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PubMed2005

Affordability of medicines and patients' cost-reducing behaviour: empirical evidence based on SUR estimates from Italy and the UK.

INTRODUCTION: Studies have demonstrated that co-payments on medication reduce the consumption of both non-essential and essential drugs, and that the latter can lead to worse health outcomes. Far less is known about how patients cope with the cost of medication, particularly if affordability is an issue, and how this compares across two countries with different prescription charge policies. Therefore, the aim of this article is to explore empirically how, and to what extent, costs incurred by patients influence their decision-making behaviour in accessing medicines. METHODS: Based on the findings from focus groups, a questionnaire was designed that addressed medication cost issues relevant to patients in both the UK and Italy. Using an econometric model, several hypotheses are tested regarding patients' decision-making behaviour and how it is influenced by health status, sociodemographic characteristics and the novel concept of a self-rated affordability measure. RESULTS: Quite a large percentage of patients (70.3% in the UK and 66.5% in Italy) stated they have to think about the cost of medicines at least sometimes. Respondents adopted numerous cost-reducing strategies, subdivided into (i) those initiated by patients and (ii) those involving self-medication. Their use was strongly influenced by income and drug affordability problems, but the self-rated affordability measure was a stronger predictor. Commonly used strategies were not to get prescribed drugs dispensed at all, prioritizing by not getting all prescribed items dispensed or delaying until the respondent got paid. Furthermore, respondents with affordability issues were also cost-conscious when self-medicating with over-the-counter (OTC) products for minor conditions such as dyspepsia. Despite patients in both countries using cost-reducing strategies, their use was more pronounced in the UK, where the prescription charge was significantly higher than in Italy. DISCUSSION/CONCLUSION: The results from this study provide detail on the kinds of strategies patients use to reduce the cost burden of prescription charges, and support previous research showing they may be foregoing essential medication. Because the same questionnaire was applied in two European countries, where the national health systems aim to provide healthcare services that are accessible to all citizens in need, it offers interesting insights for policy makers in other countries, where patients may have to pay a larger share of their drugs out-of-pocket, such as the US.

Aged↗
PubMed1999

The social class determinants of income inequality and social cohesion.

The authors argue that Wilkinson's model omits important variables (social class) that make it vulnerable to biases due to model mis-specification. Furthermore, the culture of inequality hypothesis unnecessarily "psychopathologizes" the relatively deprived while omitting social determinants of disease related to production (environmental and occupational hazards) and the capacity of the relatively deprived for collective action. In addition, the hypothesis that being "disrespected" is a fundamental determinant of violence has already been refuted. Shying away from social mechanisms such as exploitation, workplace domination, or classist ideology might avoid conflict but reduce the income inequality model to a set of useful, but simple and wanting associations. Using a nonrecursive structural equation model that tests for reciprocal effects, the authors show that working-class position is negatively associated with social cohesion but positively associated with union membership. Thus, current indicators of social cohesion use middle-class standards for collective action that working-class communities are unlikely to meet. An erroneous characterization of working-class communities as noncohesive could be used to justify paternalistic or punitive social policies. These criticisms should not detract from an acknowledgment of Wilkinson's investigations as a leading empirical contribution to reviving social epidemiology at the end of the century.

Authoritarianism↗
PubMed2004

An economic evaluation of recombinant bovine somatotropin approval in Japan.

A comprehensive econometric model was developed to evaluate potential impacts of recombinant bovine somatotropin (rbST) approval in Japan. Three novel features of the analyses include 1) investigation of impact of rbST on herd-size structure, 2) determination of economic feasibilities of rbST adoption by herd size, and 3) evaluation of policies to mitigate negative effects of rbST approval. Simulation analysis was conducted over a 10-yr projected period assuming rbST was approved in Japan in 2001. Nine hypothetical scenarios were simulated to examine sensitivity of simulation results. Simulation results indicate that rbST approval would accelerate structural change in Japan's dairy industry toward fewer, larger farms. Negative effects of rbST on farm income are projected to be more severe for smaller farms, because of higher costs, lower profit-earning ability, lower milk yields, and lower adoption rates of rbST. Larger farms benefit from rbST adoption if milk demand is maintained. However, if concerns about rbST induce significant milk demand decreases, even the largest farms' income and cow numbers will decrease. Thus, Japan's dairy industry could be caught in a double downward spiral of declining milk prices and production. Assuming rbST is approved, small farms would benefit by using the technology, but they fare best if rbST is not approved. Two policies could be effective in mitigating possible farm income losses. First, lost farm income can be offset if dairy cooperatives can exercise greater market power to control fluid milk marketings. Second, because generic milk advertising has positive effects on both milk demand and farm income, increasing check-off rates to fund more advertising could ease farm income losses.

Animals↗
PubMed1991

Modeling the costs of case management in long-term care.

A conceptual approach to developing models for analyzing cost is applied to case management in long-term care. This conceptual approach uses four dimensions to classify case management programs. The application results in identifying five case management cost models. Empirical measures of case management costs and a set of determinants of the within-model variation in these costs are suggested for each model. This article discusses several policy relevant hypotheses that could be addressed by the empirical implementation of these cost models.

