Agent relationships and information asymmetries in public health

The agent relationship and information asymmetry are two features of healthcare economics – but how do they apply to public health policy around processed foods?

Why is health different to other goods?

Arrow’s 1963 seminal paper helped lay the foundations for health economics as a discipline. The Nobel-winning economist talks about what makes healthcare different to other types of market goods. Two of the principal things are agent relationship – that a clinician often makes choices on behalf of a patient (Arrow calls them a “controlling agent”); and information asymmetry – that a clinician knows more than the patient (“informational inequality”). Whereas if someone is buying a new car, they make their own choices, and they might read up on the extensive information available so that they are reasonably knowledgeable about what to buy. These two factors have evolved and possibly diminished over time, especially among highly educated people in developed countries; people often have more choice over their treatment options, and some people have become ‘expert patients‘. Patients may no longer believe that the Götter in Weiß (Gods dressed in white) always know best.

Agent relationship and information asymmetry are features of healthcare economics but they also apply to public health economics. But where people accept clinicians as having more knowledge or acting as their agent, people don’t always accept advice on food from public health policy makers in the same way. People may think, “well I know how to buy a bottle of beer, or a can of coke, or a pizza”, and may not see any potential information asymmetry. Some of it might be ‘akrasia’ – they know that food is unhealthy, but they eat it anyway because it is delicious! However, few people may be aware that poor diet and obesity are the biggest risk factors for ill health and mortality in England.

People might ask “why should a nanny state agent make my food or drink decisions for me?” Of course, this is ignoring the fact that processed food companies might be making those decisions, and reinforcing them using huge marketing budgets. Consumers see government influences but they don’t always see the other information asymmetry and agent relationship; the latent power structures that drive their behaviours – from the food, drinks, alcohol industry, etc. Unsustainable food systems that promote obesity and poor health might be an example of market failure or a tragedy of the commons. The English food system has not moved on enough from post-world war 2 rationing, where food security was the major concern; it still has an objective to maximise calorie supply across the population, rather than maximise population health.

Some of the big UK misselling scandals like mortgage PPI are asymmetries. You could argue that processed foods (junk food high in salt, sugar and saturated fats) might be missold because producers try to misrepresent the true mix of ingredients – for example, many advertisements for processed foods try to misrepresent their products by showing lots of fresh fruit and vegetables. Even though processed foods might have ingredients listed, people have an information asymmetry (or at least, a deficit around information processing) around truly understanding the amount of hidden salt and sugars, because they may assume that the preparation process is similar to a familiar home cooked method. In the US there have been several lawsuits from consumers alleging that companies have misled them by promoting products as being wholesome and natural when they are in fact loaded with added sugars.

The agent relationship and information asymmetry as applied to food policy and health.

How acceptable are public health policies?

A 2012 UK poll carried out by YouGov, funded by the Adam Smith Institute (a right wing free market think tank), found that 22% of people in England thought that the government should tell people what to eat and drink, and 44% thought the government should not. Does this indicate a lack of respect for public health as a specialism? But telling people what to eat and drink is not the same as enacting structural policies to improve foods. Research has shown that interventions like reducing salt in processed foods in the UK or added sugar labelling in the US could be very cost effective. There has been some progress with US and UK programmes like the sugary drinks industry levy, which now has a good level of public support. But voluntary initiatives like the UK sugar reduction programme have been less effective, which may be because they are weakly enforced, and not ambitious enough.

A recent UK study used another YouGov survey to assess the public acceptability of behavioural ‘nudge’ interventions around tobacco, alcohol, and high-calorie snack foods. It compared four types of nudges: labelling (adding graphic warning labels to products); size (reducing pack size of snacks, serving size for alcohol, and number of cigarettes in packets for tobacco); tax (increasing the price to consumers); and availability (banning sales from corner shops). This study found that labelling was the most acceptable policy, then size, tax, and availability. It found that targeting tobacco use was more acceptable than targeting alcohol or food. Acceptability was lower in people who participated in the relevant behaviour regularly, i.e. smokers, heavy drinkers, frequent snackers.

What should public health experts do?

