Sam Watson’s journal round-up for 12th February 2018

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. 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.

Tuskegee and the health of black men. The Quarterly Journal of Economics [RePEc] Published February 2018

In 1932, a study often considered the most infamous and potentially most unethical in U.S. medical history began. Researchers in Alabama enrolled impoverished black men in a research program designed to examine the effects of syphilis under the guise of receiving government-funded health care. The study was known as the Tuskegee syphilis experiment. For 40 years the research subjects were not informed they had syphilis nor were they treated, even after penicillin was shown to be effective. The study was terminated in 1972 after its details were leaked to the press; numerous men died, 40 wives contracted syphilis, and a number of children were born with congenital syphilis. It is no surprise then that there is distrust among African Americans in the medical system. The aim of this article is to examine whether the distrust engendered by the Tuskegee study could have contributed to the significant differences in health outcomes between black males and other groups. To derive a causal estimate the study makes use of a number of differences: black vs non-black, for obvious reasons; male vs female, since the study targeted males, and also since women were more likely to have had contact with and hence higher trust in the medical system; before vs after; and geographic differences, since proximity to the location of the study may be informative about trust in the local health care facilities. A wide variety of further checks reinforce the conclusions that the study led to a reduction in health care utilisation among black men of around 20%. The effect is particularly pronounced in those with low education and income. Beyond elucidating the indirect harms caused by this most heinous of studies, it illustrates the importance of trust in mediating the effectiveness of public institutions. Poor reputations caused by negligence and malpractice can spread far and wide – the mid-Staffordshire hospital scandal may be just such an example.

The economic consequences of hospital admissions. American Economic Review [RePEcPublished February 2018

That this paper’s title recalls that of Keynes’s book The Economic Consequences of the Peace is to my mind no mistake. Keynes argued that a generous and equitable post-war settlement was required to ensure peace and economic well-being in Europe. The slow ‘economic privation’ driven by the punitive measures and imposed austerity of the Treaty of Versailles would lead to crisis. Keynes was evidently highly critical of the conference that led to the Treaty and resigned in protest before its end. But what does this have to do with hospital admissions? Using an ‘event study’ approach – in essence regressing the outcome of interest on covariates including indicators of time relative to an event – the paper examines the impact hospital admissions have on a range of economic outcomes. The authors find that for insured non-elderly adults “hospital admissions increase out-of-pocket medical spending, unpaid medical bills, and bankruptcy, and reduce earnings, income, access to credit, and consumer borrowing.” Similarly, they estimate that hospital admissions among this same group are responsible for around 4% of bankruptcies annually. These losses are often not insured, but they note that in a number of European countries the social welfare system does provide assistance for lost wages in the event of hospital admission. Certainly, this could be construed as economic privation brought about by a lack of generosity of the state. Nevertheless, it also reinforces the fact that negative health shocks can have adverse consequences through a person’s life beyond those directly caused by the need for medical care.

Is health care infected by Baumol’s cost disease? Test of a new model. Health Economics [PubMed] [RePEcPublished 9th February 2018

A few years ago we discussed Baumol’s theory of the ‘cost disease’ and an empirical study trying to identify it. In brief, the theory supposes that spending on health care (and other labour-intensive or creative industries) as a proportion of GDP increases, at least in part, because these sectors experience the least productivity growth. Productivity increases the fastest in sectors like manufacturing and remuneration increases as a result. However, this would lead to wages in the most productive sectors outstripping those in the ‘stagnant’ sectors. For example, salaries for doctors would end up being less than those for low-skilled factory work. Wages, therefore, increase in the stagnant sectors despite a lack of productivity growth. The consequence of all this is that as GDP grows, the proportion spent on stagnant sectors increases, but importantly the absolute amount spent on the productive sectors does not decrease. The share of the pie gets bigger but the pie is growing at least as fast, as it were. To test this, this article starts with a theoretic two-sector model to develop some testable predictions. In particular, the authors posit that the cost disease implies: (i) productivity is related to the share of labour in the health sector, and (ii) productivity is related to the ratio of prices in the health and non-health sectors. Using data from 28 OECD countries between 1995 and 2016 as well as further data on US industry group, they find no evidence to support these predictions, nor others generated by their model. One reason for this could be that wages in the last ten years or more have not risen in line with productivity in manufacturing or other ‘productive’ sectors, or that productivity has indeed increased as fast as the rest of the economy in the health care sector. Indeed, we have discussed productivity growth in the health sector in England and Wales previously. The cost disease may well then not be a cause of rising health care costs – nevertheless, health care need is rising and we should still expect costs to rise concordantly.

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Paul Mitchell’s journal round-up for 25th December 2017

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. 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.

