Physician responses to insurance benefit restrictions: The case of ophthalmology.

This study examines the impact of social insurance benefit restrictions on physician behaviour, using ophthalmologists as a case study. We examine whether ophthalmologists use their market power to alter their fees and rebates across services to compensate for potential policy-induced income losses. The results show that ophthalmologists substantially reduced their fees and rebates for services directly targeted by the benefit restriction compared to other medical specialists' fees and rebates. There is also some evidence that they increased their fees for services that were not targeted. High-fee charging ophthalmologists exhibited larger fee and rebate responses while the low-fee charging group raise their rebates to match the reference price provided by the policy environment.

Preterm Birth and Total Health Care Use and Costs in the First 5 Years of Life: A Population-based Study.

OBJECTIVES: To investigate the relationship between preterm birth and hospital/out-of-hospital care and costs over the first 5 years of life. STUDY DESIGN: Birth data from a population-based cohort of 631 532 infants born between 2007 and 2013 were linked probabilistically with data on hospitalizations, primary and secondary care, and the use of medications. We analyzed the distribution of health care use and public health care costs for infants who survived at least 5 years, comparing the outcomes of extremely preterm (<28 weeks of gestation), very preterm (28-32 weeks), moderate to late preterm (32-37 weeks), and term infants (at least 37 weeks). A linear regression model was used to investigate the effect of preterm birth on these outcomes, controlling for important confounders including pregnancy and birth complications, neonatal morbidity, survival, and maternal socioeconomic characteristics. RESULTS: Preterm birth has a statistically significant and economically relevant effect on health care use and costs in the first 5 years of life. Compared with a term infant, preterm infants born at 32-36 weeks, 28-32 weeks, and <28 weeks of gestation had, respectively, an average of 7.0 (SE 0.06), 41.6 (0.18), and 68.7 (0.35) more hospital days; 3.1 (0.04), 11.0 (0.13), and 13.2 (0.25) more outpatient specialist physician visits; and 1.2-fold (<0.01), 6.8-fold (0.01), and 10.9-fold (0.02) higher 5-year public health care costs. Preterm infants also had statistically significantly higher levels of general practitioner visits and use of medications. CONCLUSIONS: Higher levels of accessible care are needed for preterm infants across health care settings and over sustained periods. As our understanding of the impact of preterm birth on long-term clinical outcomes continues to improve, clinicians and policymakers should develop an accurate recognition of these needs to enable appropriate resource allocation toward research priorities and early intervention strategies.

Health care use in response to health shocks: Does socio-economic status matter?

We investigate how utilization of primary care, specialist care, and emergency department (ED) care (and the mix across the three) changes in response to a change in health need. We determine whether any changes in utilization are impacted by socio-economic status. The use of a unique Australian data set that consists of a large survey linked to multiple years of detailed administrative records enables us to better control for individual heterogeneity and allows us to exploit changes in health that are related to the onset of two health shocks: a new diagnosis of diabetes and heart disease. We extend the analysis by also examining changes to patient out-of-pocket costs. We find significant differences in the mix between primary and specialist care use according to income and type of health shock but no evidence of using ED as a substitute for other care. Our results indicate that low- and high-income patients navigate very different pathways for their care following the onset of diabetes and to a lesser extent heart disease. These pathways appear to be chosen on the basis of ability to pay, rather than the most effective or efficient bundle of care delivered through a combination of GP and specialist care.

Hips and hearts: the variation in incentive effects of insurance across hospital procedures.

The separate identification of effects due to incentives, selection and preference heterogeneity in insurance markets is the topic of much debate. In this paper, we investigate the presence and variation in moral hazard across health care procedures. The key motivating hypothesis is the expectation of larger causal effects in the case of more discretionary procedures. The empirical approach relies on an extremely rich and extensive dataset constructed by linking survey data to administrative data for hospital medical records. Using this approach we are able to provide credible evidence of large moral hazard effects but for elective surgeries only.

Well-being losses due to care-giving.

This paper estimates the impact of informal caregiving on self-reported well-being. It uses a sample of 23,285 respondents of the first eleven waves of the Household, Income and Labour Dynamics in Australia (HILDA). We apply a relatively new analytical method that enables us to estimate fixed effects ordered logit to analyse subjective well-being. The econometric estimates show that providing informal care has a negative effect on subjective well-being. The empirical evidence of our paper could be helpful to inform policy makers to better understand the impact of caregiving and design the appropriate long term care policies and support services.

Preference heterogeneity and selection in private health insurance: the case of Australia.

