMOs do not have a statistically signicant eect on the demand for RNs. Managed care has a smaller eect on nurse stang in medical-surgical units than in daily service units as a whole. The prospective payment system does not have a statistically signicant eect on nurse stang. CONCLUSIONS: HMOs have aected nursing employment both because HMOs have reduced the number of discharges and because of a direct relationship between HMO penetration and the demand for LPNs and aides. Contrary to press reports, LPNs and aides have been aected more by HMOs than have registered nurses. [642] Joanne Spetz and Ruth Given. The Future of the Nurse Shortage: Will Wage Increases Close the Gap? Health Aairs, 22(6):199206, NovemberDecember 2003. Abstract: In recent years the U.S. media have been reporting a shortage of registered nurses (RNs). In theory, labor-market shortages are selfcorrecting; wage increases will bring labor markets into equilibrium, and policy intervention is not necessary. In this paper we develop a simple forecasting model and ask the question: How high must RN wages rise in the future to end the RN shortage? We nd that ination-adjusted wages must increase 3.23.8 percent per year between 2002 and 2016, with wages cumulatively rising up to 69 percent, to end the shortage. Total RN expenditures would more than double by 2016. [643] Lisa D. Spiller and Walter W. Wymer, Jr. Physicians Perceptions and Uses of Commercial Drug Information Sources: An Examination of Pharmaceutical Marketing to Physicians. Health Marketing Quarterly, 19(1):91106, 2001. Using data collected from physicians at a medical conference , the authors examined physicians responses to dierent promotional tactics . . . used by the pharmaceutical industry and what information sources inuenced physicians drug choices (p. 91). They report that 84% of physicians often use drug samples and 98% of physicians say that previous experience with drugs has considerable inuence on their prescription decisions. The authors conclude that samples are eective in promoting prescriptions.


[644] Matthias Staat. The Eciency of Treatment Strategies of General Practitioners: A Malmquist Index Approach. European Journal of Health Economics, 4(3):23238, September 2003. Abstract: It is widely recognized that general practitioners (GPs) play a key role in determining the use of resources for ambulatory care. In addition to the GPs working hours, these resources consist of the work of specialists and that of hospital physicians treating the GPs referrals and the cost of medication and other measures induced by the GP. Different systems of remuneration dier in their power to lead to ecient service provision. This contribution provides empirical evidence on the efciency of service provision by Austrian GPs. The analysis is based on data for some 600 GPs. The data comprise sucient information to assess the GPs eciency with regard to the way they manage their cases. Data Envelopment Analysis, a nonparametric technique, is used to estimate the production frontier. The results suggest that almost one-half of the GPs in the sample have a relative eciency of 0.8 or less. A Malmquist decomposition of the productivity change reveals a decline in productivity. This is due to a pronounced negative shift of the frontier whereas individual eciency rises against the weaker benchmark of the new frontier. [645] Douglas Staiger, Joanne Spetz, and Ciaran Phibbs. Is There Monopsony in the Labor Market? Evidence from a Natural Experiment. NBER Working Paper No. 7258, July 1999. A variety of recent theoretical and empirical advances have renewed interest in monopsonistic models of the labor market. However, there is little direct empirical support for these models, even in labor markets that are textbook examples of monopsony. We use an exogenous change in wages at Veterans Aairs hospitals as a natural experiment to investigate the extent of monopsony in the nurse labor market. In contrast to much of the prior literature, we estimate that labor supply to individual hospitals is quite inelastic, with short-run elasticity around 0.1. We also nd that non-VA hospitals responded to the VA wage change by changing their own wages. [646] A. Dennis Stant, Elisabeth M. TenVergert, Herman Kluiter, Henk Jan Conradi, Annet Smit, and Johan Ormel. Cost-Eectiveness of a Psychoeducational Relapse Prevention Program for Depression in Primary Care. Journal of Mental Health Policy and Economics, 12(4):195204, December 2009. Abstract: Major depression is a prevalent mental disorder with a high risk of relapses. This study assessed the cost-eectiveness of a psychoeducational prevention program (PEP) aimed at depression relapses in primary care. In total 267 patients were included in the study and randomly assigned to usual care (UC), PEP, psychiatric consultation followed by PEP, or cognitive behavioral therapy followed by PEP. Mean total costs during the 36 months of the study were euro 8,200 in the UC group, euro 9,816 in 230

the PEP group, euro 9,844 in the psychiatrist-enhanced PEP group, and euro 9,254 in the CBT-enhanced PEP group. Results of the primary outcome measure were less positive for PEP than for UC, but slightly better in the enhanced PEP groups. The basic PEP intervention was not costeective compared to UC. However, results implied that UC enriched with CBT (but without PEP) might be cost-eective in preventing relapses in primary care patients with depression. [647] Michele Staton, Carl Leukefeld, T. K. Logan, Rick Zimmerman, Don Lynam, Rich Milich, Cathy Martin, Karen McClanahan, and Richard Clayton. Gender Dierences in Substance Use and Initiation of Sexual Activity. Population Research and Policy Review, 18(1-2):89100, April 1999. Abstract: Even though widespread eorts have focused on educating young adults about HIV and AIDS, many individuals continue to engage in behaviors that place them at risk. These behaviors include frequent experimentation with alcohol and other drugs prior to sex, engaging in sexual activity with dierent partners, and inconsistent safe sex practices (Butcher et al. 1991). The combination of these risky behaviors causes increased concern about the spread of HIV among those of college age. This study focused on two behaviors by examining the relationship between substance use during adolescence and early initiation of sexual activity in a sample of 950 subjects aged 19-21 in a mid-sized southern city. Results indicate that early use of alcohol and marijuana relates to earlier initiation of sexual activity and subsequent risky sexual behavior among young adults. Also, gender dierences were observed for frequent users of marijuana and alcohol with males engaging in riskier sexual practices. Recommendations for interventions are made. [648] Richard H. Steckel. Biological Measures of the Standard of Living. Journal of Economic Perspectives, 22(1):12952, winter 2008. The author examines data on life expectancy, morbidity, stature, and certain features of skeletal remains as they relate to levels and changes in human well-being (p. 129). [649] Michael A. Steinman, Ralph Gonzales, Jerey A. Linder, and C. Seth Landefeld. Changing Use of Antibiotics in Community-Based Outpatient Practice, 19911999. Annals of Internal Medicine, 138(7):525533, 1 April 2003. Abstract: Background: Judicious use of antibiotics can slow the spread of antimicrobial resistance. However, overall patterns of antibiotic use among ambulatory patients are not well understood. Objective: To study patterns of outpatient antibiotic use in the United States, focusing on broad-spectrum antibiotics. Design: Cross-sectional survey in three 2year periods (19911992, 19941995, and 19981999). Setting: The National Ambulatory Medical Care Survey, a nationally representative sample of community-based outpatient visits. Patients: Patients visiting 231

community-based outpatient clinics. Measurements: Rates of overall antibiotic use and use of broad-spectrum antibiotics (azithromycin and clarithromycin, quinolones, amoxicillin-clavulanate, and second- and thirdgeneration cephalosporins). All comparisons were made between the rst study period (19911992) and the nal study period (19981999). Results: Between 19911992 and 19981999, antibiotics were used less frequently to treat acute respiratory tract infections, such as the common cold and pharyngitis. However, use of broad-spectrum agents increased from 24% to 48% of antibiotic prescriptions in adults (P < 0.001) and from 23% to 40% in children (P < 0.001). Use of broad-spectrum antibiotics increased across many conditions, increasing two- to threefold as a percentage of total antibiotic use for a variety of diagnoses in both adults and children. By 19981999, 22% of adult and 14% of pediatric prescriptions for broadspectrum antibiotics were for the common cold, unspecied upper respiratory tract infections, and acute bronchitis, conditions that are primarily viral. Conclusions: Antibiotic use in ambulatory patients is decreasing in the United States. However, physicians are increasingly turning to expensive, broad-spectrum agents, even when there is little clinical rationale for their use. [650] Michael A. Steinman, Seth Landefeld, and Ralph Gonzales. Predictors of Broad-Spectrum Antibiotic Prescribing for Acute Respiratory Tract Infections in Adult Primary Care. Journal of the American Medical Association, 289(6):719725, 12 February 2003. Abstract: Context Broad-spectrum antibiotics are commonly prescribed, but little is known about the physicians who prescribe and the patients who take these agents. Objective To identify factors associated with prescribing of broad-spectrum antibiotics by physicians caring for patients with nonpneumonic acute respiratory tract infections (ARTIs). Design, Setting, and Patients Cross-sectional study using data from the National Ambulatory Medical Care Survey between 1997 and 1999. Information was collected on a national sample of 1981 adults seen by physicians for the common cold and nonspecic upper respiratory tract infections (URTIs) (24%), acute sinusitis (24%), acute bronchitis (23%), otitis media (5%), pharyngitis, laryngitis, and tracheitis (11%), or more than 1 of the above diagnoses (13%). Main Outcome Measure Prescription of broad-spectrum antibiotics, dened for this study as quinolones, amoxicillin/clavulanate, second- and third-generation cephalosporins, and azithromycin and clarithromycin. Results Antibiotics were prescribed to 63% of patients with an ARTI, ranging from 46% of patients with the common cold or nonspecic URTIs to 69% of patients with acute sinusitis. Broad-spectrum agents were chosen in 54% of patients prescribed an antibiotic, including 51% of patients with the common cold and nonspecic URTIs, 53% with acute sinusitis, 62% with acute bronchitis, and 65% with otitis media. Multivariable analysis identied several clinical and nonclinical factors associated with choice of a broad-spectrum agent. After adjusting for diagnosis and 232