Perhaps public health experts need to do more to enhance their reputation with the public. But when they are competing with a partnership between right wing think tanks, the media and politicians, all funded by big food, tobacco and alcohol, it is difficult for public health experts to get their message out. Perhaps it falls to celebrities and TV chefs like Jamie Oliver and Hugh Fearnley-Whittingstall to push for healthy (and often more sustainable) food policy, or fiscal measures to internalise the externalities around unhealthy foods. The food industry falls back on saying that obesity is complex, exercise is important as well as diet, and more research is needed. They are right that obesity is complex, but there is enough evidence to act. There is good evidence for an ‘equity effectiveness hierarchy‘ where policy-level interventions are more effective at a population level, and more likely to reduce inequalities between rich and poor, than individual, agentic interventions. This means that individual education and promoting exercise may not be as effective as national policy interventions around food.

The answer to these issues may be in doing more to reduce information asymmetries by educating the public about what is in processed food, starting with schools. At the same time understanding that industries are not benevolent; they have an agent relationship in deciding what is in the foods that arrive at our tables, and the main objectives for their shareholders are that food is cheap, palatable, and with a long shelf life. Healthy comes lower on the list of priorities. Government action is needed to set standards for foods or make unhealthy foods more expensive and harder to buy on impulse, and restrict marketing, as previously done with other harmful commodities such as tobacco.

In conclusion, there are hidden agent relationships and information asymmetries around public health policies, for instance around healthy food and drinks. Public health can potentially learn from economic instruments that have been used in other industries to mitigate information asymmetries and agent relationships. If Government and the food industry had shared incentives to create a healthier population then good things might happen. I would be curious to know what others think about this!

Shilpi Swami’s journal round-up for 9th December 2019

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.

Performance of UK National Health Service compared with other high-income countries: observational study. BMJ [PubMed] Published 27th November 2019

Efficiencies and inefficiencies of the NHS in the UK have been debated in recent years. This new study reveals the performance of the NHS compared to other high-income countries, based on observational data, and has already caught a bunch of attention (almost 3,000 tweets and 6 news appearances, since publication)!

The authors presented a descriptive analysis of the UK (England, Scotland, Northern Ireland, and Wales) compared to nine other countries (US, Canada, Germany, Australia, Sweden, France, Denmark, the Netherlands, and Switzerland) based on aggregated recent data from a range of sources (such as OECD, World Bank, the Institute for Health Metrics Evaluation, and Eurostat). Good things first; access to care – a lower proportion of people felt unmet needs owing to costs. The waiting times were comparable across other countries, except for specialist care. The UK performed slightly better on the metric of patient safety. The main challenge, however, is that NHS healthcare spending is lower and has been growing more slowly. This means fewer doctors and nurses, and doctors spending less time with patients. The authors vividly suggest that

“Policy makers should consider how recent changes to nursing bursaries, the weakened pound, and uncertainty about the status of immigrant workers in the light of the Brexit referendum result have influenced these numbers and how to respond to these challenges in the future.”

Understandably comparing healthcare systems across the world is difficult. Including the US in the study, and not including other countries like Spain and Japan, may need more justification or could be a scope of future research.

To be fair, the article is a not-to-miss read. It is an eye-opener for those who think it’s only a (too much) demand-side problem the the NHS is facing and confirms the perspective of those who think it’s a (not enough) supply-side problem. Kudos to the hardworking doctors and nurses who are currently delivering efficiently in the stretched situation! For sustainability, the NHS needs to consider increasing its spending to increase labour supply and long-term care.

A systematic review of methods to predict weight trajectories in health economic models of behavioral weight management programs: the potential role of psychosocial factors. Medical Decision Making [PubMed] Published 2nd December 2019

In economic modelling, assumptions are often made about the long-term impact of interventions, and it’s important that these assumptions are based on sound evidence and/or tested in sensitivity analysis, as these could affect the cost-effectiveness results.

The authors explored assumptions about weight trajectories to inform economic modelling of behavioural weight management programmes. Also, they checked their evidence sources, and whether these assumptions were based on any psychosocial variables (such as self-regulation, motivation, self-efficacy, and habit), as these are known to be associated with weight-loss trajectories.

