Adherence during COVID-19: The role of aging and socio-economics status in shaping drug utilization.

Our study investigates the potential impact that COVID-19 and lockdown restrictions may have had on drug utilization and the role of patient age and education in reshaping it. We focused on patients affected by diabetes mellitus, who are likely to suffer a higher degree of morbidity and mortality due to COVID-19. We used a bi-monthly administrative panel dataset from January 2019 to December 2020 from Liguria (Italy), one of the regions with the highest number of individuals over the age of 65 in Europe. The results demonstrated that, after the initial shock, when patients tried to increase their personal stock of drugs to overcome the risk of possible additional barriers generated by the coronavirus, the hoarding effect almost disappeared. Adherence has drastically reduced during the COVID-19 pandemic and has never reached pre-COVID levels again. Older and poorly educated patients seem to have suffered more from the restrictions imposed by the lockdown and fear of contagion and they may be the ideal target group when considering possible policy interventions to improve adherence.

Which valued-based price when patients are heterogeneous?

We use a simple model to study the static and dynamic efficiency of alternative regulation regimes for the reimbursement of medical innovations when responses to a new treatment (effectiveness) are heterogeneous across the eligible population. When the rational behavior of profit-maximizing firms is taken into account, only average value-based prices can ensure both static and dynamic efficiency, but they imply higher expenditure and lower consumer surplus. Ignoring dynamic efficiency, if patients' responses are sufficiently homogeneous, marginal value-based prices may dominate from the payer's perspective. We also present a refinement of average value-based prices that could reverse this result. Overall, the cost of ensuring static and dynamic efficiency is increasing in the degree of heterogeneity. A real-world example is used to illustrate these results.

Innovation, aging, and health care: Unraveling "silver" from "red" herrings?

This perspective paper argues that a sustainable health system design encompasses identifying opportunities and incentives for innovation, alongside an analysis of its effect on expenditure. Although aging alone is not a powerful cost driver, the combined effect of costly innovation, personalized care, and the rise of chronic conditions is. We identify an increasing role of prevention, the reduction of the prevalence of chronic conditions, re-organisation of incentives in health care markerts, including a closer scrutiny of the appropriateness of new treatments.

Decentralisation and waste flows: A welfare approach.

We analyse incentives, equilibria and implications of the governance framework for the disposal of municipal solid waste in an N-Region model where waste mobility is allowed. The key decisions revolve around the flow of waste between regions and the externalities associated with its final disposal. Two different institutional settings are considered: a centralised framework where a central planner takes all the decisions and a decentralised model where each region decides on its waste flows. When the regions are characterised by different levels of efficiency in the final treatment of waste, a certain degree of mobility might allow to reap the benefits of higher efficiency. However, when coupled with decentralisation, waste flows may produce sub-optimal outcomes that undermine environmental protection. In the light of these results, we show how the regulator can use the transfer price and the proximity principle as welfare-improving tools.

The redistributive effects of copayment in outpatient prescriptions: evidence from Lombardy.

BACKGROUND: In Italy, copayment has changed its nature and it can no longer be simply considered a system to curb inappropriate expenditure. It has become an important form of revenue for public health care provision, but it might also become a source of distortions in income and health benefits redistribution. METHODS: We use a rich administrative dataset gathering information on patients demand (whose records have been matched to income declared for tax purposes) to study the effects of an additional copayment (the so called "superticket" introduced by the Italian government in 2012) in Lombardy, the biggest Italian Region whose socio-economic dimension is comparable to that of many European countries (e.g., the Netherlands, Switzerland, etc.). RESULTS: Our analysis shows that at the aggregate level the non-uniform superticket schedule adopted in Lombardy is slightly pro-poor, but this result coexists with evidences pointing towards possible cases of restriction to access caused by the additional copayment. CONCLUSIONS: The introduction of the superticket and the ensuing increase in the out-of pocket payment for health care raises questions about the distribution of the burden among patients, and the sustainability of the extra revenue through time. This issue needs to be further investigated by combining health status data with the information in this dataset.

Should I pay for your risky behaviours? Evidence from London.

