Chris Sampson’s journal round-up for 19th March 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.

Using HTA and guideline development as a tool for research priority setting the NICE way: reducing research waste by identifying the right research to fund. BMJ Open [PubMed] Published 8th March 2018

As well as the cost-effectiveness of health care, economists are increasingly concerned with the cost-effectiveness of health research. This makes sense, given that both are usually publicly funded and so spending on one (in principle) limits spending on the other. NICE exists in part to prevent waste in the provision of health care – seeking to maximise benefit. In this paper, the authors (all current or ex-employees of NICE) consider the extent to which NICE processes are also be used to prevent waste in health research. The study focuses on the processes underlying NICE guideline development and HTA, and the work by NICE’s Science Policy and Research (SP&R) programme. Through systematic review and (sometimes) economic modelling, NICE guidelines identify research needs, and NICE works with the National Institute for Health Research to get their recommended research commissioned, with some research fast-tracked as ‘NICE Key Priorities’. Sometimes, it’s also necessary to prioritise research into methodological development, and NICE have conducted reviews to address this, with the Internal Research Advisory Group established to ensure that methodological research is commissioned. The paper also highlights the roles of other groups such as the Decision Support Unit, Technical Support Unit and External Assessment Centres. This paper is useful for two reasons. First, it gives a clear and concise explanation of NICE’s processes with respect to research prioritisation, and maps out the working groups involved. This will provide researchers with an understanding of how their work fits into this process. Second, the paper highlights NICE’s current research priorities and provides insight into how these develop. This could be helpful to researchers looking to develop new ideas and proposals that will align with NICE’s priorities.

The impact of the minimum wage on health. International Journal of Health Economics and Management [PubMed] Published 7th March 2018

The minimum wage is one of those policies that is so far-reaching, and with such ambiguous implications for different people, that research into its impact can deliver dramatically different conclusions. This study uses American data and takes advantage of the fact that different states have different minimum wage levels. The authors try to look at a broad range of mechanisms by which minimum wage can affect health. A major focus is on risky health behaviours. The study uses data from the Behavioral Risk Factor Surveillance System, which includes around 300,000 respondents per year across all states. Relevant variables from these data characterise smoking, drinking, and fruit and vegetable consumption, as well as obesity. There are also indicators of health care access and self-reported health. The authors cut their sample to include 21-64-year-olds with no more than a high school degree. Difference-in-differences are estimated by OLS according to individual states’ minimum wage changes. As is often the case for minimum wage studies, the authors find several non-significant effects: smoking and drinking don’t seem to be affected. Similarly, there isn’t much of an impact on health care access. There seems to be a small positive impact of minimum wage on the likelihood of being obese, but no impact on BMI. I’m not sure how to interpret that, but there is also evidence that a minimum wage increase leads to a reduction in fruit and vegetable consumption, which adds credence to the obesity finding. The results also demonstrate that a minimum wage increase can reduce the number of days that people report to be in poor health. But generally – on aggregate – there isn’t much going on at all. So the authors look at subgroups. Smoking is found to increase (and BMI decrease) with minimum wage for younger non-married white males. Obesity is more likely to be increased by minimum wage hikes for people who are white or married, and especially for those in older age groups. Women seem to benefit from fewer days with mental health problems. The main concerns identified in this paper are that minimum wage increases could increase smoking in young men and could reduce fruit and veg consumption. But I don’t think we should overstate it. There’s a lot going on in the data, and though the authors do a good job of trying to identify the effects, other explanations can’t be excluded. Minimum wage increases probably don’t have a major direct impact on health behaviours – positive or negative – but policymakers should take note of the potential value in providing public health interventions to those groups of people who are likely to be affected by the minimum wage.

Aligning policy objectives and payment design in palliative care. BMC Palliative Care [PubMed] Published 7th March 2018

Health care at the end of life – including palliative care – presents challenges in evaluation. The focus is on improving patients’ quality of life, but it’s also about satisfying preferences for processes of care, the experiences of carers, and providing a ‘good death’. And partly because these things can be difficult to measure, it can be difficult to design payment mechanisms to achieve desirable outcomes. Perhaps that’s why there is no current standard approach to funding for palliative care, with a lot of variation between countries, despite the common aspiration for universality. This paper tackles the question of payment design with a discussion of the literature. Traditionally, palliative care has been funded by block payments, per diems, or fee-for-service. The author starts with the acknowledgement that there are two challenges to ensuring value for money in palliative care: moral hazard and adverse selection. Providers may over-supply because of fee-for-service funding arrangements, or they may ‘cream-skim’ patients. Adverse selection may arise in an insurance-based system, with demand from high-risk people causing the market to fail. These problems could potentially be solved by capitation-based payments and risk adjustment. The market could also be warped by blunt eligibility restrictions and funding caps. Another difficulty is the challenge of achieving allocative efficiency between home-based and hospital-based services, made plain by the fact that, in many countries, a majority of people die in hospital despite a preference for dying at home. The author describes developments (particularly in Australia) in activity-based funding for palliative care. An interesting proposal – though not discussed in enough detail – is that payments could be made for each death (per mortems?). Capitation-based payment models are considered and the extent to which pay-for-performance could be incorporated is also discussed – the latter being potentially important in achieving those process outcomes that matter so much in palliative care. Yet another challenge is the question of when palliative care should come into play, because, in some cases, it’s a matter of sooner being better, because the provision of palliative care can give rise to less costly and more preferred treatment pathways. Thus, palliative care funding models will have implications for the funding of acute care. Throughout, the paper includes examples from different countries, along with a wealth of references to dig into. Helpfully, the author explicitly states in a table the models that different settings ought to adopt, given their prevailing model. As our population ages and the purse strings tighten, this is a discussion we can expect to be having more and more.