chronic comorbid illnesses, the strongest independent predictors of broadspectrum antibiotic prescribing were physician specialty (odds ratio [OR], 2.4; 95% condence interval [CI], 1.6-3.5 for internal medicine physicians compared with general and family physicians) and geographic region (OR, 2.6; 95% CI, 1.4-4.8 for Northeast and OR, 2.4; 95% CI, 1.4-4.2 for South [both compared with West]). Other independent predictors of choosing a broad-spectrum agent included black race, lack of health insurance, and health maintenance organization membership, each of which was associated with lower rates of broad-spectrum prescribing. Patient age, sex, and urban vs rural location were not signicantly associated with prescribing choice. Conclusions Broad-spectrum antibiotics are commonly prescribed for the treatment of ARTIs, especially by internists and physicians in the Northeast and South. These high rates of prescribing, wide variations in practice patterns, and the strong association of nonclinical factors with antibiotic choice suggest opportunities to improve prescribing patterns. [651] Glenda Stone and Walter O. Simmons. Relative Eciency in the Spatial Distribution of Physicians Services. Review of Regional Studies, 32(2):32534, summerfall 2002. Abstract: This paper uses hearth status outputs with Data Envelopment Analysis to assess the relative eciency of the use of physician labor inputs. The trends in physician population growth are examined to see if there is a link between physician population ratios and the health status of the communities they serve. Input eciency scores are analyzed for Michigan counties with comparable population densities over a 10-year period. Overall, approximately 47 percent of Michigan counties operated with relative input eciency during the decade. In addition to assigning an eciency rating, Data Envelopment Analysis also identies the eciency reference set. The eciency reference set can be used to develop a composite unit that produces the same output level as the inecient unit, employing the most ecient combination of inputs. [652] Wolfgang Stroebe. Dieting, Overweight, and Obesity: Self-Regulation in a Food-Rich Environment. American Psychological Association, Washington, DC, 2008. Abstract (from the jacket): Dieting, Overweight, and Obesity: SelfRegulation in a Food-Rich Environment examines why self-regulation of weight is so dicult for many people. In light of the fact that overweight and obesity have been increasing so dramatically that the World Health Organization has declared a global epidemic, Wolfgang Stroebe explores the genetic, environmental, and psychological inuences on weight gain. He details the psychological and physical consequences of being overweight and explores the various treatment and prevention plans for obesity. In reviewing psychological theories of weight regulation, Stroebe argues that they do not take into account a major obstacle for dieting, namely the desire to enjoy palatable food. He then presents a goal conict theory, 233

which assumes that chronic dieters who have diculties in controlling their weight often disregard bodily cues of hunger and satiety, not because they are unable to recognize them but because they do not want to recognize them. Their eating behavior is dominated by a conict between two incompatible goals: the goal of enjoying palatable food and the goal of losing weight. Although the dieting goal normally curbs their desire for eating enjoyment and helps to control their eating, this fragile balance is easily disturbed by attractive food cues. The theory proposes that exposure to palatable food temporarily inhibits thoughts about dieting in chronic dieters and leads to overeating. This theory, which is supported by extensive research, also integrates earlier theories of the self-regulation of eating. This book gives readers a comprehensive understanding of the issues involving weight gain and dieting. Psychologists and medical professionals in the eld of weight management will nd this book to be an indispensable resource. [653] William J. Strouse and Jean Harris. A Cost/Benet Analysis of Providing Tax-Exempt Status to Non-Prot Hospitals. Technical report, SSRN Electronic Library, 1997. Studying four non-prot hospitals in Pennsylvania (p. 13), the authors nd that each received more benet from their tax exemptions than the amount of charity care they provided to their communities (p. 15). [654] Elena Strukova, Alexander Golub, and Anil Markandya. Air Pollution Costs in Ukraine. working paper 2006.120, Fondazione Eni Enrico Mattei, Milano, September 2006. Available from http://www.feem. it/NR/rdonlyres/B16C9BB4-9CA8-4F18-9DB5-64CD9DF92292/2115/ 12006.pdf. Abstract: The paper presents estimation of the health losses from urban air pollution in Ukraine. The methodology developed by US EPA and adjusted in Russia for Eastern European transition countries was applied for health risk assessment. PM2.5 was identied as the major source of human health risk, based on experience from the Russian studies. In the absence of reliable computed concentrations of PM2.5, the study was based on monitoring data of total suspended particle (TSP) emissions in Ukraine. Additional cases of mortality and morbidity were calculated based on reporting data on TSP concentration that was recalculated into PM2.5. Then the concentration-response function was applied to estimate individual risk. Next, individual risk was applied to the population exposed to the concentration reported for each city included in the analysis (we selected most polluted cities). For each city we considered individual data on baseline mortality and morbidity and population structure. In total, air pollution related mortality represents about 6 percent of total mortality in Ukraine. In Russia the corresponding indicator totals about 4 percent. The relative mortality risk attributed to air pollution calculated per 100 000 population in both countries is about 55-59 cases. Since ap234

plied method is sensitive to the primary data uncertainties we conducted sensitivity analysis applying Monte-Carlo method. Economic damage related to mortality risk was estimated at about 4 percent of GDP. There was no relevant WTP study in Ukraine therefore we applied the benettransfer method in order to estimate VSL, since mortality attributed to air pollution is major component of health losses (about 94 percent). In order to compare and aggregate mortality and morbidity risks we recalculated them in DALY. Then morbidity represents about 30 percent of total air pollution health load. Data on baseline morbidity is less reliable than data on baseline mortality; therefore the morbidity risk estimates are more uncertain than mortality estimates. It is likely that morbidity risk is underestimated. Regardless of uncertainties mentioned above and some problems with reported data we can conclude that the mortality risk attributed to air pollution is signicant. Therefore, costs of air pollution in Ukraine are sizable and in the nearest future may oset the economic growth. Recovery of the Ukrainian economy based on restoration of polluting industries may lead to stagnation since mortality and morbidity risks not only puts burden on the economy, but also reduce labor force. [655] Daniel Sullivan. Monopsony Power in the Market for Nurses. Journal of Law & Economics, 32(2):S135S178, October 1989. Using U.S. data for 197985, the author estimates that the labor supply elasticity for RNs and LPNs employed by hospitals was 1.261.41 over a one-year horizon, 2.713.05 over a two year horizon, and 3.763.89 over a three year horizon. Those gures are elasticities of supply to a hospital that changes its wages while other hospitals in the same service area hold theirs constant. The elasticities when all hospitals change their wages are smaller: 1.071.33 over one year, .5612.68 over two, and .2182.64 over three. [656] Shirley Svorny. Should We Reconsider Licensing Physicians? Contemporary Policy Issues, 10(1):3138, January 1992. Abstract: This article focuses on the role of medical licensure in motivating physician service quality. It characterizes recent changes in health care markets as reducing the positive contribution of licensure to social welfare. These changes include increased hospital and health maintenance organization (HMO) liability, incentives to shift to for-prot provision of care, increased use of brand names, direct employment of physicians, and the establishment of national data banks that keep records of physicians past performance. Also, the article argues that recent and expected pressures on physician earnings reduce the incentive eects of existing state licensing arrangements. [657] Shirley V. Svorny. Physician Licensure: A New Approach to Examining the Role of Professional Interests. Economic Inquiry, 25(3):497509, July 1987.


Abstract: For years, economists have debated the extent to which organized medicine has beneted from medical licensing restrictions. This debate has been hampered by the lack of a viable alternative hypothesis. This paper provides an alternative hypothesis and suggests an empirical test which focuses on the relationship between licensure restrictions and the level of consumption of physician services across states. The evidence suggests that in the mid-1960s the interests of organized medicine dominated those of consumers in inuencing the medical regulatory supply process [658] J. William Thomas, Kyle L. Grazier, and Kathleen Ward. Economic Proling of Primary Care Physicians: Consistency among Risk-Adjusted Measures. Health Services Research, 39(4, part 1):9851003, August 2004. Abstract: Patient risk scores obtained with six proling risk-adjustment methodologies were used in conjunction with claims cost tabulations to measure practice eciency of all primary care physicians who managed 25 or more members of an HMO. Although we observed moderate consistency among dierent risk-adjusted PCP rankings, consistency of measures does not prove that practice eciency rankings are valid, and health plans should be careful in how they use practice eciency information. Indicators of practice eciency should be based on the standardized cost dierence, which controls for number of patients in a panel, instead of O/E ratio, which does not. [659] Melissa Thomasson. Health Insurance in the United States., April 18 2003. Abstract: This article describes the development of the U.S. health insurance system and its growth in the twentieth century. It examines the roles of important factors including medical technology, hospitals and physicians, and government policy culminating in the development of Medicare and Medicaid. [660] Melissa Thomasson. The Importance of Group Coverage: How Tax Policy Shaped U.S. Health Insurance. American Economic Review, 93(4):1373 84, September 2003. The author notes that a tax policy rst introduced in 1943 and codied in 1954 . . . exempts employer contributions to employee health plans from taxable employee income (p. 1373). She argues that by lowering the after-tax price of health insurance, the change in tax policy led workers to purchase more group health insurance coverage from their employers and encouraged the expansion of employment-based, group health insurance (p. 1374). [661] Lindsay A. Thompson, David C. Goodman, and George A. Little. Is More Neonatal Intensive Care Always Better? Insights from a Cross-National Comparison of Reproductive Care. Pediatrics, 109(6):103643, June 2002.


