nep-hea New Economics Papers
on Health Economics
Issue of 2006‒10‒07
five papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. R&D IN THE PHARMACEUTICAL INDUSTRY: A WORLD OF SMALL INNOVATION By Beatriz Dominguez; Juan-José Ganuza; Gerard Llobet
  2. The Welfare Costs of HIV/AIDS in Eastern Europe: An Empirical Assessment Using the Economic Value-of-Life Approach By Julia Fimpel; Michael Stolpe
  3. Pinning Down the Value of Statistical Life By Thomas J. Kniesner; W. Kip Viscusi; Christopher Woock; James P. Ziliak
  4. Physician Labour Supply in Canada: a Cohort Analysis By Thomas F. Crossley, Jeremiah Hurley, and Sung-Hee Jeon
  5. Do subsidized health programs in Armenia increase utilization among the poor? By Angel-Urdinola, Diego F.; Jain, Shweta

  1. By: Beatriz Dominguez; Juan-José Ganuza; Gerard Llobet (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: It is commonly argued that in recent years pharmaceutical companies have directed their R&D towards small improvements of existing compounds instead of more risky drastic innovations. In this paper we show that the proliferation of these small innovations is likely to be linked to the lack of market sensitivity of a part of the demand to changes in prices. Compared to their social contribution, small innovations are relatively more profitable than large ones because they are targeted to the smaller but more inelastic part of the demand. We also study the effect of regulatory instruments such as price ceilings, copyments and reference prices and extend the analysis to competition in research.
    Keywords: Health-care, pharmaceuticals, innovation.
    JEL: I11 I18 O31
    Date: 2006–01
  2. By: Julia Fimpel; Michael Stolpe
    Abstract: Based on the aggregation of individual willingness-to-pay for a statistical life, we calibrate an intertemporal optimization model to determine the aggregate welfare losses from HIV/AIDS in 25 Eastern European countries. Assuming a discount rate of three percent, we find a total welfare loss for the whole region of 1.2 trillion US-$, approximately 16 percent of the region’s annual GDP between 1995 and 2001. Although prevalence and incidence rates diverge sharply between countries – with central Europe far less affected than the major countries in the Commonwealth of Independent States and the Baltics – the epidemic is likely to spread to all countries unless a coherent strategy of prevention and treatment is backed up by substantial increases in health care investments. The sheer size of this task and the international nature of the epidemic render this one of the most important current challenges for all of Europe.
    Keywords: HIV/AIDS; Survival Probabilities; Value of a Statistical Life; Willingness-to-Pay; Eastern Europe
    JEL: D91 I12 I18 J17
    Date: 2006–09
  3. By: Thomas J. Kniesner (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); W. Kip Viscusi; Christopher Woock; James P. Ziliak
    Abstract: Our research addresses fundamental long-standing concerns in the compensating wage differentials literature and its public policy implications: the econometric properties of estimates of the value of statistical life (VSL) and the wide range of such estimates from about $0.5 million to about $21 million. We address most of the prominent econometric issues by applying panel data, a new and more accurate fatality risk measure, and systematic selection of panel estimator in our research. Controlling for measurement error, endogeneity, individual heterogeneity, and state dependence yields both a reasonable average level and narrow range for the estimated value of a statistical life of about $5.5-$7.5 million.
    JEL: J17 I12
    Date: 2006–09
  4. By: Thomas F. Crossley, Jeremiah Hurley, and Sung-Hee Jeon
    Abstract: This paper employs cohort analysis to examine the relative importance of different factors in explaining changes in the number of hours spent in direct patient care by Canadian general/ family practitioners (GP/FPs) over the period 1982 to 2002. Cohorts are defined by year of graduation from medical school. The results for male GP/FPs indicate that: there is little age effect on hours of direct patient care, especially among physicians aged 35 to 55; there is no strong cohort effect on hours of direct patient care; but there is a secular decline in hours of direct patient care over the period. The results for female GP/FPs indicate that: female physicians on average work fewer hours than male physicians; there is a clear age effect on hours of direct patient care; there is no strong cohort effect; there has been little secular change in average hours of direct patient care. The changing behaviour of male GP/FPs accounted for a greater proportion of the overall decline in hours of direct patient care from the 80’s through the mid 90’s than did the growing proportion of female GP/FPs in the physician stock
    JEL: I11 J24
    Date: 2006–10
  5. By: Angel-Urdinola, Diego F.; Jain, Shweta
    Abstract: This article analyzes the extent to which the Basic Benefit Package (BBP), a subsidized health program in Armenia, increases utilization and affordability of outpatient health care among the poor. The authors find that beneficiaries of the BBP pay approximately 45 percent less in fees for doctor visits (and display 36 percent higher outpatient utilization rates) than eligible users not receiving the BBP. However, even among BBP beneficiaries the level of outpatient health care utilization remains low. This occurs because the program mainly provides discounted fees for doctor visits, but fees do not constitute the main financial constraint for users. The authors estimate suggest that other non-fee expenditures, such as prescription medicines, constitute a more significant financial constraint and are not subsidized by the BBP. As a result, outpatient health care remains expensive even for BBP beneficiaries.
    Keywords: Health Monitoring & Evaluation,Health Systems Development & Reform,Health Economics & Finance,Population Policies,Public Sector Expenditure Analysis & Management
    Date: 2006–09–01

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