Efficiency,access, and the mixed delivery of health care services

Universal health systems often rely on both pubic provision and contracting arrangements with private hospitals. This paper studies the optimal mix of public and private provision of health care services. We propose a model in which the regulator acts as athird-party payer, and aims to ensure universal access to treatment at minimal cost. Patients need one unit of medical services and differ in the severity of illness. A private and a public hospital are available. Under incomplete contracts, ownership affects the regulatory constraints and the power of managerial incentives. Only the private manager internalizes profits, and has incentives to reject costly patients and to exert effort in cost reduction. Contracting with the private hospital is optimal when managerial effort is relatively effective in reducing costs. By using the public hospital as a last resort provider, the regulator can ensure access, provide incentives to the private manager, and internalize part of the resulting cost savings. Imposing a no-dumping constraint on the private hospital reduces the power of incentives and is not always optimal.     

Private and public sector regulation of competitively tendered contracts

This paper addresses two contractual issues using a sample of competitively tendered contracts for cleaning services. First, the paper considers the characteristics that distinguish private from public sector organisations in their methods of selection and regulation of contractors. Secondly, the paper examines the perceived effectiveness of such regulatory mechanisms in terms of compliance with contract specifications and overall assessment of quality. Econometric analysis reveals that private sector organisations differ from their public sector counterparts in the selection procedures of contractors. Moreover, significant differences emerge in the apparent efficacy of a range of regulatory instruments in assuring contractual performance.We are grateful to Jörg Finsinger and participants at the Industrial Organization Conference in Vienna (1992) for helpful comments. The usual disclaimer applies.     

THE EFFECTS OF ORGANIZATIONAL FORM IN THE MIXED MARKET FOR FOSTER CARE

ABSTRACT ** : This paper uses proprietary quality of care data to examine the consequences of organizational form in privatized US foster care services. The contract failure hypothesis generically proposes that nonprofits should provide higher quality services, relative to for‐profits, when output is costly to observe. Advocates argue that the nonprofits offer important consumer protections when public services are contracted to private agencies. Contrary to expectations, we find that nonprofit firms do not offer higher quality services. We explore the possibility that monitoring efforts by state regulators or competition among foster care agencies effectively mitigate the influence of organizational form in this particular mixed market.     

Money for nothing: The dire straits of medical practice in Delhi,India

The quality of medical care received by patients varies for two reasons: differences in doctors' competence or differences in doctors' practice. Using medical vignettes, we evaluated competence for a sample of doctors in Delhi. One month later, we observed the same doctors in their practice. We find three patterns in the data. First, doctors do less than what they know they should do. Second, the more competent the doctor, the greater the effort exerted. Third, competence and practice diverge in different ways in the public and private sectors. Urban India pays a lot of “Money for Nothing”: in the private sector there is a lot of expenditure on unnecessary drugs. In the public sector, education subsidies and salary payments translate into little (and in small clinics, very little) effort and care. Provider training has a small impact on the actual quality of advice; under the circumstances, awareness campaigns to create a more informed clientele may be the best option.     

Valuation of ecosystem services from rural landscapes using agricultural land prices

Agricultural lands, primarily managed for crops and livestock production, provide various ecosystem services (ES) to people. In theory, the economic value of the service flows that can be captured privately is capitalized into land prices. This study proposes an integrative framework to characterize the ecosystem services associated with agricultural lands. Using that framework, we demonstrate how hedonic analysis of agricultural land prices can be used to estimate the private values of land-based ES. The model is estimated with data from southwestern Michigan, USA. Results suggest that ES values are associated with lakes, rivers, wetlands, forests and conservation lands in rural landscapes. Ecosystem services that support direct use values, such as recreational and aesthetic services, are likely to be perceived by land owners and capitalized in land prices. Some regulating services that provide indirect use values may be partially capitalized in a land parcel's relationship to natural resources and landscapes. Other ES from the land parcel and its surroundings are unlikely to be capitalized due to lack of private incentives, unawareness, or small perceived value. The private ES values measured in this study highlight opportunities to design cost-effective public policies that factor in the value of private benefits from agricultural lands.     

Importing exporters and exporting importers: A study of the decision of Chinese firms to engage in international trade

This paper examines the complex and interdependent relationship between importing and exporting for a panel of Chinese manufacturing firms. We estimate the decision to import and export simultaneously within a dynamic random‐effects bivariate probit framework addressing the endogenous initial conditions problem. Results show that decisions to export and import are simultaneously determined and that sunk‐entry costs play a significant role in a firm's decision to enter international markets. Costs are larger for exporting. We also find a substitution effect between the two decisions. The substitutability between exporting and importing is greater for financially constrained private firms.     

