IS-LM stability and economic policy effectiveness: A note

Accepting the findings of Weber (1970) and Yarrow (1975), Cebula finds that conventional fiscal policy has its usual positive effect on the level of income while monetary policy has a negative impact. This paper shows that if a budget constraint of the specific, simplified form G ? T = ΔM is added to the model, the results differ from Cebula's.     

Budget impact of everolimus for the treatment of progressive,well-differentiated,non-functional neuroendocrine tumors of gastrointestinal or lung origin that are advanced or metastatic

Background: Advanced neuroendocrine tumors (NETs) are a rare malignancy with considerable need for effective therapies. Everolimus is a mammalian target of rapamycin (mTOR) inhibitor approved by the US Food and Drug Administration (FDA) and European Medicines Agency (EMA) in 2016 for treatment of adults with progressive, well-differentiated, non-functional NETs of gastrointestinal (GI) or lung origin that are unresectable, locally advanced, or metastatic.

Objective: To assess the 3-year budget impact for a typical US health plan following availability of everolimus for treatment of GI and lung NETs.

Methods An economic model was developed that considered two perspectives: an entire health plan and a pharmacy budget. The total budget impact included costs of drug therapies, administration, hospitalizations, physician visits, monitoring, and adverse events (AEs). The pharmacy model only considered drug costs.

Results: In a US health plan with 1 million members, the model estimated 66 patients with well-differentiated, non-functional, and advanced or metastatic GI NETs and 20 with lung NETs undergoing treatment each year. Total budget impact in the first through third year after FDA approval ranged from $0.0568–$0.1443 per member per month (PMPM) for GI NETs and from $0.0181–$0.0355 PMPM for lung NETs. The total budget impact was lower than the pharmacy budget impact because it included cost offsets from administration and AE management for everolimus compared with alternative therapies (e.g. chemotherapies).

Limitations: Because GI and lung NETs are rare diseases with limited published data, several assumptions were made that may influence interpretation of results.

Conclusions: The budget impact for everolimus was minimal in this rare disease area with a high unmet need, largely due to low disease prevalence. These results should be considered in the context of significant clinical benefits potentially provided by everolimus, including significantly longer progression-free survival (PFS) for advanced GI and lung NET patients.     

Fiscal and Monetary Policy Interaction in a Simple Accelerator Model

In this paper, a simple Keynesian and discrete time multiplier ?C accelerator model is developed, which results after the inclusion of the money market and a balanced government budget constraint in Samuelson??s (1939) business cycle model. The resulted model is proved to be less stable and the evolution of income around its equilibrium is more likely to exhibit a sinusoidal way of movement. The magnitude of the main tools of fiscal and monetary policy is assumed to be determined solely by the government and the Central Bank respectively, so that income??s constant amplitude around its intertemporal equilibrium value is minimized.     

Budget impact of pasireotide for the treatment of Cushing’s disease,a rare endocrine disorder associated with considerable comorbidities

Objectives:

Cushing’s disease (CD) is a rare condition with a prevalence of roughly 39 cases per million in the general population. Healthcare costs are substantial for CD patients with either untreated or inadequately controlled disease. This study assesses the 3-year budget impact of pasireotide on a US managed care health plan following pasireotide (Signifor) availability.

Methods:

Two scenarios were evaluated to understand the differences in costs associated with the introduction of pasireotide. The first scenario evaluates the budget impact of pasireotide from the perspective of an entire health plan (total budget impact) and the second from the perspective of the pharmacy budget (pharmacy budget impact). Both scenarios evaluate the annual incremental budget impact with and without pasireotide. Scenario 1 includes costs for medical procedures, drug therapies, monitoring, surgical complications, comorbidities for patients with controlled or uncontrolled CD, and adverse events. Procedures include transsphenoidal surgery, bilateral adrenalectomy, radiotherapy and radiosurgery. Drugs include pasireotide (indicated for CD), mifepristone (indicated to control hyperglycemia secondary to hypercortisolism in patients with Cushing’s syndrome) as well as several off-label treatments (ketoconazole, cabergoline, mitotane). Scenario 2 considers costs solely from the perspective of a health plan pharmacy. Costs are in $2013.