A basic prediction of theoretical models of insurance is that if consumers have private information about their risk of suffering a loss there will be a positive correlation between risk and the level of insurance coverage. We test this prediction in the context of the market for private health insurance in Australia. Despite a universal public system that provides comprehensive coverage for inpatient and outpatient care, roughly half of the adult population also carries private health insurance, the main benefit of which is more timely access to elective hospital treatment. Like several studies on different types of insurance in other countries, we find no support for the positive correlation hypothesis. Because strict underwriting regulations create strong information asymmetries, this result suggests the importance of multi-dimensional private information. Additional analyses suggest that the advantageous selection observed in this market is driven by the effect of risk aversion, the ability to make complex financial decisions and income.

Explaining health care expenditure variation: large-sample evidence using linked survey and health administrative data.

Explaining individual, regional, and provider variation in health care spending is of enormous value to policymakers but is often hampered by the lack of individual level detail in universal public health systems because budgeted spending is often not attributable to specific individuals. Even rarer is self-reported survey information that helps explain this variation in large samples. In this paper, we link a cross-sectional survey of 267 188 Australians age 45 and over to a panel dataset of annual healthcare costs calculated from several years of hospital, medical and pharmaceutical records. We use this data to distinguish between cost variations due to health shocks and those that are intrinsic (fixed) to an individual over three years. We find that high fixed expenditures are positively associated with age, especially older males, poor health, obesity, smoking, cancer, stroke and heart conditions. Being foreign born, speaking a foreign language at home and low income are more strongly associated with higher time-varying expenditures, suggesting greater exposure to adverse health shocks.

The effect of adverse information and positive promotion on women's preferences for prescribed contraceptive products.

Recent rapid growth in the range of contraceptive products has given women more choice, but also adds complexity to the resultant decision of which product to choose. This paper uses a discrete choice experiment (DCE) to investigate the effect of adverse information and positive promotion on women's stated preferences for prescribed contraceptive products. In November 2007, 527 Australian women aged 18-49 years were recruited from an online panel. Each was randomly allocated to one of three information conditions. The control group only received basic information on contraceptive products. One treatment group also received adverse information on the risks of the combined oral pill. The other group received basic information and promotional material on the vaginal ring, newly introduced into Australia and on the transdermal patch, which is unavailable in Australia. Respondents completed 32 choice sets with 3 product options where each option was described by a product label: either combined pill, minipill, injection, implant, hormonal IUD, hormonal vaginal ring, hormonal transdermal patch or copper IUD; and by the attributes: effect on acne, effect on weight, frequency of administration, contraceptive effectiveness, doctor's recommendation, effect on periods and cost. Women's choices were analysed using a generalized multinomial logit model (G-MNL) and model estimates were used to predict product shares for each information condition. The predictions indicated that adverse information did not affect women's preferences for products relative to only receiving basic information. The promotional material increased women's preferences for the transdermal patch. Women in all groups had a low preference for the vaginal ring which was not improved by promotion. The findings highlight the need for researchers to pay attention to setting the context when conducting DCEs as this can significantly affect results.

Preferences for new and existing contraceptive products.

New contraceptive methods provide greater choice in terms of effectiveness, management of side-effects, convenience and frequency of administration and flexibility, but make the decisions about contraception more complex. There are limited data on the factors that determine women's choices among these alternatives, to inform providers about the factors which are most important to women, or to predict uptake of new products. This paper reports on a choice experiment designed to elicit women's preferences in relation to prescribed contraception and to forecast the impact of the introduction of two new products into the Australian market. A generalised multinomial logit model is estimated and used in the simulation exercise. The model forecasts that the hormonal patch would be well received among women, achieving a greater market share than current non-pill products, but the vaginal ring would have limited appeal.

Why worry about awareness in choice problems? Econometric analysis of screening for cervical cancer.

The decision to undertake a screening test is conditional upon awareness of screening. From an econometric perspective there is a potential selection problem, if no distinction is made between aware and unaware non-screeners. This paper explores this problem through analysis of the determinants of cervical screening in Australia. Cervical cancer is one of the most preventable and curable forms of cancer. Since 1991 there has been a concerted effort in Australia to recommend and encourage women to have Pap smears every two years. The success of this program can be partly gauged by exploring the determinants of screening for cervical cancer. Using unit record data from the 1995 National Health Survey, an econometric model is developed for whether women have ever screened or not. A proportion of women in the sample contend that they have never heard of a Pap test. The analysis characterizes this group of women and accounts for their presence in the modelling. The paper demonstrates failing to model awareness can result in inconsistent parameter estimates even when the degree of censoring in the sample is relatively small.

What influences participation in genetic carrier testing? Results from a discrete choice experiment.

This study explores factors that influence participation in genetic testing programs and the acceptance of multiple tests. Tay Sachs and cystic fibrosis are both genetically determined recessive disorders with differing severity, treatment availability, and prevalence in different population groups. We used a discrete choice experiment with a general community and an Ashkenazi Jewish sample; data were analysed using multinomial logit with random coefficients. Although Jewish respondents were more likely to be tested, both groups seem to be making very similar tradeoffs across attributes when they make genetic testing choices.