Tax compliance under horizontal and vertical equity conditions: An experimental approach

Tax compliance is a complex phenomenon, which requires to be addressed from different perspectives. We report the results of a real-effort experiment aiming at testing the effect of different equity conditions on individual tax compliance levels. We show that equity considerations seem to change individual behaviour only when a vertically unfair tax system is implemented. Also, random effects Tobit estimations show that being audited in the previous period has a negative effect on tax evasion, whereas the level of the fine paid in the previous period positively affects income underreporting. Also, we find that when subjects are in the vertical inequity condition they are significantly more likely to fully evade taxes than in the equity condition, whereas such result cannot be found in the horizontal inequity condition. Finally, we find a standard gender effect showing that female participants are less likely to evade taxes than man and that risk aversion negatively affect tax evasion behaviour.     

The economic value of INTUITY in aortic valve replacement

Objective: The recent development of the EDWARDS INTUITY Elite? (EIE) valve system enables the rapid deployment of a prosthetic surgical heart valve in an aortic valve replacement (AVR) procedure via both the minimally invasive (MISAVR) and conventional (CAVR) approaches. In order to understand its economic value, this study performed a cost evaluation of the EIE valve system used in a MIS rapid-deployment approach (MIS-RDAVR) vs MISAVR and CAVR, respectively, compared to standard prosthetic aortic valves.

Methods: A simulation model was developed using TreeAge (and validated with MS Excel) to compare the inpatient utilization and complication costs for each treatment arm. Thirty-day clinical end-points for the MIS-RDAVR (mortality and complications) were taken from the TRANSFORM trial; and a best evidence review of the published literature was used for the MISAVR and CAVR approaches. Studies were pooled and parameter estimates were weighted by sample size in order to compare the TRANSFORM patients. Cost data (2016 USD) were taken from the Premier database. Incremental cost and cost-effectiveness was assessed and one-way/probabilistic sensitivity analyses performed to gauge the robustness of the results.

Results: MIS-RDAVR costs $2,621 less than CAVR and had lower mortality rates, making it a superior (dominant) technology relative to CAVR. MIS-RDAVR costs $4,560 more than MISAVR, but was associated with an additional 0.20 life years-per-patient. This implies a cost-effectiveness ratio of $22,903 per-life-year-gained. Thus, MIS-RDAVR is cost-effective compared to MISAVR.

Conclusions: The EIE valve system deployed in a MIS approach appears to be a cost-effective technology compared to MISAVR and CAVR. When compared to CAVR it may achieve cost savings as well. These results suggest that MIS-RDAVR confers superior economic value compared to both standard MISAVR and CAVR via lowered key complication rates (re-operation, renal complications, wound infection, TIA, endocarditis) and utilization (cross-clamp time, hospital ward days).     

Competition and physician-enabled demand: The role of managed care

Recent organizational changes in the health care sector promote greater patient participation in their treatment decisions. How physicians respond to patient-initiated requests for treatment is an issue of considerable policy interest. To study this phenomenon, we introduce the notion of physician-enabled demand and examine empirically whether this behavior responds to competitive pressures in the market and financial incentives associated with different physician payment mechanisms.We find that physician-enabled demand increases with more competition under fee-for-service reimbursement, but decreases with greater competition under managed care. This asymmetric response is quite consistent with our conceptual framework and at odds with alternative interpretations.     

Analysis of Domestic Factors Affecting Outward Foreign Direct Investment in Brazil

Developing markets have increasingly gained prominence in the world economy, but the domestic factors behind this success are not well established. This uncertainty may interfere with multinational expansion plans. In this article, we examine several macroeconomic and institutional factors affecting Brazilian outward foreign direct investment in 17 destination countries. We applied a pooled ordinary least squares regression over the 2001–2014 period. The findings suggest that macroeconomic factors are still statistically significant to explain investment abroad, but several institutional factors such as corruption have emerged, having a negative effect and political violence having a positive effect on Brazilian outward foreign direct investment.     