The authors conducted a systematic literature review of economic models of weight management interventions that aimed at reducing weight. In the 38 studies included, they found 6 types of assumptions of weight trajectories beyond trial duration (weight loss maintained, weight loss regained immediately, linear weight regain, subgroup-specific trajectories, exponential decay of effect, maintenance followed by regain), with only 15 of the studies reporting sources for these assumptions. The authors also elaborated on the assumptions and graphically represented them. Psychosocial variables were, in fact, measured in evidence sources of some of the included studies. However, the authors found that none of the studies estimated their weight trajectory assumptions based on these! Though the article also reports on how the assumptions were tested in sensitivity analyses and their impact on results in the studies (if reported within these studies), it would have been interesting to see more insights into this. The authors feel that there’s a need to investigate how psychosocial variables measured in trials can be used within health economic models to calculate weight trajectories and, thus, to improve the validity of cost-effectiveness estimates.

To me, given that only around half of included studies reported sources of assumptions on long-term effects of the interventions and performed sensitivity analysis on these assumptions, it raises the bigger long-debated question on the quality of economic evaluations! To conclude, the review is comprehensive and insightful. It is an interesting read and will be especially useful for those interested in modelling long-term impacts of behavioural support programs.

The societal monetary value of a QALY associated with EQ‐5D‐3L health gains. The European Journal of Health Economics [PubMed] Published 28th November 2019

Finding an estimate of the societal monetary value of a QALY (MVQALY) is mostly performed to inform a range of thresholds for accurately guiding cost-effectiveness decisions.

This study explores the degree of variation in the societal MVQALY based on a large sample of the population in Spain. It uses a discrete choice experiment and a time trade-off exercise to derive a value set for utilities, followed by a willingness to pay questionnaire. The study reveals that the societal values for a QALY, corresponding to different EQ-5D-3L health gains, vary approximately between €10,000 and €30,000. Ironically, the MVQALY associated with larger improvements on QoL was found to be lower than with moderate QoL gains, meaning that WTP is less than proportional to the size of the QoL improvement. The authors further explored whether budgetary restrictions could be a reason for this by analysing responses of individuals with higher income and found out that it may somewhat explain this, but not fully. As this, at face value, implies there should be a lower cost per QALY threshold for interventions with largest improvement of health than with moderate improvements, it raises a lot of questions and forces you to interpret the findings with caution. The authors suggest that the diminishing MVQALY is, at least partly, produced by the lack of sensitivity of WTP responses.

Though I think that the article does not provide a clear take-home message, it makes the readers re-think the very underlying norms of estimating monetary values of QALYs. The study eventually raises more questions than providing answers but could be useful to further explore areas of utility research.

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Alastair Canaway’s journal round-up for 10th June 2019

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.

Analytic considerations in applying a general economic evaluation reference case to gene therapy. Value in Health Published 17th May 2019

For fledgling health economists starting in the world of economic evaluation, the NICE reference case is somewhat of a holy text. If in doubt, check the reference case. The concept of a reference case for economic evaluation has been around since the first US Panel on Cost-Effectiveness in Health and Medicine in 1996 and NICE has routinely used its own reference case for well over a decade. The primary purpose of the reference case is to improve the quality and comparability of economic evaluations by standardising methodological practices. There have been arguments made that the same methods are not appropriate for all medical technologies, particularly those in rare diseases or where no treatment currently exists. The focus of this paper is on gene therapy: a novel method that inserts genetic material into cells (as opposed to a drug/surgery) to treat or prevent disease. In this area there has been significant debate as to the appropriateness of the reference case and whether a new reference case is required in this transformative but expensive area. The purpose of the article was to examine the characteristics of gene therapy and make recommendations on changes to the reference case accordingly.

The paper does an excellent job of unpicking the key components of economic evaluation in relation to gene therapy to examine where weaknesses in current reference cases may lie. Rather than recommend that a new reference case be created, they identify specific areas that should be paid special attention when evaluating gene therapy. Additionally, they produce a three part checklist to help analysts to consider what aspects of their economic evaluation they should consider further. For those about to embark on an economic evaluation of a gene therapy intervention, this paper represents an excellent starting point to guide your methodological choices.

