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Research in Health Economics: What’s next? A personal view
Pedro Pita Barros Universidade Nova de Lisboa
Terms of reference
• "The key quesHons that the next generaHon of health economists should address”
or • "What topics will the next generaHon of health economists be focusing on in ten years' Hme?”
• Wish list vs crystal ball? Try a mix
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How does it feel like? • Get the help of PhD comics:
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• A personal view – not sure it will get your work published and or have impact
• At the same Hme, I had fun trying to answer these quesHons
• StarHng point: – the Alan Williams diagram – handbooks of health economics – Papers presented at the EuHEA 2014 Workshop – Last year issues of main health economics journals
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First step
• Take all 2013 and 2014 issues of Journal of Health Economics and of Health Economics
• Take the keywords of all arHcles (exclude le[ers and replies)
• What do they tell us?
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keyword nr_men~s
Health2insurance 28
Health 23
Instrumental2variables 13
Obesity 13
Health2inequality 12
Panel2data 11
QALY 11
Mortality 11
Child2health 11
Medicare 10
Mental2health 10
Alcohol 10
Medicaid 8
Education 8
CostHeffectiveness 7
Economic2evaluation 7
Equity 7
China 6
Pharmaceuticals 6
Inequality 6
keyword nr_men~sHealth2insurance 28Health 23Obesity 13Health2inequality 12QALY 11Mortality 11Child2health 11Medicare 10Mental2health 10Alcohol 10Medicaid 8Education 8CostEeffectiveness 7Economic2evaluation 7Equity 7China 6Pharmaceuticals 6Inequality 6Prevention 6Quality 6
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Without “methods” “Methods” keywords
Top 20 keywords
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By journal – in case you suspected... They are different
Historical curiosity • “a survey of recent research in health economics:” – Demand for adults’ health and medical care – Grossman model and health producHon funcHon, including educaHon
– Effects of health on labor suppy and wage rates – Demand for children’s health and medical care – The supply side – supplier-‐induced demand
(reference: Michael Grossman 1976 NBER 129)
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Second step
• Take the papers of this conference • Read the introducHons and
– Classify into categories – Look for presence of relevant keywords
• Guidance to classificaHon: Williams’ diagram
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10
11
4
11
14
6
2
3
1 1
05
1015
Frequency
0 1000 2000 3000words
Word count in introduction – some details
12
31
6
3
1 1
010
2030
Frequency
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Expenditure
13
Expenditure (or similar) – absent from 31 papers
23
13
23
1
05
1015
2025
Frequency
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16policy
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Policy: present in 19 – concern in arguing for relevance (?)
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2 2 21
010
2030
40Frequency
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16effectiveness
15
Mentioned in only a few papers... Self-selection bias?
29
8
21 1 1
010
2030
Frequency
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Market
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Market: mentioned several times, but analysis does not look in most cases at market equilibrium effects
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1 1
010
2030
40Frequency
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16sustainable
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Sustainable – one buzzword almost absent in this sample of research
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19
Take the top 10 keywords and variants and see how often they are present together – all papers have at least one of them in the introduction
The words: Insurance Obesity inequality Mortality QALY Child health Medicare Alcohol Mental inequalities children
Most of you are in the mainstream
A selected list of topics
• Market equilibrium issues – compeHHon in health care markets
• PoliHcal economy / insHtuHons of health care • Concepts and tools for macro analysis of the health sector
• Need to rethink balance of theory and empirics (?)
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Market equilibrium issues
• Neglected, but many of the health system features have some sort of equilibrium, either market, quasi-‐market, administraHve, etc
• Trend in policy making in looking for compeHHon as a tool (someHmes a principle in itself) – we need to know more about it
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Why is this topic relevant?
• CompeHHon was introduced in several countries by reforms
• European Commission is assessing the potenHal role of compeHHon in health care
• Economics tends to stress decentralized mechanisms to allocate resources
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CompeHHon as an example • Simple quesHon: compeHHon increases or decreases quality of care? (starHng point: review paper by Brekke, Gravelle, Siciliani, Straume, 2014)
• Meaning of compeHHon? – different ways to define it? Are prices flexible or not?
• Current literature under fixed prices: whatever increases demand sensiHveness and having marginal cost of treatment decreasing in quality will increase quality
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• Open issues for research: – CompeHHon between public and private hospitals (also in internaHonal context, with the EU direcHve)
– Price selng procedures and Hming of decisions – if prices are regulated, is quality easy to adjust (primary care – Hme of doctor) or difficult to change (hospital – surgical theater)?
– NegoHated prices as signals to quality (?) – Is compeHHon a way to achieve be[er match of what paHents want to what providers deliver?
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• But also payment for performance – how does it change the way providers compete?
• For the moment, pay for performance operates “at the margin”, what if it becomes the predominant model of payment of care? This calls both theory and empirical research (infer to outside the domain of current range of payments?)
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PoliHcal economy / insHtuHons
• We tend to largely ignore the role and incenHves of insHtuHons present in the health system
• Demand and supply for regulaHon? • How insHtuHons decide and influence decisions of others?
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Example • (not really elaborated, just brainstorming) • Before NICE and HTA => introducHon of new products, mainly convince one stakeholder – medical doctors
• Aper NICE and HTA => one more relevant agent (at least, depending on countries) => how do decisions change? How do decisions reflect social values? IncenHves to “right” decisions?
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• On a broader way, how do insHtuHons and the rules they set will meet the quesHons of access, cost, and quality?
