James Lomas’s journal round-up for 21st May 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.

Decision making for healthcare resource allocation: joint v. separate decisions on interacting interventions. Medical Decision Making [PubMed] Published 23rd April 2018

While it may be uncontroversial that including all of the relevant comparators in an economic evaluation is crucial, a careful examination of this statement raises some interesting questions. Which comparators are relevant? For those that are relevant, how crucial is it that they are not excluded? The answer to the first of these questions may seem obvious, that all feasible mutually exclusive interventions should be compared, but this is in fact deceptive. Dakin and Gray highlight inconsistency between guidelines as to what constitutes interventions that are ‘mutually exclusive’ and so try to re-frame the distinction according to whether interventions are ‘incompatible’ – when it is physically impossible to implement both interventions simultaneously – and, if not, whether interventions are ‘interacting’ – where the costs and effects of the simultaneous implementation of A and B do not equal the sum of these parts. What I really like about this paper is that it has a very pragmatic focus. Inspired by policy arrangements, for example single technology appraisals, and the difficulty in capturing all interactions, Dakin and Gray provide a reader-friendly flow diagram to illustrate cases where excluding interacting interventions from a joint evaluation is likely to have a big impact, and furthermore propose a sequencing approach that avoids the major problems in evaluating separately what should be considered jointly. Essentially when we have interacting interventions at different points of the disease pathway, evaluating separately may not be problematic if we start at the end of the pathway and move backwards, similar to the method of backward induction used in sequence problems in game theory. There are additional related questions that I’d like to see these authors turn to next, such as how to include interaction effects between interventions and, in particular, how to evaluate system-wide policies that may interact with a very large number of interventions. This paper makes a great contribution to answering all of these questions by establishing a framework that clearly distinguishes concepts that had previously been subject to muddied thinking.

When cost-effective interventions are unaffordable: integrating cost-effectiveness and budget impact in priority setting for global health programs. PLoS Medicine [PubMed] Published 2nd October 2017

In my opinion, there are many things that health economists shouldn’t try to include when they conduct cost-effectiveness analysis. Affordability is not one of these. This paper is great, because Bilinski et al shine a light on the worldwide phenomenon of interventions being found to be ‘cost-effective’ but not affordable. A particular quote – that it would be financially impossible to implement all interventions that are found to be ‘very cost-effective’ in many low- and middle-income countries – is quite shocking. Bilinski et al compare and contrast cost-effectiveness analysis and budget impact analysis, and argue that there are four key reasons why something could be ‘cost-effective’ but not affordable: 1) judging cost-effectiveness with reference to an inappropriate cost-effectiveness ‘threshold’, 2) adoption of a societal perspective that includes costs not falling upon the payer’s budget, 3) failing to make explicit consideration of the distribution of costs over time and 4) the use of an inappropriate discount rate that may not accurately reflect the borrowing and investment opportunities facing the payer. They then argue that, because of this, cost-effectiveness analysis should be presented along with budget impact analysis so that the decision-maker can base a decision on both analyses. I don’t disagree with this as a pragmatic interim solution, but – by highlighting these four reasons for divergence of results with such important economic consequences – I think that there will be further reaching implications of this paper. To my mind, Bilinski et al essentially serves as a call to arms for researchers to try to come up with frameworks and estimates so that the conduct of cost-effectiveness analysis can be improved in order that paradoxical results are no longer produced, decisions are more usefully informed by cost-effectiveness analysis, and the opportunity costs of large budget impacts are properly evaluated – especially in the context of low- and middle-income countries where the foregone health from poor decisions can be so significant.

