Thesis Thursday: Caroline Vass

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 Caroline Vass who has a PhD from the University of Manchester. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Using discrete choice experiments to value benefits and risks in primary care
Katherine Payne, Stephen Campbell, Daniel Rigby
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Are there particular challenges associated with asking people to trade-off risks in a discrete choice experiment?

The challenge of communicating risk in general, not just in DCEs, was one of the things which drew me to the PhD. I’d heard a TED talk discussing a study which asked people’s understanding of weather forecasts. Although most people think they understand a simple statement like “there’s a 30% chance of rain tomorrow”, few people correctly interpreted that as meaning it will rain 30% of the days like tomorrow. Most interpret it to mean there will be rain 30% of the time or in 30% of the area.

My first ever publication was reviewing the risk communication literature, which confirmed our suspicions; even highly educated samples don’t always interpret information as we expect. Therefore, testing if the communication of risk mattered when making trade-offs in a DCE seemed a pretty important topic and formed the overarching research question of my PhD.

Most of your study used data relating to breast cancer screening. What made this a good context in which to explore your research questions?

All women are invited to participate in breast screening (either from a GP referral or at 47-50 years old) in the UK. This makes every woman a potential consumer and a potential ‘patient’. I conducted a lot of qualitative research to ensure the survey text was easily interpretable, and having a disease which many people had heard of made this easier and allowed us to focus on the risk communication formats. My supervisor Prof. Katherine Payne had also been working on a large evaluation of stratified screening which made contacting experts, patients and charities easier.

There are also national screening participation figures so we were able to test if the DCE had any real-world predictive value. Luckily, our estimates weren’t too far off the published uptake rates for the UK!

How did you come to use eye-tracking as a research method, and were there any difficulties in employing a method not widely used in our field?

I have to credit my supervisor Prof. Dan Rigby with planting the seed and introducing me to the method. I did a bit of reading into what psychologists thought you could measure using eye-movements and thought it was worth further investigation. I literally found people publishing with the technology at our institution and knocked on doors until someone would let me use it! If the University of Manchester didn’t already have the equipment, it would have been much more challenging to collect these data.

I then discovered the joys of lab-based work which I think many health economists, fortunately, don’t encounter in their PhDs. The shared bench, people messing with your experiment set-up, restricted lab time which needs to be booked weeks in advance etc. I’m sure it will all be worth it… when the paper is finally published.

What are the key messages from your research in terms of how we ought to be designing DCEs in this context?

I had a bit of a null-result on the risk communication formats, where I found it didn’t affect preferences. I think looking back that might have been with the types of numbers I was presenting (5%, 10%, 20% are easier to understand) and maybe people have a lot of knowledge about the risks of breast screening. It certainly warrants further research to see if my finding holds in other settings. There is a lot of support for visual risk communication formats like icon arrays in other literatures and their addition didn’t seem to do any harm.

Some of the most interesting results came from the think-aloud interviews I conducted with female members of the public. Although I originally wanted to focus on their interpretation of the risk attributes, people started verbalising all sorts of interesting behaviour and strategies. Some of it aligned with economic concepts I hadn’t thought of such as feelings of regret associated with opting-out and discounting both the costs and health benefits of later screens in the programme. But there were also some glaring violations, like ignoring certain attributes, associating cost with quality, using other people’s budget constraints to make choices, and trying to game the survey with protest responses. So perhaps people designing DCEs for benefit-risk trade-offs specifically or in healthcare more generally should be aware that respondents can and do adopt simplifying heuristics. Is this evidence of the benefits of qualitative research in this context? I make that argument here.

Your thesis describes a wealth of research methods and findings, but is there anything that you wish you could have done that you weren’t able to do?

Achieved a larger sample size for my eye-tracking study!

Thesis Thursday: Mathilde Péron

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 Mathilde Péron who graduated with a PhD from Université Paris Dauphine. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Three essays on supplementary health insurance
Brigitte Dormont
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How important is supplementary health insurance in France, compared with other countries?

In France in 2016, Supplementary Health Insurance (SHI) financed 13.3% of total health care expenditure. SHI supplements a partial mandatory coverage by covering co-payments as well as medical goods and services outside the public benefit package, such as dental and optical care or balance billing. SHI is not a French singularity. Canada, Austria, Switzerland, the US (with Medicare / Medigap) or the UK do offer voluntary SHI contracts. A remarkable fact, however, is that 95% of the French population is covered by a SHI contract. In comparison, although the extent of public coverage is very similar in France and in the UK, the percentage of British patients enrolled in a private medical insurance is below 15%.

The large SHI enrolment and the subsequent limited out-of-pocket payments – €230 per year on average, the lowest among EU countries – should not hide important inequalities in the extent of coverage and premiums paid. SHI coverage is now mandatory for employees of the private sector. They benefit from subsidized contracts and uniform premiums. Individuals with an annual income below €8,700 benefit from free basic SHI coverage which covers copayments, essentially. However, the rest of the population (students, temporary workers, unemployed, retirees, independent, and civil servants) buy SHI in a competitive market where premiums generally increase with age.

Can supplementary health insurance markets lead to an adverse selection death spiral?

Competitive health insurance markets are subject to asymmetric information that prevent the existence of pooling contracts (Rothschild and Stiglitz, 1976Cutler and Zeckhauser, 1998). The US market is a good example; in the 1950s not-for-profit insurance companies (Blue Cross, Blue Shields) – which offered pooled contracts – almost all disappeared (Thomasson, 2002). And, despite a notably higher public coverage that could limit adverse selection effects, the French SHI market is not an exception.