Capitation Fee↗
PubMed1992

Whither private health insurance? Self-destruction or rebirth?

The American public increasingly finds itself disenchanted with the system for health care financing in this country. Three forms of reform proposal are examined: those that place the locus of primary responsibility for health insurance coverage on the individual, those that would rely on employer mandates with patients and government bearing the residual responsibility, and those that lodge chief financial responsibility with the government, and act as primary agent for cost control. The second approach, government-mandated employer-provided health insurance, appears to be the most politically viable at this time. However, that option is likely to be acceptable to the business community only if the mandate is coupled with additional regulation of private health insurance. Specifically, private health insurance in such a system likely would be based on mandatory open enrollment, community-rated premiums, and all-payer reimbursement, under which every payer pays a given provider the same fee for the same service.

Consumer Behavior↗
PubMedDate not supplied

Is Germany a model for managers?

Most American managers have a hard time making sense of Germany. The country has a fraction of the resources and less than one-third the population of the United States. Labor costs are substantially higher, paid vacations are at least three times as long, and strong unions are deeply involved at all levels of business, from the local plant to the corporate boardroom. Yet German companies manage to produce internationally competitive products in key manufacturing sectors, making Germany the greatest competitive threat to the United States after Japan. The seemingly paradoxical nature of the German economy typically evokes one of two diametrically opposed responses. The first is to celebrate the German economy as a "model" worth emulating--indeed, as the answer to declining U.S. competitiveness. The alternative, more skeptical response is to question Germany's staying power in a new, more competitive global economy. According to Kirsten Wever and Christopher Allen, the problem with both points of view is that they miss the forest for the trees. Observers are so preoccupied with praising--or blaming--individual components of the German economy that they fail to see the dynamic logic that ties these components together into a coherent system. In their review of recent research on the German business system, Wever and Allen argue that managers can learn an important lesson from Germany. In the global economy, competition isn't just between companies but between entire socioeconomic systems. Germany's ability to design a cohesive economic and social system that adapts continuously to changing requirements goes a long way toward explaining that country's competitive success.

Administrative Personnel↗
PubMed1996

An analysis of selectivity bias in the Medicare AAPCC (adjusted average per capita cost).

Using econometric models of endogenous sample selection, we examine possible payment bias to Medicare Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) risk health maintenance organizations (HMOs) in the Twin Cities in 1988. We do not find statistically significant evidence of favorable HMO selection. In fact, the sign of the selection term indicates adverse selection into HMOs. This finding is interesting, in view of the fact that three of the five risk HMOs in the study have since converted to non-risk contracts.

Aged↗
PubMed1997

Costs and reimbursement of medical teaching and clinical research in Finland.

Alongside care and cure, hospitals produce teaching and research (T&R). In addition to the direct costs the T&R decrease productivity in patient care. An econometric model was used to estimate the effect of T&R. The variables in model were number of postgraduate medical students, on-the-job training weeks of nurses and the weighted number of articles published in scientific journals. Also service-mix (DRG), input mix and factor-prices were controlled. The average influence of teaching and research in costs of teaching hospitals was found to be 14.5 per cent. The cost of T&R in teaching hospitals varied between 10 and 16 per cent. The new reimbursement method based on the weighted numbers of physician examinations, dissertations and published articles in scientific journals was adopted. The total reimbursement was 700 million FIM per annum on which 50 per cent for the costs of research.

Cost-Benefit Analysis↗
PubMed1998

Percent-of-premium capitation yields mixed results in a Rhode Island case study.

In 1996, Harvard Pilgrim Health Care of New England (HPHC-NE) established six percent-of-premium arrangements with five Rhode Island PHOs. Each PHO received a percentage of the regional earned premium amounts for members who selected a primary care physician affiliated with it, adjusted for member demographics, benefit differences, and group size. Each of these six joint venture agreements also incorporated a per-member-per-month capitation fee. Despite improved communication between the PHOs and the plan and inpatient utilization reductions, all six joint ventures experienced losses beyond the withhold amounts during the first year of the arrangement. Factors affecting the medical utilization and financial results included market pressure on premium levels; risk pool size and adverse selection; and lack of timely, complete, and reliable financial and utilization data.

Capitation Fee↗
PubMed1999

Who gains and who loses with community rating for small business?

This paper compares community rating with experience rating for small businesses using a microsimulation model to determine what firms offer and who within these firms purchases insurance. We generate four years of data and find that our results are remarkably stable through time. Both offer and purchase rates are about five percentage points higher under experience rating, but community rating leads to more stable offerings. Under community rating, high-risk firms and families purchase insurance, whereas under experience rating, it is the low-risk firms and families who are the purchasers. Young families and poor families have the lowest purchase rates, with these rates being disproportionately low under community rating.

Age Factors↗
PubMed1999

Coping with ill health in a rickshaw puller's household in Chittagong, Bangladesh.