Abstract: BACKGROUND: Despite high per capita health care expenditure, the United States has crude infant survival rates that are lower than similarly developed nations. Although dierences in vital recording and socioeconomic risk have been studied, a systematic, cross-national comparison of perinatal health care systems is lacking. OBJECTIVE: To characterize systems of reproductive care for the United States, Australia, Canada, and the United Kingdom, including a detailed analysis of neonatal intensive care and mortality. DESIGN/METHODS: Comparison of selected indicators of reproductive care and mortality from 1993 2000 through a systematic review of journal and government publications and structured interviews of leaders in perinatal and neonatal care. RESULTS: Compared with the other 3 countries, the United States has more neonatal intensive care resources yet provides proportionately less support for preconception and prenatal care. Unlike the United States, the other countries provided free family planning services and prenatal and perinatal physician care, and the United Kingdom and Australia paid for all contraception. The United States has high neonatal intensive care capacity, with 6.1 neonatologists per 10 000 live births; Australia, 3.7; Canada, 3.3; and the United Kingdom, 2.7. For intensive care beds, the United States has 3.3 per 10 000 live births; Australia and Canada, 2.6; and the United Kingdom, 0.67. Greater neonatal intensive care resources were not consistently associated with lower birth weight-specic mortality. The relative risk (United States as reference) of neonatal mortality for infants < 1000 g was 0.84 for Australia, 1.12 for Canada, and 0.99 for the United Kingdom; for 1000 to 2499 g infants, the relative risk was 0.97 for Australia, 1.26 for Canada, and 0.95 for the United Kingdom. As reported elsewhere, low birth weight rates were notably higher in the United States, partially explaining the high crude mortality rates. CONCLUSIONS: The United States has signicantly greater neonatal intensive care resources per capita, compared with 3 other developed countries, without having consistently better birth weight-specic mortality. Despite low birth weight rates that exceed other countries, the United States has proportionately more providers per low birth weight infant, but oers less extensive preconception and prenatal services. This study questions the eectiveness of the current distribution of US reproductive care resources and its emphasis on neonatal intensive care. [662] James Thornton. Are Malpractice Insurance Premiums a Tort Signal That Inuence Physician Hours Worked? Economics Letters, 55(3):403 07, September 1997. Abstract: This study reports some new evidence on the impact of malpractice insurance costs on physician labor supply behavior. A strategy is proposed to test for the existence of malpractice premium tort signal eects on physician hours worked.


[663] James Thornton. The Labour Supply Behaviour of Self-Employed Solo Practice Physicians. Applied Economics, 30(1):8594, January 1998. [664] Norman K. Thurston. Physician Market PowerEvidence from the Allocation of Malpractice Premiums. Economic Inquiry, 39(3):48798, July 2001. Abstract: Based on evidence from variations in malpractice premiums, physicians have local market power, at least in some dimensions. It is observed that higher-cost physicians pass on a signicant portion of idiosyncratic costs to patients as higher prices. I test two hypothesized sources of this market power: barriers to entry from specialization and relatively inelastic rm-level demand for certain services. Examining the relationship of physician-specic malpractice premiums to fees, I nd no observable dierence in the ability of surgeons and nonsurgeons to pass on these costs; however, both types of physicians pass them on more to surgical than to nonsurgical patients. [665] Joe Timmerman. Determinants of Access to Job-Related Health Insurance. Eastern Economic Journal, 31(4):67180, fall 2005. The author nds that access to job-related health insurance is positively related to hours worked and (in the earlier of two periods studied) union membership, but negatively related to having children at home. [666] E. Toubes, K. Singh, D. Yin, R. Lyu, N. Glick, L. Russell, S. Mohapatra, N. Saghal, R. A. Weinstein, and G. Trenholme. Risk Factors for Antibiotic-Resistant Infection and Treatment Outcomes among Hospitalized Patients Transferred from Long-Term Care Facilities: Does Antimicrobial Choice Make a Dierence? Clinical Infectious Diseases, 36(6):724 30, March 2003. Abstract: A prospective observational study of 153 patients transferred from long-term care facilities and admitted to acute-care hospitals who had microbiologically conrmed infections was undertaken to determine the risk factors, outcomes, and resource use associated with isolation of antibiotic-resistant bacteria (ARB). Eighty patients (52%) were infected with ARB. In multivariable logistic analysis, the presence of a feeding tube (odds ratio, 3.0) or polymicrobial infection (odds ratio, 4.6) was associated with isolation of ARB. Forty-nine percent of patients infected with ARB received an initial antibiotic regimen to which their isolate was not susceptible. Fifty-one percent of all patients had a change in their antibiotic regimen during their hospital course. For these patients, length of stay, number of days of antibiotic therapy, and cost of hospitalization were signicantly higher. However, neither infection with ARB nor appropriateness of initial treatment regimen was signicantly related to outcome or resource use. [667] Leonardo Trasande, Philip J. Landrigan, and Clyde Schechter. Public health and economic consequences of methyl mercury toxicity to the de238

veloping brain. Environmental Health Perspectives, 113(5):5906, May 2005. Abstract: Methyl mercury is a developmental neurotoxicant. Exposure results principally from consumption by pregnant women of seafood contaminated by mercury from anthropogenic (70%) and natural (30%) sources. Throughout the 1990s, the U.S. Environmental Protection Agency (EPA) made steady progress in reducing mercury emissions from anthropogenic sources, especially from power plants, which account for 41% of anthropogenic emissions. However, the U.S. EPA recently proposed to slow this progress, citing high costs of pollution abatement. To put into perspective the costs of controlling emissions from American power plants, we have estimated the economic costs of methyl mercury toxicity attributable to mercury from these plants. We used an environmentally attributable fraction model and limited our analysis to the neurodevelopmental impacts specically loss of intelligence. Using national blood mercury prevalence data from the Centers for Disease Control and Prevention, we found that between 316,588 and 637,233 children each year have cord blood mercury levels > 5.8 microg/L, a level associated with loss of IQ. The resulting loss of intelligence causes diminished economic productivity that persists over the entire lifetime of these children. This lost productivity is the major cost of methyl mercury toxicity, and it amounts to $8.7 billion annually (range, $2.2-43.8 billion; all costs are in 2000 US$). Of this total, $1.3 billion (range, $0.1-6.5 billion) each year is attributable to mercury emissions from American power plants. This signicant toll threatens the economic health and security of the United States and should be considered in the debate on mercury pollution controls. [668] Jack E. Triplett, editor. Measuring the Prices of Medical Treatments. Brookings Institution, Washington, D.C., 1999. [669] Wei-Der Tsai and I-hsin Li. Hospital Nonprice Competition and Market Structure: An Empirical Study of Hospitals Acquisition of High-Tech Medical Equipment. Academia Economic Papers, 30(1):5778, March 2002. In Chinese. With English summary. Abstract: Competition among hospitals by means of acquiring hi-tech medical equipment, the so-called medical arms race, has been a focus for research in health economics literature. The importance of the issue arises from its implications on medical expenditure. A medical arms race may lead to a surge in medical expenditure and thereby prompting a waste of resources. The purpose of this research is to empirically examine the medical arms race phenomena and its relationship with the market structure. More specically, we test whether or not the degree of competition in the local medical market has a positive impact on a hospitals acquisition of hi-tech medical equipment. The empirical work is based on a panel of hospitals in Taiwan for the period 19931999. A xed eects negative binomial regression model is set up as a vehicle for our empirical work. 239

We nd that the number of pieces of hi-tech equipment that a hospital has is positively associated with the degree of market competition. [670] Lynn Unruh, C. Allison Russo, H. Joanna Jiang, and Carol Stocks. Can State Databases Be Used to Develop a National, Standardized Hospital Nurse Stang Database? Western Journal of Nursing Research, 31(1):66 88, Februrary 2009. Abstract: This study evaluates the feasibility of building a national, standardized hospital nurse stang database from state data collections in order to improve the availability of valid, reliable nursing stang measures and to allow linkage to other databases. A state-by-state review of public and private reporting systems reveals that 25 states collect some form of nurse stang data. Out of those, 12 states make complete, usable data available, and 5 additionally meet data quality and specicity criteria. Our review nds that there is little consistency in the content of the RN measure, which makes it dicult to conduct multistate research on nurse stang topics. We recommend the long-term development of two types of nurse stang databases: a state-by-state collection, and a standardized, multistate database with uniform data elements across states. This mixed approach will provide a comprehensive source of nurse stang data to researchers with diverse analytic needs. [671] Rhema Vaithianathan. Supply-Side Cost Sharing When Patients and Doctors Collude. Journal of Health Economics, 22(5):76380, September 2003. Abstract: Doctors and patients generally share a common interest in maximizing the quality of care. Purchasers of health care on the other hand, desire cost-eective levels of quality. We consider the purchasers problem of implementing supply-side cost sharing when patients and doctors are asymmetrically informed and can collude to advance their own joint interests in maximal quality. Such collusion can be interpreted as the sort of informal side-payments that are observed in transitional and developing economies. It may also be interpreted as a formal (but unregulated) case of physician balance billing. We show that both collusion-proof schemes and collusion-inducing schemes can implement cost-eective care. A number of policy implications are discussed. In particular, more permissive advertising of referred services (such as pharmaceuticals) and more informed patients will increase the cost of implementing collusion-proof mechanisms. If patients have a high willingness to pay or are informed, then allowing collusion may be preferred. [672] Rene C. J. A. Van Vliet. Eects of Price and Deductibles on Medical Care Demand, Estimated from Survey Data. Applied Economics, 33(12):1515 24, October 2001. Abstract: This paper estimates the price sensitivity of medical care demand from cross-sectional survey data by relating medical consumption to approximated copayment rates resulting from deductibles. Instead of 240

the deductibles itself, a transformation is used that better takes into account that expected expenditures at policy level play an important role in the reaction of consumers with regard to their deductible. This transformation approximates the average expected copayment rate, that is, the portion of expenditures that one may expectat the beginning of the yearto pay out-of-pocket, given the deductible and given the expected expenditures at policy level. The principal nding is an estimated price elasticity of medical care demand of -0.079. The highest price sensitivity was found for physiotherapy visits (-0.12) and general practitioner visits (-0.085), and the lowest for specialist visits (-0.074) and prescription drugs (-0.056). Hospital care demand appeared not to be aected by deductibles. [673] A. H. van Zon and G. J. Kommer. Patient Flows and Optimal Health-Care Resource Allocation at the Macro-level: A Dynamic Linear Programming Approach. Health Care Management Science,, 2(2):8796, May 1999. Abstract: In this paper we present a deterministic allocation model in which a patients health-state changes due to health-care interventions. This change in a patients health-state has a direct eect on the patients expected future need for health-care. Hence, current allocation decisions determine to some extent the set of possible allocation decisions in the future. In order to take this into account we have formulated a dynamic linear programming version of a patient-ow system. This enables us to describe the eects of using dierent objective functions on the optimum level and composition of the provision of health services within given resource constraints. The linear programming approach enables the quantication of the health eects and therefore the desirability of the (re)allocation of health-care resources. We provide some simulation results in order to illustrate the working of the model. [674] David J. Vanness. A Structural Econometric Model of Family Valuation and Choice of Employer-Sponsored Health Insurance in the United States. Health Economics, 12(9):77190, September 2003. Abstract: This paper estimates a fully structural unitary household model of employment and health insurance decisions for dual wage-earner families with children in the United States, using data from the 1987 National Medical Expenditure Survey. Families choose hours of work and the breakdown of compensation between cash wages and health insurance benets for each wage earner in order to maximize expected utility under uncertain need for medical care. Heterogeneous demand for the employer-sponsored health insurance is thus generated directly from variations in health status and earning potential. The paper concludes by discussing the benets of using structural models for simulating welfare eects of insurance reform relative to the costly assumptions that must be imposed for identication. [675] Patricia Siqueira Varela, Gilberto de Andrade Martins, and Luiz Paulo Lopes Favero. Production Eciency and Financing of Public