Consensus-based cross-European recommendations for the identification, measurement and valuation of costs in health economic evaluations: a European Delphi study. European Journal of Health Economics [PubMedPublished 19th December 2017

The primary aim of this study was to develop guidelines for costing in economic evaluation studies conducted across more than one European country. The starting point of the societal perspective as the benchmark for costing was not entirely obvious from the abstract, where this broadest approach to costing is not recommended uniformly across all European countries. Recommendations following this starting point looked at the identification, measurement and valuation of resource use, discount rate and discounting of future costs. A three-step Delphi study was used to gain consensus on what should be included in an economic evaluation from a societal perspective, based initially on findings from a review of costing methodologies adopted across European country-specific guidelines. Consensus required at least two thirds (67%) agreement across those participating in the Delphi study at all 3 stages. Where no agreement was reached after the three stages, a panel of four of the co-authors made a final decision on what should be recommended. In total, 26 of the 110 invited to participate completed at least one Delphi round, with all Delphi rounds having at least 16 participants. It remains unclear to me if 16 for a Delphi round is sufficient to reach a European wide consensus on costing methodologies. There were a number of key areas where no consensus was reached (e.g. including costs unrelated to the intervention, measurement of resource use and absenteeism, and valuation of opportunity costs of patient time and informal care), so the four-strong author panel had a leading role on some of the main recommendations. Notwithstanding the limitations associated with the reference perspective taken and sample for the Delphi study and panel, the paper provides a useful illustration of the different approaches to costing across European countries. It also provides a good coverage of costing issues that need to be explained in detail in economic evaluations to allow for clear understanding of methods used and the underpinning rationale for those decisions where a choice is required on the costing methodology applied.

A (five-)level playing field for mental health conditions?: exploratory analysis of EQ-5D-5L derived utility values. Quality of Life Research [PubMedPublished 16th December 2017

The UK health economics community has been reeling from the decision made earlier this year by UK guidelines developer, the National Institute for Health and Care Excellence (NICE), who recommended to not adopt the new population values developed for the EQ-5D-5L version when calculating QALYs and instead rely on a crosswalk of the values developed over 20 years ago for the 3 level EQ-5D version. This paper provides a timely comparison of how these two value sets perform for the EQ-5D-5L descriptive system in patient groups with mental health conditions, groups often thought to be disadvantaged by the physical health functioning focus of the EQ-5D descriptive system. Using baseline data from three trials, the authors find that the new utility values produce a higher mean EQ-5D score of 0.08 compared to the old crosswalk values, with a 0.225 difference for those reporting extreme problems with the anxiety/depression dimension on EQ-5D. Although, the authors of this study highlight using these new values would increase cost per QALY results in this sample using scenario analysis, when improvements are in the depression/anxiety category only, such improvements are relatively better than across the whole EQ-5D-5L descriptive system due to the relative additional value placed on the anxiety/depression dimension in the new values. This paper makes for interesting reading and one that NICE should take into consideration when reviewing their decision on this issue next year. Although I would disagree with the authors when they state that this study would be a primary reason for revising the NICE cost-effectiveness threshold (more compelling arguments for this elsewhere in my view), it does clearly highlight the influence of the choice of descriptive system and the values used in the outcomes produced for economic analysis such as QALYs, even when the two descriptive systems in question (EQ-5D-3L and EQ-5D-5L) are roughly the same.

What characteristics of nursing homes are most valued by customers? A discrete choice experiment with residents and family members. Value in Health Published 1st December 2017

Our final paper for review in 2017 looks at the characteristics that are of most importance to individuals and their family members when it comes to nursing home provision. The authors conducted a valuation exercise using a discrete choice experiment (DCE) to calculate the relative importance of the attributes contained on the Consumer Choice Index-Six Dimension (CCI-6D), a measure developed to assess the quality of nursing home care across 3 levels on six domains: 1. level of time care staff spent with residents; 2. homeliness of shared spaces; 3. homeliness of room setup; 4. access to outside and garden; 5. frequency of meaningful activities; and 6. flexibility with care routines. Those who lived in a nursing home for at least a year with low levels of cognitive impairment completed the DCE themselves, whereas family members were asked to proxy for their close relative with more severe cognitive impairment. 126 residents and 416 family member proxies completed the DCE comparisons of nursing homes with different qualities in these six areas. The results of the DCE show differences in preferences across the two groups. Although similar importance is placed on some dimensions across both groups (i.e. “homeliness of room set up” ranked highly, whereas “frequency of meaningful activities” ranked lower), residents value access to outside and garden four times as much as the family proxies do (second most important dimension for residents, lowest for family proxies), family members value level of time care staff spent with residents twice as much as residents themselves (most important attribute for family proxies, third most important for residents). Although residents in both groups may have important differences in characteristics that might explain some of this difference, it is probably a good time of year to remember family preferences may be inconsistent with individuals within them, so make sure to take account of this variation when preparing those Christmas dinners.