Patient cost-sharing, socioeconomic status, and children’s health care utilization. Journal of Health Economics [PubMed] Published 16th April 2018

This paper evaluates a policy using a combination of regression discontinuity design and difference-in-difference methods. Not only does it do that, but it tackles an important policy question using a detailed population-wide dataset (a set of linked datasets, more accurately). As if that weren’t enough, one of the policy reforms was actually implemented as a result of a vote where two politicians ‘accidentally pressed the wrong button’, reducing concerns that the policy may have in some way not been exogenous. Needless to say I found the method employed in this paper to be a pretty convincing identification strategy. The policy question at hand is about whether demand for GP visits for children in the Swedish county of Scania (Skåne) is affected by cost-sharing. Cost-sharing for GP visits has occurred for different age groups over different periods of time, providing the basis for regression discontinuities around the age threshold and treated and control groups over time. Nilsson and Paul find results suggesting that when health care is free of charge doctor visits by children increase by 5-10%. In this context, doctor visits happened subject to telephone triage by a nurse and so in this sense it can be argued that all of these visits would be ‘needed’. Further, Nilsson and Paul find that the sensitivity to price is concentrated in low-income households, and is greater among sickly children. The authors contextualise their results very well and, in addition to that context, I can’t deny that it also particularly resonated with me to read this approaching the 70th birthday of the NHS – a system where cost-sharing has never been implemented for GP visits by children. This paper is clearly also highly relevant to that debate that has surfaced again and again in the UK.



Thesis Thursday: Francesco Longo

On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Francesco Longo who has a PhD from the University of York. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Essays on hospital performance in England
Luigi Siciliani
Repository link

What do you mean by ‘hospital performance’, and how is it measured?

The concept of performance in the healthcare sector covers a number of dimensions including responsiveness, affordability, accessibility, quality, and efficiency. A PhD does not normally provide enough time to investigate all these aspects and, hence, my thesis mostly focuses on quality and efficiency in the hospital sector. The concept of quality or efficiency of a hospital is also surprisingly broad and, as a consequence, perfect quality and efficiency measures do not exist. For example, mortality and readmissions are good clinical quality measures but the majority of hospital patients do not die and are not readmitted. How well does the hospital treat these patients? Similarly for efficiency: knowing that a hospital is more efficient because it now has lower costs is essential, but how is that hospital actually reducing costs? My thesis tries to answer also these questions by analysing various quality and efficiency indicators. For example, Chapter 3 uses quality measures such as overall and condition-specific mortality, overall readmissions, and patient-reported outcomes for hip replacement. It also uses efficiency indicators such as bed occupancy, cancelled elective operations, and cost indexes. Chapter 4 analyses additional efficiency indicators, such as admissions per bed, the proportion of day cases, and proportion of untouched meals.

You dedicated a lot of effort to comparing specialist and general hospitals. Why is this important?

The first part of my thesis focuses on specialisation, i.e. an organisational form which is supposed to generate greater efficiency, quality, and responsiveness but not necessarily lower costs. Some evidence from the US suggests that orthopaedic and surgical hospitals had 20 percent higher inpatient costs because of, for example, higher staffing levels and better quality of care. In the English NHS, specialist hospitals play an important role because they deliver high proportions of specialised services, commonly low-volume but high-cost treatments for patients with complex and rare conditions. Specialist hospitals, therefore, allow the achievement of a critical mass of clinical expertise to ensure patients receive specialised treatments that produce better health outcomes. More precisely, my thesis focuses on specialist orthopaedic hospitals which, for instance, provide 90% of bone and soft tissue sarcomas surgeries, and 50% of scoliosis treatments. It is therefore important to investigate the financial viability of specialist orthopaedic hospitals relative to general hospitals that undertake similar activities, under the current payment system. The thesis implements weighted least square regressions to compare profit margins between specialist and general hospitals. Specialist orthopaedic hospitals are found to have lower profit margins, which are explained by patient characteristics such as age and severity. This means that, under the current payment system, providers that generally attract more complex patients such as specialist orthopaedic hospitals may be financially disadvantaged.

In what way is your analysis of competition in the NHS distinct from that of previous studies?