The correlation between poverty and ill-health is undeniably strong. Ill-health reduces the earning capacity, and increases the risk of families with ill members to drift down the social and economic ladder. In this article, we present a simulation model of how a poor rickshaw puller in Bangladesh copes with illness, in particular tuberculosis (TB). We first analyze the various coping mechanisms that are set in motion when he starts to suffer from tuberculosis; the impact on household assets, income and food intake will be studied. The simulation model is then used to analyse the effects on his household of a specific health intervention, namely the Directly Observer Treatment Short Course (DOTS) treatment. It shows that DOTS offers positive improvements of the overall well-being of the household by restoring the working capacity of the rickshaw puller in one treatment course and minimizing lost income. Assets and food consumption would be preserved significantly more in the presence of DOTS, rendering the household both financially and physically less vulnerable. The probability of death of the sick rickshaw puller is also significantly reduced, improving household's welfare over the long run.

Adaptation, Psychological↗
PubMed2000

The effect of Employee Assistance Programs use on healthcare utilization.

OBJECTIVE: To estimate the effect of Employee Assistance Program (EAP) use on healthcare utilization as measured by health claims. DATA SOURCES: A unique data set that combines individual-level information on EAP utilization, demographic information, and health insurance claims from 1991 to 1995 for all employees of a large midwestern employer. STUDY DESIGN: Using "fixed-effect" econometric models that control for unobserved differences between individuals' propensities to use healthcare resources and the EAP, we perform our analyses in two steps. First, for those employees who visited the EAP, we test whether post-EAP claims differ from pre-EAP claims. Second, we combine claims data of individuals who went to an EAP with those of individuals who did not use an EAP to test whether differences in utilization exist between EAP users and nonusers. DATA COLLECTION METHODS: From the EAP we obtained the date of first EAP contact for all employees who used the service, and from the company's human resources department we obtained limited demographic data on all employees. We obtained healthcare utilization claims data on all employees and their dependents from the company's two healthcare plans: a fee-for-service (FFS) plan and a health maintenance organization (HMO) plan. PRINCIPAL FINDINGS: We found that going to an EAP substantially increases both the probability of an alcohol, drug abuse, or mental health (ADM) claim and the number of ADM claims in the same quarter as EAP contact. The increased probability of an ADM claim persists for approximately 11 quarters after the initial contact, while the increased ADM charges persist for approximately six quarters after the initial EAP contact. CONCLUSIONS: Our results strongly suggest that the EAP is able to identify behavioral and other health problems that may affect workplace performance and prompt EAP users to access ADM and other healthcare. Consistent with the stated goals of many EAPs, including the one examined in this study, this process should improve individuals' health, family functioning, and workplace performance.

Alcoholism↗
PubMed2000

The financial performance of hospitals belonging to health networks and systems.

The U.S. health industry is experiencing substantial restructuring through ownership consolidation and development of new forms of interorganizational relationships. Using an established taxonomy of health networks and systems, this paper develops and tests four hypotheses related to hospital financial performance. Consistent with our predictions, we find that hospitals in health systems that had unified ownership generally had better financial performance than hospitals in contractually based health networks. Among health network hospitals, those belonging to highly centralized networks had better financial performance than those belonging to more decentralized networks. However, health system hospitals in moderately centralized systems performed better than those in highly centralized systems. Finally, hospitals in networks or systems with little differentiation or centralization experienced the poorest financial performance. These results are consistent with resource dependence, transaction cost economics, and institutional theories of organizational behavior, and provide a conceptual and empirical baseline for future research.

American Hospital Association↗
PubMed2002

The economic benefit for family/general medicine practices employing physician assistants.

OBJECTIVE: To measure the economic benefit of a family/general medicine physician assistant (PA) practice. STUDY DESIGN: Qualitative description of a model PA practice in a family/general medicine practice office setting, and comparison of the financial productivity of a PA practice with that of a non-PA (physician-only) practice. METHODS: The study site was a family/general medicine practice office in southwestern Pennsylvania. The description of PA practice was obtained through direct observation and semistructured interviews during site visits in 1998. Comparison of site practice characteristics with published national statistics was performed to confirm the site's usefulness as a model practice. Data used for PA productivity analyses were obtained from site visits, interviews, office billing records, office appointment logs, and national organizations. RESULTS: The PA in the model practice had a same-task substitution ratio of 0.86 compared with the supervising physician. The PA was economically beneficial for the practice, with a compensation-to-production ratio of 0.36. Compared with a practice employing a full-time physician, the annual financial differential of a practice employing a full-time PA was $52,592. Sensitivity analyses illustrated the economic benefit of a PA practice in a variety of theoretical family/general medicine practice office settings. CONCLUSIONS: Family/general medicine PAs are of significant economic benefit to practices that employ them.

Cost-Benefit Analysis↗
PubMed1997

The importance of demographics in economic analysis: the unusual suspects.

"The proper use of demographic information can add significantly to the ability to analyze and forecast economic activity. With housing, short-run forecasting is difficult and long-term forecasting impossible without considering changing demographic factors. Combining detailed demographic analysis with sound structural econometric modeling of the cyclical factors underlying the demand for and the supply of housing has resulted in significantly more accurate analyses and forecasts of the [U.S.] housing market."

Americas↗