RHC Week 2

Question 1

Waiting times

Answer 1

= mismatch between supply and demand with demand > supply (may be caused by / built in/ the design of a health care system. For instance by leaving demand free, but restricting supply of care

Question 2

Welfare loss

Answer 2

= we are providing things for people at the cost of society that is not made up for by the valuation of those people for the thing

Question 3

An Aside

Answer 3

• people low on demand curve can have high objective ‘need’ and people high on demand curve can have low objective need
• having a person low on the curve use care for which WTP<MC may still be socially desirebale (still as a society we say it is desirable for them to consume healhtcare)

Question 4

Waiting list positive aspects

Answer 4

• Reduces need to use other rationing mechanisms; This may signal unnecessary treatments.
• Waiting time functions as a price - longer waiting induces lower demand
• In principle, this mechanism should work similar for the rich and the poor (a price that could be ‘equally limiting’ for the rich and the poor); Having to wait is not different for the rich or the poor. They both have to wait. Treat people based on their need.
• Therefore, no socio-economic differences need to occur due to this rationing mechanism; This is what the NHS system tries to do. No differences in the public system.
• Especially unnecessary care should be restricted (given the professional judgement of necessity); This is done by referrals of the GP.
• Existing waiting times and waiting lists can reduce the flow of referrals (more restrictive referrals; e.g. Stoddard & Tavakoli); of the GP.
• Waiting lists can help to use available capacity optimally (planning device)
• Prioritisation on waiting lists possible based on medical need, so that negative medical side-effects of waiting may be minimised

Question 5

Waiting list negative aspects

Answer 5

• Loss of quality of life during waiting
• Health state may worsen during waiting time (even causing unnecessary deaths)
• Recovery time may increase with waiting time
• Treatment may sometime be less successful after waiting times (e.g. psychotherapy, cancer treatment)
• Higher medical costs due to “worse cases” and lower success rates
• Uncertainty in patients about when they will be treated; At the dentist, you usually plan an appointment. This is also waiting, but because you know when you will be treated, it doesn’t feel like waiting.
• Dissatisfaction in society with health care systems when waiting times are perceived as too high
• Costs in other economic sectors due to absence of waiting employees (next week); People who are not able to work due to their disabilities.
• Higher risk of becoming permanently disabled when waiting keeps you away from work for longer period
• Differences in waiting times between countries (or regions) may induce cross-border care, which has specific problems

Question 6

balance

Answer 6

• If a country opts for waiting lists/times as rationing device, then optimal waiting times could be searched for
• This waiting time is long enough to discourage demand, but short enough to limit negative aspects from waiting
• Optimal waiting time in systems without financial barriers to care are not zero (OECD, 2004)
• It should not be zero and there are no other restrictions, you whole systems is unrestriced —> costs of health care will be extremely high. Iedereen wordt altijd behandeld met alles, niet mogelijk en willen we niet. Je wil toch iets van limitatie in wat je aanbied voor de samenleving. Want anders behandel je iedereen met ook een hele lage medical need.
• If you have no waiting times, you should have other rationing mechanisms. Also the other way around: if you have no other rationing mechanisms, you should have waiting lists.
• Problem: optimal waiting time differs per disease, per situation, per individual etc. and may not be only based on medical need!

Question 7

What works to reduce waiting times?

Answer 7

• supply-side expansion (if capacity considered too low): reducing budgetary/capacity contraints, rewarding productivity
• Demand side reduction (if capacity is deemed adequate): less referrals, less demand (e.g., co-payments); system meer efficient maken
• Process / regulations: improving utilization facilities, maximum waiting time guarantees, choice (given variation in waiting times)

Question 8

‘Hidden demand’

Answer 8

becomes visible when waiting time reduces (or the ‘price’ of care is lowering)

–> It is like digging in the sand on the beach: the hole will fill itself with sand while you are digging (Smethurst & Williams, Nature, 2001)

Question 9

Martin and Smith (1999) performed a cross-regional study in the UK

Answer 9

Demand increased with supply, but increase in demand relatively small: ‘The policy implications of these results are therefore important. They suggest that increased NHS resources can bring about reductions in waiting times, and that the associated stimulation of demand is relatively trivial’.