The second part of my thesis investigates the effect of competition on quality and efficiency under two different perspectives. First, it explores whether under competitive pressures neighbouring hospitals strategically interact in quality and efficiency, i.e. whether a hospital’s quality and efficiency respond to neighbouring hospitals’ quality and efficiency. Previous studies on English hospitals analyse strategic interactions only in quality and they employ cross-sectional spatial econometric models. Instead, my thesis uses panel spatial econometric models and a cross-sectional IV model in order to make causal statements about the existence of strategic interactions among rival hospitals. Second, the thesis examines the direct effect of hospital competition on efficiency. The previous empirical literature has studied this topic by focusing on two measures of efficiency such as unit costs and length of stay measured at the aggregate level or for a specific procedure (hip and knee replacement). My thesis provides a richer analysis by examining a wider range of efficiency dimensions. It combines a difference-in-difference strategy, commonly used in the literature, with Seemingly Unrelated Regression models to estimate the effect of competition on efficiency and enhance the precision of the estimates. Moreover, the thesis tests whether the effect of competition varies for more or less efficient hospitals using an unconditional quantile regression approach.

Where should researchers turn next to help policymakers understand hospital performance?

Hospitals are complex organisations and the idea of performance within this context is multifaceted. Even when we focus on a single performance dimension such as quality or efficiency, it is difficult to identify a measure that could work as a comprehensive proxy. It is therefore important to decompose as much as possible the analysis by exploring indicators capturing complementary aspects of the performance dimension of interest. This practice is likely to generate findings that are readily interpretable by policymakers. For instance, some results from my thesis suggest that hospital competition improves efficiency by reducing admissions per bed. Such an effect is driven by a reduction in the number of beds rather than an increase in the number of admissions. In addition, competition improves efficiency by pushing hospitals to increase the proportion of day cases. These findings may help to explain why other studies in the literature find that competition decreases length of stay: hospitals may replace elective patients, who occupy hospital beds for one or more nights, with day case patients, who are instead likely to be discharged the same day of admission.

Method of the month: Coding qualitative data

Once a month we discuss a particular research method that may be of interest to people working in health economics. We’ll consider widely used key methodologies, as well as more novel approaches. Our reviews are not designed to be comprehensive but provide an introduction to the method, its underlying principles, some applied examples, and where to find out more. If you’d like to write a post for this series, get in touch. This month’s method is coding qualitative data.


Health economists are increasingly stepping away from quantitative datasets and conducting interviews and focus groups, as well as collecting free text responses. Good qualitative analysis requires thought and rigour. In this blog post, I focus on coding of textual data – a fundamental part of analysis in nearly all qualitative studies. Many textbooks deal with this in detail. I have drawn on three in particular in this blog post (and my research): Coast (2017), Miles and Huberman (1994), and Ritchie and Lewis (2003).

Coding involves tagging segments of the text with salient words or short phrases. This assists the researcher with retrieving the data for further analysis and is, in itself, the first stage of analysing the data. Ultimately, the codes will feed into the final themes or model resulting from the research. So the codes – and the way they are applied – are important!


There is no ‘right way’ to code. However, I have increasingly found it useful to think of two phases of coding. First, ‘open coding’, which refers to the initial exploratory process of identifying pertinent phrases and concepts in the data. Second, formal or ‘axial’ coding, involving the application of a clear, pre-specified coding framework consistently across the source material.

Open coding

Any qualitative analysis should start with the researcher being very familiar with both the source material (such as interview transcripts) and the study objectives. This sounds obvious, but it is easy, as a researcher, to get drawn into the narrative of an interview and forget what exactly you are trying to get out of the research and, by extension, the coding. Open coding requires the researcher to go through the text, carefully, line-by-line, tagging segments with a code to denote its meaning. It is important to be inquisitive. What is being said? Does this relate to the research question and, if so, how?

Take, for example, the excerpt below from a speech by the Secretary of State for Health, Jeremy Hunt, on safety and efficiency in the NHS in 2015:

Let’s look at those challenges. And I think we have good news and bad news. If I start with the bad news it is that we face a triple whammy of huge financial pressures because of the deficit that we know we have to tackle as a country, of the ageing population that will mean we have a million more over 70s by 2020, and also of rising consumer expectations, the incredible excitement that people feel when they read about immunotherapy in the newspapers that gives a heart attack to me and Simon Stevens but is very very exciting for the country. The desire for 24/7 access to healthcare. These are expectations that we have to recognise in the NHS but all of these add to a massive pressure on the system.

