HEALTH, THE MEDICAL PROCESSION, AND REGULATION

Transcription

1 HEALTH, THE MEDICAL PROCESSION, AND REGULATION

2 Developments in Health Economics and Public Policy VOLUME 6 Series Editors Peter Zweifel, University a/zurich, Switzerland H.E. Frech III, University a/california, Santa Barbara, U.S.A. The titles published in this series are listed at the end0/this volume.

3 HEALTH, THE MEDICAL PROFESSION, AND REGULATION Edited by Peter Zweifel Socioeconomic Institute University of Zürich... " SPRINGER SCIENCE+BUSINESS MEDIA, LLC

4 Library of Congress Cataloging-in-Publieation Data Health, the medieal profession, and regulation I edited by Peter Zweifel. p. em. -- (DevelopmenlS in health eeonomics and public poliey; v.6) Includes bibliographical referenees. ISBN ISBN (ebook) DOI / Medieal eeonomies. 2. Medical poliey. 3. Medicallaws and legislation. I. Zweifel, Peter. 11. Series. RA410.5.H ' dc CIP Copyright 1998 Springer Scienee+Business Media New York Original1y published by Kluwer Academic Publishers in 1998 Sofleover reprint of the hardcover 1 si edition 1998 retrieval system or transmitted in any fonn or by any means, meehanieal. photoeopying, reeording, or otherwise, without the prior written permission of the publisher, Springer Science+Busincss Media, LLC Printed on acid-free paper

5 CONTENTS CONTRIBUTORS' LIST vii INTRODUCTION Peter Zweifel ix PART 1 HEALTH 1 The Impact ofthe Environment on the Demands for Health and Health Care: An Empirical Analysis for Gennany 3 Manfred Erbsland, Walter Ried, and Volker Ulrich 2 The Demand for Health: An Empirical Test ofthe Grossman Model Using Panel Data 35 Sandra Nocera and Peter Zweifel 3 Counting and Discounting Gained Life-years 51 Jes Segaard and Dorte Gyrd-Hansen 4 Inequality in Infant Mortality in Portugal, JOCIO A. Pereira PART Health, Work-Hours, and Wages in Sweden 95 Gun Sundberg The Determinants of Health Expenditure in the OECD Countries: A Pooled Data Analysis 113 Ulf-G Gerdtham, Bengt Jonsson, Maitland MacFarlan, and Howard Oxley THE MEDICAL PROFESSION 135 Clinical Response ofsalaried Consultants to Economic Incentives 137 Tor Iversen

6 vi HEALTH, THE MEDICAL PROFESSION, AND REGULATION 8 9 The Use ofmultilevel Analysis in Health Economics: An Application to Examining the Effect of Competition on General Practitioners' Behavior 159 Anthony Scott and Alan Shiell A Comparative Application ofeconometric Frontier and DEA Methods for Assessing Cost Efficiency of Finnish Hospitals 169 Miika Linna and Unto Htikkinen PART 3 REGULATION Financial Incentives and Primary Care Provision in Britain: Do General Practitioners Maximise their Income? 191 Mauricea Lynch Cream-Skimming in Deregulated Social Health Insurance: Evidence from Switzerland 211 Konstantin Beck and Peter Zweifel Modeling Cross-Border Care in the EU Using a Principal-Agent Framework 229 Luca Crivelli and Peter Zweifel INDEX 259

7 CONTRIBUTORS'LIST Dr. Konstantin Beck CSS Switzerland Luca Crivelli University ofzurich Switzerland Manfred Erbsland Zentrum fur Europaische Ulir~chajisforschung Germany Ulf-G. Gerdtham Stockholm School ofeconomics Sweden Dorte Gyrd-Hansen Odense University Denmark Unto Hakkinen National Research and Development Centre for Ulelfare and Health Finland Prof. Dr. Tor Iversen University ofoslo Norway Bengt Jonsson Stockholm School ofeconomics Sweden Miika Linna National Research and Development Centre for UIelfare and Health Finland Dr. Mauricea Lynch University ofstirling Scotland, UK Maitland MacFarlan OECD Paris Dr. Sandra Nocera University ofzurich Switzerland Howard Oxley OECD France Dr. Joao Pereira Universidade Nova de Lisboa Portugal Walter Ried Univerisity ofmannheim Germany Anthony Scott University ofaberdeen Scotland, UK Alan Shiell The University ofsydney Australia Dr. Jes S0gaard Odense University Denmark Gun Sundberg Uppsala University Sweden Prof. Dr. Volker Ulrich Ernst-Moritz-Arndt-Universittit Greifswald Germany Peter Zweifel University ofzurich Switzerland

