Looking into the black box of "Medical Innovation": rising health expenditures by illness type.

There is agreement among health economists that on the whole medical innovation causes health care expenditures (HCE) to rise. This paper analyzes for which diagnoses HCE per patient have grown significantly faster than average HCE. We distinguish decedents (patients in their last 4 years of life) from survivors and use a unique dataset comprising detailed HCE of all members of a regional health insurance fund in Upper Austria for the period 2005-2018. Our results indicate that among decedents in particular, the expenditures for treatment of neoplasms have exceeded the general trend in HCE. This confirms that medical innovation for this group of diseases has been particularly strong over the last 15 years. For survivors, we find a noticeable growth in cases and cost per case for pregnancies and childbirth, and also for treatment of mental and behavioral disorders. We discuss whether these findings contradict the widespread interpretation of cost-increasing innovations as "medical progress" and offer some policy recommendations.

Domain-specific effects of physical activity on the demand for physician visits.

OBJECTIVES: To assess domain-specific effects of physical activity (PA) in the relationship with health care utilization and to investigate whether a measure that aggregates PA across domains (leisure, transport, work) is appropriate. METHODS: Data were retrieved from a longitudinal cohort study conducted in Southern Germany (women n = 1330, men n = 766). The number of physician visits was regressed on total PA and on PA differentiated by the domains leisure time, travel time and working time in a negative binomial model. RESULTS: For women, no association with physician visits is found for total PA, while high leisure time physical activity (LTPA) is associated with 22% more visits. The effect of high LTPA is statistically different from the effect of high total PA. For men, no significant associations are found for both measures. CONCLUSIONS: The specific, positive effect of high LTPA on physician visits among women shows that using an aggregate measure of PA is inappropriate for analyzing the relation between PA and health care utilization. Further, the positive relationship should be considered in attempts to promote physical activity.

[Can the "Rule of Rescue" be rescued? A comment on Weyma Lübbe's "Rule of Rescue vs. Rescue of statistical life"]. / Ist die "Rule of Rescue" noch zu retten? Eine Antwort auf Weyma Lübbes "Rule of Rescue vs. Rettung statistischer Leben".

In her article "Rule of Rescue vs. Rescue of statistical lives" [1] Weyma Lübbe elevates gut feelings supporting the "rule of rescue" to "civic judgments". Without doubt in a constitutional democracy ultimately the judgments and aspirations of citizens must be decisive. Yet, particularly in the field of health policy, the bias to overemphasize what are closer rather than more remote, concrete rather than abstract consequences, should be counteracted not supported. The utility forgone by observing the "rule of rescue" in health care must be held against it. Making the "opportunity costs" of applying the rule of rescue visible is part of the citizens' "health ethic information package" and not as such an attack on the "Rule of Rescue".

How you ask is what you get: Framing effects in willingness-to-pay for a QALY.

In decisions on financing new and innovative health care technologies a central question is how to determine the value citizens place on the gains in health and life expectancy that result from respective medical treatments. We report results of surveys of four representative samples of the German population. In 2010 and 2012, in total about 5000 respondents were asked for their willingness-to-pay (WTP) for either an extension of their life or an improvement in their health corresponding to a gain of one quality-adjusted life year (QALY). Specific changes of the study design allow for ceteris paribus comparisons of different survey versions. While the initial version exactly copied a questionnaire used in the EuroVaQ (European Value of a QALY) project, which was conducted in nine European countries and Palestine, but not in Germany, in other versions the wording and the survey technique were modified. The findings show that the technique of posing the questions plays an important role when respondents are asked to imagine being in hypothetical situations. This clearly refers to the wording of the questions and the survey setting (personal or online interview). But even simple design elements such as putting a yes/no filter in front greatly affect the answers in terms of both the frequency of zero WTP and the distribution of positive amounts. From the different results, we conclude that it is inevitable to conduct studies comprising a broad variety of versions when trying to elicit WTP for a specific type of QALY in order to achieve an array of values combined by insights into the principles of their sensitivity.

Does diabetes prevention pay for itself? Evaluation of the M.O.B.I.L.I.S. program for obese persons.

In response to the growing burden of obesity, public primary prevention programs against obesity have been widely recommended. Several studies have estimated the cost-effectiveness of diabetes-prevention trials for different countries. Nevertheless, it is still controversial if prevention conducted in more real-world settings and among people with increased risk but not yet exhibiting increased glucose tolerance can be a cost-saving strategy to cope with the obesity epidemic. We examine this question in a simulation model based on the results of the M.O.B.I.L.I.S program, a German lifestyle intervention to reduce obesity, which is directed on the high-risk group of people who are already obese. The contribution of this paper is the use of 4-year follow-up data on the intervention group and a comparison with a control group formed by SOEP respondents as inputs in a Markov model of the long-term cost savings through this intervention due to the prevention of type 2 diabetes. We show that from the point of view of a health insurer, these programs can pay for themselves.

"Priority of liberty" and the design of a two-tier health care system.

Libertarian views on rights tend to rule out coercive redistribution for purposes of public health care guarantees, whereas liberal conceptions support coercive funding of potentially unlimited access to medical services in the name of medical needs. Taking the "priority of liberty" seriously as supreme political value, a plausible prudential argument can avoid these extremes by providing systematic reasons for both delivering and limiting publicly financed guarantees. Given impending demographic change and rapid technical progress in medicine, only a two-tier system with explicitly limited public guarantees and optional privately financed health services seems acceptable.

Health care expenditures and longevity: is there a Eubie Blake effect?