Results:

The estimated total budget impact is $0.0115 per-member per-month (PMPM) in the first year following FDA approval, $0.0184 in the second year, and $0.0194 in the third year. Introduction of pasireotide is expected to increase the pharmacy budget by $0.0257 PMPM in the first year, $0.0363 in the second year, and $0.0360 in the third year.

Limitations:

Model inputs rely on the small body of literature available for Cushing’s disease.

Conclusions:

Cushing’s disease is severe disease with debilitating comorbidities and substantial healthcare costs when untreated or inadequately controlled. The inclusion of pasireotide in a health plan formulary appears to have only a small impact on the total health plan or pharmacy budget.     

预算软约束与资产价格理性泡沫

文章将预算软约束引入资产价格理性泡沫的分析之中,在给出一个预算软约束情形下资产均衡价格决定模型的基础上,得出了资产价格理性泡沫的表达式.模型分析表明,当存在预算软约束时风险资产的理性泡沫为正;同时,风险资产对应企业面临的预算软约束越大,该风险资产价格中的理性泡沫越大.     

Essential data, budget sets and rationalization

According to a minimalist version of Afriat’s theorem, a consumer behaves as a utility maximizer if and only if a feasibility matrix associated with his choices is cyclically consistent. An “essential experiment” consists of observed consumption bundles $(x_{1}, \ldots , x_{n})$ and a feasibility matrix $\varvec{\alpha }$ . Starting with a standard experiment, in which the economist has access to precise budget sets, we show that the necessary and sufficient condition for the existence of a utility function rationalizing the experiment, namely, the cyclical consistency of the associated feasibility matrix, is equivalent to the existence, for any budget sets compatible with the deduced essential experiment, of a utility function rationalizing them (and typically depending on them). In other words, the conclusion of the standard rationalizability test, in which the economist takes budget sets for granted, does not depend on the full specification of the underlying budget sets but only on the essential data that these budget sets generate. Starting with an essential experiment $(x_{1}, \ldots , x_{n}; \varvec{\alpha }$ ) only, we show that the cyclical consistency of $\varvec{\alpha }$ , together with a further consistency condition involving both $(x_{1}, \ldots , x_{n})$ and $\varvec{\alpha }$ , guarantees the existence of a budget representation and that the essential experiment is rationalizable almost robustly, in the sense that there exists a single utility function which rationalizes at once almost all budget sets which are compatible with $(x_{1}, \ldots , x_{n}; \varvec{\alpha }$ ). The conditions are also trivially necessary.     

A political economy theory of the soft budget constraint

Why do soft budget constraints exist and persist? In this paper we argue that the prevalence of soft budget constraints can be best explained by the political desirability of softness. We develop an infinite horizon political economy model where neither democratic nor autocratic politicians can commit to policies that are not ex post optimal. We show that because of the dynamic commitment problem inherent in the soft budget constraint, politicians can in essence commit to make transfers to entrepreneurs which otherwise they would not be able to do. This encourages such entrepreneurs to support them politically. Though the soft budget constraint may induce economic inefficiency, it may be politically rational because it influences the probability of political survival. In consequence, even when information is complete, politicians may fund bad projects which they anticipate they will have to bail out in the future. We show that, maybe somewhat surprisingly, dictators who are less likely to lose power, are more likely to use the soft budget constraint as a strategy to gain political support.     

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.     

Economic value of narrow band imaging versus white light endoscopy for the characterization of diminutive polyps in the colon: systematic literature review and cost-consequence model

Aims: To demonstrate the economic implication of adopting narrow-band imaging (NBI) for the characterization of diminutive polyps in the colon from an English payer perspective.

Materials and methods: A decision-tree model was undertaken to perform a cost-consequence and budget impact analysis from the NHS England perspective in the UK, over a 7-year time horizon. Clinical inputs came from the published literature (both randomized controlled trials and meta-analyses) identified through a systematic literature review, and cost inputs came from national list prices and unpublished internal market data. Deterministic sensitivity analysis (DSA) was conducted on the budget impact results to assess their robustness.