Health: An Analysis of Small Municipalities in the State of Sao Paulo Brazil. Health Care Management Science, 13(2):11223, June 2010. Abstract: This paper measured the variations in performance of small municipalities in the State of Sao Paulo, Brazil, regarding the technical eciency in the use of public funds in public primary health care actions concerning the funding prole, in a scenario of scal federalism. Technical eciency is one of the parameters of evaluation of public sector performance and was measured by means of data envelopment analysis (DEA). The correlation analysis of DEA score was used to verify possible associations between technical eciency and the funding prole of expenses with health care. The results showed that 6.41% of the municipalities were considered ecient. They also showed that the level of municipality dependence to inter-governmental general purpose grants and the national health funding specic purpose grants have negative correlation with eciency scores. [676] M. S. Vaughan-Sarrazin, E.L. Hannan, C. J. Gormley, and G. E. Rosenthal. Mortality in Medicare Beneciaries Following Coronary Artery Bypass Graft Surgery in States with and Without Certicate of Need Regulation. Journal of the American Medical Association, 288(15):18591866, October 16 2002. Abstract: Context: Certicate of need regulation was designed to control health care costs by preventing health care facilities from expanding unnecessarily. While there have been several studies investigating whether these regulations have aected health care investment, few have evaluated the relationship between certicate of need regulation and quality of care. Objective: To compare risk-adjusted mortality and hospital volumes for coronary artery bypass graft (CABG) surgery in states with and without certicate of need regulation. Design, Setting, and Participants: Retrospective cohort study of 911407 Medicare beneciaries aged 65 years or older, who underwent CABG surgery between 1994 and 1999 in 1063 US hospitals. Main Outcome Measures: States (and the District of Columbia) with continuous (n=27), none (n=18), or intermittent (n=6) certicate of need regulation; mortality (in-hospital or within 30 days of CABG surgery) rates; and mean annual hospital volumes for CABG surgery. Results: Unadjusted mortality was 5.1% in states without certicate of need regulation compared with 4.4% in states with continuous regulation, and 4.3% in states with intermittent certicate of need regulation (P < .001 for each comparison). Adjusting for demographic and clinical factors, mortality remained higher in states without certicate of need regulation compared with states with continuous certicate of need regulation (odds ratio [OR], 1.22; 95% condence interval [CI], 1.15-1.28; P < .001). Using the same groups for comparison, the mean annual hospital volume for CABG surgery was 84% lower in states without certicate of need regulation (104 vs 191; P < .001) and more patients underwent CABG surgery in low-volume hospitals (<100 procedures annually) (30% 242

vs 10% for states with continuous certicate of need programs; P < .001). Following the repeal of certicate of need regulation in states categorized as intermittent, the percentage of patients undergoing CABG surgery in low-volume hospitals tripled. Conclusions: Mortality rates for Medicare patients undergoing CABG surgery were higher in states without certicate of need regulation. Repeal of certicate of need regulations during the study period was associated with declines in hospital volume for CABG surgery. [677] Nerina Vecchio, Paul A. Scuham, and Michael F. Hilton. Mental Health and Hours Worked among Nurses. Australian Journal of Labour Economics, 12(3):299320, 2009. Accounting for the endogenous relationship between health and hours worked, the goal of this study was to estimate the eect of mental health on the working hours of nursing professionals. The impact of hours worked on mental health was also investigated. The data was based on the Work Outcomes Research Cost-Benet (WORC) Survey conducted in Australia during 2005 and 2006. The study sample of 6,086 nurses represented 15 per cent of nurses in Queensland. Analysis involved the use of simultaneous equations estimated with generalized method of moments. The analysis of the data identied an endogenous relationship between mental health and hours of labour supplied. The ndings revealed that among Queensland nurses, a deterioration of mental health was associated with a reduction in hours worked and increasing hours worsened mental health. The ndings imply that an eective approach to meeting nursing shortages should include strategic attempts to improve the mental health capital of nursing sta. Previous studies have shown resilience training in the workplace as eective in increasing the supply of labor. [678] John A. Vernon. The Relationship between Price Regulation and Pharmaceutical Prot Margins. Applied Economics Letters, 10(8):46770, June 2003. Abstract: In the USA, prescription drug prices are largely unregulated. In most other countries, however, drug prices are regulated. This is typically accomplished directly through price controls (e.g. France and Italy), indirectly through limits on reimbursement under social insurance schemes (e.g. Germany and Japan), or indirectly through prot controls (e.g. the United Kingdom). Using current data on rm pre-tax pharmaceutical prot margins and the proportion of rm pharmaceutical sales subjected to price regulation (i.e., non-US pharmaceutical sales), it is demonstrated that price regulation may be exerting a substantially negative inuence on pharmaceutical price-cost margins. The analysis nds that pharmaceutical price-cost margins in the USA are, on average, approximately four times higher than non-US pharmaceutical price-cost margins. While price regulation may not be the only factor responsible for this striking dierence in price-cost margins, it is likely to be a prominent factor. 243

[679] W. Kip Viscusi. Regulation of Health, Safety, and Environmental Risks. Working Paper 11934, National Bureau of Economic Research, Cambridge,Mass, 2006. Abstract: This paper provides a systematic review of the economic analysis of health, safety, and environmental regulations. Although the market failures that give rise to a rationale for intervention are well known, not all market failures imply that market risk levels are too great. Hazard warnings policies often can address informational failures. Some market failures may be exacerbated by government policies, particularly those embodying conservative risk assessment practices. Labor market estimates of the value of statistical life provide a useful reference point for the ecient risk tradeos for government regulation. Guided by restrictive legislative mandates, regulatory policies often strike a quite dierent balance with an inordinately high cost per life saved. The risk-risk analysis methodology enables analysts to assess the net safety implications of policy eorts. Inadequate regulatory enforcement and behavioral responses to regulation may limit their eectiveness, while rising societal wealth will continue to generate greater levels of health and safety. [680] W. Kip Viscusi and Patricia H. Born. Damages Caps, Insurability, and the Performance of Medical Malpractice Insurance. Journal of Risk and Insurance, 72(1):2343, March 2005. Abstract: This article uses the complete property-casualty insurance les of the National Association of Insurance Commissioners from 1984 to 1991 to assess the eect of medical malpractice reforms pertaining to damages levels and the degree to which these damages are insurable. Limits on noneconomic damages were most inuential in aecting insurance market outcomes. Several punitive damages variables specically aected the medical malpractice insurance market, including limits on punitive damage levels, prohibitions of the insurability of punitive damages, and prohibition of punitive damages awards. Estimates for insurance losses, premiums, and loss ratios indicate eects of reform in the expected directions, where the greatest constraining eects were for losses. The quantile regression analysis of losses indicates that punitive damages reforms and limits were most consequential for rms at the high end of the loss spectrum. Tort reforms also enhanced insurer protability during this time period. [681] W. Kip Viscusi, John M. Vernon, and Joseph E. Harrington. Economics of Regulation and Antitrust. MIT Press, Cambridge, third edition, 2000. Chapter 22 is a case study of the pharmaceutical industry. [682] Janet M. Wagner, Daniel G. Shimshak, and Michael A. Novak. Advances in physician proling: the use of DEA. Socio-Economic Planning Sciences, 37(2):141163, June 2003. Abstract: Insurers, health plans, and individual physicians in the United States are facing increasing pressures to reduce costs while maintaining 244

quality. In this study, motivated by our work with a large managed care organization, we use readily available data from its claims database with data envelopment analysis (DEA) to examine physician practices within this organization. Currently the organization evaluates primary care physicians using a prole of 16 disparate ratios involving cost, utilization, and quality. We employed these same factors along with indicators of severity to develop a single, comprehensive measure of physician eciency through DEA. DEA enabled us to identify a reference set of best practice physicians tailored to each inecient physician. This paper presents a discussion of the selection of model inputs and outputs, the development of the DEA model using a stepwise approach, and a sensitivity analysis using supereciency scores. The stepwise and supereciency analyses required little extra computation and yielded useful insights into the reasons as to why certain physicians were found to be ecient. This paper demonstrates that DEA has advantages for physician proling and usefully augments the current ratio-based reports. [683] Adam Wagsta and Eddy van Doorslaer. Equity in Health Care Finance and Delivery. In Culyer and Newhouse [152], chapter 34, pages 18031862. The authors briey survey normative doctrines including libertarianism (each individual has rights to acquire and use property in pursuit of health or any other objective), Marxism (people are entitled to the health care they need), and egalitarianism (with regard to health or access to care). Equality of access seems to be a standard consistent with Sens emphasis on equality of capabilities, although the authors do not say so explicitly. More space is devoted to recent empirical work on the measurement and explanation of inequities, variously dened. Health care expenditures tend to be regressive if nanced out of pocket or through private insurance. They tend to be progressive if tax nanced. If nanced by social insurance (payroll taxes) they tend to be regressive if the tax is capped and progressive otherwise. In several countries the rich make disproportionate use of specialists and the poor of in-patient care. In cross country studies, inequality of age-at-death is associated with inequality of income. [684] Mei Wang and Paul S. Fischbeck. Incorporating Framing into Prospect Theory Modeling: A Mixture-Model Approach. Journal of Risk and Uncertainty, 29(2):18197, September 2004. Abstract: This paper illustrates the use of a statistical technique, nite mixture models, to t the parameters in cumulative prospect theory. For a given decision, some individuals may adopt a gain frame, while others may adopt a loss frame. By using nite mixture models, the best tting parameters can be obtained for the two subgroups, even though the information about subjective frames was not available. Our application uses two health insurance survey datasets collected by Rand and Chinese State Natural Science Foundation, respectively. The results are compared with previous studies on framing eects and parameterizations of prospect theory 245