We investigate the extent to which respondents from a general population sample in London (July-August 2011) agree or disagree with the NHS covering the healthcare costs related to five risky health behaviours: overeating, unhealthy diet, sedentary life, excess of alcohol, and smoking. For each behaviour, we also directly explore the main factors associated with the likelihood to agree or disagree. Half of the respondents (N=146) manifest agreement with the idea. Wider agreement exists for covering the costs associated smoking, heavy drinking, and sedentary lives than with overeating, or poor diets. With the exception of alcohol drinking and sedentary life, there is an almost one-to-one relationship between the agreement that the NHS should pay the healthcare costs associated with a specific behaviour, and the respondents' actual engagement in that behaviour. Those at higher risk of depending on publicly funded healthcare, are more likely to agree.

Health care expenditure decisions in the presence of devolution and equalisation grants.

In a model where health care provision, its regional distribution and the equalisation grant are the result of a utilitarian bargaining between a (relatively) rich region and a poor one, a First Best solution can be reached only if the two Regions have the same bargaining power. From a policy point of view, our model may explain the observed cross-national differences in the redistributive power of health care expenditure and it suggests that to equalise resources across Regions an income based equalisation grant may be preferred because it causes less distortions than an expenditure based one.

Patients' mobility across borders: a welfare analysis.

Welfare systems are designed on geographical and membership boundaries. In terms of access to health care this implies that, as a general rule, only individuals residing in their national territory can obtain health care from providers located there. However, in the past few years medical tourism has grown at an explosive pace throughout the world and in Europe. Each year in fact a small, but significant number of European citizens seek medical treatment that is financed by their public insurer in another EU country. From an economic point of view, it is important to distinguish between the two following sources of patients' mobility: a regulated mobility, where the third payer decides to send patients abroad and patients' choice, where the patient himself decides to seek care abroad. In this article we show how the combined effect of restrictions to the use of health care, transfer prices, and mobility rules determine social welfare and its allocation between Regions. The results are quite interesting: if the price set for these patients is equal to the marginal cost of the more efficient Region, patients' mobility should be preferred to patients' choice. On the other hand, if the price is equal to the marginal cost of the less efficient Region, patient choice should be preferred. The other interesting result is a possible trade off between a static model where each Region chooses its level of cost/effectiveness and a more long-term situation, where patient mobility determines a common level for this parameter.

Cross border health care provision: who gains, who loses.

The diffusion of the welfare state has produced a widespread involvement of the public sector in financing the production of private goods for paternalistic reasons. In this chapter we model the production of health care as a merit impure local public good whose consumption is subsidized and whose access is free, but not unlimited. The impure local public good aspect means that the production of health care spreads its benefits beyond the geographical boundaries of the Region where it is produced. Finally, we include the (optional) provision of an equalization grant that allows reduction of fiscal imbalance among Regions. In this framework we study the possible effects of cross border provision of health care. We assume that information is complete and symmetric and that there is no comparative advantage in local provision. In this context devolution is always suboptimal for the whole community: the lack of coordination means that the impure public good is under-provided. However, more efficient Regions may be better off because of the impure public good nature of health care.

With a little help from my (neighbouring) friends. 'Border region patient mobility' in the European Union: A policy analysis.

Increased disparities in income and health care expenditure across EU countries may lead to an increase in patient mobility, which may, in turn, call for more action by the EU and its Member States. At present, patient mobility (or cross-border healthcare) is still a marginal phenomenon but is deemed to increase in the future. In this paper we examine border region patient mobility, defined as patients receiving care in a neighbouring country within a certain proximity. We examine, with the use of a spatial competition model, the options used to regulate such a patient flow and their welfare implications, both for patients and Governments. We show that marginal price costing would lead to an increase in patient welfare, whilst reducing the risk of increasing cost for the exporting country. At present there seems to be an East/West difference in the way these flows are regulated. In order to increase equity, we suggest that a 'joint implementation' of EU Directives by neighbouring Member States, especially in the field of cross-border healthcare, would allow Member States to define target populations (in terms of type of care and distance travelled) that could allow more freedom in terms of border care, without increasing health care expenditure. A future combination of the two existing legal frameworks in this field would also be more user- or patient-friendly.

Timely, Cheap, or Risk-Free? The Effect of Regulation on the Price and Availability of New Drugs.

The high level of regulation of innovative drugs on the market, which is necessary to protect consumers, produces important effects on drug availability and innovation. In public healthcare systems, the need to curb prices comes from expenditure considerations. The aim of price regulation is to obtain a more equitable allocation of the value of an innovative drug between industries and patients (by reducing prices to make drugs more affordable), but it may also reduce access. (In the listing process, the industry may find it more convenient to limit commercialisation to profitable subgroups of patients.) Furthermore, with the advent of personalised medicine, there is another important dimension that has to be considered, namely, incentives to invest in drug personalisation. In this paper, we review and discuss the impact of different pricing rules on the expenditure and availability of new drugs.