A Monte Carlo simulation estimating US hospital cost reductions associated with hypotension control in septic ICU patients

Objective: This economic analysis extends upon a recent epidemiological study to estimate the association between hypotension control and hospital costs for septic patients in US intensive care units (ICUs).

Methods: A Monte Carlo simulation decision analytic model was developed that accounted for the probability of complications—acute kidney injury and mortality—in septic ICU patients and the cost of each health outcome from the hospital perspective. Probabilities of complications were calculated based on observational data from 110?US hospitals for septic ICU patients (n?=?8,782) with various levels of hypotension exposure as measured by mean arterial pressure (MAP, units: mmHg). Costs for acute kidney injury (AKI) and mortality were derived from published literature. Each simulation calculated mean hospital cost reduction and 95% confidence intervals based on 10,000 trials.

Results: In the base-case analysis hospital costs for a hypothetical “control” cohort (MAP of 65?mmHg) were $699 less per hospitalization (95% CI: $342–$1,116) relative to a “case” cohort (MAP of 60?mmHg). In the most extreme case considered (45?mmHg vs 65?mmHg), the associated cost reduction was $4,450 (95% CI: $2,020–$7,581). More than 99% of the simulated trials resulted in cost reductions. A conservative institution-level analysis for a hypothetical hospital (which assumes no benefit for increasing MAP above 65?mmHg) estimated a cost decline of $417 for a 5?mmHg increase in MAP per ICU septic patient. These results are applicable to the US only.

Conclusions: Hypotension control (via MAP increases) for patients with sepsis in the ICU is associated with lower hospitalization cost.     

Pricing dynamics and product quality: the case of antidepressant drugs

The rising prices of pharmaceuticals have generated considerable, and often acrimonious, debate. Yet, there is little conceptual work or empirical evidence on pharmaceutical pricing strategies or on the time paths of these prices. This study provides a conceptual framework describing the interplay between quality and product differentiation in determining the preferred pricing strategy. We hypothesize that higher quality products will engage in price skimming strategies in markets where products are sufficiently differentiated, but will choose a market penetration strategy in markets that are less differentiated. We apply an empirical analysis to brand name antidepressants during the years 1999–2002, a market where differences in quality are modest. A nationally representative data set on drug utilization and expenditures is combined with a physician survey on the quality attributes of drugs to examine the effect of drug quality on pharmaceutical pricing strategies. Results indicate that higher quality antidepressants engage in a market penetration strategy, charging initially lower prices that rise over time. At approximately 6–7 years post-entry, prices of the antidepressant drugs examined converge. Prices of higher quality antidepressants continue to increase thereafter, eventually becoming the highest priced drugs in the therapeutic class. These findings are consistent with a market in which product differentiation is modest and consumers learn which drug works best for them through experience.     

The determinants of academic patenting by Italian universities

This work investigates the determinants of patenting at Italian universities. We test the effect of public and external funds, in terms of commercial activity by universities, towards the propensity of universities to file patents at the European Patent Office. We then estimate the effect of several variables referring to the contextual characteristics of both university and localisation. The results suggest that, while in the southern regions of Italy commercial income bears a negative effect on the patenting activity of universities, in the other regions we register an important positive effect. We moreover find that the adoption of internal university regulations relating to patenting and the fact of being embedded in an innovative region are factors that exert a positive influence on the university rate of application for patents.     

Medication adherence and persistence in the treatment of rheumatoid arthritis with adalimumab and etanercept. Six years of analysis

Objective:

The aim of this study was to evaluate medication adherence and persistence of patients treated with Etanercept and Adalimumab for Rheumatoid Arthritis, also giving economic evaluations on therapy costs for Received Daily Dose (RDD).

Materials and methods:

This retrospective study took into account 6 years from January 1, 2007 to December 31, 2012. Medication adherence was quantified utilizing the ratio between RDD and Prescribed Daily Dose (PDD). Persistence has been reckoned taking into account the actual days of therapy comparing posology with supplied dose. The persistence has been graphed according to Kaplan-Meier method. The cost per RDD was reckoned starting from the expense incurred by Pescara General Hospital.

