US and UK health economics: Two disciplines separated by a common language?

Health Economics

Volumn 7, Issue SUPPL. 1, 1998, Pages

  Newhouse, Joseph P ^a  

^a HARVARD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; HEALTH CARE POLICY; HEALTH ECONOMICS; PRIORITY JOURNAL; QUESTIONNAIRE; UNITED KINGDOM; UNITED STATES;

EID: 0031671423     PISSN: 10579230     EISSN: None     Source Type: Journal    
DOI: 10.1002/hec.4730070907     Document Type: Article

References (37)

1. Fuchs, V. Economics, values, and health care reform. American Economic Review 1996; 86: 1-24.
2. Interestingly enough, Fuchs' perception is not universally held; some observers believe President Clinton's approach - to its detriment - borrowed heavily from the Jackson Hole group's advocacy of managed competition, a concept they identify with economics (Starr, P. and Zelman, W. Bridge to compromise: competition under a budget. Health Affairs 1993; 12: 7-23; Hacker, J.S. The road to nowhere: The genesis of President Clinton's plan for health security. Princeton: Princeton University Press, 1997). The Jackson Hole Group, however, emphatically rejects the link between the Clinton proposal and their ideas (Enthoven, A. and Singer, S. J. A single-payer system in Jackson Hole clothing. Health Affairs 1994; 13: 81-95.).
3. Interestingly enough, Fuchs' perception is not universally held; some observers believe President Clinton's approach - to its detriment - borrowed heavily from the Jackson Hole group's advocacy of managed competition, a concept they identify with economics (Starr, P. and Zelman, W. Bridge to compromise: competition under a budget. Health Affairs 1993; 12: 7-23; Hacker, J.S. The road to nowhere: The genesis of President Clinton's plan for health security. Princeton: Princeton University Press, 1997). The Jackson Hole Group, however, emphatically rejects the link between the Clinton proposal and their ideas (Enthoven, A. and Singer, S. J. A single-payer system in Jackson Hole clothing. Health Affairs 1994; 13: 81-95.).
4. Interestingly enough, Fuchs' perception is not universally held; some observers believe President Clinton's approach - to its detriment - borrowed heavily from the Jackson Hole group's advocacy of managed competition, a concept they identify with economics (Starr, P. and Zelman, W. Bridge to compromise: competition under a budget. Health Affairs 1993; 12: 7-23; Hacker, J.S. The road to nowhere: The genesis of President Clinton's plan for health security. Princeton: Princeton University Press, 1997). The Jackson Hole Group, however, emphatically rejects the link between the Clinton proposal and their ideas (Enthoven, A. and Singer, S. J. A single-payer system in Jackson Hole clothing. Health Affairs 1994; 13: 81-95.).
5. One could also have not moved to the next name, thereby creating a simple random sample of HESG members rather than my procedure of what an uncharitable discussant might refer to as first- and second-class citizens. As noted below, I find no differences in responses between these two groups, so in the analyses presented here I have pooled them.
6. I increased the sampling fraction of non-UK members from the HESG membership list to generate 24 names from outside the UK.
7. I did not conduct any follow-up.
8. Weisbrod, B. The health care quadrilemma: an essay on technological change, insurance, quality of care, and cost containment. Journal of Economic Literature 1991; 29: 523-552.
9. Newhouse, J.P. Medical care costs: how much welfare loss? Journal of Economic Perspectives 1992; 6:3-21.
10. Fuchs himself was one of the originators of the notion of the technological imperative hypothesis (Fuchs, V.R. The health economy. Cambridge: Harvard University Press, 1986, 29-30).
11. Aaron, H. and Schwartz, W.B. The painful prescription: rationing hospital care. Washington: Brookings, 1984.
12. Gruber, J. The incidence of mandated maternity benefits. American Economic Review 1994; 84:622-641.
13. Gruber, J. and Krueger, A.B. The incidence of mandated employer-provided health insurance: lessons from worker's compensation insurance, in Tax policy and the American economy, Vol. 5. Bradford, D (ed). Boston: MIT Press, 1991.
14. Summers, L. H. Some simple economics of mandated benefits. American Economic Review 1989; 79: 177-183.