The illness trap: The impact of disability benefits on willingness to receive HCV treatment.

Health care is assumed to be a primary good, implying that patients should always demand or accept treatments that may enhance their life expectancy and quality of life, especially if the risks associated with the treatment are low. We argue that, especially in countries with a well-developed welfare state, treating an invalidating condition may lead to opportunity costs in terms of reduced disability allowances that may represent a barrier to treatment for low-income individuals. We test this hypothesis by applying a recursive bivariate probit approach to population data from an ad hoc administrative database for Liguria (an Italian administrative region). The dataset includes data for more than 8 thousand people affected by hepatitis C Virus (HCV) infection between 2013 and 2020. After the discovery of new direct-acting antivirals (DAAs) in 2014, HCV eradication may now be possible. However, despite the national and international efforts, several patients diagnosed with HCV choose not to undergo drug therapy despite the adverse consequences for their personal health and relevant costs to the national health system. We show that five years after the implementation of the new drugs, approximately 41 % of the diagnosed population in Liguria remains untreated. This percentage increases to 64 % within the subgroup entitled to disability benefits and characterized by lower income levels. The "illness trap" effect is more substantial for older people but also low-income patients. Moreover, we find that this effect is higher in patients with an intermediate range of comorbidities; indeed, these patients are at a higher risk of losing economic benefits if they recover from HCV. These results suggest the need for healthcare policies addressing this distorting effect when designing benefit programs and granting financial benefits to patients.

Definition of a prospective payment system to reimburse emergency departments.

BACKGROUND: Payers are increasingly turning to Prospective Payment Systems (PPSs) because they incentivize efficiency, but their application to emergency departments (EDs) is difficult because of the high level of uncertainty and variability in the cost of treating each patient.To the best of our knowledge, our work represents the first attempt at defining a PPS for this part of hospital activity. METHODS: Data were specifically collected for this study and relate to 1011 patients who were triaged at an ED of a major Italian hospital, during 1 week in December 2010.The cost for each patient was analytically estimated by adding up several components: 1) physician and other staff costs that were imputed on the basis of the time each physician claimed to have spent treating the patient; 2) the cost for each test/treatment each patient actually underwent; 3) overhead costs, shared among patients using the time elapsed between first examination and discharge from the ED. RESULTS: The distribution of costs by triage code shows that, although the average cost increases across the four triage groups, the variance within each code is quite high. The maximum cost for a yellow code is €1074.7, compared with €680 for red, the most serious code. Using cluster analysis, the red code cluster is enveloped by yellow, and their costs are therefore indistinguishable, while green codes span all cost groups. This suggests that triage code alone is not a good proxy for the patient cost, and that other cost drivers need to be included. CONCLUSIONS: Crude triage codes cannot be used to define PPSs because they are not sufficiently correlated with costs and are characterized by large variances. However, if combined with other information, such as the number of laboratory and non-laboratory tests/examinations, it is possible to define cost groups that are sufficiently homogeneous to be reimbursed prospectively. This should discourage strategic behavior and allow the ED to break even or create profits, which can be reinvested to improve services. The study provides health policy administrators with a new and feasible tool to implement prospective payment for EDs, and improve planning and cost control.

The impact of conventional cost-effectiveness analysis on pricing dynamics in the market of new medicines: a proposed countervailing approach.

BACKGROUND: Countries using cost effectiveness ratio as a decision tool for price and reimbursement decisions still witness accelerating price increases. The objective of this paper is to propose a change in the application of the incremental cost effectiveness ratio as a criterion for price policy. RESEARCH DESIGN: We develop a model that sets a price for marginal effectiveness equal to the marginal willingness to pay, but it reimburses average effectiveness according to the size of increased QALY gain. RESULTS: This new formula also allows to split the economic value of drug between patients and the industry and creates a reward to invest into QALY gains. We show some empirical data of the new prices derived from the application of the new formula, as well as the implications in terms of the consumer and manufacturer´s surplus based on two potential scenarios of the incentives generated by this new formulation. DISCUSSION: We propose that small increases in life expectancy be priced differently from substantial as a way of containing the price dynamics. CONCLUSIONS: A change in the application of the ICER threshold will help to reduce the price pressure on public budgets.