This excerpt may be analysed, for example, as part of a study into demand pressures on the NHS. And, in this case, codes such as “ageing population” “consumer expectations” “immunotherapy” “24/7 access to healthcare” might initially be identified. However, if the study was investigating the nature of ministerial responsibility for the NHS, one might pull out very different codes, such as “tackle as a country”, “public demands vs. government stewardship” and “minister – chief exec shared responsibility”.

Codes can be anything – attitudes, behaviours, viewpoints – so long as they relate to the research question. It is very useful to get (at least) one other person to also code some of the same source material. Comparing codes will provide new ideas for the coding framework, a different perspective of the meaning of the source material and a check that key sections of the source material have not been missed. Researchers shouldn’t aim to code all (or even most) of the text of a transcript – there is always some redundancy. And, in general, initial codes should be as close to the source text as possible – some interpretation is fine but it is important to not get too abstract too quickly!

Formal or ‘axial’ coding

When the researcher has an initial list of codes, it is a good time to develop a formal coding framework. The aim here is to devise an index of some sort to tag all the data in a logical, systematic and comprehensive way, and in a way that will be useful for further analysis.

One way to start is to chart how the initial codes can be grouped and relate to one another. For example, in analysing NHS demand pressures, a researcher may group “immunotherapy” with other medical innovations mentioned elsewhere in the study. It’s important to avoid having many disconnected codes, and at this stage, many codes will be changed, subdivided, or combined. Much like an index, the resulting codes could be organised into loose chapters (or themes) such as “1. Consumer expectations”, “2. Access” and/or there might be a hierarchical relationship between codes, for example, with codes relating to national and local demand pressures. A proper axial coding framework has categories and sub-categories of codes with interdependencies formally specified.

There is no right number of codes. There could be as few as 10, or as many as 50, or more. It is crucial however that the list of codes are logically organised (not alphabetically listed) and sufficiently concise, so that the researcher can hold them in their head while coding transcripts. Alongside the coding framework itself – which may only be a page – it can be very helpful to put together an explanatory document with more detail on the meaning of each code and possibly some examples.


Once the formal coding framework is finalised it can be applied to the source material. I find this a good stage to use software like Nvivo. While coding in Nvivo takes a similar amount of time to paper-based methods, it can help speed up the process of retrieving and comparing segments of the text later on. Other software packages are available and some researchers prefer to use computer packages earlier in the process or not all – it is a personal choice.

Again, it is a good idea to involve at least one other person. One possibility is for two researchers to apply the framework separately and code the first, say 5 pages of a transcript. Reliability between coders can then be compared, with any discrepancies discussed and used to adjust the coding framework accordingly. The researchers could then repeat the process. Once reliability is at an acceptable level, a researcher should be able to code the transcripts in a much more reproducible way.

Even at this stage, the formal coding framework does not need to be set in stone. If it is based on a subset of interviews, new issues are likely to emerge in subsequent transcripts and these may need to be incorporated. Additionally, analyses may be conducted with sub-samples of participants or the analysis may move from more descriptive to explanatory work, and therefore the coding needs may change.


Published qualitative studies will often mention that transcript data were coded, with few details to discern how this was done. In the study I worked on to develop the ICECAP-A capability measure, we coded to identify influences on quality of life in the first batch of interviews and dimensions of quality of life in later batches of interviews. A recent study into disinvestment decisions highlights how a second rater can be used in coding. Reporting guidelines for qualitative research papers highlight three important items related to coding – number of coders, description of the coding tree (framework), and derivation of the themes – that ought to be included in study write-ups.

Coding qualitative data can feel quite laborious. However, the real benefit of a well organised coding framework comes when reconstituting transcript data under common codes or themes. Codes that relate clearly to the research question, and one another, allow the researcher to reorganise the data with real purpose. Juxtaposing previously unrelated text and quotes sparks the discovery of exciting new links in the data. In turn, this spawns the interpretative work that is the fundamental value of the qualitative analysis. In economics parlance, good coding can improve both the efficiency of retrieving text for analysis and the quality of the analytical output itself.