Health economics of medical devices: opportunities and challenges

Expenditure on medical devices is substantial and is expected to grow in the future. This Editorial draws attention to health economic issues surrounding medical devices. To this effect, opportunities and challenges involved in the economic analysis of the market structure of medical device sectors and in the economic evaluation of medical devices are identified.

Markets for medical devices tend to be fragmented and suffer from a lack of transparency and competition. In response to this, there is extensive government intervention in many developed countries with a view to keeping down prices, restricting public reimbursement and promoting an efficient use of medical devices. Studies are called for that evaluate and compare country approaches towards regulating medical device markets with a view to informing medical-device policies.

Whereas economic evaluation of medicines is well established, and is used to inform pricing and reimbursement decisions in many developed countries, this is less the case for medical devices. There is a need for economic evaluations of medical devices with a view to demonstrating their cost effectiveness. In addition, countries need to implement frameworks for the assessment of new and emerging medical devices with a view to taking pricing and reimbursement decisions.     

Prenatal care: Mechanisms and impacts on infant health and health care utilization

We estimate that prenatal care has positive impacts on health measured at birth, shifts the distribution of future health care utilization away from inpatient care, and find that some of these impacts likely come from an informational mechanism. We also find well child visits are used in a complementary fashion with emergency department care in the production of infant health, suggesting that factors beyond barriers to access may drive the demand for emergency care. Finally, we find differential impacts of prenatal care across racial groups with evidence that the information mechanism may be particularly important for black mothers.     

An introduction to evolutionary theories in economics

This paper presents the basic ideas and methodologies of a set of contemporary contributions which are grouped under the general heading of evolutionary economics. Some achievements-especially with regard to the analysis of technological change and economic dynamics-are illustrated, some unresolved issues are discussed and a few promising topics of research are flagged.This article draws on a chapter prepared for the book Market and Organization: The Competitive Firm and its Environment, edited within an EEC/Tempus Programme by LATAPSES, Nice, France, and Iside, Rome.     

Health economics of market access for biopharmaceuticals and biosimilars

Abstract

Background and scope: This article discusses health economic challenges of research and development, registration, pricing and reimbursement of biopharmaceuticals and biosimilars. A literature search was carried out of PubMed, Centre for Reviews and Dissemination databases, Cochrane Database of Systematic Reviews and EconLit up to March 2009.

Findings: The development process of biopharmaceuticals is risky, lengthy, complex and expensive. Registration is complicated by the inherent variation between biopharmaceuticals. Also, as biopharmaceuticals are likely to be efficacious in a subgroup of the patient population, there is a need to select the most responsive target population and to identify biomarkers. To inform pricing and reimbursement decisions, the development process needs to collect comparative data to calculate the incremental cost effectiveness and budget impact of biopharmaceuticals. There is a role for innovative mechanisms such as risk-sharing arrangements to reimburse biopharmaceuticals.

Conclusions: Given that biosimilars are similar, but not identical to the reference biopharmaceutical, the development process needs to generate clinical trial data in order to gain marketing authorisation. From a health economic perspective, the question arises whether inherent differences between biopharmaceuticals and biosimilars produce differences in safety, effectiveness and costs: to date, this question is unresolved. The early inclusion of health economics in the process of developing biopharmaceuticals and biosimilars is imperative with a view to demonstrating their relative (cost) effectiveness and informing registration, pricing and reimbursement decisions.     

Using data envelopment analysis approach to estimate the health production efficiencies in China

By using Data Envelopment Analysis approach, we treat the health production system in a certain province as a Decision Making Unit (DMU), identify its inputs and outputs, evaluate its technical efficiency in 1982, 1990 and 2000 respectively, and further analyze the relationship between efficiency scores and social-environmental variables. This paper has found several interesting findings. Firstly, provinces on frontier in different year are different, but provinces far from the frontier keep unchanged. The average efficiency of health production has made a significant progress from 1982 to 2000. Secondly, all provinces in China can be divided into six categories in terms of health production outcome and efficiency, and each category has specific approach of improving health production efficiency. Thirdly, significant differences in health production efficiencies have been found among the eastern, middle and western regions in China, and among the eastern and middle regions. At last, there is significant positive relationship between population density and health production efficiency but negative relationship (not very significant) between the proportions of public health expenditure in total expense and efficiency. Maybe it is the result of inappropriate tendency of public expenditure. The relationship between abilities to pay for health care services and efficiency in urban areas is opposite to that in rural areas. One possible reason is the totally different income and public services treatments between rural and urban residents. Therefore, it is necessary to adjust health policies and service provisions which are specifically designed to different population groups. __________ Translated from Jingji Yanjiu 经济研究 (Economic Research Journal), 2006, (7): 92–105     

A model to optimize investments in health technologies,quality of care and research

Funds for health technologies compete with funds for implementing health technologies as well as funds for conducting research to reduce uncertainty around treatment and implementation cost-effectiveness. No study has yet shown how to allocate a combined budget for health technologies, implementation and research. The purpose of this work was to present an allocation model with the goal to maximize health. Based on a constrained optimization formulation, we show that considering opportunities to invest in implementation and research may justify considerable disinvestment in health technologies. This may reduce the willingness to pay for new health technologies significantly.     