[685] Jayashree Watal. Pharmaceutical Patents, Prices and Welfare Losses: Policy Options for India under the WTO TRIPS Agreement. World Economy, 23(5):73352, May 2000. The author is aliated with the Institute for International Economics, Washington, DC. [686] Marcia R. Weaver. Cost-Eectiveness Analysis of Integrated Care for People with HIV, Chronic Mental Illness and Substance Abuse Disorders. Journal of Mental Health Policy and Economics, 12(1):3346, March 2009. Abstract: The HIV/AIDS Treatment Adherence, Health Outcomes and Cost study evaluated the cost-eectiveness of integrated HIV primary care, mental health, and substance abuse services for triply diagnosed patients from a health-sector budget perspective. Patients from four sites were randomly assigned to intervention (n = 232) or control group (n = 199). Cost (2002 dollars) of a comprehensive list of health services was measured at baseline and three, six, nine, and 12 months. Quality of life was measured at baseline and six and 12 months using the SF-6D. During the 12-month trial, total average monthly cost of health services for the intervention group decreased from $3,235 to $3,052 and for the control group decreased from $3,556 to $3,271, but the decreases were not signicant. For both groups, the percentage attributable to hospital care decreased signicantly. There were no signicant dierences in total annual cost of health services or quality of life between groups. [687] Gerard J. Wedig. Ramsey Pricing and Supply-Side Incentives in Physician Markets. Journal of Health Economics, 12(4):36584, December 1993. Abstract: In this paper, the author develops a theory of optimal prices using a relative value scale where there are xed costs of medical practice. He considers a regulator constrained to set prices in excess of marginal cost in markets where physicians can create demand at the margin. Under these conditions, basing prices on physician costs alone is shown to be suboptimal. Instead, prices should anticipate the behavior of physicians by setting prot margins highest for services least susceptible to demand creation. This is equivalent to a form of Ramsey pricing, used in this case to minimize the deadweight loss of oversupply. [688] William B. Weeks and Amy E. Wallace. The More Things Change: Revisiting a Comparison of Educational Costs and Incomes of Physicians and Other Professionals. Academic Medicine, 77(4):31219, April 2002. Abstract: The authors previously compared the 1990 educational costs and incomes of physicians and other professional groups. Since then, there have been dramatic changes in the market for the groups examined. This article reports their update of the previous analysis, using 1997 data. For this update, the authors applied standard nancial techniques to expected incomes and educational costs to determine the return on educational investment over the working lifetime for ve professional groups: primary 246

care physicians, procedure-based physicians, dentists, attorneys, and graduates of the top 20 business schools. The hours-adjusted net present values of the educational investments for attorneys ($10.73) and procedurebased physicians ($10.40) are considerably higher than those for dentists ($8.90) and businessmen ($8.27); the return for primary care physicians ($5.97) remains much lower than all others. Primary care physicians have an hours-adjusted internal rate of return on their educational investment equal to 16%, compared with 18% for procedure-based medicine, 22% for dentistry, 23% for law, and 26% for business. Although it remains the lowest of all professional groups examined, primary care medicine has made the largest percentage gain in net present value of all groups. Although anticipated changes in physician incomes have occurred, the standing of physicians relative to other professional groups has not changed. Students can still anticipate relatively poorer returns on their educational investment when they choose a career in primary care medicine as compared with careers in procedure-based medicine or surgical specialties, business, law, or dentistry. [689] William B. Weeks, Amy E. Wallace, Myron M. Wallace, and H. Gilbert Welch. A Comparison of the Educational Costs and Incomes of Physicians and Other Professionals. New England Journal of Medicine, 330(18):1280 1286, 1994. Abstract: BACKGROUND Eorts at physician-payment reform in the United States have focused largely on the relative incomes of primary care physicians and specialists, who more often have procedure-based practices. Comparisons of the incomes of physicians and other professional groups have received less attention. METHODS We used standard nancial techniques to determine the return on educational investment over a working lifetime for ve groups of professionals: primary care physicians, specialist physicians, dentists, attorneys, and graduates of business schools. RESULTS In current dollars, the dierence in the average future hourly income between a given professional and a high-school graduate of the same age, after educational expenses are subtracted (average hours-adjusted net present value of the educational investment) was greatest for specialist physicians and attorneys; dentists and businesspeople had intermediate values; and primary care physicians had the lowest value. The annual yield on the educational investment over a working life (hours-adjusted internal rate of return) was 15.9 percent for primary care physicians, as compared with 29.0 percent for businesspeople, 25.4 percent for attorneys, 20.9 percent for specialist physicians, and 20.7 percent for dentists. A sensitivity analysis showed that primary care physicians did less well in terms of the return on investment than the other groups even when we varied the assumptions in our model widely and that specialist physicians did less well than attorneys working in law rms and dental specialists. CONCLUSIONS Students can expect a poorer nancial return on their educational investment when they choose a career in primary care medicine than when 247

they choose a procedure-based medical or surgical specialty, business, the law, or dentistry. [690] N. J. Welton, A. E. Ades, D. M. Caldwell, and T. J. Peters. Research Prioritization Based on Expected Value of Partial Perfect Information: A Case-Study on Interventions to Increase Uptake of Breast Cancer Screening. Journal of the Royal Statistical Society: Series A (Statistics in Society), 171(4):80734, October 2008. Abstract: We investigate whether Bayesian decision theory, in the form of expected value of partial perfect information (EVPPI) analysis, is a realistic and practical approach to research prioritization. We develop a simple cost-eectiveness analysis of breast cancer screening as a typical case-study, motivated by data from a cluster randomized 2 x 2 factorial trial of interventions to increase uptake. An EVPPI analysis is developed which shows that, on the basis of the evidence that was available beforehand, the trial was cost eective, but that after incorporating the results of the trial it would still be cost eective to carry out research that further reduced decision uncertainty. We identify key conceptual and technical issues: the relationship between the target interventions and the previous evidence, the distinction between variation and uncertainty and methods for correlated parameters. EVPPI methods have clear advantages over current methods of research prioritization, but we suggest that some specic sensitivity analyses are required before they can be used condently in practice. These have limitations, and there is a need to develop robust methods to optimize research portfolios. [691] Joseph White. Competing Solutions: American Health Care Proposals and International Experience. Brookings Institution, Washington, D.C., 1995. Abstract: Examines the range of strategies and institutions for provision of universal health coverage in Australia, Canada, France, Germany, Japan, and the United Kingdom. Describes the current American health care system, drawing attention to features that are questionable as well as features that are hard to change and so set limits on the measures that the United States might adapt from other countries. Describes and analyzes German and Canadian models of health care and surveys, more briey, health care systems in Australia, France, Japan, and the United Kingdom. Challenges the assertion that superior American quality or greater American social problems explain other nations better performance on cost and guaranteed access. Explains the theory of managed competition in health care and its presumptions, evaluating its attractions and weaknesses; analyzes the related internal market reforms of the British National Health Service; and considers political, administrative, and other problems of managed competition, focusing on federal legislative proposals. Reviews the Clinton compromise between managed care and the standard strategies used in other countries, and outlines an approach that, for reasons 248

of substance and politics, would rely more on the international standard than on managed competition. [692] Steven N. Wiggins and Robert Maness. Price Competition in Pharmaceuticals: The Case of Anti-infectives. Economic Inquiry, 42(2):247263, April 2004. Abstract: A fundamental question in industrial organization regards the relationship between price and the number of sellers. This relationship has been particularly important in the pharmaceutical industry where legislative changes were specically designed to foster competition. Previous research on the pharmaceutical industry has shown generic entry has a mixed impact; generic prices fall rapidly with generic entry, whereas branded prices tend to increase or decrease only slightly. Using more complete data, focused on one segment of the pharmaceutical industryantiinfectiveswe nd that the relationship between pharmaceutical prices and the number of sellers is more like that found in other industries. [693] Virginia Wilcox-Gok. The Eects of For-Prot Status and System Membership on the Financial Performance of Hospitals. Applied Economics, 34(4):47989, March 2002. Abstract: This research examines whether for-prot status or system membership is signicantly related to the nancial performance of hospitals. Panel data containing 573 observations of Florida hospitals for 1984 through 1987 are used in a xed-eects regression model. The results indicate that it is system membership rather than for-prot status that is signicantly related to better nancial performance. For-prot status is unrelated to overall nancial performance. System hospitals have higher revenues per admission, but not higher expenditures per admission than independent hospitals. The ndings are consistent with the hypothesis that expanding hospital systems target locations and services that are potentially protable. [694] James E. Wilen and Siwa Msangi. Dynamics of Antibiotic Use: Ecological Versus Interventionist Strategies to Manage Resistance to Antibiotics. In Laxminarayan [387], pages 1741. The authors note that that bacteria that develop resistance to drugs often incur a tness costi.e., a reduced ability to survive in a drug-free environment as compared to related drug-susceptible bacteria. In this case, resistant and susceptible bacteria can coexist in a steady state. Also in this case, ecological (nonantibiotic) strategies that encourage susceptible bacteria to outcompete resistant bacteria may be economically preferable to interventionist strategies involving aggressive antibiotic treatment (p. 18). [695] Elizabeth Wiley-Exley, Marisa Elena Domino, James Maxwell, and Sue Ellen Levko. Cost-eectiveness of integrated care for elderly de-