Question 10

Siciliani & Hurst (2003)

Answer 10

• Among the group of countries with waiting times, it is the availability of doctors that has the most significant negative association with waiting times. Econometric estimates suggest that a marginal increase of 0.1 practising physicians and specialists (per 1,000 population) is associated respectively with a marginal reduction of mean waiting times of 8.3 and 6.4 days (at the sample mean) and a marginal reduction of median waiting times of 7.6 and 8.9 days, across all procedures included in the study.
• Analogously, an increase in total health expenditure per capita of $100 is associated with a reduction of mean waiting times of 6.6 days and of median waiting times of 6.1 days.

Question 11

treeknormen

Answer 11

= de normen die we hebben gezet voor max wachttijden in NL

Question 12

Waiting List Fund in 1997

Answer 12

–> to have a waiting list to get money out of the fund

–> perverse incenitives: if you pay hospitals with waiting lists it is profitable to have long waiting lists

Question 13

Why less wiaiting after 2000?

Answer 13

• System changes (first lifting budget restrictions and later regulated competition) – productivity rewarded
• These decreased waiting time considerably
• They came at a price though: expenditure increased and demand restrictions (from no claim to deductible) more prominent
• This short example from The Netherlands shows complexity of waiting times and policy measures to reduce them
• System and details matter!
  Waiting times decreased (especially rapidly after 2000). But expenditures increased.

Question 14

Different scenarios (koopmanschap et al)

Answer 14

fig 1. people stay the same (je gezondheid blijft hetzelfde terwijl je wacht)

fig 2. while they are waiting the situation gets worse. But once you get treated late, you will get back to the same level as you would have when you would have been treated earlier

fig 3. people deteriorate while waiting and it takes longer to recover. But they will get back to the same level as they would have, when they would have been treated earlier

fig 4. people deteriorate while waiting and they will never get back to the situation, as they would have when they would have been treated earlier –> they never get the same quality of life. (permanent gezondheidsverlies door het wachten)

Question 15

socio-economic inequity waiting lists

Answer 15

benefit of waiting lists is allocation health care wihtout dpeending on ATP (how much income you have –> ability to pay)

evidence shows sociio-economic inequity nonetheless. Possible explanations include:
- people with higher SES engage more actively with the system and exercise pressure when they experience long delay
- may have better social networks (“know someone”) and use them to gain priority
- may have lower probability of missing scheduled appointments
- may articulate their wishes and needs better and more forcefully

Question 16

consumer moral hazard

Answer 16

• ex ante
• ex post

Question 17

ex ante

Answer 17

= less prevention and more risk  Before something happens. A person who is fully ensured, will be less engaged in, for instance, prevention. BEFORE.

Question 18

ex post

Answer 18

= demand more and more expensive care  Once you are ill, you want more and more expensive care then you otherwise would have wanted. Not matter the cost I want the best care after falling ill. AFTER.

Question 19

Solution for consumer moral hazard?

Answer 19

• Through for instance cost-sharing (certain % of costs is borne by patient) the experienced price is raised and the incentive for consumption and moral hazard decreased. By having this incentive, you want to reduce unnecessary care.
  Reduce the amount of unnecessary care (push out the demand curve); you hope that the right side of the demand care represents unnecessary care.

Question 20

Questions about efficiency and equity

Answer 20

effiiency: are people actually capable to see where they should be on the demand curve? is it only unnecessary care that we are putting out of the system or is there also necessary care put out of the system?
equity: are we not pushing more care in people who are actually not so well of relative to people who are relatively well off?