Results: Optical diagnosis with NBI offered cost savings vs white light endoscopy (WLE) over 7 years due to reductions in histological exams, resections, and associated adverse events, while having minimal impact on health outcomes. Budget impact analysis demonstrated annual cost savings of £141 192 057 over 7 years, with histological exams being the biggest cost driver. DSA showed these results to be robust, but most sensitive to the cost of tariff with and without biopsy, and the cost of histological exam. Break-even analysis to explore how changing the unit cost and number of biopsies per patient would change the budget impact found NBI consistently offered net savings, even if the cost of biopsy was £0.

Limitations: Although every effort was made to ensure robustness of results, as with any model, there were some limitations including a lack of published data for certain clinical inputs and potential variation between model inputs and real-life cost and market share values.

Conclusions: Optical diagnosis with NBI was found to be equally effective compared with the standard of care (WLE), while potentially enabling cost savings from the NHS England perspective.     

Unbalanced government budgets,private asset holdings,and the traditional comparative static multipliers

During the past quarter century, the traditional macro model of effective demand has been criticized repeatedly for ignoring certain asset market effects associated with government policy. The customary approach in using an underlying framework for this model has been to assume that government faces a budget constraint whereas the private sector confronts a wealth constraint. In this paper, we demonstrate thet if every sector faces a budget constraint, many of the aforementioned criticisms disappear. One particularly interesting result is that a balanced government budget is not necessary to achieve a stationary equilibrium for national income.     

Targeted erlotinib for first-line treatment of advanced non-small cell lung cancer: a budget impact analysis

Objectives:

A recent phase III trial showed that patients with advanced non-small cell lung cancer (NSCLC) whose tumors harbor specific EGFR mutations significantly benefit from first-line treatment with erlotinib compared to chemotherapy. This study sought to estimate the budget impact if coverage for EGFR testing and erlotinib as first-line therapy were provided in a hypothetical 500,000-member managed care plan.

Methods:

The budget impact model was developed from a US health plan perspective to evaluate administration of the EGFR test and treatment with erlotinib for EGFR-positive patients, compared to non-targeted treatment with chemotherapy. The eligible patient population was estimated from age-stratified SEER incidence data. Clinical data were derived from key randomized controlled trials. Costs related to drug, administration, and adverse events were included. Sensitivity analyses were conducted to assess uncertainty.

Results:

In a plan of 500,000 members, it was estimated there would be 91 newly diagnosed advanced NSCLC patients annually; 11 are expected to be EGFR-positive. Based on the testing and treatment assumptions, it was estimated that 3 patients in Scenario 1 and 6 patients in Scenario 2 receive erlotinib. Overall health plan expenditures would increase by $0.013 per member per month (PMPM). This increase is largely attributable to erlotinib drug costs, in part due to lengthened progression-free survival and treatment periods experienced in erlotinib-treated patients. EGFR testing contributes slightly, whereas adverse event costs mitigate the budget impact. The budget impact did not exceed $0.019 PMPM in sensitivity analyses.

Conclusions:

Coverage for targeted first-line erlotinib therapy in NSCLC likely results in a small budget impact for US health plans. The estimated impact may vary by plan, or if second-line or maintenance therapy, dose changes/interruptions, or impact on patients’ quality-of-life were included.     

The budget impact and cost-effectiveness of defibrotide for treatment of veno-occlusive disease with multi-organ dysfunction in patients post-hematopoietic stem cell transplant

Background: A Phase-3 study of defibrotide compared with historical controls demonstrated a 23% improvement in 100-day survival post-hematopoietic stem cell transplantation (HSCT) among patients with veno-occlusive disease with multi-organ dysfunction (VOD with MOD).

Aim: To estimate the budget impact and cost-effectiveness of introducing defibrotide to a transplant center.