pressed patients in the PRISM-E study. Journal of Mental Health Policy and Economics, 12(4):20513, December 2009. Abstract: BACKGROUND: One proposed strategy to improve outcomes associated with depression and other behavioral health disorders in primary care settings is to strengthen collaboration between primary care and specialty mental health care through integrated care (IC). AIMS: We compare the cost-eectiveness of IC in primary care to enhanced specialty referral (ESR) for elders with behavioral health disorders from the Primary Care Research in Substance Abuse and Mental Health study, which was a randomized trial conducted between 2000 and 2002, using a societal perspective. METHODS: The IC model had a behavioral health professional co-located in the primary care setting, and the primary care provider continued involvement in the mental health/substance abuse care of the patient. The comparison model, enhanced specialty referral (ESR), required referral to a behavioral health provider outside the primary care setting, and the behavioral health provider had primary responsibility for the mental health/substance abuse needs of the patient. Costs and clinical outcomes for 840 elders with depression were analyzed using incremental cost-eectiveness ratios, the net benets framework, cost-eectiveness planes, and acceptability curves. Outcomes were measured by the Center for Epidemiologic Studies Depression Scale (CES-D) and converted to depression-free days and Quality Adjusted Life Years (QALY). A variation on depression free days was proposed as an improvement on current methods. Separate analyses were conducted for Veterans Aairs (n=365; n=175 in IC and n=190 in ESR) and non-Veterans Aairs (n=475; n=242 in IC and n=233 in ESR) settings. RESULTS: ESR participants in the non-VA sample exhibited lower average CES-D scores (i.e., an improvement in depressive symptoms) than did IC participants (beta = 2.8, p 0.01), no such dierence was noted in the VA sample (p 0.05). Mean costs were $D6,338 for VA IC participants; $7,007 for VA ESR participants; $3,657 for non-VA IC participants; and $3,673 for non-VA ESR participants. Although the cost-eectiveness planes suggest some uncertainty about the cost-eectiveness of the intervention, more than 75% of the bootstrap draws were considered cost-eective due to a decrease in total costs for IC in the full Veterans Aairs sample. DISCUSSION: The ndings indicate that IC is likely to be a cost-eective intervention in contrast with ESR in the Veterans Aairs setting. In the non-Veterans Aairs settings, IC is not a more cost-eective intervention in comparison with ESR. In the VA setting, the greater clinical improvement associated with IC coupled with the variation in costs and outcomes were such that IC was determined to be more cost-eective than ESR with a probability of 73-80%. Among non-VA participants, the lower clinical outcomes combined with no discernable dierences in costs translated with a low probability that IC was more cost-eective than ESR, at any of the estimated values of clinical improvements. This suggests the importance of clinical


setting in determining the clinical and cost eectiveness of IC for mental health. LIMITATIONS: Our analyses were restricted to a six-month period, based on self-report, and did not include societal costs related to lost productivity and future costs. IMPLICATIONS: These results suggest that general integration has its advantages and, when such integration exists, further integrating behavioral health care into primary care might be considered as one way to improve depression in elders. The nding that ESR may be cost eective in some settings is also policy relevant. Further research is needed to analyze the components of the costs of ESR in non-VA settings and the eectiveness of IC in VA settings. [696] Andrew R. Willan and Matthew E. Kowgier. Cost-Eectiveness Analysis of a Multinational RCT with a Binary Measure of Eectiveness and an Interacting Covariate. Health Economics, 17(7):77791, July 2008. Abstract: In a recent multinational randomized clinical trial, 1,356 patients from 14 countries were randomized between two arms. The primary measure of eectiveness was 30-day survival. Health care utilization was collected on all patients and was combined with a single countrys price weights to provide patient-level cost data. The purpose of this paper is to report the results of the cost-eectiveness analysis for the country that provided the cost weights, so as to provide a case study for illustrating recently proposed methodologies that account for skewed cost data, the between-country variation in treatment eects, possible interactions between treatment and baseline covariates, and the diculty of estimated adjusted risk dierences. A hierarchal model is used to account for the two sources of variation (between country and between patients, within a country). The model, which uses gamma distributions for cost data and recent methods for estimating adjusted risk dierences, provides overall and country-specic estimates of treatment eects. Model estimation is facilitated by Markov chain Monte Carlo methods using the WinBUGS software. In addition, the theory of expected value of information is used to determine if the data provided by the trial are sucient for decision making. [697] Alan William and Richard Cookson. Equity in Health. In Culyer and Newhouse [152], chapter 35, pages 18631910. The authors survey normative theories, distinguishing those (like libertarianism) that constrain the opportunity set from those (like egalitarianism) that require the social welfare function (or maximand) to have particular properties (p. 1864). The survey is clear and accompanied by helpful diagrams. However, no conclusion is reached about which normative theory is best. Surveys suggest that most people do not subscribe to any one pure theory of of distributive justice, applicable in all circumstances. Rather, peoples responses appear to mix dierent concepts of equity together...and to vary the chosen equity concept from one context to another (p. 1905). Outcomes that impose losses...on others relative 251

to a status quo situation are perceived as being unfair, quite apart from egalitarian considerations (p. 1905). [698] R. J. Willke, W.S. Custer, J.W. Moser, and R.A. Musacchio. Collaborative Production and Resource Allocation: The Consequences of Prospective Payment for Hospital Care. Quarterly Review of Economics and Business, 31(1):2847, spring 1991. Abstract: This article presents a model of the intensity of care provided by hospitals and physicians and how such intensity was aected by the change to prospective payment by Medicare. Prospective payment introduced an incentive for hospitals to shorten average length of stay, but in order to keep the patient recovery level constant, intensity of inpatient care was forced to increase. Physicians reacted to hospital changes by increasing their own intensity of care provided to inpatients. Implication of the model for admissions and physician oce time are also explored. Empirical results indicate that for the period 198387, spanning the introduction of PPS, both hospital and physician intensity of care per inpatient rose signicantly. [699] Clevo Wilson and Clem Tisdell. Why Farmers Continue to Use Pesticides Despite Environmental, Health and Sustainability Costs. Ecological Economics, 39(3):44962, December 2001. Abstract: Use of chemical inputs such as pesticides has increased agricultural production and productivity. However, negative externalities from such use have increased too. These externalities include damage to agricultural land, sheries, fauna and ora. Another major externality is the unintentional destruction of benecial predators of pests thereby increasing the virulence of many species of agricultural pests. Furthermore, increased mortality and morbidity of humans due to exposure to pesticides are recorded especially in developing countries. The costs from these externalities are large and aect farmers returns. However, despite these high costs, farmers continue to use pesticides and in most countries in increasing quantities. In this paper, we examine this paradox and show why farmers continue to use pesticides despite the increasing costs. We also emphasize lock-in aspects of pesticide use [700] Mark E. Wilson, Je Fisher, Andrew Fischer, Vanessa Lee, Ruth B. Harris, and Timothy J. Bartness. Quantifying Food Intake in Socially Housed Monkeys: Social Status Eects on Caloric Consumption. Physiology & Behavior, 94:586594, 2008. Abstract: Obesity results from a number of factors including socioenvironmental inuences and rodent models show that several dierent stressors increase the preference for calorically dense foods leading to an obese phenotype. We present here a non-human primate model using socially housed adult female macaques living in long-term stable groups given access to diets of dierent caloric density. Consumption of a low 252

fat (LFD; 15% of calories from fat) and a high fat diet (HFD; 45% of calories from fat) was quantied by means of a custom-built, automated feeder that dispensed a pellet of food when activated by a radiofrequency chip implanted subcutaneously in the animals wrist. Socially subordinate females showed indices of chronic psychological stress having reduced glucocorticoid negative feedback and higher frequencies of anxiety-like behavior. Twenty-four hour intakes of both the LFD and HFD were signicantly greater in subordinates than dominates, an eect that persisted whether standard monkey chow (13% of calories from fat) was present or absent. Furthermore, although dominants restricted their food intake to daylight, subordinates continued to feed at night. Total caloric intake was signicantly correlated with body weight change. Collectively, these results show that food intake can be reliably quantied in non-human primates living in complex social environments and suggest that socially subordinate females consume more calories, suggesting this ethologically relevant model may help understand how psychosocial stress changes food preferences and consumption leading to obesity. [701] Paul W. Wilson and Kathleen Carey. Nonparametric Analysis of Returns to Scale in the US Hospital Industry. Journal of Applied Econometrics, 19(4):50524, July-August 2004. Abstract: This paper presents new estimates of scale economies for US hospitals. We show that the common translog specication of hospital costs is a misspecication, and employ nonparametric, local linear estimation with both continuous and discrete covariates. A bootstrap method is used to provide inferences regarding ray scale economies and expansion path scale economies for a large sample of hospitals covering 1984-1996. We nd evidence of changes in the structure of hospital costs over the sample period, as well as evidence of locally optimal hospital sizes. [702] Paula Wilton, Richard Smith, Joanna Coast, and Michael Millar. Strategies to Contain the Emergence of Antimicrobial Resistance: a Systematic Review of Eectiveness and Cost-Eectiveness. Journal of Health Services Research & Policy, 7(2):11117, April 2002. Abstract: . . . In total, 43 studies were reviewed, with 21 classed as being at moderate or low risk of bias and therefore reported in the paper. These studies covered policies on: restricting the use of antimicrobials (ve studies, suggesting that restriction policies can alter prescriber behaviour, although with limited evidence of subsequent eect on AMR); prescriber education, feedback and use of guidelines (six studies, with no clear conclusion); combination therapies (seven studies, showing the potential to lower drug-specic resistance, although for an indeterminate time period); vaccination (three studies showing cost/eectiveness). Most of these studies were: from the developed world, principally the USA; hospital-based, with few community level interventions; and concerned with eectiveness, not cost-eectiveness. Overall, there is an absence of 253

