Health System Productivity

This article considers approaches to tracking changes in the productivity of a health care system over time. Economists generally believe that measured productivity growth in the sector is biased downward because of difficulties in measuring medical care output accurately and also that measurement errors are pervasive in some of the inputs. This article discusses the most essential tasks of getting the data right in all productivity measurement. It also discusses some of the economic implications of the fact that medical care, though it is demanded to improve health, does not, by itself, produce health. It considers an alternative concept for medical care output and necessity to separate trends in medical care expenditures into trends in quantities of treatments and prices or costs of treatments. Improving the database for the analysis of medical care productivity deserves high priority because vital questions of health care policy demand exactly the same data.

Health Utility Measurement

Measuring and valuing health is a major component of economic evaluation, meaning that health utility measurement has been growing in popularity in recent years due to the increasing demand for health state values in economic models and evaluations. The main issues in health utility measurement are how to describe health states, how to value the health state description and whose values should be used. This article briefly outlines these main issues and then focuses on recent methodological developments in health utility measurement. It assesses the current state of health utility measurement and discusses the question of assessment of a health state to be used in economic evaluation. The discussion whether experience utility should be used rather than conventional preference-based utility raises important issues about perspective and the role of various factors.

Public-Sector Health Care Financing

This article discusses the share of expenses that should be covered by the public plan and looks at how those revenues should be raised. It deals with a fundamental issue that must be addressed in a system where government takes a major role in health care financing. This issue is about the relative importance of the public plan and private payments as sources of funding. Another related issue is how the revenue to pay for public spending on health care should be raised. The article discusses financing through general revenue and compares it with various forms of social insurance. A related issue is the financing of health care for the elderly in a social insurance system. The third fundamental question, finally, concerns the way money should be spent. The article discusses the nature of the contracts between providers and the public plan.

The Economics of the Biopharmaceutical Industry

This article summarizes the literature, and considers the issue of paying for research and development. It reviews research and development costs, regulation, productivity and incentives for innovation. It discusses market demand and pricing, effects of insurance, reimbursement regulation, alternatives to patents, and generics. Further, it reviews trends in promotion, regulation of promotion and its effects. It discusses global issues, including differential pricing and R&D for neglected diseases. The focus is on the US, as the home of the largest number of multinational pharmaceutical and smaller biotech companies. This article notes the important differences in regulatory and reimbursement systems in other countries. Finally it suggests that although there is large and growing literature on the pharmaceutical industry that has produced valuable information, important issues remain for future research.

Economics and Mental Health: an International Perspective

This article notes that problems of incomplete information are particularly salient in the context of mental health. It considers how different nations address economics and mental health in the formulation of mental health policy. It focuses on three key economic phenomena that are central to understanding the allocation of resources to the treatment of mental disorders. These are externalities, methods for efficient rationing of health resources, and incentives for allocating funds across different types of mental health services. This article provides some background on mental disorders and organization of mental health care in different OECD countries. It considers determination of mental health spending as part of health care rationing schemes in various nations. It discusses the role of government and how each country aligns its financing arrangements with stated policy goals of reducing reliance on institutional care for people with mental illnesses. Finally, it offers some concluding observations on mental health policy.

User Charges

This article considers the use of user charges or co-payments in both developed and developing countries. It discusses a fundamental tension between controlling moral hazard and assuring access to needed services, especially amongst the very poor. This article focuses on public systems and only refers to empirical results for private insurers. It gives a brief overview of the importance of out-of pocket payments in the world and discusses the allocative effects of user charges, their implementation as a revenue-raising mechanism, and their effects on equity. It also discusses the quantitative information derived from various surveys. Finally, there is a deviation on two related phenomena: informal (even illegal) payments to providers and extra (or balance) billing, i.e. charging additional fees on top of the official fee schedule that is used for reimbursement. These raise same issues as user charges in general.

Health Care Cost Growth

Health care cost growth is among the most important issues facing the United States and other developed countries. This article describes the rapid growth in expenditure in most developed countries, and discusses the factors that have driven this growth, such as population aging, general economic growth, and the adoption and use of new medical technologies. The public financing aspect of health care spending adds an additional dimension to assessing the impact of rapid health care cost growth. The article considers a range of strategies for slowing cost growth, including economic evaluation of technologies. Most health care systems employ some method of cost sharing as a means to reduce health care utilization. This article also discusses managed care plans that integrate the financing and delivery of care. However, as costs grow, pressures to control spending will grow and distributional issues will become even more salient.

Measuring inequality and Inequity in Health and Health Care

This article examines the measurement of the success of the redistributive function describing strategies used for measuring the inequality of the outcomes of a health care system in terms of the use of care. The discussion of inequalities can be divided into health, health care, and health care payments. This article is concerned with the association between income, on the one hand, and health and health care, on the other. It further discusses the potential underlying causal pathways of this association. It explains in detail that a significant association or causal effect is a necessary but not sufficient condition for the presence of inequalities. Finally, it reviews the economics approaches of measuring socioeconomic inequalities in health and health care that are applied in the empirical literature. The measurement tools developed and used by health economists to analyze socioeconomic inequalities in health and health care are also discussed.

Economics of Infectious Diseases

Infectious diseases remain a central preoccupation in many countries. This article sets out the economic issues that arise in this highly complex domain. It reviews four main strands of literature on the economics of infectious diseases. It discusses the economic impact of infectious diseases on labor productivity and investment decisions. It focuses on the interplay between disease prevention and treatment and individual risk-taking behavior. It discusses vaccination as an important tool in the prevention of infectious diseases and presents a classic public goods problem. Disease reporting and eradication efforts are also global public goods. A fourth strand of literature is on the optimal design and allocation of resources for prevention and treatment programs. These programs are based on epidemiological models of disease spread that present significant mathematical challenges.

Disease Prevention, Health Care, and Economics

This article attempts to take on the policy issues and explores the economic analysis of prevention that can add to policy development. It discusses prevention and draws on the economic concepts of human capital and utility maximization. It provides a framework for investigating the reasons for people making the decisions and their response if their incentives or constraints alter. This approach can yield useful insights into behavior and answer various questions such as the reasons for smoking and the rise in the obesity level. Thus economic analysis can provide a basis for designing prevention strategies. This article addresses the issue of whether there is a current under-investment in prevention. For many policymakers and public health advocates, this question is about whether more prevention will save on care expenditure. Furthermore, the article turns to the special challenges in building an evidence base for prevention policy.