Rethinking value in health innovation: from mystifications towards prescriptions

Debates over value in health innovation in the U.S. and Europe have become increasingly dominated by “value-based pricing”. We examine this prevailing narrative and its weaknesses and then present an alternative framework for rethinking value in health. Drawing on scholarship from the political economy of innovation, we argue that value in health must be considered in terms of both value creation as a collective process amongst public and private actors, as well as value extraction that occurs due to financialization. In building this alternative framework, we pose three questions that present areas for further research and public policy change.     

Nominalising the numeric: an alternative to mathematical reduction in economics

Mathematical reduction in economics is the attempt to reducereasoning about human economic behaviour to the logic of numbersand numerical relations. The method of numerics shows how, insimple cases, the mathematical and non-mathematical componentsof economic theory can be both formally distinguished and integrated.However, in its compressed idiomatic form, this method treatsnumerics (the numerical terms in measuremental expressions)as determinatives (numerical adjectives) rather than as substantives.This paper shows how the numeric can be nominalised or giventhe grammatical status of a substantive. The method of numericsis then used to explore the fundamental flaws of mathematicalreduction in economists' efforts to achieve logical rigour inthe formalisation of economic theory.     

From simplistic to complex systems in economics

The applicability of complex systems theory in economics isevaluated and compared with standard approaches to economictheorising based upon constrained optimisation. A complex systemis defined in the economic context and differentiated from complexsystems in physio-chemical and biological settings. It is explainedwhy it is necessary to approach economic analysis from a network,rather than a production and utility function perspective, whenwe are dealing with complex systems. It is argued that muchof heterodox thought, particularly in neo-Schumpeterian andneo-Austrian evolutionary economics, can be placed within acomplex systems perspective upon the economy. The challengeis to replace prevailing ‘simplistic’ theories,based in constrained optimisation, with ‘simple’theories, derived from network representations in which valueis created through the establishment of new connections betweenelements.     

Universal Health Care and the Economics of Responsibility

In the American health care system the cost of health insurance is underwritten by all three sectors of the economy: 1) households; 2) employers; and 3) government. However, while costs are shared, responsibility is not. The retreat of private firms and government from assuming a substantial share of the burden of health care costs is based on the presumption that health care is an individual’s responsibility, while the contributions of government and the private sector are basically optional - a matter of benevolence rather than responsibility. The outcome of the current debates over health care reform will depend on this issue of responsibility. Who should pay for health care? Is it a collective responsibility or an individual one? In this paper, we explore the economics of responsibility as it applies to health care. In the institutionalist framework, any reallocation of costs must be driven by an underlying philosophy of shared responsibility.     

Transition to market economics: Employment and informal activity in rural areas

According to the neo-liberal model, the high levels of unemployment and collapsing real wages of transition will reallocate labor to new activities. But whether and how households actually reallocate labor is the subject of growing debate. We use survey data from Bulgaria to develop a typology of rural households based on their labor allocation characteristics. We find a diversity of outcomes. A significant share of households experience no change in labor allocation, some shift labor to own commercial enterprises, but a significant minority are displaced from the emerging market economy. Potential for informal activity among these households appears limited. Of great concern is the regional concentration of such households.     

A health economic model to assess the cost-effectiveness of OPTIFAST for the treatment of obesity in the United States

Objectives: Obesity is associated with high direct medical costs and indirect costs resulting from productivity loss. The high prevalence of obesity generates a justified need to identify cost-effective weight loss approaches from a payer’s perspective. Within the variety of weight management techniques, OPTIFAST is a clinically recognized and scientifically proven total meal replacement Low Calorie Diet that provides meaningful results in terms of weight loss and reduction in comorbidities. The objective of this study is assess potential cost-savings of the OPTIFAST program in the US, as compared to “no intervention” and pharmacotherapy.

Methods: An event-driven decision analytic model was used to estimate payer’s cost-savings from reimbursement of the 1-year OPTIFAST program over 3 years in the US. The analysis was performed for the broad population of obese persons (BMI >30?kg/m²) undergoing the OPTIFAST program vs liraglutide 3?mg, naltrexone/bupropion and vs “no intervention”. The model included the risk of complications related to increased BMI. Data sources included published literature, clinical trials, official US price/tariff lists, and national population statistics. The primary perspective was that of a US payer; costs were provided in 2016?US dollars.

Results: OPTIFAST leads over a period of 3 years to cost-savings of USD 9,285 per class I and II obese patient (BMI 30–39.9?kg/m²) as compared to liraglutide and USD 685 as compared to naltrexone/bupropion. In the same time perspective, the OPTIFAST program leads to a reduction of cost of obesity complications of USD 1,951 as compared to “no intervention”, with the incremental cost-effectiveness ratio of USD 6,475 per QALY. Scenario analyses also show substantial cost-savings in patients with class III obesity (BMI?≥?40.0?kg/m²) and patients with obesity (BMI?=?30–39.9?kg/m²) and type 2 diabetes vs all three previous comparators and bariatric surgery.