good evidence concerning what is eective, and especially cost-eective, in reducing the emergence of AMR. . . [703] Joachim Winter, Rowilma Balza, Frank Caro, Florian Heiss, Byung hill Jun, Rosa Matzkin, and Daniel McFadden. Medicare Prescription Drug Coverage: Consumer Information and Preferences. Proceedings of the National Academy of Science of the United States of America, 103(20):7929 34, May 16 2006. Abstract: We investigate prescription drug use, and information and enrollment intentions for the new Medicare Part D drug insurance program, using a sample of Medicare-eligible subjects surveyed before open enrollment began for this program. We nd that, despite the complexity of competing plans oered by private insurers under Part D, a majority of the Medicare population had information on this program and a substantial majority planned to enroll. We nd that virtually all elderly, even those with no current prescription drug use, can expect to benet from enrollment in a Part D Standard plan at the low premiums available in the current market. However, there is a signicant risk that many eligible seniors, particularly low-income elderly with poor health or cognitive impairment, will make poor enrollment and plan choices. [704] Lara J. Wolfson, Joseph B. Kadane, and Mitchell J. Small. Bayesian Environmental Policy Decisions: Two Case Studies. Ecological Applications, 6(4):10561066, November 1996. Abstract: Statistical decision theory can be a valuable tool for policymaking decisions. In particular, environmental problems often benet from the application of Bayesian and decision-theoretic techniques that address the uncertain nature of problems in the environmental and ecological sciences. This paper discusses aspects of implementing statistical decisionmaking tools in situations where uncertainty is present, looking at issues such as elicitation of prior distributions, covariate allocation, formulation of loss functions, and minimization of expected losses subject to cooperation constraints. These ideas are illustrated through two case studies in environmental remediation. [705] Herbert S Wong. Market Structure and the Role of Consumer Information in the Physician Services Industry: An Empirical Test. Journal of Health Economics, 15(2):13960, April 1996. Abstract: This paper applies J. C. Panzar and J. N. Rosses (1987) econometric test of market structure to examine two long-debated issues: What is the market structure for physician services? Do more physicians in a market area raise the search cost of obtaining consumer information and increase prices? For primary care and general and family practice physicians, the monopolistically competitive model prevailed over the competing hypothesesmonopoly, perfect competition, and monopolistic competition characterized by consumer informational confusion. Although less 254

conclusive, there is some evidence to support the monopolistically competitive model for surgeons and the consumer informational confusion model for internal medicine physicians. [706] Stee Woolhandler, Terry Campbell, and David U. Himmelstein. Costs of Health Care Administration in the United States and Canada. New England Journal of Medicine, 349(8):8013, 21 August 2003. Abstract: BACKGROUND: A decade ago, the administrative costs of health care in the United States greatly exceeded those in Canada. We investigated whether the ascendancy of computerization, managed care, and the adoption of more businesslike approaches to health care have decreased administrative costs. METHODS: For the United States and Canada, we calculated the administrative costs of health insurers, employers health benet programs, hospitals, practitioners oces, nursing homes, and home care agencies in 1999. We analyzed published data, surveys of physicians, employment data, and detailed cost reports led by hospitals, nursing homes, and home care agencies. In calculating the administrative share of health care spending, we excluded retail pharmacy sales and a few other categories for which data on administrative costs were unavailable. We used census surveys to explore trends over time in administrative employment in health care settings. Costs are reported in U.S. dollars. RESULTS: In 1999, health administration costs totaled at least 294.3 billion dollars in the United States, or 1,059 dollars per capita, as compared with 307 dollars per capita in Canada. After exclusions, administration accounted for 31.0 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada. Canadas national health insurance program had overhead of 1.3 percent; the overhead among Canadas private insurers was higher than that in the United States (13.2 percent vs. 11.7 percent). Providers administrative costs were far lower in Canada. Between 1969 and 1999, the share of the U.S. health care labor force accounted for by administrative workers grew from 18.2 percent to 27.3 percent. In Canada, it grew from 16.0 percent in 1971 to 19.1 percent in 1996. (Both nations gures exclude insurance-industry personnel.) CONCLUSIONS: The gap between U.S. and Canadian spending on health care administration has grown to 752 dollars per capita. A large sum might be saved in the United States if administrative costs could be trimmed by implementing a Canadian-style health care system. [707] Stee Woolhandler, David U. Himmelstein, Marcia Angell, and Quentin D. Young. Proposal of the Physicians Working Group for SinglePayer National Health Insurance. Journal of the American Medical Association, 290(6):798805, 13 August 2003. Abstract: The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet more than 41 million Americans have no health insurance. 255

Many more are underinsured. Confronted by the rising costs and capabilities of modern medicine, other nations have chosen national health insurance (NHI). The United States alone treats health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In this market-driven system, insurers and providers compete not so much by increasing quality or lowering costs, but by avoiding unprotable patients and shifting costs back to patients or to other payers. This creates the paradox of a health care system based on avoiding the sick. It generates huge administrative costs that, along with prots, divert resources from clinical care to the demands of business. In addition, burgeoning satellite businesses, such as consulting rms and marketing companies, consume an increasing fraction of the health care dollar. We endorse a fundamental change in US health carethe creation of an NHI program. Such a program, which in essence would be an expanded and improved version of traditional Medicare, would cover every American for all necessary medical care. An NHI program would save at least 200 billion dollars annually (more than enough to cover all of the uninsured) by eliminating the high overhead and prots of the private, investor-owned insurance industry and reducing spending for marketing and other satellite services. Physicians and hospitals would be freed from the concomitant burdens and expenses of paperwork created by having to deal with multiple insurers with dierent rules, often designed to avoid payment. National health insurance would make it possible to set and enforce overall spending limits for the health care system, slowing cost growth over the long run. An NHI program is the only aordable option for universal, comprehensive coverage. [708] World Health Organization. Containing Antimicrobial Resistance: Review of the Literature and Report of a WHO Workshop on the Development of a Global Strategy for the Containment of Antimicrobial Resistance., 1999. Contents: Introduction, Review of the literature, Interventions to contain antimicrobial resistance, Knowledge gaps & research needs. [709] World Health Organization. World Health Report 2000: Health Systems: Improving Performance. World Health Organization, Geneva, 2000. This volume presents for the rst time an index of national health systems performance in trying to achieve three overall goals: good health, responsiveness to the expectations of the population, and fairness of nancial contribution (p. xi). First place for the overall performance of the national health system in 1997 goes to France. [710] World Health Organization. WHO Global Strategy for Containment of Antimicrobial Resistance. World Health Organization, Geneva, 2001.


Abstract: This document outlines the World Health Organizations strategy for containing antimicrobial resistance and provides a framework of interventions to slow the emergence and reduce the spread of antimicrobial resistant microorganisms. There are three main sections of this document: an introduction and background to global antimicrobial resistance; an outline of appropriate antimicrobial use and emerging resistance; and the proposed implementation of the WHO global strategy. Excerpts from executive summary: Resistance costs money, livelihoods and lives and threatens to undermine the eectiveness of health delivery programmes. . . . Resistance is only just beginning to be considered as a societal issue and, in economic terms, as a negative externality in the health care context. Individual decisions to use antimicrobials (taken by the consumer alone or by the decision-making combination of health care worker and patient) often ignore the societal perspective and the perspective of the health service. . . . The World Health Assembly (WHA) Resolution of 1998 (1) urged Member States to develop measures to encourage appropriate and costeffective use of antimicrobials, to prohibit the dispensing of antimicrobials without the prescription of a qualied health care professional, to improve practices to prevent the spread of infection and thereby the spread of resistant pathogens, to strengthen legislation to prevent the manufacture, sale and distribution of counterfeit antimicrobials and the sale of antimicrobials on the informal market, and to reduce the use of antimicrobials in food-animal production. [711] Matthias Wrede. Health Values, Preference Inconsistency, and Insurance Demand. Working Paper 1634, CESifo, DocCIDL/cesifo1_wp1634.pdf, 2005. Abstract: Several empirical studies provide evidence that their actual health state aects peoples attitudes towards health and medical care in hypothetical health states. In the tradition of behavioural economics this paper considers the actual health state as a point of reference and builds a model for studying the implications of this phenomenon on health insurance and on demand for medical care. It considers the insurance demand of dierent types of agents: naive individuals, individuals who are able to commit to medical care demand and sophisticated individuals. Furthermore, it raises the question of whether inconsistency of preferences reinforces or tones down moral hazard problems. [712] Walter W. Wymer, Jr. and Lisa D. Spiller. Physicians Responses to Marketing Strategies of Pharmaceutical Companies. Journal of Pharmaceutical Marketing & Management, 15(1):514, 2002. Abstract: This study investigates physicians responses to dierent marketing media and promotional tactics typically used by the pharmaceutical industry. Results from a sample of 109 physicians show that pharmaceutical representatives were most useful, followed by drug samples and advertorials in medical journals. Direct mail, promotional faxes, and 257

promotional products were used less by physicians. In addition, the investigation explored which sources of information physicians use in obtaining information about pharmaceuticals. Medical books, medical journals, and medical conferences and symposia were found to be the most useful. Secondary sources identied as being useful included free samples, other physicians, and pharmaceutical representatives. Managerial implications for marketing to physicians and ideas for future research are discussed. [713] Hideo Yasunaga, Hiroo Ide, Tomoaki Imamura, and Kazukiko Ohe. Impact of the Japanese Diagnosis Procedure Combination-based Payment System on Cardiovascular Medicine-Related Costs. International Heart Journal, 46(5):85566, September 2005. Abstract: In 2003, a lump-sum payment system based on Diagnosis Procedure Combinations (DPC) was introduced to 82 specic function hospitals in Japan. While the US DRG/PPS system is a per case payment system, the DPC based payment system adopts a per day payment. It is generally believed that the Japanese system provides as much of an incentive as the DRG/PPS system to shorten the average length of stay (LOS). We performed an empirical analysis of the eect of LOS shortening on hospital revenue and expenditure under the DPC-based payment system, particularly in cardiovascular diseases. We also point out fundamentally controversial aspects of the current system. A total 109 cases were selected from patients hospitalized at the University of Tokyo Hospital from May to July, 2003 and classied into one of three categories: (1) cardiac catheter interventions, (2) cardiac catheter examinations, and (3) other conservative treatments. We analyzed the changes in prot per day in cases of a reduction in average LOS and an increase in the number of cases. In category (1) prot increased signicantly in conjunction with reduced LOS. In category (2) prot increased only minimally. In category (3), prot increased rarely and sometimes decreased. In cases of conservative treatment, prots sometimes decreased because an increase in material costs exceeded the increase in revenue. It therefore became clear that the DPC-based payment system does not decisively provide an economic incentive to reduce LOS in cardiovascular medicine. [714] Hideo Yasunaga, Hiroo Ide, Tomoaki Imamura, and Kazukiko Ohe. Inuence of Japans New Diagnosis Procedure Combination-Based Payment System on the Surgical Sector: Does it Really Shorten the Hospital Stay? Surgery Today, 36(7):577585, July 2006. Abstract: Purpose In 2003, the Diagnosis Procedure Combination (DPC)based payment system was introduced on a trial basis in 82 major Japanese hospitals. We analyzed the inuence of this system on hospital revenue and expenditure, focusing on whether it reduces the length of stay in hospital (LOS), particularly in the surgical sector. Methods We studied 120 patients hospitalized at the University of Tokyo hospital between May and July 2003, including 93 surgical patients who underwent operations 258

