Transcript Lecture 8

Lecture 8:
Distributional considerations
Reference on the reading list: Williams and Cookson
15.03.2005
Tor Iversen
Problem to be discussed:
With voluntary insurance each person decides for himself the kind of
insurance contract he would like to have. Hence, the allocation of
health care and the implied allocation of health is not a public concern.
With compulsory insurance the allocation of health care and the
distribution of health in the population become challenges for political
assemblies
Hence, distributional considerations (equity in health) become
important to consider
What is meant by equity?
According to Williams: reducing inequalities in health
Assume that health is easily measurable, and interpersonal comparable for
instance in terms of Quality Adjusted Life Years (QALYs). (Of course
problematic, but convenient for sorting out various concepts at this stage)
Utilitarianism – maximize total health
F-F health frontier – the farthest you
get with the available resources and
the individuals’ capacity to benefit
from health services in terms of
health improvements.
Health of B
The welfare function has linear
indifference curves with 45 degree
angles with both axes. This implies
that a health improvement is of equal
social value independent of who is
having it and on what level of health
he is initially.
F
X
45◦
F
Health of A
F-F has shifted to F’-F’ to the benefit
of A
A shift in the utility frontier
We can think of two reasons:
-B has a smaller capacity to benefit
for instance because of old age
-A’s disease has been less expensive
to treat
Health of B
The utilitarian approach is not
concerned about why the
shift occurs.
F
F’
X
Y
F
F’
Health of A
Greater weight for A than B
Health of B
Welfare contours steeper than
45 degrees
For some reason A deserves a
greater weight than B
F
X
F
Health of A
The welfare function has convex
non- linear indifference curves
The better health you have
the smaller is the weight that an
additional improvement in health
is given in the social valuation
Health of B
F
X
F
Health of A
Very strong preference for equality in health
Health of B
The welfare function has
non- linear kinked indifference
curves
Only improvement in health
for the person with the lowest
health level is given a positive
social valuation
Maxi-min
Allocate resources to
maximize the level of health to
the person who is least well
off.
F
X
Need
Seriousness of disease
45◦
F
Health of A
An example (see also introduction):
Prioritizing services and groups of patients according to explicit
goals
•
Related to degrees equity concern
Group I
Treatment I
5 years survival without 5 %
treatment
5 years survival with
15%
treatment
Treatment cost per
100.000
patient
Number of patients
100
Cost per saved life
1000.000
Group II
Treatment II
30 %
Group III
Treatment III
92 %
60 %
97 %
100.000
100
100
333.300
100
2.000
Alternative rules (criteria) for making priorities:
A: Priority according to the seriousness (prospects without the treatment)
of the disease
Prioritize according to increasing survival without treatment
B: Priority according to treatment effect
Prioritize according to difference in survival with treatment and
without treatment, such that the group with the greatest difference is
given first priority.
C: Maximize total health within the resource constraint
Prioritize according to increasing cost per saved life, such that the group
with lowest cost per saved life is given first priority.
D: Priority according to the seriousness of the disease constrained by an
upper limit on cost per saved life.
E: Maximize total health constrained by a lower limit on the seriousness
of disease
The importance of criteria for prioritizing the three treatments
Treatment I
Treatment II Treatment III
A:Priority according to seriousness
1
2
3
B:Priority according to treatment effect
2
1
3
C: Maximize total health
3
2
1
1
2
1
Not compatible
with constraint
D:Priority according to seriousness given Not compatible
that cost per saved life is less than
with constraint
900 000
E: Maximize total health given that the
probability of survival without treatment
is less than 90%
2
Some implications:
Optimal priority-setting depends on the aims that the health sector is expected
to pursue including the distributional considerations
It is possible to obtain a considerable total health gain by prioritizing treatments with modest
effect given that they are sufficiently inexpensive
Criteria C and E is at a disadvantage for patients who, because of some reason, do not
manage to get much health out of the health services
The cost of treatment relative to other treatments should not influence priority according to
criteria A and B.
The introduction of cost saving technologies should influence priorities according to criterion
C (and possibly D and E), but not according to criteria A and B
Cost- benefit analysis are relevant for priority decisions only according to criteria C, D and E
Hence, if you are in favor of criteria A or B, it is inconsistent simultaneously to argue that
cost-benefit analysis should have an increased role as a means to allocating resources
within the health sector
In fact the three types of criteria mirror quite well the criteria actually used
in legislations and other regulation of priority-setting
Norway: Act on the right of patients (1999), Article 2 (my translation):
The patient has a right to necessary help from the specialist health service when:
1.
The patient has a considerable reduction in length of life or quality of life if treatment is
postponed.
2.
The patient may have an expected health improvement from the treatment
3.
The expected cost is in a reasonable relation to the expected effect of the treatment
Which of the three criteria apply here?
Ammendment (2003):
The specialist health service should, based on medical criteria, decide on a
time limit for a patient with a right to treatment
……
If the regional health enterprise does not manage to give a patient necessary
treatment within the prescribed time limit, then the patient has a right to receive
treatment without further delay, if necessary from a private provider or a
provider abroad.
•
Tendencies in development of criteria over time?
•
•
•
In Norway the ambition of equity in the allocation of medical care is high
among all political parties.
The instruments for auditing whether these goals are fulfilled are not equally
ambitious.
Decentralized decision-making makes it hard to verify whether approved
priority rules in fact are adhered to
•
An example of a Norwegian study – see
http://www.hero.uio.no/publicat/2005/HERO2005_2.pdf
•
The Norwegian Act on Health Enterprises states that the aim of the health
enterprises is to provide high quality specialist health care on an equitable
basis to patients in need, irrespective of age, sex, place of residence,
material resources and ethnic background.
