Is health care really a luxury?

Much of the work which has led to a widely held view that the income elasticity of health care spending exceeds one has been based on international cross-section data, or on pooled cross-sections and time series. In this paper we re-examine this view in the context of long-run equilibrium relationships between non-stationary time series, possibly including autonomous trends. Our results cast doubt upon the usefulness of pooling and upon the notion of an elasticity above one.     

Is home health care a substitute for hospital care?

A previous study used aggregate (region-level) data to investigate whether home health care serves as a substitute for inpatient hospital care and concluded that "there is no evidence that services provided at home replace hospital services." However, that study was based on a cross-section of regions observed at a single point of time and did not control for unobserved regional heterogeneity. In this article, state-level employment data are used to reexamine whether home health care serves as a substitute for inpatient hospital care. This analysis is based on longitudinal (panel) data--observations on states in two time periods--which enable the reduction or elimination of biases that arise from use of cross-sectional data. This study finds that states that had higher home health care employment growth during the period 1998-2008 tended to have lower hospital employment growth, controlling for changes in population. Moreover, states that had higher home health care payroll growth tended to have lower hospital payroll growth. The estimates indicate that the reduction in hospital payroll associated with a $1,000 increase in home health payroll is not less than $1,542, and may be as high as $2,315. This study does not find a significant relationship between growth in utilization of home health care and growth in utilization of nursing and residential care facilities. An important reason why home health care may serve as a substitute for hospital care is that the availability of home health care may allow patients to be discharged from the hospital earlier. Hospital discharge data from the Healthcare Cost and Utilization Project are used to test the hypothesis that use of home health care reduces the length of hospital stays. Major Diagnostic Categories with larger increases in the fraction of patients discharged to home health care tended to have larger declines in mean length of stay (LOS). Between 1998 and 2008, mean LOS declined by 4.1%, from 4.78 to 4.59 days. The estimates are consistent with the hypothesis that this was entirely due to the increase in the fraction of hospital patients discharged to home health care, from 6.4% in 1998 to 9.9% in 2008. The estimated reduction in 2008 hospital costs resulting from the rise in the fraction of hospital patients discharged to home health care may have been 36% larger than the increase in the payroll of the home health care industry.     

Is there a general theory for health care budgeting?

This article suggests that a broad theoretical framework is needed within which the empirical evidence about the results of the many different health care funding systems can be analysed. A possible framework is described. The article also proposes that when policy makers select the budgetary system most likely to produce the patterns of health care that are required they should also install output and quality controls designed to avoid any predictable and undesirable side effects. Reimbursement under the budget could be made conditional upon an adequate performance as measured by the controls.     

Is family care associated with reduced health care expenditures?

BACKGROUND: Specific components of family medicine associated with reduced health care costs are not well understood. We examined whether people who received "family care," the sharing of a personal physician across familial generations, had lower health care expenditures than those who received "individual care" that lacked generational continuity. METHODS: We studied 1728 children and 2543 adults using a data subset of the 1987 National Medical Expenditure Survey, a representative sample of the civilian noninstitutionalized US population, to examine the relationship between care category and total health care expenditures, adjusting for potential confounders and effect modifiers. Survey respondents from households with either a married or a single woman aged 18 to 55 years as head of household and at least 1 child younger than 18 years were included. Only individuals reporting a family physician (FP) or general practitioner (GP) as their personal doctor were examined, since intergenerational family care is provided almost exclusively by FPs and GPs. RESULTS: Family care provided by an FP or GP was associated with 14% lower expenditures for adults ($51), after adjustment for covariates (P = .04), compared with individual care provided by a family or general practitioner. Although not statistically significant, for children family care was associated with 9% lower expenditures ($19). CONCLUSIONS: These findings suggest that family care provided by FPs or GPs is associated with lower health care costs. Policies promoting family care may reduce health care costs.     

Is Dutch health care a model for the U.S. health system?

The Netherlands provides universal access and high-quality care, but the Dutch are reforming their system to encourage more competition among insurers.     

Is health insurance in Greece in need of reform?

This paper aims to assess the relationship between insurance contributions and health benefits in Greece by using information from sickness funds' accounts. The paper argues that the fragmentation of social health insurance, and the particular ways in which sickness funds' financial services are organized, are a major source of inequity and are grossly inefficient. The survival of these systems in the 1990s cannot be explained except on grounds of inertia and corporate resistance.     

Do you need a managed mental health program?

Effective plan design and employee assistance programs can help employers manage the costs of mental health care. Employers have redesigned their mental health programs to save money, without sacrificing quality of care.     

Is health care infected by Baumol's cost disease? Test of a new model

Rising health care costs are a policy concern across the Organisation for Economic Co‐operation and Development, and relatively little consensus exists concerning their causes. One explanation that has received revived attention is Baumol's cost disease (BCD). However, developing a theoretically appropriate test of BCD has been a challenge. In this paper, we construct a 2‐sector model firmly based on Baumol's axioms. We then derive several testable propositions. In particular, the model predicts that (a) the share of total labor employed in the health care sector and (b) the relative price index of the health and non‐health care sectors should both be positively related to economy‐wide productivity. The model also predicts that (c) the share of labor in the health sector will be negatively related and (d) the ratio of prices in the health and non‐health sectors unrelated, to the demand for non‐health services. Using annual data from 28 Organisation for Economic Co‐operation and Development countries over the years 1995–2016 and from 14 U.S. industry groups over the years 1947–2015, we find little evidence to support the predictions of BCD once we address spurious correlation due to coincident trending and other econometric issues.     

Is product-line management appropriate for your health care facility?

Although many hospitals have adopted product-line management as a management tool, questions remain about its applicability in the health care industry. Using a national sample, the authors examine the impact of product-line management on operating results and profile hospitals in which product-line management has been associated with higher performance. Their study reveals the circumstances under which product-line management is likely to be the most successful.