Historically, SHI coverage was provided by not-for-profit insurers, the Mutuelles, who relied on solidarity principles. But as the competition becomes more intense, the Mutuelles experience the adverse selection death spiral; they lose their low-risk clients attracted by lower premiums. To survive, they have to give up on uniform premiums and standardized coverage. Today 90% of SHI contracts in the individual market have premiums that increase with age. It is worth noting that in France insurers have strong fiscal incentives to avoid medical underwriting, so age remains the only predictor for individual risk. Still, premiums can vary with a ratio of 1 to 3, which raises legitimate concerns about the affordability of insurance and access to health care for patients with increasing medical needs.

How does supplementary health insurance influence prices in health care, and how did you measure this in your research?

A real policy concern is that SHI might have an inflationary effect by allowing patients to consume more at higher prices. Access to specialists who balance bill (i.e. charge more than the regulated fee) – a signal for higher quality and reduced waiting times – is a good example (Dormont and Peron, 2016).

To measure the causal impact of SHI on balance billing consumption we use original individual-level data, collected from the administrative claims of a French insurer. We observe balance billing consumption and both mandatory and SHI reimbursements for 43,111 individuals from 2010 to 2012. In 2010, the whole sample was covered by the same SHI contract, which does not cover balance billing. We observe the sample again in 2012 after that 3,819 among them decided to switch to other supplementary insurers, which we assume covers balance billing. We deal with the endogeneity of the decision to switch by introducing individual effects into the specifications and by using instrumental variables for the estimation.

We find that individuals respond to better coverage by increasing their proportion of visits to a specialist who balance bills by 9%, resulting in a 32% increase in the amount of balance billing per visit. This substitution to more expensive care is likely to encourage the rise in medical prices.

Does the effect of supplementary insurance on health care consumption differ according to people’s characteristics?

An important result is that the magnitude of the impact of SHI on balance billing strongly depends on the availability of specialists. We find no evidence of moral hazard in areas where specialists who do not charge balance billing are readily accessible. On the contrary, in areas where they are scarce, better coverage is associated with a 47% increase in the average amount of balance billing per consultation. This result suggests that the most appropriate policy to contain medical prices is not necessarily to limit SHI coverage but to monitor the supply of care in order to guarantee patients a genuine choice of their physicians.

We further investigate the heterogeneous impact of SHI in a model where we specify individual heterogeneity in moral hazard and consider its possible correlation with coverage choices (Peron and Dormont, 2017 [PDF]). We find evidence of selection on moral hazard: individuals with unobserved characteristics that make them more likely to ask for comprehensive SHI show a larger increase in balance billing per visit. This selection effect is likely to worsen the inflationary impact of SHI. On the other hand, we also find that the impact of a better coverage is larger for low-income people, suggesting that SHI plays a role in access to care.

Have the findings from your PhD research influenced your own decision to buy supplementary health insurance?

As an economist, it’s interesting to reflect on your own decisions, isn’t it? Well, I master cost-benefit analysis, I have a good understanding of expected utility and definitely more information than the average consumer in the health insurance market. Still, my choice of SHI might appear quite irrational. I’m (reasonably) young and healthy, I could have easily switched to a contract with lower premiums and higher benefits, but I did not. I stayed with a contract where premiums mainly depend on income and benefits are standardized, an increasingly rare feature in the market. I guess that stresses out the importance of other factors in my decision to buy SHI, my inertia as a consumer, probably, but also my willingness to pay for solidarity.

Meeting round-up: Fourth EuHEA PhD Student-Supervisor and Early Career Researcher Conference

The 4th catchily-titled EuHEA PhD Student-Supervisor and Early Career Researcher (ECR) conference took place from 6th–8th September 2017 in Lausanne, Switzerland. Students and ECRs can attend alone but are encouraged to bring their supervisors or other senior colleagues with them, who are then allocated as discussants.

With a format inspired by the UK HESG meeting, papers are pre-circulated and each given an hour session. The student or ECR first presents their paper for 25 minutes, followed by a 15-minute discussion from an allocated senior delegate. The floor is then opened to the audience for a further 20 minutes of discussion. This format enables students and ECRs to gain experience in both writing and presenting their work, in addition to receiving detailed feedback and suggestions for future directions.

45 papers were presented in total, and the overall standard of the work was exceptional. Four parallel sessions ran, roughly grouped into the themes of: economic evaluation of medical technologies; economics of health system financing, regulation and delivery; determinants of health behaviours and consequences; and patient and provider decision making and incentives. So there really was something for everyone. There were also short 10-minute presentation sessions. I really enjoyed these quick overviews and felt that I learnt more about people’s research from these than a traditional poster session.

The atmosphere is purposefully relaxed and friendly, and it was great to see students and ECRs contributing to the discussions just as much as their senior supervisors. The conference also seems to attract repeat attendance and so is beginning to form a supportive network of junior health economists who now meet annually. As one of the organisers of the first conference in Manchester, a personal highlight for me was seeing delegates who had originally attended as PhD students returning this time in the role of supervisor as their careers have progressed.

Ieva Sriubaite had the rather daunting but invaluable opportunity to have her paper “Go your own way? The importance of peers in the formation of physician practice styles” discussed by Prof Amitabh Chandra from Harvard, who also gave the plenary speech. Whilst the conference programme was packed, there were still plenty of opportunities to socialise, and a cultured trip to The Hermitage Foundation.

An initiative to come out of the previous conference is the formation of a EuHEA Early Career Committee, which will represent the interests of health economists at the start of their careers within EuHEA. I had the great honour of being elected to chair this committee, and we held our first committee meeting during the conference. Watch out for updates on our best idea to come from this meeting – a conference cruise.

For now, hold 5th–7th September 2018 in your diaries and book your flights to Sicily for the 5th conference. If that location doesn’t convince you to attend I don’t know what will.