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Grace Li’s journal round-up for 20th July 2020

Every Monday our authors provide a round-up of the latest peer-reviewed journal publications. We cover all issues of major health economics journals as well as some other notable releases. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

Health Economics

Volume 29, Issue 8

Accurately measuring the number of unauthorised migrants living in the UK has been a long-standing challenge for the UK Home Office. Estimates vary, however the Pew Research Centre thinks that there may be between 800,000 – 1.2 million unauthorised migrants living in the UK. Since 2015, individuals residing outside the European Economic Area are liable for 150% of the cost of NHS treatment for the care they receive. From October 2017, all NHS trusts and NHS foundation trusts have been required to record when a person is an overseas visitor (i.e. not ordinarily resident in the UK), against their NHS number. This month’s paper by Jiménez‐Rubio and Vall Castelló is therefore of particular relevance to the current situation in the UK.

The authors exploit a rich dataset from the Barometro Sanitario (Spanish Health Barometer) following Spanish health reform in 2012 to investigate the impact on access to health care services for undocumented migrants on health care utilisation, health care system perceptions, and self-reported health. Prior to 2012, health care in Spain was universal; undocumented migrants were entitled to the same health care as residents. In April 2012, after 4 years of severe economic crisis, the Spanish government introduced a new law which linked entitlement to health care with contribution to the system. Emergency, maternity, and child care were the only services that undocumented migrants were still able to use on the same terms. The authors identify the undocumented migrant population using disparities between 2011 Census information and the number of actual residence permits issued for a given nationality. Their difference-in-difference approach reveals that the probability of visiting a GP fell by 8.1%, and of visiting a specialist fell by 25.7%, and hospital visits by 36.4%, for undocumented migrants. A non-statistically significant reduction in self-assessed health was also seen, however, this is not inconsistent with previous studies which suggest that self-reported health and mortality are related and that restricting access to health care can lead to higher mortality rates for undocumented migrants.

This policy has since been reversed in Spain, where the new 2018 government restored universal health coverage to immigrants who could provide evidence that they had resided in Spain for more than 90 days. Although the restrictions in healthcare coverage differ to those in place in the UK (notably, maternity services were excluded in 2015), this paper may be relevant when considering how to evaluate the effects of similar policies in the UK.

Community pharmacies in Europe have undergone extensive reform in the last twenty years. In particular, the sale of over-the-counter (OTC) medications has moved from a pharmacy-centred model to one in which channels such as petrol stations and supermarkets play an increasingly significant role. One rationale for this policy change was that increasing competition would lead to lower OTC drug prices.

Whilst this policy was implemented in the UK in the 1990s, to date, using Portuguese data, Moura and Pita Barros are the first to formally use a difference-in-differences approach to compare changes in prices charged by pharmacies experiencing the entry of a non-pharmacy competitor amongst their main competitors (as measured geographically within a 400-metre radius and also in absolute numbers of nearest competitors). Their results show that existing pharmacies lower prices by approximately 6% after experiencing the entry of a supermarket (but not other outlets) amongst their three nearest competitors. This effect appears to be relatively localised (disappearing when the radius is over 800 metres) and there is no evidence from their models that the pricing of OTC drugs by pre-existing pharmacies has any influence on a subsequent non-pharmacy entry into the local market. Whilst these results may be specific to the municipality of Lisbon, from which the data were taken, they provide an interesting view into how evolving deregulation of drug markets impacts upon the prices that consumers face and how larger retailers such as supermarkets can play a role in price competition.

Lastly, how can we evaluate the value of innovation when patients may not respond equally to a new treatment? This is what Levaggi and Pertile attempt to answer using a new pricing model, taking into account occasions when the patient population may be relatively heterogeneous. This is becoming particularly relevant in the era of genomic medicine and biomarker discovery. Should reimbursement rules be based on the average value for a patient treated or the marginal value (conceptually closest to the idea of stratified cost-effectiveness analysis, where patients are grouped according to their propensity to respond to treatment)? Although average value-based pricing is both statically and dynamically efficient, there is increased expenditure for the payer and lower consumer surplus. The authors argue that pricing should take into account the heterogeneity of patient populations not by stratifying prices but by lowering the average value-based price overall. Future analyses may benefit from consideration of other aspects of the long-term relationship between the payer and firm, e.g. risk aversion concerning the outcome of R&D. Can any parallels be brought between this and cost-sharing schemes?

Health Affairs

Volume 39, Issue 7

This month’s Health Affairs explores factors outside the health care system, e.g. cultural and social factors, which promote good health. Several countries around the world, including cities in the US, have adopted sugar-sweetened beverage taxes with the goal of reducing consumption. A study from Philadelphia focused on sales at small independent stores and found that the entire amount of the tax (plus, often, an additional levy) was passed onto consumers, leading to a 39% reduction by volume of sugar-sweetened beverages being consumed. A greater effect was seen in low-income households and substitution with non-taxed beverages was seen.

Whilst the Sustainable Development Goals emphasise the need to ensure that women are fully involved in public life, there is also increasing evidence that increased women’s political representation may positively affect policy outcomes in relation to the quality of child care and health care. Hessel and colleagues use longitudinal data from Brazil to assess the association between female political participation and the under-5 mortality rate, whilst exploring the way it may be linked to the rollout of the country’s primary care health programme. Female participation was captured by whether a municipality had an elected female mayor, the percentage of female representatives in the state legislature and lastly the percentage of elected representatives in the federal Chamber of Deputies. They regressed under-5 mortality on these indicators, health care coverage on under-5 mortality, and finally health care coverage on the indicators, to assess whether increases in representation were associated with higher coverage. They found evidence that health care coverage was associated with increased female political representation at not only the national but also the local level. This may perhaps require a broader examination of what we consider the determinants of health to be.


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