• Different countries have different insHtuHons and interests – move away from Europe-‐centric research
• StarHng to see it with China • Other areas are more neglected: insHtuHonal development to enlarge access to care in Africa? (for the insurance exchanges in the US I am sure work will appear)
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Also designing new organizaHons • One of the new mantras: paHent-‐centered care => paHent moving from passive client to partner in decision making about treatment and management of clinical condiHon – changes in informaHon structures, efforts and relaHve contribuHon to outcome
• What organizaHons are be[er suited? IncenHves and asymmetric informaHon issues? Economics of new business models?
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• PaHent-‐centered care: who disagrees? • PaHent-‐centered care: what is the theory behind it?
• Take the well-‐known Grossman model: ProducHon of health by the individual becomes the result of non-‐contracHble investments (efforts, ideas) by both the paHent and the health professional.
• What’s the best way to structure payments in this ‘partnership’ environment? (should paHents be paid too?)
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• Taking seriously the wishes of the paHent and recognizing that paHent preferences can be quite heterogeneous, what is the best way to accommodate paHents’ preferences? – CompeHHon? (under the need of specific investment and risk of hold-‐up on investment?)
– Health sector bureaucrat? (one size fits all) – Other mechanisms?
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Macro aspects
• Let me elect one: Sustainability of health care systems
• (other topics like relaHon between macroeconomic condiHons and health are being taken by public health researchers, economics could contribute more to the discussion)
• Who’s worrying about it?
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Macro aspects: sustainability
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34
From the Guardian
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LSE BLOG
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• What is the meaning of sustainability to an economist? – Keep spending under control? – Can we afford current spending growth?
What means “under control”? (US esHmates mean 1 p.p. above GDP growth) What means “afford”?
• That’s when theory can help
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Example of a “toy model”
• QuesHon: what is a sustainable/affordable health system?
• One that ciHzens can/are willing to pay (?!)
• UHlity as a funcHon of consumpHon, health and publicly provided goods and services (not necessarily public goods)
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U(C,H,G)
• constraints: • Aggregate producHon funcHon
• (leave capital out for simplicity, contribuHon of labor input depends on health of the populaHon)
• Health producHon funcHon depends on health care (only):
• (sum of public health care and private care, take it to be out-‐of-‐pocket for the moment)
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Y = f(L,H)
H = GH +X
• Government budget constraint:
• Consumer budget constraint:
• Decision variable of consumer: • Plug-‐in into uHlity and get
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rB +G+GH � T = �B
Y � T = C +X
X
U(f(L,H(X +GH))� rB �G�GH +�B �X,H(X +GH), G)
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• OpHmal choice of
• Impact of increasing ? • Since it enters addiHvely with it will have zero marginal impact – thus, it is irrelevant in this “economy” – sustainability/affordability is not an issue
• Next step: look for deviaHons
X
GH
GH X
@U
@X=
@U
@Y
✓@f
@H
@H
@X� 1
◆+
@U
@H
@H
@X= 0
• What if hits the boundary? • Then
• And the public health expenditure is never sustainable/affordable in the sense of being good to consumers
• Need to look for other missing elements • Suppose a cost in the economy of providing services by the public sector
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X@U
@X
����X=0
< 0
@U
@GH
����X=0
< 0
�
• And it results:
• Then public expenditure is never sustainable – sHll not parHcularly saHsfactory – maintained assumpHon: at the margin direct payment and payment by consumer provide the same health gain
• What about value of insurance? • What about value of redistribuHon by public sector?
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@U
@Gh= ��
@U
@Y< 0
• Introduce insurance moHve ad-‐hoc, making opHmal by adding desuHlity from out-‐of-‐pocket payment
• The new first-‐order condiHon
• And
• Which means sustainable public health care
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X = 0�⌦(X)
@U
@X� @⌦
@X= 0
@U
@GH> 0
• If
• Then can have any sign.
• We can also see subsHtuHon with other public expenditures
• Then increasing will be uHlity increasing or decresasing according to
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✓@U
@X� @⌦
@X
◆
X=0
< 0
@U
@GH
d(G+GH) = 0GH
@U
@Y� @U
@G
• Other issues: – Dynamic opHmizaHon – Decision on public health care that may overshoot (diverge from) consumers preferences
– Consumers heterogeneity and voHng for health care
– Etc... • My intenHon was illustrate that the apparently simple issue of sustainability has more to it than drawing the usual picture of growth of costs versus GDP per capita (or a variant) 46
Other things that ma[er? • The demand and supply of research funds
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• IncenHves in profession will make your research topics recursive – people will devote efforts to “publishable” areas and topics
• How do you know it is a “publishable area/topic”? Look what has been published recently – recursive nature
• And of course funding sources – take H2020 from the European Commission
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• Socio-‐economic determinants of health / inequaliHes / inequiHes – likely to remain acHve as policy makers give more a[enHon (and funds…)
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• Taking one the iniHal quesHons: “What topics will the next generaHon of health economists be focusing on in ten years' Hme?”
• I guess that whatever fits into these funding lines, from EC and from naHonal funding bodies, will lead to research...
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Let’s get it done!
My wish list for research:
1) Market equilibrium (including compeHHon aspects)
2) PoliHcal economy and insHtuHons of health care
3) Macro aspects of health care – concepts and guidance to empirical analysis and policy
4) A different balance of theory and empirical work
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My expectaHons:
1) Keep current trend – health determinants, analysis of policy experiments, focus on methods – panel data and instrumental
variables
2) Research where the money is: look at the H2020 as example – acHve and healthy
ageing, new models of care, etc.
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My hopes:
Researchers keep their curiosity and are able to find relevant issues, basic or/and applied,
conceptual and/or policy driven
Check progress in two years...
