nep-hea New Economics Papers
on Health Economics
Issue of 2006‒03‒25
four papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Health plan pricing behaviour and managed competition. By Rudy Douven; Erik Schut
  2. Explorations of the Effect of Experience on Preferences: Two Health-Care Case Studies By Einat Neuman; Shoshana Neuman
  3. Perception of the Risks Associated with Impaired Driving and Effects on Driving Behavior By Georges Dionne; Claude Fluet; Denise Desjardins
  4. Patent Protection of Pharmaceutical Products in the Globalising World Economy By Ants Kukrus; Raul Kartus

  1. By: Rudy Douven; Erik Schut
    Abstract: In the Dutch social health insurance scheme, health plans operate in a managed competition framework. Essential features of this framework are risk adjustment, open enrolment and community rating. The objective is to study how health plans determine their community rated premiums. Using a panel data set for all health plans operating in the Dutch social health insurance market over the period 1996-2004, we estimate a premium model to determine which factors explain the price setting behaviour of health plans. Our empirical results indicate that competition did not play a major role in premium setting by health plans. We find that financial stability rather than profit maximisation offers the best explanation for health plan pricing behaviour. The forecast of next year's health-care expenditure by the government and the adjusted forecast by the insurers' association play a major role in health plans' pricing decisions. The introduction of a national health insurance scheme in 2006 urged all citizens to reconsider their health plan choice. The threat of losing customers had a profound impact on health plans' pricing behaviour. In sharp contrast to the period 1996-2005, in 2006 competition seems to play a dominant role in insurers' pricing decisions. Whether this will be a temporary or a lasting phenomenon is hard to predict.
    Keywords: Managed competition; Community rating; Health insurance; Health plan choice
    JEL: I11 I18 L11 D41
    Date: 2006–03
  2. By: Einat Neuman (Academic College of Tel Aviv-Yaffo); Shoshana Neuman (Bar-Ilan University, CEPR and IZA Bonn)
    Abstract: The standard assumption in economic theory is that preferences are stable. In particular, they are not changed as a result of experience with the good/service/event. Behavioral scientists have challenged this assumption and claimed (providing evidence) that preferences are constantly changing when experience is accumulated. This paper tests the effect of experience on preferences for attributes of health-care events. We are using two very different samples and a methodology that facilitates the estimation of marginal utilities of various attributes of a composite non-traded health-care service. Discrete Choice Experimental design is employed for the analysis of samples of (1) women who gave birth, and (2) women who were diagnosed with breast cancer. For each group we had information on experience. In the case of women who gave birth, the sample was decomposed into 3 sub-samples: pregnant women with their first child (no experience); women after one delivery (single experience); and mothers after more than one delivery (multiple experience). Preferences of the 3 sub-groups have then been compared. The breast cancer patients reported the number of chemotherapy/radiation treatments they have already received, thus enabling the construction of an experience variable and testing for the effect of experience on preferences. The basic finding is that preferences for health-care attributes are significantly changed as a result of experience with the health event. However, the amount of experience is irrelevant.
    Keywords: preferences, experience, Discrete Choice Experiment, health-care, delivery, breast cancer
    JEL: D12 I19
    Date: 2006–03
  3. By: Georges Dionne; Claude Fluet; Denise Desjardins
    Abstract: This research studies the perception of the risks associated with impaired driving-probability of being apprehended or of having an accident-and the relation between the perception of risks and driving behavior. The most important determinants of perceptual biases are age, an accumulation of violations in the year preceding the survey, being a non-drinker, knowledge of the legal alcohol limit for driving, opinion about zero tolerance for impaired driving, and family income. Perceptual biases are shown to influence driving behavior, as captured by drivers' accumulated violations, demerit points and bodily injury accidents, in the years preceding and in the year following the survey. In conclusion, we analyze the results in terms of public policy for road safety.
    Keywords: Risk perception, impaired driving, driving behavior, traffic violation, road accident, regulation, public policy
    JEL: D81 C11 C13 K42
    Date: 2006
  4. By: Ants Kukrus (School of Economics and Business Administration, Tallinn University of Technology); Raul Kartus (School of Economics and Business Administration, Tallinn University of Technology)
    Abstract: Patenting new products in pharmaceuticals industry is of greater importance than in the other high technology branches of industry nowadays. Concentration of manufacturing takes place in pharmaceuticals industry as well as in the other branches of industry and it is characterised by the joining of firms. However, there are several specific features in patenting pharmaceutical products. Enforcement of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) made it compulsory to establish in all World Trade Organization (WTO) Members patent protection on pharmaceutical products and their manufacturing methods as well as patent protection of drugs. WTO Doha Declaration is an essential stage in patent protection of pharmaceutical products establishing the legal basis and compulsory licensing system. In 2005, the European Commission completed the Regulation of the European Parliament and the Council on compulsory licensing of patents relating to the manufacture of pharmaceutical products for export to countries with public health problems.
    Keywords: patent protection of pharmaceutical products, the TRIPS Agreement, the Doha Declaration, compulsory license, exclusive right, global economy
    JEL: K10 K41
    Date: 2005

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