Heterogeneous effects of obesity on mental health: evidence from Mexico. Health Economics [PubMed] [RePEc] Published April 2019

The first line of the ‘summary’ section of this paper caught my eye: “Obesity can spread more easily if it is not perceived negatively”. This stirred up contradictory thoughts. From a public health standpoint we should be doing our utmost to prevent increasing levels of obesity and their related co-morbidities, whilst simultaneously we should be promoting body positivity and well-being for mental health. Is there a tension here? Might promoting body positivity and well-being enable the spread of obesity? This paper doesn’t really answer that question, instead it sought to investigate whether overweight and obesity had differing effects on mental health within different populations groups.

The study is set in Mexico which has the highest rate of obesity in the world with 70% of the population being overweight or obese. Previous research suggests that obesity spreads more easily if not perceived negatively. This paper hypothesises that this effect will be more acute among the poor and middle classes where obesity is more prevalent. The study aimed to reveal the extent of the impact of obesity on well-being whilst controlling for common determinants of well-being by examining the impact of measures of fatness on subjective well-being, allowing for heterogeneous effects across differing groups. The paper focused only on women, who tend to be more affected by excess weight than men (in Mexico at least).

To assess subjective well-being (SWB) the General Health Questionnaire (GHQ) was used whilst weight status was measured using waist to height ratio and additionally an obesity dummy. Data was sourced from the Mexican Family and Life Survey and the baseline sample included over 13,000 women. Various econometric models were employed ranging from OLS to instrumental variable estimations, details of which can be found within the paper.

The results supported the hypothesis. They found that there was a negative effect of fatness on well-being for the rich, whilst there was a positive effect for the poor. This has interesting policy implications: policy attempt to reduce obesity may not work if excess weight is not perceived to be an issue. The findings in this study imply that different policy measures are likely necessary for intervening in the wealthy and the poor in Mexico. The paper offers several explanations as to why this relationship may exist, ranging from the poor having lower returns from healthy time (nod to the Grossman model), to differing labour market penalties from fatness due to different job types for the rich and the poor.

Obviously there are limits to the generalisability of these findings, however it does raise interesting questions about how we should seek to prevent obesity within different elements of society, and the unintended consequences that shifts in attitudes may have.

ICECAP-O, the current state of play: a systematic review of studies reporting the psychometric properties and use of the instrument over the decade since its publication. Quality of Life Research [PubMed] Published June 2019

Those who follow the methodological side of outcome measurement will be familiar with the capability approach, operationalised by the ICECAP suite of measures amongst others. These measures focus on what people are able to do, rather than what they do. It is now 12-13 years since the first ICECAP measure was developed: the ICECAP-O designed for use in older adults. Given the ICECAP measures are now included within the NICE reference case for the economic evaluation of social care, it is a pertinent time to look back over the past decade to assess whether the ICECAP measures are being used and, if so, to what degree and how. This systematic review focusses on the oldest of the ICECAP measures, the ICECAP-O, and examines whether it has been used, and for what purpose as well as summarising the results from psychometric papers.

An appropriate search strategy was deployed within the usual health economic databases, and the PRISMA checklist was used to guide the review. In total 663 papers were identified, of which 51 papers made it through the screening process.

The first 8 years of the ICECAP-O’s life is characterised by an increasing amount of psychometric studies, however in 2014 a reversal occurred. Simultaneously, the number of studies using the ICECAP-O within economic evaluations has slowly increased, surmounting the number examining the psychometric properties, and has increased year-on-year in the three years up to 2018. Overall, the psychometric literature found the ICECAP-O to have good construct validity and generally good content validity with the occasional exception in groups of people with specific medical needs. Although the capability approach has gained prominence, the studies within the review suggest it is still very much seen as a secondary instrument to the EQ-5D and QALY framework, with results typically being brief with little to no discussion or interpretation of the ICECAP-O results.

One of the key limitations to the ICECAP framework to date relates to how economists and decision makers should use the results from the ICECAP instruments. Should capabilities be combined with time (e.g. years in full capability), or should some minimum (sufficient) capability threshold be used? The paper concludes that in the short term, presenting results in terms of ‘years of full capability’ is the best bet, however future research should focus on identifying sufficient capability and establishing monetary thresholds for a year with sufficient capability. Given this, whilst the ICECAP-O has seen increased use over the years, there is still significant work to be done to facilitate decision making and for it to routinely be used as a primary outcome for economic evaluation.

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