15. Eighteen percent of US workers were employed in firms that did not offer insurance in 1988 and such firms tend to have higher turnover, suggesting that secondary workers (with higher labour supply elasticities) may be disproportionately in such firms (Long, S.H. and Marquis, M.S. Gaps in employer coverage: lack of supply or lack of demand? Health Affairs 1993; 12: S282-293.). This would strengthen the case that the incidence is on wages.
16. The auto industry is health-care intensive in the US because of its generous insurance benefits and the agricultural industry is not in part because of its relatively high proportion of uninsured.
17. There is some consistency in the responses, however. If one for some reason believed that the low cost of health care made the UK more competitive, it would have to be the case that any adverse effects of low spending on labour force productivity were negligible. This is consistent with the answer to question 7.
18. Put another way, if something that is 7% of GDP falls by a seventh (one percentage point), the share of the remaining economy only grows by about one percent (1/93), if the total is constant.
19. Grossman, M. The demand for health: A theoretical and empirical investigation. National Bureau of Economic Research, 1972.
20. Atkinson, A.B. and Stern, N.H. Pigou, taxation, and public goods. Review of Economic Studies 1974; 41, 119-128.
21. Newhouse, J. P. Free for all? Lessons from the RAND health insurance experiment. Cambridge: Harvard University Press, 1993.
22. Browning, E. On the marginal welfare cost of taxation. American Economic Review 1987; 77; 11-23.
23. Ballard, C. L. and Fullerton, D. Distortionary taxes and the provision of public goods. Journal of Economic Perspectives 1992; 6: 117-131.
24. Laffont, J-J. Toward a normative theory of incentive contracts between government and private firms. Economic Journal 1987 (Conference); 17-31.
25. Prospective Payment Assessment Commission. Medicare and the American health care system: Report to the Congress. Washington, DC: The Commission, 1996.
26. Rice, T. The impact of changing Medicare reimbursement rates on physician-induced demand. Medical Care 1983; 21: 803-815.
27. Specifically, US respondents were asked whether health insurance premiums should be higher for smokers than non-smokers, whereas the non-US respondents were asked whether smokers should pay a surcharge on their income taxes to finance the NHS. Because an income tax surcharge is more progressive than a premium surcharge and because the UK sample showed more support for redistribution (see below), the difference in question wording may actually have understated the difference in views on the propriety of charging smokers.
28. Manning et al. (1991 see [27]) show that at the levels of US tobacco excise taxes a decade ago, there was little redistribution between smokers and non-smokers. To a first approximation non-smokers paid a disproportionate share of smokers' health care costs, and smokers paid a disproportionate share of non-smokers' retirement costs.
29. Manning, W. G., Keeler, E. B., Newhouse, J. P., et al. The cost of poor health habits. Cambridge, MA: Harvard University Press, 1991.
30. Question 29 was misworded and referred to question 27 when it should have referred to question 28; I have ignored this mistake.
31. To carry out the joint test I have had to impute covariances among the three questions to the American sample, since I only had access to the means and variances for the Fuchs items. In order to do this, I simply imputed the covariances in my sample; as can be seen in Table 3, the variances on the three items are similar between the two samples, so simply imputing the covariances seems to be a tolerable approximation. F with 3 and 307 d.f. is 14.7; the 1 percent critical value is around 3.9.
32. Specifically, I took the sum of questions 27 and 29 (expressed as a number between O and 1) and added 1 minus the value on question 28.
33. Williams, A. Economics of coronary artery bypass grafting. British Medical Journal 1985; 291: 326-329.
34. Drummond, M. F. Principles of economic appraisal in health care. Oxford: Oxford University Press, 1980.
35. Culyer, A. J. Need and The National Health Service. London: Martin Robertson, 1976.
36. I scored this response as missing, which is why there is no 100% value in Figure 2.
37. I concluded that if were doing this again, I would choose some less obtrusive identification method, for example, colour coding the various subsamples.