Credits

 

Chris Sampson’s journal round-up for 11th April 2016

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.

Estimating the medical care costs of obesity in the United States: systematic review, meta-analysis, and empirical analysis. Value in Health Published 6th April 2016

I’m always a little wary of the “[insert disease] costs the economy $[insert big number] per year” studies. There is just too much up for debate: whether a cost can be attributed to the disease; who bears the cost; whether in fact it should be considered a cost at all. A second look through the lense of a critical review is just what these studies need. Obesity is a big deal, but there is wide variation in estimates of its cost to the US economy. This study includes a systematic review and meta-analysis looking at the medical costs of obesity estimated by studies between 2008 and 2012. Twelve studies were included in the review. The annual cost of obesity per person that was reported in the studies ranged from $227 to $7269. Wow! The pooled estimate from the meta-analysis was $1910; around $150 billion for the US as a whole. The authors looked at the methods used in the studies, but due to the variation in methods chosen and data used they weren’t able to learn that much about how this might affect estimates. The studies aren’t entirely comparable to one another. So the authors also carry out an original analysis using data from the Medical Expenditure Panel Survey to explore the impact on estimates of alternative modelling strategies. The analysis was varied by 4 age groups, 5 statistical models and 4 sets of confounders to give 80 estimates in total. The alternative statistical models didn’t make much difference, but the authors found that their extended estimating equation had the best goodness of fit. This analysis found an average cost of $1343 per person. Age groups and confounders were important. Costs were especially high in the over 65s. Older obese people have a lot of obesity-related diseases, while obese children have very few and have relatively low costs. Controlling for obesity-related disease explained away most of the incremental cost. This brings us back to the question of what should and what shouldn’t be considered a cost of the disease. What we really want to know is the counterfactual cost of the presence of obesity; what if these people weren’t obese? It remains unclear how studies might even go about defining this, let alone actually estimating it.

Introduction of a national minimum wage reduced depressive symptoms in low-wage workers: a quasi-natural experiment in the UK. Health Economics [PubMedPublished 4th April 2016

The introduction to this paper states that “no study has investigated the health effects of the UK National Minimum Wage”. That took me by surprise. So – apparently – here is the first, and it’s particularly relevant given the recent introduction of the so-called ‘National Living Wage’. The authors use data from the BHPS to test whether the increase in wages for low earners associated with the introduction of the minimum wage resulted in a positive health effect. A difference-in-differences analysis was performed using data from just before and just after the introduction of the minimum wage. Health effect is measured using the General Health Questionnaire (GHQ), which asks about current mental health problems relative to what the respondent normally feels. The intervention group was those earning less than £3.60 per hour in 1998 and between £3.60 and £4.00 per hour in 1999. There are 2 alternative control groups; one consisting those earning just above the minimum wage in 1998 and another for people whose employer did not comply. Plenty of effort is made to try and isolate the effect by incorporating physical health changes into the model and exploring the role of financial strain as a mediating effect. The results show a (statistically significant) positive impact on the GHQ. But the results aren’t quite as compelling as they might at first seem. There are a lot of exclusions that might not stand up to scrutiny, and the intervention group was made up of just 63 people. It would be good to see the analysis adapted into an economic evaluation of the policy.

An econometric model of healthcare demand with nonlinear pricing. Health Economics [PubMedPublished 4th April 2016

In Germany, health insurance is mandatory and most people receive their coverage through a public system. Between 2004 and 2013 it operated an interesting policy: the first visit to a doctor in each calendar quarter was subject to a co-payment of €10, with no copayment for subsequent visits. That’s not a lot of money for most people, but instinct would tell me that at least some people would probably avoid a single visit within a quarter and perhaps bunch-up visits if possible. This study tests that instinct. The authors develop a model of health care demand based on health shocks arriving as a Poisson process. It assumes that the co-payment increases the probability of no visit taking place and that if one does take place then this is more likely to be later in the quarter. A joint analysis of two difference-in-differences experiments is used, based on both the introduction and the repeal of the policy. The control group consists the people with private health insurance who were not affected by the policy changes. Data come from the German Socio-Economic Panel and the main analysis included over 30,000 observations. This was in part thanks to the development and successful implementation of a method to address mismatching between observation date and calendar quarters. None of the various model specifications identified a statistically significant effect of the policy on the number of doctor visits, so I suspect it won’t be reintroduced any time soon.

Diagnosing the causes of rising health-care expenditure in Canada: does Baumol’s cost disease loom large? American Journal of Health Economics Published 31st March 2016

Baumol’s cost disease is a neat idea: health care costs will rise faster than most others because health care is labour intensive and – while wages will grow in line with other industries – productivity growth cannot keep up. There’s some evidence that Baumol’s cost disease does exist, but there is less evidence about how big a deal it is compared to other non-observable drivers of rising health care expenditure. As for many other countries, Canada’s health care spending has grown at a much faster rate than the consumer price index. This new study looks at national and provincial data from Canada for 1982-2011 and decomposes the growth rate into that driven by the cost disease, technological progress and observable factors. Observable variables include population ageing, per capita income growth, economic recession and social determinants of health. The analysis uses a recently developed method, referred to as the Hartwig-Colombier test, to evaluate the impact of Baumol’s cost disease. In line with previous research, growth in per capita income is shown to be the most important driver of health care spending growth. For all provinces, the analysis finds that the cost disease is relatively unimportant. Technological progress appears to have a far greater influence, accounting for at least 31% of spending increases. Furthermore, the authors find that population ageing is not such a big concern and that the spending increases resulting from it are manageable. The implication is that if Canada wants to control spending growth then it should focus on managing the adoption of new technologies.