It is still an open question whether increasing life expectancy as such causes higher health care expenditures (HCE) in a population. According to the "red herring" hypothesis, the positive correlation between age and HCE is exclusively due to the fact that mortality rises with age and a large share of HCE is caused by proximity to death. As a consequence, rising longevity-through falling mortality rates-may even reduce HCE. However, a weakness of many previous empirical studies is that they use cross-sectional evidence to make inferences on a development over time. In this paper, we analyse the impact of rising longevity on the trend of HCE over time by using data from a pseudo-panel of German sickness fund members over the period 1997-2009. Using (dynamic) panel data models, we find that age, mortality and 5-year survival rates each have a positive impact on per-capita HCE. Our explanation for the last finding is that physicians treat patients more aggressively if the results of these treatments pay off over a longer time span, which we call "Eubie Blake effect". A simulation on the basis of an official population forecast for Germany is used to isolate the effect of demographic ageing on real per-capita HCE over the coming decades. We find that, while falling mortality rates as such lower HCE, this effect is more than compensated by an increase in remaining life expectancy so that the net effect of ageing on HCE over time is clearly positive.

On the welfare theoretic foundation of CEA: comment.

This is a comment on a recent paper by Bengt Liljas (Eur J Health Econ 11:5-13, 2010) in this Journal. The author's analysis is flawed because he fails to take the envelope theorem into account. As a bottom line, we conclude that from a welfare theoretic point of view, future consumption and future labor hours should not be considered in a valid CEA.

[On the necessity of benefit assessments across all indications]. / Zur Notwendigkeit indikationsübergreifender Nutzenmasse.

IQWiG's General Methods catalogue has raised a controversial debate among experts, and one of the major issues is the catalogue's authors' decision to exclusively use indication-specific output measures for benefit assessments. In contrast, numerous critics of this approach demand that benefit be measured using a uniform scale which is valid and interpretable for all indications, such as the "quality-adjusted life-year" (QALY). The present article will take a critical look at the arguments put forward by IQWiG and point out the disadvantages of purely indication-specific benefit assessments. We will then explore the legal possibilities of benefit assessments independent of the type of disease, and make some suggestions for the future approach to healthcare evaluation in Germany.

Life expectancy and health care expenditures: a new calculation for Germany using the costs of dying.

Some people believe that the impact of population ageing on future health care expenditures will be quite moderate due to the high costs of dying. If not age per se but proximity to death determines the bulk of expenditures, a shift in the mortality risk to higher ages will not affect lifetime health care expenditures as death occurs only once in every life. We attempt to take this effect into account when we calculate the demographic impact on health care expenditures in Germany. From a Swiss data set, we derive age-expenditure profiles for both genders, separately for persons in their last 4 years of life and for survivors, which we apply to the projections of the age structure and mortality rates for the German population between 2002 and 2050 as published by the Statistische Bundesamt. In the extreme case, we assume that morbidity is compressed at the end of life in such a way that a 60-year old in 2050 is as healthy as a 56-year old today if his life expectancy is 4 years higher. We calculate that at constant prices, per-capita health expenditures of Social Health Insurance would rise from 2596 Euro in 2002 to between 2959 Euro and 3102 Euro in 2050 when only the age structure of the population changes and everything else remains constant at the present level, and to between 5232 Euro and 5485 Euro with a technology-driven exogenous cost increase of 1% per annum. A "naïve" projection based only on the age distribution of health care expenditures, but not distinguishing between survivors and decedents, yields values of 3217 Euro and 5688 Euro for 2050, respectively. Thus, the error of excluding the "costs of dying" effect is small compared with the error of underestimating the financial consequences of expanding medical technology.

Determinants of health care utilization by German sickness fund members--with application to risk adjustment.

In many countries, social health insurance systems are being reformed in favor of more competition among insurers, while premiums are community rated by regulation. The implicit incentives for insurers to engage in risk selection can only be curtailed using appropriate systems of risk-adjusted equalization payments among insurers. To develop these systems, predictors of individual utilization patterns have to be identified, e.g. via regression analysis using previous utilization data. In some countries such as Germany, such data are hardly ever available. In the early nineties, a number of sickness funds participated in an experiment in which individual utilization data were collected. Our data set covers more than 70,000 members of company sickness funds over a 5-year period. We analyze socio-demographic determinants of utilization which could be used as risk adjusters in a risk equalization scheme. Our results suggest that besides age and sex, the set of risk adjusters should include income, family status and a dummy for the last year of life.

Reimbursement and cost containment: a German perspective.

This paper distinguishes short- and long-term financing problems in social health insurance systems in Germany and other European countries. The first part focuses on recent healthcare reforms in Germany that are directed at short-term problems, in particular measures of cost containment in the pharmaceutical sector such as the introduction of a drug formulary and reforms in the system of risk adjustment to enhance competition between sickness funds. The second part discusses the likely effects of the aging of the population on the sustainability of present types of mandatory insurance coverage in Germany and possible reforms that could solve the problems. It is argued that the proposed distinction between basic and supplementary benefits requires a system of explicit rationing (e.g. by age), which determines the package of basic benefits several decades in advance.

"Primary" rationing of health services in ageing societies--a normative analysis.

While most of the debate on "rationing in health care" focusses on the distribution of scarce medical resources among competing needs, which we propose to call "secondary rationing," this paper is concerned with "primary rationing," i.e., the conscious decision by society to limit the amount of resources devoted to a collectively financed health care system. Based upon a number of transparent normative criteria, we analyze whether primary rationing should be performed and, if so, what type should be chosen (hard vs. soft, explicit vs. implicit). Finally we discuss whether age should be used as a criterion in any systematic attempt at primary rationing of health care.