Methods: The authors developed a budget impact model from the perspective of a bone-marrow transplant center. It was estimated that 2.3% of adults and 4.2% of children would develop VOD with MOD following HSCT based on a retrospective hospital database analysis and the effect that treating patients with defibrotide would have on costs for adult and pediatric centers was estimated. A cost-utility analysis (CUA) was also developed to capture the long-term cost-effectiveness of defibrotide. Projected life expectancies in the two groups were estimated based on trial data, transplant registry data, studies of long-term survival among HSCT patients, and US population life-tables.

Results: There was an estimated 3% increase ($330,706) per year in total adult transplantation center costs associated with adopting defibrotide, and a <1% increase ($106,385) for pediatric transplant centers, assuming 100 transplants per year. In the CUA, the lifetime increase in cost per patient was $106,928, life expectancy increased by 3.74 years, and quality-adjusted life-years (QALYs) increased by 2.24. The incremental cost-effectiveness ratio (ICER) was $47,736 per QALY gained; 88% probability defibrotide was cost-effective at a $100,000/QALY threshold.

Conclusion: The budget impact of defibrotide for a transplant center is relatively modest compared to the overall cost of transplantation. Defibrotide provides an important survival advantage for VOD with MOD patients, and the life years gained lead to defibrotide being highly cost-effective.     

The budget impact of introducing delayed-release dimethyl fumarate for treatment of relapse-remitting multiple sclerosis in Canada

Abstract

Objective:

Multiple sclerosis (MS) causes significant disability globally and is especially prevalent in Canada. Delayed-release dimethyl fumarate (DMF; also known as gastro-resistant DMF) is an orally administered disease-modifying treatment (DMT) for patients with relapsing-remitting MS (RRMS) that is currently on the market in the US, Australia, Canada, and Europe. A budget impact model (BIM) was developed to assess the financial consequences of introducing DMF for treatment of RRMS in Canada.     

Economic impact of onabotulinumtoxinA for overactive bladder with urinary incontinence in Europe

Background: Overactive bladder (OAB) is a common condition that has a significant impact on patients’ health-related quality-of-life and is associated with a substantial economic burden to healthcare systems. OnabotulinumtoxinA has a well-established efficacy and safety profile as a treatment for OAB; however, the economic impact of using onabotulinumtoxinA has not been well described.

Methods: An economic model was developed to assess the budget impact associated with OAB treatment in France, Germany, Italy, Spain and the UK, using onabotulinumtoxinA alongside best supportive care (BSC)—comprising incontinence pads and/or anticholinergic use and/or clean intermittent catheterisation (CIC)—vs BSC alone. The model time horizon spanned 5 years, and included direct costs associated with treatment, BSC, and adverse events.

Results: Per 100,000 patients in each country, the use of onabotulinumtoxinA resulted in estimated cost savings of €97,200 (Italy), €71,580 (Spain), and €19,710 (UK), and cost increases of €23,840 in France and €284,760 in Germany, largely due to day-case and inpatient administration, respectively. Projecting these results to the population of individuals aged 18 years and above gave national budget saving estimates of €9,924,790, €27,458,290, and €48,270,760, for the UK, Spain, and Italy, respectively, compared to cost increases of €12,160,020 and €196,086,530 for France and Germany, respectively. Anticholinergic treatment and incontinence pads were the largest contributors to overall spending on OAB management when onabotulinumtoxinA use was not increased, and remained so in four of five scenarios where onabotulinumtoxinA use was increased. This decreased resource use was equivalent to cost offsets ranging from €106,110 to €176,600 per 100,000 population.

Conclusions: In three of five countries investigated, the use of onabotulinumtoxinA, in addition to BSC, was shown to result in healthcare budget cost savings over 5 years. Scenario analyses showed increased costs in Germany and France were largely attributable to the treatment setting rather than onabotulinumtoxinA acquisition costs.     

Are government bonds net wealth? intertemporal optimization and the government budget constraint

Full integration of the government sector's intertemporal budget constraint into the private sector's intertemporal budget constraint implies the Ricardian equivalence proposition associated with Barro (1974) is valid. Private sector holdings of government bonds are not net wealth. Previous tests of the equivalence proposition estimate Keynesian consumption relationships augmented by alternative measures of government liabilities. Decisive results have not been obtained. The test presented here uses a formulation of the permanent income model to test the integration of the government's intertemporal budget constraint into the private sector's intertemporal budget constraint. The explicit use of a forward looking model of consumption imposes constraints on the equation estimated and on construction of the data; the present test is a significant improvement. The results of this test do not support the equivalence proposition.     