Conclusions: Reimbursing OPTIFAST leads to meaningful cost-savings for US payers as compared with “no intervention” and liraglutide and naltrexone/bupropion in obese patients. Similar results can be expected in matching healthcare settings of other countries. Moreover, OPTIFAST has additional clinical and economic advantages through very low complication and adverse events rates.     

Models in evolutionary economics and environmental policy: Towards an evolutionary environmental economics

In this paper we review evolutionary economic modelling in relation to environmental policy. We discuss three areas in which evolutionary economic models have a particularly high added value for environmental policy-making: the double externality problem, technological transitions and consumer demand. We explore the possibilities to apply evolutionary economic models in environmental policy assessment, including the opportunities for making policy-making endogenous to environmental innovation. We end with a critical discussion of the challenges that remain.     

高校经济学专业应用型人才培养实践教学模式探讨

随着社会经济的发展,对经济学专业应用型人才的需求越来越多,传统的人才培养模式已不能满足社会需要。从经济学专业应用型人才培养模式现状分析入手,对当前培养模式存在的问题进行了探讨,提出构建经济学专业应用型人才实践教学培养模式的思路。     

Incorporating research findings in the economics syllabus: evidence on genuine sociality from Italy and the UK

Economics education is proving slow in incorporating into the syllabus the genuine advances made in economics research in the last few decades. As economics education relies primarily on the single approach of neoclassical economics, whilst recent advances in research have been marked by a wide variety of approaches, many of which are interdisciplinary, the methodological divide between education and research is growing wider. We attempt to measure how keen students are to incorporate research findings in the syllabus by developing a questionnaire which introduces undergraduate students in Italy and the U.K. to key findings in the research literature on genuine sociality, an area in which the methodological divide is very noticeable. Students display moderate support for being taught the material on genuine sociality. Students who wish to incorporate genuine sociality in the syllabus tend to be older, value virtue and have a religion.     

The arrow of time in economics: from Robinson's critique to the new historical economics

Abstract

How time is comprehended in economics is central to the type of discipline to which economics is analogized. Rejecting the symmetrical notion of time in classical physics, Joan Robinson emphasized the importance of ‘historical time’, and hence history. A new generation of economists – including Paul Krugman, Paul David, and Brian Arthur – took up Robinson's challenge, seeking to create a new historical economics by relating random or ‘accidental’ historical events in different ways to the necessity of economic rules, and finding that, as Robinson saw, scale effects were crucial. Their efforts, however, fell short of integrating history into economics.     

The turn in recent economics and return of orthodoxy

This paper examines change on the economics research frontier,and asks whether the current competition between new researchprogrammes may be supplanted by a new single dominant approachin the future. The paper discusses whether economics tends tobe dominated by a single approach or reflect a pluralism ofapproaches, and argues that, historically, it has alternatedbetween the two. It argues that orthodoxy usually emerges fromheterodoxy, and interprets the division between orthodoxy andheterodoxy in terms of a core–periphery distinction. Regardingrecent economics, the paper maps out two different types ofcombinations of new research programmes as being synchronicor diachronic in nature. It treats the new research programmesas a new kind of heterodoxy, and asks how a new orthodoxy mightarise out of this new heterodoxy and traditional heterodoxy.It discusses this question by advancing two views regardinghow to different types of combinations in the new research programmesmight consolidate along the lines of three shared commitmentswith traditional heterodoxy to form a new orthodoxy in economics.     

Simon's and Siegel's responses to the 'mixed strategy anomaly': a missed case in the sensitivity of economics to empirical evidence

In some of their papers published in the 1950s, Herbert Simonand Sidney Siegel responded to the so-called mixed strategyanomaly in ways which deserve more attention. They producednot only (i) immediate defences of the economic theory of theirown time, but also (ii) ideas and solutions that have laterturned out to be significant contributions to the developmentof the economic theory of choice and decision-making and theseparation of experimental economics from experimental psychology.These observations suggest that economics can be more responsiveto empirical anomalies than has been assumed. Furthermore, knowledgeof the desirable responsiveness to anomalies can provide meansof avoiding the non-desirable immunity to anomalies.     

Income-related inequalities of health and health care utilization

By utilizing the China Health and Nutrition Survey (CHNS) data, this paper examines the extent of deviations in terms of horizontal equity in the field of China’s health and medical community, i.e., that those in equal demand ought to be treated equally, and computes the contribution of income in health inequality and utilization inequality of health care. The main conclusions are: There is pro-rich inequality in health and utilization of health care; income contribution to inequality of health care utilization accounts for 0.13–0.2; insurance also enlarges the inequality of health care utilization; health inequality in rural area is larger than that of in urban area; and both rural and urban health inequality are increasing. From 1991 to 2006, income changes in urban districts and rural area account for 7.08% and 13.38% respectively of raising inequality of rural and urban health.