Results:

Medication adherence gave results in values between 0.88–0.97 for Etanercept and 0.83–0.90 for Adalimumab. The value of persistence was 100% for Etanercept and 90% for Adalimumab for the first year, and 70% for Etanercept and 80% for Adalimumab for the second year. In the 3rd year the persistence for Etanercept was 50% while for Adalimumab it was 60%. In the fourth year the persistence for Etanercept was 21% while for Adalimumab it was 27%. The statistical analysis was conducted using the Log rank test. The average cost per RDD was €32.97 for Etanercept and for Adalimumab it was €32.00 as an average of 6 years.

Conclusion:

The medication adherence was good for both Etanercept and Adalimumab. The rate of persistence decreased strictly in the fourth year of treatment. This data suggests the need for continuous monitoring of patients in treatment with TNF blockers.     

Foundations of The Economics of Time and Ignorance

The Economics of Time and Ignorance grew out of the need to reinvigorate the Austrian School in light of the challenges of contemporary economics. It did this by re-examining the foundations of the Austrian tradition and by making explicit many of its hidden assumptions and implications. The book also attempted to make Austrian economics more of an open system than it had been in the conservationist decades of the 1950s, 60s, and 70s. The degree to which it has been successful is examined in this essay.     

Budget impact analysis of bioabsorbable drug-eluting sinus implants following endoscopic sinus surgery

Objective: Propel is a bioabsorbable drug-eluting sinus implant inserted following an endoscopic sinus surgery (ESS) for chronic rhinosinusitis (CRS). The objective of this study was to estimate the budget impact of incorporating Propel post-ESS for CRS patients from a self-insured employer or third-party payer perspective.

Methods: An Excel-based budget impact model was developed. Estimates of the prevalence of CRS, rates of ESS, and effectiveness outcomes, along with direct and indirect costs from CRS were obtained from published literature. A total population of 1.5 million members was hypothesized for the analysis. All cost data were adjusted to October 2015 US dollars using the Medical Care Component of the Consumer Price Index. The cost and clinical/economic characteristics of Propel were compared to other treatments commonly used to minimize post-operative complications. The primary outcome was the incremental budget impact reported using per-member-per-month (PMPM) costs. Scenario-based, probabilistic, and one-way sensitivity analyses were performed to gauge the robustness of the results and identify the parameters with the most influence on the results.

Results: For a US self-insured employer or a commercial health plan of 1.5 million members, the incremental PMPM impact of incorporating Propel was estimated to range from ?Objective: Propel is a bioabsorbable drug-eluting sinus implant inserted following an endoscopic sinus surgery (ESS) for chronic rhinosinusitis (CRS). The objective of this study was to estimate the budget impact of incorporating Propel post-ESS for CRS patients from a self-insured employer or third-party payer perspective.

Methods: An Excel-based budget impact model was developed. Estimates of the prevalence of CRS, rates of ESS, and effectiveness outcomes, along with direct and indirect costs from CRS were obtained from published literature. A total population of 1.5 million members was hypothesized for the analysis. All cost data were adjusted to October 2015 US dollars using the Medical Care Component of the Consumer Price Index. The cost and clinical/economic characteristics of Propel were compared to other treatments commonly used to minimize post-operative complications. The primary outcome was the incremental budget impact reported using per-member-per-month (PMPM) costs. Scenario-based, probabilistic, and one-way sensitivity analyses were performed to gauge the robustness of the results and identify the parameters with the most influence on the results.

Results: For a US self-insured employer or a commercial health plan of 1.5 million members, the incremental PMPM impact of incorporating Propel was estimated to range from ?$0.003 to $0.036, respectively, for all members in the health plan. Sensitivity analyses identified the cost of Propel, probability of polyposis recurrence requiring medical intervention, probability of adhesion formation requiring surgical intervention, and the treatment costs for polyposis as the primary parameters influencing the results.

Conclusion: This study has demonstrated the use of Propel following ESS procedures has a negligible impact on the budget of a US self-insured employer or payer. The upfront cost of Propel was offset by savings associated with reduced probability for polyp recurrence, adhesion formation, and their subsequent treatment.