Resilient managed competition during pandemics: lessons from the Italian experience during COVID-19.

In the last decades, several European health systems have abandoned their vertically integrated health care in favour of some form of managed competition (MC), either in a centralised or decentralised format. However, during a pandemic, MC may put health systems under additional strain as they are designed to follow some form of 'organisational self-interest', and hence face reduced incentives for both provider coordination (e.g. temporary hospital close down, change in the case-mix), and information sharing. We illustrate our argument using evidence for the Covid-19 pandemic outbreak in Italy during March and April 2020, which calls for the development of 'coordination mechanisms' at times of a health emergency.

Is there a bias in patient choices for hospital care? Evidence from three Italian regional health systems.

Patients choice is at the core of competition in hospital care. In spite of a flourishing literature, little is known about the true process leading patients to choose a specific provider. Most models in this literature assume - without testing - that hospitals are perceived to be homogeneous providers. In this article we take a different direction. We assume that patients have a bias towards some types of hospitals, we test this hypothesis and show which attributes determine this bias. We exploit the characteristic of Italian health care organization, where devolution has allowed regional systems to choose the level of competition and the private-public hospitals mix. We estimate conditional logit models for hip replacement admissions in three regions (Lombardy, Veneto, and Emilia-Romagna) over the period 2014- 2016. We show that, depending on the competition framework (peculiar to each region) patients are aware that some hospitals are best performers in their area and are willing to travel more to be admitted there. This is particularly true for regional health care systems where competition between public and private providers is well developed. Our model provides interesting policy implications: a) the idea that hospitals are different in patients perception should be kept in mind in the architecture of the market for hospital care; b) clinical quality as a driver to patients choice seems to work better in a less regulated competition settings.

Waste-to-Energy and recycling: The role of plant ownership and waste mobility.

This paper proposes a stylized two-region model to study the joint effect of waste mobility and WtE plant's ownership on waste disposal choices, welfare and environmental quality. The aggregate level of recycling emerging from the mobility/private ownership scenario is excessive relative to the first best. By contrast, under waste autarky, the institutional configuration of the WtE plant turns out to be neutral and the resulting level of recycling is generally suboptimal. The analysis further shows that mobility may not be Pareto improving for both regions, and that the engagement of local authorities in the decision of how much waste to incinerate has a sound economic justification, especially in the presence of old-generation WtE plants. Finally, this work provides new insights into the debate about the relationship between WtE incineration and recycling by suggesting that the two opposing views within such debate are not totally incompatible; rather they capture different dimensions of the problem. In particular, the view that WtE combustion represents an obstacle to recycling is consistent with what is found at the local level when burning waste for energy recovery becomes available. while the view that the two activities are positively correlated is more in line with the findings at the aggregate level.

Welfare properties of restrictions to health care based on cost effectiveness.

In this note we explore the welfare properties of access restrictions to health care based on cost effectiveness. We show that such instrument can improve the average effectiveness of health care, but it is optimal only under specific assumptions relating to the shape of the welfare function and the utility of health care.

Beyond price: the effects of non-financial barriers on access to drugs and health outcomes.

OBJECTIVES: We study the impact of the pharmacy dispensing channel (as a proxy for access to drugs) on the drug purchases, health outcomes, and health care utilization (emergency room visits or hospitalizations) of chronically ill patients in Liguria, Italy, in 2017. METHODS: We use the coarsened exact matching algorithm to compare the health outcomes for a treated group of patients living in a local health authority (LHA) where drug distribution through community pharmacies was restricted. These patients were matched to a control group of patients living in other LHAs, where drugs were also dispensed through a broad network of community pharmacies. We exploit a unique administrative dataset with information on the socio-demographic characteristics and health care services utilization of Ligurian patients with chronic cardiovascular and respiratory ailments. We restrict our analysis to patients 65 years of age or older who were admitted to hospitals from 2013 to 2016 with either a principal or secondary diagnosis connected to chronic cardiovascular and respiratory diseases. RESULTS: Reduced access to drugs leads to lowered drug consumption, a higher probability of adverse health outcomes including mortality, and a higher consumption of medical services in terms of hospitalizations and emergency room visits. These effects increase with patients' age. CONCLUSION: The pharmacy dispensing channel significantly affects drug consumption and acts as a proxy for adherence among chronically ill patients. Thus, health outcomes and health care utilization should be carefully evaluated when comparing the costs of alternative dispensing channels.