Question 21

creese (BMJ, 1997)

Answer 21

Poor people are both sicker and more sensitive to healthcare prices than wealthier people. A range of policy options other than user fees exists for dealing with situations of both underfinanc¬ing and rapid growth in expenditure. As an instrument of health policy, user fees have proved to be blunt and of limited success and to have potentially serious side effects in terms of equity. They should be prescribed only after alternative interventions have been considered.  lets not go there unless we tried al the other things

Question 22

What do we know RAND-experiment (USA)

Answer 22

• Largest and most famous source of information: RAND HIE (1974-1977)
• Households randomized to schemes with 0 to 95% co-payment and varying deductible (up to maximum amount) with long follow-up
• Data was collected on expenditures but also on health status
• Shows people are indeed sensitive to prices - mean expenses of those households with free care $982, those with 95% coinsurance $679 (individual price elasticity around -0.20)
• All types of service fell: physician visits, hospital admissions, mental health service.
• The poor more severely restricted use than the rich did
  –> Yes, you can reduce healthcare consumption by have a co-payment.

Question 23

Newhouse et all, 1993) is free health beneficial?

Answer 23

For the average person there were no substantial benefits from free care (Newhouse et al., 1993, p. 201) Exception: “sick poor” (appr. 6% of US population) - people with low incomes with particular illnesses (high blood pressure, vision problems, bad teeth & gums, children with amaenia (=bloedarmoede)). For them free access to care beneficial. For the average person they didn’t find an effect on health.

Question 24

Policy implications (newhouse et al)

Answer 24

• targeted free beneficts (e.g. vision and dental) or avoid for certain people that they have to pay
  -problem: conditions can be difficult to exempt (e.g. high blood pressure), since identification of potential beneficiaries is crucial part of treatment
• solution: exempting loew-income people form cost-sharing (but: how to draw poverty line, stigmatization of poor) people don’t like carying the green card if other people can see that they belong to the 6% poorest
• simply accept the negative side-efffects form this rationing device
• what do we value: equal access, equal use, or equal health outcomes

Question 25

Side-effect from payment

Answer 25

having to pay a person, the relationship with this person changes. People will demand for something if they are paying for it. People will be more demanding –> im not paying you for nothing

Question 26

Fogel (health technology)

Answer 26

‘the increasing share of global income spent on healthcare expenditures is not a calamity; it is a sign of the remarkable ecomic and social progress of our age

–> health technology is an important driver of costs and health increases; pharmaceuticals, medical technologies, new type of surgeries etc.

Question 27

evalutation criterea

Answer 27

ZiN advises Minister of Health:
- necessity (severity of illness and need for insurance)
- effectiveness
- cost-effectiveness
- feasibility (geschiktheid)

Question 28

expressing health in money terms, decision rule

Answer 28

Benefit - costs > 0

=> viΔQi – Δct > 0 => Δct / ΔQi (= difference in QALY’s that you gain in a new intervention relative to an old intervention.) < vi (differ in value in QALY gains)
* Are the benefits exceeding the costs of consuming something?
* Benefits are QUALY’s gained (times the costs)
* V = value of QALY, ct = total costs and Q is QALY (Δ = change)
* Subscript i: needed if we want to distinguish between different QALY gains…
Δct / ΔQ (otal costs / total QALY’s that you gain
—> that ratio should be lower than the value of the QALY) = normal output of CUAs (cost utility analyses, QALY is the outcome) => how much health is gained per invested euro?
All QALYs (initially) treated the same

Question 29

Absolute scarcity

Answer 29

= supply of a good is naturally limited bv diamonds in the earth

Question 30

Relative scarcity

Answer 30

= insufficient goods to satisfy all wants and needs, trade-off is necessary –> optimal outcome? bijv flower to make a cake or to make a bread –> more about a choice problem

Question 31

implicit

Answer 31

society determines the health care budget, but leaves it to physicians to allocate resources to individual patients (fixed budget; bedside rationing) bedside rationing  on a patient level, may be differences between decisions of physicians and therefore differences between hospitals, fixed budget

Question 32

explicit

Answer 32

society determines the rules that determine under which circumstances, patients can claim medical services (flexible budget) more equal between patients because the government decides and not the physicians, budget more insecure