Happy holidays all.

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Chris Sampson’s journal round-up for 4th December 2017

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. 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.

Funding breakthrough therapies: a systematic review and recommendation. Health Policy Published 2nd December 2017

One of the (numerous) financial pressures on health care funders in the West is the introduction of innovative (and generally very expensive) new therapies. Some of these can be considered curative, which isn’t necessarily the best way for manufacturers to create a steady income. New funding arrangements have been proposed to facilitate patient access while maintaining financial sustainability. This article focuses on a specific group of innovative therapies known as ‘Advanced Therapy Medicinal Products’ (ATMPs), which includes gene therapies. The authors conducted a systematic review of papers proposing funding models and considered their appropriateness for ATMPs. There were 48 papers included in the review that proposed payment mechanisms for high-cost therapies. Three top-level groups were identified: i) financial agreements, ii) performance-based agreements, and iii) healthcoin (a tradable currency representing the value of outcomes). The different mechanisms are compared in terms of their feasibility, acceptability, burden, ‘financial attractiveness’ and their appeal to payers and manufacturers. Annuity payments are identified as relatively attractive compared to other options, but each mechanism is summarily shown to be imperfect in the ATMP context. So, instead, the authors propose an ATMP-specific fund. For UK readers, this will likely smell a bit too much like the disastrous Cancer Drugs Fund. It isn’t clear why such a programme would be superior to annuity payments or more inventive mechanisms, or even whether it would be theoretically sound. Thus, the proposal is not convincing.

Supply-side effects from public insurance expansions: evidence from physician labor markets. Health Economics [PubMed] Published 1st December 2017

Crazy though American health care may be, its inconsistency in coverage can make for good research fodder. The Child Health Insurance Program (CHIP) was set up in 1997 and then, when the initial money ran out 10 years later, the program was (eventually) expanded. In this study, the authors use the changes in CHIP to examine the impact of expanded public coverage on provider behaviour, namely; subspecialty training (which could become more attractive with a well-insured customer base), practice setting and prevailing wage offers. The data for the study relate to the physician labour market for New York state for 2002-2013, as collected in the Graduate Medical Education survey. A simple difference-in-differences analysis is conducted with reference to the 2009 CHIP expansion, controlling for physician demographics. Paediatricians are the treatment group and the control group is adult physician generalists (mostly internal medicine). 2009 seems to be associated with a step-change in the proportion of paediatricians choosing to subspecialise – an increased probability of about 8 percentage points. There is also an upward shift in the proportion of paediatricians entering private practice, with some (weak) evidence that there is an increased preference for rural areas. These changes don’t seem to be driven by relative wage increases, with no major change in trends. So it seems that the expanded coverage did have important supply-side effects. But the waters are muddy here. In particular, we have the Great Recession and Obamacare as possible alternative explanations. Though it’s difficult to come up with good reasons for why these might better explain the observed changes.

Reflections on the NICE decision to reject patient production losses. International Journal of Technology Assessment in Health Care [PubMedPublished 20th November 2017

When people conduct economic evaluations ‘from a societal perspective’, this often just means a health service perspective with productivity losses added. NICE explicitly exclude the inclusion of these production losses in health technology appraisals. This paper reviews the issues at play, focussing on the normative question of why they should (or should not) be included. Findings from a literature review are summarised with reference to the ethical, theoretical and policy questions. Unethical discrimination potentially occurs if people are denied health care on the basis of non-health-related characteristics, such as the ability to work. All else equal, should health care for men be prioritised over health care for women because men have higher wages? Are the unemployed less of a priority because they’re unemployed? The only basis on which to defend the efficiency of an approach that includes productivity losses seems to be a neoclassical welfarist one, which is hardly tenable in the context of health care. If we adopt the extra-welfarist understanding of opportunity cost as foregone health then there is really no place for production losses. The authors also argue that including production losses may be at odds with policy objectives, at least in the context of the NHS in the UK. Health systems based on privately-funded care or social insurance may have different priorities. The article concludes that taking account of production losses is at odds with the goal of health maximisation and therefore the purpose of the NHS in the UK. Personally, I think priority setting in health care should take a narrow health perspective. So I agree with the authors that production losses shouldn’t be included. I’m not sure this article will convince those who disagree, but it’s good to have a reference to vindicate NICE’s position.

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