To what extent is this goal fulfilled?
•
Patient flows
(system of referrals not strictly adhered to when the study was done)
Private specialist
Patient
GP
Hospital outpatient
Hospital inpatient
•
Panel data of survey of living-conditions (Statistics Norway) merged with data on
capacity and accessibility to general practice and specialist care
•
A representative national sample consisting of 3501 individuals
•
Reported use of outpatient visits and visits to private specialists during the last year
•
Self-assessed health
•
Accessibility index: Describing the access to specialist health care at the municipality
level
•
Specialist care includes:
-hospitals, outpatient and inpatient care
-privately practicing physician specialists
•
Incorporated in the index is:
-capacity of the specialized health care
-discounted distance
Table 1: Distribution of contracts with private specialists and
distribution of population according to regional health enterprise.
Health
East
Health
South
Health Health
West
Middle
Health Sum
North
Distribution of private
specialists
48 %
18 %
17 %
10 %
6%
100 %
Distribution of population
36 %
20 %
20 %
14 %
10 %
100 %
Suspicion that actual use of the services is skewed as well
The number of private specialists is about 10% of the total number of
physician specialist
Private physician specialists with a contract 2003
Number of man-labor years per 1000 inhabitants
0.25
0.22
0.2
0.14
0.15
0.14
0.09
0.1
0.09
0.05
0
Helse Øst
Helse Sør
Kilde: Statistics Norway
Helse Vest
Helse Midt-Norge
Helse Nord
Descriptives
Variable
Definition
Private
specialist
visits
N=589
(17%)
Hospital
outpatient
visits
N=667
(19%)
The whole
sample
N=3501
Very good health
=1 Very good health
0.19
0.17
0.26
Good health
=1 Good health
0.46
0.41
0.50
Fair health
=1 Fair health
0.23
0.27
0.17
Bad or very bad health
=1 Bad or very bad health
0.12
0.15
0.07
Chronic illness
=1 if the person has a chronic illness
0.31
0.46
0.49
0.38
0.39
0.48
47.1
(16.5)
48.4
(16.5)
44.6
(16.6)
Man
=1 if man
Age
The respondent’s age
Junior high
=1 if highest education is junior high
0.16
0.21
0.18
University low
=1 if university degree after 3 years
0.21
0.21
0.21
University high
=1 if university degree after 5 years or more
0.06
0.03
0.05
Household income
Household income in NOK 100,000
3.86
(7.93)
3.35
(2.71)
3.38
(3.85)
Descriptives II
Variable
Definition
Private
specialist
visits
N=589
(17%)
GPs per 10,000 residents
No. of GPs per 10,000 residents in the
municipality
Personal GP
=1 if the individual consider himself to have a
personal GP.
0.68
0.69
Regular health center
=1 if individual sees a regular health center
0.21
0.23
Hospital outpatient visits
=1 if individual has been at hospital for outpatient
visits during the last 12 months
7.71
(1.53)
Hospital
outpatien
t visits
N=667
(19%)
The whole
sample
N=3501
7.81
(1.69)
7.79
(1.67)
0.60
0.24
0.19
0.31
1
0.69
(2.16)
2.58
(6.35)
Number of hospital
outpatient visits
The number of hospital outpatient visits during
the last 12 months.
0.49
(2.95)
Visits to a private
specialist
=1 if individual has had at least one visit to a
private specialist during the last 12 months
1
0.27
Number of visits to
private specialists
The number of visits to privately specialists
during the last 12 months
2.34
(4.89)
0.68
(2.33)
0.39
(2.19)
Access to hospital beds
Accessibility index estimated for hospital beds
1.83
(2.43)
1.52
(2.25)
1.68
(2.37)
Access to hospital
physician
Accessibility index estimated for hospital
physicians
2.10
(2.84)
1.70
(2.58)
1.90
(2.73)
Access to private
specialists
Accessibility index estimated for private
specialists
2.70
(3.57)
2.03
(3.19)
2.31
(3.42)
0.17
Estimated effect of independent variables (Statistically significant at 5% level) on the probability
of at least one visit to private specialists or hospital outpatient departments during the last
12 months. Marginal effect estimated from a multinomial logit model
Constant
Very good health
Good health
Fair health
Chronic illness
Man
High school
University low
University high
Age:31-50
Age: 51-70
Age: 70<
Household income
GPs per 10,000 residents
Personal GP
Regular health center
Access to private specialists
Access to hospital physician
Access to hospital beds
Private specialist Hospital outpatient
-0.17
-0.08
-0.13
-0.05
-0.11
-0.05
-0.06
0.05
0.06
-0.05
-0.04
0.04
0.04
0.11
0.04
0.04
0.05
0.06
0.005
-0.01
0.07
0.07
0.07
Conclusion:
A person’s self-assessed health contributes to the probability of hospital outpatient visits
and visits to private specialists in the sense that poorer health increases the probability of
a visit
The utilization of hospital outpatient clinics is not influenced by socioeconomic factors
A person’s accessibility to hospital physicians does not contribute to the probability of
hospital outpatient visits
The utilization of private specialists is influenced by the accessibility to specialists and a
patient’s socioeconomic characteristics, such as education and income
An individual with a higher university degree living in a municipality with the best access
to private specialists has a 46 percentage points higher probability of at least one visit to
a private specialist compared with an individual with junior high living in a municipality
with poorest access to private specialists
Private specialists seems to offer services that are supplemental to services provided by
the outpatient departments and alternative to services offered by the GPs.
Implications for health policy?
Should specialists be relocated or ambitions regarding equity be reduced?