Regulating Providers' Reimbursement in a Mixed Market for Health Care

Hospitals can be reimbursed for their costs in many ways. Several authors have investigated the effects of these reimbursement rules on physician incentives and, therefore, on the quantity of services provided to patients. A form of (linear) cost-sharing tends to emerge as the socially efficient reimbursement policy. We present a model of hospital reimbursement, based on Ellis and McGuire (1986). The new feature is that physicians can supply private health care services to a patient, as well as public sector ones; a common institutional arrangement in many health care systems. We investigate the optimal public sector reimbursement rule given that private market incentives must now be taken into account. Public sector cost-sharing remains socially efficient, but it is generally non-linear: the precise details depend on whether public and private services are substitutes or complements and on the degree of social efficiency achieved in the private sector. Other reimbursement schemes exhibit optimality properties not present in Ellis and McGuire's work.     

The Use and Cost of Child Care in Australia

The use and cost of child care have become important policy issues with rising labour force participation for women responsible for young children. In this article it is shown that for children aged less than 2 informal care is much more important than formal care. For children aged 3 to 5 by far the most important, and cheapest, form of formal care is preschool. The category of formal care which has expanded most rapidly is child care centre places. However the recent expansion of female employment has been effected with no rise in the share of formal care in the total. Publicly supplied child care centre places are over 40 per cent more expensive to produce than private ones. It is argued that for those who do not receive a fee relief subsidy public care is more expensive than private care. The inference is drawn that people are willing to pay more for public than private care because public care is of higher quality. However those buying this higher quality care pay (at most) only 80 per cent of the cost of producing the care. The shortage of care in the public sector is not solved by private sector expansion because users of care are not willing to pay the price of producing high quality care.     

BENEFITS AND COSTS OF INTENSIVE FOSTER CARE SERVICES: THE CASEY FAMILY PROGRAMS COMPARED TO STATE SERVICES

The foster care system attempts to prepare children and youth who have suffered child maltreatment for successful adult lives. This study documents the economic advantages of a privately funded foster care program that provided longer term, more intensive, and more expensive services compared to public programs. The study found significant differences in major adult educational, health, and social outcomes between children placed in the private program and those placed in public programs operated by Oregon and Washington. For the outcomes for which we could find financial data, the estimated present value of the enhanced foster care services exceeded their extra costs. Generalizing to the roughly 100,000 adolescents age 12-17 entering foster care each year, if all of them were to receive the private model of services, the savings for a single cohort of these children could be about $6.3 billion in 2007 dollars. ( JEL D61, H75)     

Managerial talent,motivation, and self-selection into public management

The quality of public management is a recurrent concern in many countries. Calls to attract the economy's best and brightest managers to the public sector abound. This paper studies self-selection into managerial positions in the public and private sector, using a model of a perfectly competitive economy where people differ in managerial ability and in public service motivation. We find that, if demand for public sector output is not too high, the equilibrium return to managerial ability is always higher in the private sector. As a result, relatively many of the more able managers self-select into the private sector. Since this outcome is efficient, our analysis implies that attracting a more able managerial workforce to the public sector by increasing remuneration to private-sector levels is not cost-efficient.     

中国居民医疗保险购买行为研究-基于商业健康保险的角度

本文通过健康保险市场供需双方行为分析,构建居民医疗保险购买行为模型,利用中国健康与营养调查数据(2000—2006),运用部分观测的二元Probit估计方法(Bivariate Probit with partial observability),从实证的角度分析商业健康保险市场中供需双方各自的风险选择行为,以及城乡地区居民对商业健康保险的潜在需求行为及其宏微观影响因素。本文发现:(1)城乡居民都存在显著的逆向选择行为;(2)城乡社会医疗保障对居民商业健康保险需求行为有显著的促进作用;(3)影响居民商业健康保险行为的其他因素还包括,个人的风险偏好和经济购买力。     

The nonexcludable publicness of primary and secondary public education

Existing theoretical models of education, as with most practical applications of public good theory, suggest some form of joint public-private financing. Empirical work has only rarely addressed these theoretical considerations. Employing individual level observations, we model and estimate the private and social demands for public education in a community. An ordered probit model with known thresholds is used to obtain unique parameter estimates. The individual private and social demands are then employed to construct a measure of the publicness of education at various quantities.     

健康投资的产业结构效应:来自OECD等国家的宏观证据

在"未富先病"以及"健康中国"的背景下,文章从产业结构出发,通过使用世界银行数据库和佩恩表1995-2011年百余个国家的面板数据,研究了健康投资行业的发展对经济结构的影响,以期为当下中国转型经济结构的时代诉求提供参考.研究结果显示:首先,发展健康投资行业有助于增加服务业就业人口比重,并且私人健康投资对增加服务业就业人口比重的影响系数大于公共健康投资;其次,相对于公共健康投资,私人健康投资对第二产业增加值的挤出效应更有限;第三,发展健康服务业,尤其是公共健康事业将加快经济结构转型速度.综上所述,发展健康产业对推进产业结构转型具有积极意义,但如何在政策效果和可能的阻力之间进行权衡还需要政策制定者的慎重考虑.     