Budget constraint of a firm and economic theory

Summary Firms in reality are subject to budget constraints which general equilibrium theorists have paid little attention. Using Morishima (1950, 1992) model, this paper deals with firms that are subject to budgets pertaining to sales and investment decisions, and proves the existence of a general equilibrium. We show that an economy with firms subject to budgets does not necessarily satisfy the efficiency proposition, and clarify how the total profit maximum condition in the Arrow-Debreu (1954) type economy ensures an efficiency in a limited dynamic sense.The author is grateful to Professors J. Iritani, H. Nagatani, and K. Urai who gave useful comments on occasions of Saturday Workshop on Economic Theory and Mathematics. He is also grateful to Professor M. Kaneko for his useful comments on an earlier version of the paper Kuga (1993), to which this article is closely related.     

Capital mobility and sustainability: Evidence from U.S. current account data

We propose an empirical framework that allows us to jointly test for the sustainability of the current account deficit and evaluate the capital mobility thesis by examining the time series properties of the current account. We argue that this approach is more useful than the Feldstein-Horioka (1980) cross-section regression because of its firm basis on the long run inter-temporal budget constraint and of its richer dynamics that allow for a more useful method to evaluate the capital mobility thesis. Based on a century and half of U.S. current account data, we find evidence of current account sustainability and major breaks in the current account dynamics such that adjustment in the current account switches off allowing the current account to accumulate at a non-stationary rate. We assess whether periods in which the current account accumulates in a non-stationary way correspond to historical periods believed to have witnessed high degree of capital mobility.First version received: June 2003/ Final version received: January 2004     

Joint production in teams

Consider Holmström's moral hazard in teams problem when there are n agents, each agent i has an a_i-dimensional strategy space and output is m-dimensional. We show that a compensation mechanism that satisfies budget balance, limited liability and implements an efficient allocation generically exists if and only if . Moreover, under a weak additional condition, the equilibrium implemented by this mechanism is unique in the class of pure strategy Coalition-Proof equilibria.     

Investment and the soft budget constraint in China

This paper examines the incentive effects of the soft budget constraint on the investment behavior of firms in general and on the investment-cash flow sensitivity in particular. To this end, we develop a simple model of moral hazard that takes the soft budget constraint into account. Within this moral hazard environment, we show that investment is positively related to the amount of internal funds. We further show that the presence of the soft budget constraint deteriorates the moral hazard problem, thereby making the investment level less sensitive to the amount of internal funds. This is the case irrespective of whether the soft budget constraint renders the firm more or less liquidity constrained. To test the model's empirical implications, we employ data of China's listed companies for the period from 1997 to 2003. We use the share of state ownership as a proxy for the severity of the soft budget constraint. We find strong evidence that firms with larger shares of state ownership exhibit lower investment-cash flow sensitivities than firms with smaller shares of state ownership.     

企业、银行和政府三方还贷博弈研究

预算软约束已成为国有企业改革的阻碍因素,并影响经济转型期的政企、银企关系,而政府对于债务的软预算约束是企业信贷违约的原因之一,根据企业还贷过程中相关利益者的相互博弈,建立一个企业、银行、政府之间三方博弈模型来分析它们之间的行为及其目标差异对企业信贷违约的影响。模型分析表明：政府出于政治和经济利益的考虑,通过补贴银行和企业来实施对企业还贷的软预算约束,而银行在衡量了政府补贴和清算得失之后有可能对企业再贷款。解决预算软约束和企业信贷违约的关键在于＂政府、银行、企业＂之间的关系处理,企业完全按市场化运作,建立科学的法人治理结构,让政府从企业中逐步退出,硬化企业的预算约束环境,从而降低企业的信贷违约的概率。