The Quarterly review of economics and business最新文献

This article provides comments on Feldstein's article on "Health Policy Issues: An Economic Perspective." The predictive ability of Feldstein's analysis is extended. The importance of exogeneous shocks is discussed, specifically the role of technology in shaping health policy and the development of the health care industry.

Technologies can be viewed as a mixed blessing: rising health care costs versus improved diagnosis, treatment, and health status. This article briefly discusses the influence of key factors on the demand for technology and its utilization. These factors include rising health expenditures, changes in populations, and the development of cost containment strategies. Resulting shifts in incentives and utilization are examined. Because of the difficult and complex issues associated with the increasing use of medical technologies, hard choices will need to be made about quality of life, technology assessment, and the allocation of health resources to the terminally ill.

This article investigates the effect of a change in Medicare payment regulations on for-profit hospital market values. A theoretical argument on the effects of this regulatory event is presented in which hospital managers are concerned about firm wealth but also value prestige, provider perceptions of quality, and perhaps other prerequisites. In this case, DRGs will induce hospitals to seek higher wealth because they increase the opportunity cost of nonpecuniary benefits. The issue is pursued empirically by estimating the market response to DRG legislation using seemingly unrelated regressions.

Health expenditures have grown steadily in the United States, but though United States spending is the highest in the world, it may not be as far out of line as is often assumed. However, although the economy is capable of absorbing an increasing amount of health care without reducing other consumption, financing mechanisms are breaking down. That part of Medicare financed through payroll taxes will be insolvent by the year 2003; the rest of Medicare and all of Medicaid adds to a growing budget deficit. And, the free market fails to provide rational long-term financing of long-term care.

Health policy in the United States is best understood as a policy of incrementalism with major interventions occurring only in response to crisis, as in the case of the Medicare legislation that profoundly altered our historic financing of health care. The characteristically minor, unplanned, adjustments that are made often have major unanticipated consequences, and these serve to explain the radical transformation of the nation's health system in the half-century since World War II. The main elements in this change--the evolution of employment-tied private insurance for the majority of the population, the predominance of specialism and superspecialism in medical practice, the expansion of the voluntary hospital system with capital liberally raised through tax-exempt bond issues, advancing technology and medical capability are reviewed. The major persistent policy issues--uncontrolled expenditures and the increasing numbers of uninsured--will ultimately precipitate change, perhaps by the end of the decade, very likely a minimum benefit, universal federal-state insurance system, supplemented by the private market--hardly radical systemic reform.

This article develops a derived demand for physicians that is general enough to encompass physician control, simple profit maximization and hospital utility maximization models of the hospital. The analysis focuses on three special aspects of physician affiliations: the price of adding a physician to the staff is unobserved; the physician holds appointments at multiple hospitals, and physicians are not homogeneous. Using 1983 American Hospital Association data, a system of specialty-specific demand equations is estimated. The results are consistent with the model and suggest that physicians should be concerned about reduced access to hospitals, particularly as the stock of hospitals declines.

This article suggests ways to preserve innovation while partially restraining the impressive growth rate in new medical technology. Health care will soon consume 12 percent of GNP. There is a wide range of opinions as to whether medical technology is a major or minor source of rising health care expenditures. Given our current fiscal problems, health care providers will be in direct competition with education and other domestic programs for a limited supply of R&D funds. More funding will have to come from the private sector. The challenge for prudent buyers of health care services is to control costs without eroding the biomedical capacity of the nation.

This article examines whether private patients, who typically pay a price higher than the Medicaid reimbursement rate, receive the same or higher quality services than Medicaid patients in the same health care facility. Because the mix of patients will affect the firm's cost only when Medicaid and private patients receive different levels of quality, the cost function can be used to test for the presence of quality differences. Estimates of a cost function for Texas nursing home in 1983 indicate that the mix of patients does not affect the firm's cost. Thus, private and Medicaid patients in the same nursing home receive the same level of quality.