Supplementary private health insurance and health care utilization of people aged 50+

Does supplementary private health insurance (PHI) coverage influence health care utilization in countries where the coverage ratio with public health insurance is high? I estimate this effect using the Survey of Health, Ageing and Retirement in Europe. Handling the potential endogeneity of supplementary insurance coverage and the large fraction of zero observations in the utilization models influences the empirical results. I show that the effect of PHI coverage on inpatient and outpatient care utilization is not trivial even in countries with generous public health funding. The main finding is that supplementary PHI coverage increases dental care utilization, but decreases the visits to general practitioners. Private insurance is estimated to have little and insignificant influence on the utilization of inpatient care and outpatient specialist care. The magnitude of the effect of supplementary PHI on health care utilization varies with the characteristics of the health care systems.     

The impact of private hospital insurance on the utilization of hospital care in Australia

We use the Australian National Health Survey to estimate the impact of private hospital insurance on the propensity for hospitalization as a private patient. We account for the potential endogeneity of supplementary private hospital insurance purchases and calculate moral hazard based on a difference-of-means estimator. We decompose the moral hazard estimate into a diversion component that is due to an insurance-induced substitution away from public patient care towards private patient care, and an expansion component that measures a pure insurance-induced increase in the propensity to seek private patient care. Our results suggest that on average, private hospital insurance causes a sizable and significant increase in the likelihood of hospital admission as a private patient. However, there is little evidence of an expansion effect; the treatment effect of private hospital insurance on private patient care is driven almost entirely by the substitution away from public patient care towards private patient care. We discuss the implications for policies that aim to expand supplementary private insurance coverage for the purpose of reducing excess demand on the public healthcare system.     

Fiscal policy, long‐run growth, and welfare in a stock‐flow model of public goods

Abstract.  We introduce public capital and public services as inputs in an endogenous growth model. We show that the growth rate depends on the apportionment of tax revenues between the accumulation of public capital and the provision of public services. When public spending is financed by proportional income taxes, the growth rate, the level of public spending as a proportion of GDP, the level of investment in public capital as a proportion of total public spending, and the level of private investment as a proportion of total private spending all are lower in the equilibrium outcome than in the optimal outcome. JEL classification: E62, O40     

Ex Post Welfare under Alternative Health Care Systems

The implications of a societal aversion to inequality for the optimal structure of the health care system are studied. The agents are assumed to be ex ante identical, but to differ ex post in the state of their health. Inequality aversion is introduced by postulating a strictly concave ex post social welfare function. It is shown that the optimal public health care system allocates health care differently than would private health insurance; specifically, people who are relatively unhealthy with and without treatment receive more health care, and people who are relatively healthy with and without treatment receive less health care. The aggregate quantity of health care under the optimal public health care system can be either greater or smaller than under private health care insurance. If the public health care system is optimally designed, allowing agents to purchase supplementary private health care insurance cannot raise social welfare and is likely to decrease it.     

中国城市养老机构的兴起:发展与公平问题

利用2009-2010年在南京市和天津市对养老机构的调查数据,描述了养老机构在两市的发展态势,比较了公办和民办机构在入住老人的健康状况及机构特征方面的差异。近10年来养老机构在两市迅猛增长,且以民办机构为主导。政府财政投入在两市公办机构的日常收入来源中占了相当的比重,而对民办机构的财政补贴则微乎其微。公办机构平均规模较大,在入住率上也远超民办机构。两市公办机构入住老人比民办机构入住老人在总体上更健康。公办机构在决定收住对象时比民办机构有更强的选择性。公众在享有现存养老机构资源时面临着机会不平等的问题。政府应确保在公办机构中公平、合理地分配公共服务资源,以最大程度地彰显其公益性,同时也应着力扶持民办机构,促进二者在社会化养老服务中公平竞争、协调发展。     

What drives the choice of the type of partner in R&D cooperation? Evidence for Spanish manufactures and services

We analyse the heterogeneity in firms’ decisions to engage in R&D cooperation, taking into account the type of partner (competitors, suppliers or customers, and research institutions) and the sector to which the firm belongs (manufactures or services). We use information from the Technological Innovation Panel (PITEC) for Spanish firms and estimate multivariate probit models corrected for endogeneity which explicitly consider the interrelations between the different R&D cooperation strategies. We find that placing a higher importance to publicly available information (incoming spillovers), receiving public funding and firm size increase the probability of cooperation with all kind of partners but the role is much stronger in the case of cooperative agreements with research institutions and universities. Our results also suggest that R&D intensity and the importance attributed to the lack of qualified personnel as a factor hampering innovation are key factors influencing positively R&D cooperation activities in the service sector but not in manufactures.     

Equality of opportunity and optimal cash and in-kind policies

This paper examines the argument for public provision of certain private goods, like education and health, based on equality of opportunity by studying the utility possibility frontier of a society in which there is a concern for the distribution of these goods. A given quality of education or health services can be consumed for free in the public sector, but people can opt-out and purchase their desired quality levels in the private sector. Some of the conclusions are: (i) a pure cash transfer is optimal when the utility redistribution is either “sufficiently” small or large; (ii) if and only if both the equality-of-opportunity concern and the utility redistribution are large enough, can an in-kind program which attracts the whole population be justified; (iii) even when everybody chooses the in-kind program, it may be optimal to perform some additional utility redistribution by increasing the size of such program.