8 INTRODUCTION Health and its determinants, the behavior of physicians, and regulation of the health care sector-these are the timely themes of this book. A dozen contributions to the Third European Conference on Health Economics held in Stockholm (Sweden), 20 to 22 August 1995 were selectedto illuminate these issues. Part 1, comprising six papers, is devoted to people's health. Manfred Erbsland, Ulrich Ried, and Volker Ulrich provide long-awaited econometric evidence on the influence of the environment on health, using German micro data. Indeed, they fmd a nonneglegible negative effect on environmental pollution on health. The novelty of the contribution by Sandra Nocera and Peter Zweifel lies in their ability to trace a sample of Swiss individuals over a period of twelve years. The well-known Grossman model predicts a long-run positive relationship between medical care and health, but even these data strongly suggest a negative one: people seek care when they are in bad health. Jes Sogaard and Dorte Gyrd-Hansen examine the issue of discounting utility, which is crucial for the application of capital theory in the same Grossman model. They distinguish between deterministic and probabilistic approaches to life expectancy and show that depending on the choice, the present value of years gained may differ by a factor of no less than 150. Economists have always considered income to be one of the major determinants of health; however, its importance may diminish as income levels rise generally. This is precisely what Joao Pereira fmds in the case ofperinatal mortality in Portugal. However, over a period of twenty years, inequality in postnatal mortality shows a rebound after a drop in the 1970s. Inequality in health likely is related to inequality in income; specifically, a higher wage permits people to work less, which should enhance health. Gun Sundberg presents evidence of such a relationship. Finally, Ulf Gerdtham, Bengt J5nsson, Maitland MacFarlan, and Howard Oxley provide an international comparison of health care expenditure. They show that income growth explains most of the development of health care expenditure, pretty much regardless of the policy orientation ofgovernments. Part 2 consists of three papers that deal with the supply side of the market for health care services. In particular, financial incentives may well influence clinical decisions. Tor Iversen investigates the setting of priorities by Norwegain clinicians in response to a change in relative fees. He finds economic incentives to matter when it comes to the choice between inpatient and outpatient treatment of patients of the same diagnostic group but not when it comes to the treatment choices for patients belonging to different diagnostic groups. Anthony Scott and Alan Shiell present evidence suggesting that Australian GPs also change their style of practice in response to changed economic incentives. In particular, increased competition is shown to have a crucial effect. But above all, increased competition holds the

9 x HEALTH, THE MEDICAL PROFESSION, AND REGULATION promise of weeding out inefficiencies in the supply of health care services, not least in hospitals. Miika Linna and Unto Hlikkinen measure the average level of inefficiency in Finnish hospital in two ways, obtaining results that broadly agree. Part 3 contains three contributions devoted to health regulation. Regulatory effects very much depend on whether physicians are ethical or income maximizers. Using a linear programming model for income maximization, Mauricea Lynch concludes that only some 5 percent of British GPs unambiguously fall in the latter category. Regulation and deregulation are crucial issues also in insurance-based health care systems, where the problem of cream skimming of good risks has been at the center of debate. Konstantin Beck and Peter Zweifel show that Swiss sick funds, regardless of their status of social health insurers, engaged heavily in cream skimming. They propose an improvement of the risk adjustment formula that should substantially mitigate the incentive to cream skim. Finally Luca Crivelli and Peter Zweifel add an international touch by looking into so-called cross-border care in the European Union (EU). This is becoming an issue because citizens of EU member countries have the right to obtain treatment in another member country provided their claim is endorsed by a number of authorities. This editor for one found each of these topics fascinating. May this fascination spring over to the reader when he or she delves into some of these contributions, discovering parallels and differences that provide answers but also raise interesting questions for future research!