for gastric, colon, rectal, hepatic, or mammary carcinoma; arteriosclerosis obliterans; appendicitis; adult hernia inguinalis; or varicose veins, and 27 nonsurgical patients hospitalized for recurrent gastric carcinoma, ileus, appendicitis, or mild acute pancreatitis. We analyzed the changes in prot per day in patients with a reduced LOS using the simulation model. Results Reducing the LOS of the surgical patients resulted in a greater prot; however, there was minimal if any prot increase achieved by reducing the LOS of the medical patients. In fact, when material costs were high, prot decreased. Conclusion The DPC-based payment system does not usually oer an economic incentive to shorten the LOS. Expanding our current system will reduce the LOS only in major hospitals, but it will reduce the national average LOS. Thus, the current DPC-based payment system needs to be improved further. Key words Diagnosis Procedure Combination - Prospective payment system - Fee-for-service - Length of hospital stay [715] Donald E. Yett. The Chronic Shortage of Nurses: A Public Policy Dilemma. In Herbert E. Klarman, editor, Empirical Studies in Health Economics. Johns Hopkins University Press, Baltimore, 1970. [716] Winnie C. Yip. Physician Response to Medicare Fee Reductions: Changes in the Volume of Coronary Artery Bypass Graft (CABG) Surgeries in the Medicare and Private Sectors. Journal of Health Economics, 17(6):67599, December 1998. Abstract: The demand inducement hypothesis predicts that physicians will respond to reductions in their income by increasing the volume of their services when the income eect is strong and negative. The author tests for such inducement in the market for coronary artery bypass grafting (CABG), using a longitudinal panel of physicians in New York and Washington states. The results show that physicians whose incomes were reduced the most by Medicare fee cuts performed higher volumes of CABGs, and they did so in both the Medicare and private markets. [717] Byung-Kwang Yoo, Jay Bhattacharya, Kathryn M. McDonald, and Alan M. Garber. Impacts of Informal Caregiver Availability on LongTerm Care Expenditures in OECD Countries. Health Services Research, 39(6):197192, December 2004. Abstract: Secondary data analysis, applying xed- and random-eects models to time-series cross-sectional data. Outcome variables are inpatient or home heath LTC expenditures. Key explanatory variables are measures of the availability of informal caregivers, generosity in public funding for formal LTC, and the proportion of the elderly population in the total population. The availability of an informal caregiver, particularly a spouse caregiver, is among the most important factors explaining variation in LTC expenditure growth. Long-term care policies should take into account behavioral responses: decreased public funding in LTC may lead working women to leave the labor force to provide more informal care. 259

[718] Albert Yoon. Damage Caps and Civil Litigation: An Empirical Study of Medical Malpractice Litigation in the South. American Law and Economics Review, 3(2):199227, fall 2001. Abstract: This article looks at the eect that damage caps have on plaintis recovery in medical malpractice litigation, using a unique data set of litigation in the South, from 1987 to 1999. During this time, Alabama underwent both the implementation and nullication of damagecap laws; neighboring states did not undergo any signicant legal changes. The product of a dierence-in-dierence approach, the results reveal that the average relative recovery by Alabama plaintis decreased by roughly $20,000 after the Alabama legislature enacted damage caps and increased by roughly double that amount after the Alabama Supreme Court ruled them unconstitutional. [719] Gary J. Young, Kamal R. Desai, and Fred J. Hellinger. Community Control and Pricing Patterns of Nonprot Hospitals: An Antitrust Analysis. Journal of Health Politics, Policy, and Law, 25(6):105181, December 2000. Abstract: Traditional control of nonprot hospitals by the communities they serve has been oered as justication for restraining antitrust enforcement of mergers that involve nonprot hospitals. The community is arguably a constraint on a nonprots inclination to exercise market power in the form of higher prices; however, community control is likely to be attenuated for hospitals that through merger or acquisition become members of hospital systemsparticularly those that operate on a regional or multiregional basis. We report ndings from a study in which we examined empirically the relationship between market concentration and pricing patterns for three types of nonprot hospitals that are distinguishable based on degree of community control: an independent hospital, a member of a local hospital system, and a member of a nonlocal hospital system. Study results indicated that when conditions existed to create a more concentrated market, (1) all three types of nonprot hospitals exercised market power in the form of higher prices, and (2) hospitals that were members of nonlocal systems were more aggressive in exercising market power than were either independent or local system hospitals. The results have important implications for antitrust enforcement policy. [720] T. A. Young, D. Rowen, J. Norquist, and J. E. Brazier. Developing preference-based health measures: using Rasch analysis to generate health state values. Discussion paper 09/15, University of Sheeld. School of Health and Related Research, 1/c6/01/87/47/HEDSDP09-15untagged.pdf, 2009. Abstract: Background/aims: Condition specic measures may not always have independent items, and existing techniques of developing health state values from these measures are inappropriate when items are not independent. This study develops methods for deriving and valuing health 260

states for a preference-based measure. Methods: Three key stages are presented: Rasch analysis is used to develop a health state classication system and identify a set of health states for valuation. A valuation survey of the health states using time-trade-o (TTO) methods is conducted to elicit health state values. Finally, regression models are applied to map the relationship between mean TTO values and Rasch logit values. The model is then used to estimate health state values for all possible health states. Methods are illustrated using the Flushing Symptoms Questionnaire (FSQ). Results: Rasch models were tted to 1270 responders to the FSQ and a series of 16 health states identied for the valuation exercise. An ordinary least squares model best described the relationship between mean TTO values and Rasch logit values. (R2 = 0.958; Root mean square error = 0.042). Conclusions: We have shown how the valuation of health states can be mapped onto the Rasch scale in order to value all states dened by the FSQ. This should signicantly enhance work in this eld. [721] Kathryn M. Zeiler. Medical Malpractice and Contract Disclosure: A Study of the Eects of Legal Rules on Behavior in Health Care Markets. PhD thesis, California Institute of Technology, 2003. [722] Joshua Gra Zivin and Alexander S. P. Pfa. To Err on Humans Is Not Benign: Incentives for Adoption of Medical Error-Reporting Systems. Journal of Health Economics, 23(5):93549, September 2004. Abstract: Concerns about frequent and harmful medical errors have led policy makers to advocate the creation of a system for medical error reporting. Health providers, fearing that reported information about errors would be used against them under the current medical malpractice system, have been reluctant to participate in such reporting systems. We propose a re-design of the malpractice systemone in which penalties are a function of the health providers reporting eortsto overcome this incentive problem. We also consider some alternatives to this mechanism that address two important ways in which reporting eort may not be observable: hospitals may have interests distinct from individual physicians and may not be able to observe their reporting eorts, and a regulatory agency or a court may not be able to adequately observe reporting eorts by a provider. [723] Joshua Gra Zivin and David Zilberman. Optimal Environmental Health Regulations with Heterogeneous Populations: Treatment versus Tagging. Journal of Environmental Economics and Management, 43(3):455 76, May 2002. Abstract: In this paper, we develop a model of population level environmental health risk with individuals that are heterogeneous in their susceptibility to environmental toxins. This framework allows us to determine when it is optimal to target vulnerable subgroups of the population with special exposure-reducing treatments. Our analytic results show that the


potential economic gains from targeted policies will depend critically on the quality of existing capital, the degree of returns to scale in treatment technologies, and the size and sensitivity of the vulnerable population. An empirical application of the model is extended to the case of cryptosporidium in drinking water supplies. [724] Jack Zwanziger. Physician Fees and Managed Care Plans. 39(2):18493, summer 2002. Inquiry,

Abstract: One of the objectives of managed care organizations (MCOs) has been to reduce the rate of growth of health care expenditures, including that of physician fees. Yet, due to a lack of data, no one has been able to determine whether MCOs have been successful in encouraging the growth of price competition in the market for physician services in order to slow the growth in physician fees. This study uses a unique, national-level data set to determine what factors inuenced the physician fees that MCOs negotiated during the 19901992 period. The most inuential characteristics were physician supply and managed care penetration, which suggest that the introduction of competition into the health care market was an eective force in reducing physician fees. [725] Peter Zweifel and Friedrich Breyer. Health Economics. Oxford University Press, Oxford, 1997. This is a graduate-level text, translated from German. [726] Peter Zweifel, Harry Telser, and Stephan Vaterlaus. Consumer Resistance against Regulation: The Case of Health Care. Journal of Regulatory Economics, 29(3):31932, May 2006. Abstract: Regulation fostering Managed Care alternatives in health insurance is spreading. This work reports on an experiment designed to measure the amounts of compensation asked by the Swiss population (in terms of reduced premiums) for Managed-Care type restrictions in the provision of health care. It nds that restrictions on the freedom of physician choice would require an average compensation of more than one-third of the premium, while generic substitution even meets with a small willingness to pay. Marked preference heterogeneity is an argument against regulation imposing uniformity of contract in Swiss social health insurance.