The causal impact of cesarean sections on neonatal health

This post has been written by Ana Costa Ramón and Ana Rodríguez González.  Both are PhD candidates at the Economics department of Universitat Pompeu Fabra.

In recent decades there has been an increasing concern about the rise of cesarean section births. Among OECD countries in 2013, on average more than 1 out of 4 births involved a c-section (OECD, 2013), being one of the most commonly performed surgeries. Cesarean sections, performed when needed and under standard quality measures, save lives. However, unnecessary c-sections not only impose significant costs for the health system but can also negatively impact infant health.  Previous literature has found cesarean sections to be associated with several adverse health outcomes for the newborn (Grivell & Dodd, 2011) and with worse later infant health(Keag, Norman, & Stock, 2018). However, most of the studies that came to these conclusions compared mothers who gave birth vaginally with those that had a cesarean section, and this may produce biased results: mothers who give birth by c-section are likely to have different characteristics from those who have vaginal births, and this may influence the health outcomes of the child and the mother after delivery.

In a recent paper, published in the Journal of Health Economics (Costa-Ramón, Rodríguez-González, Serra-Burriel, & Campillo-Artero, 2018), we contribute to fill this gap by providing causal evidence of the impact of avoidable cesarean birth on neonatal health. To do so, we exploit variation in the probability of having a c-section that is unrelated to maternal characteristics: variation by time of day.

In particular, using data from four public hospitals in Spain, we first document that the probability of having an unplanned c-section is higher in the early hours of the night (from 11 pm to 4 am) and that this is not driven by different characteristics of mothers giving birth during these times. Figure 1 shows the c-section rate at different times of day in our sample. We can observe that the distribution of unscheduled c-sections by time of birth is not uniform. Births that take place between 11 pm and 4 am are around 6 percentage points more likely to be by cesarean.

Csections

Notes: The figure represents the proportion of unplanned c-sections by time of day over the sample of unplanned c-sections and vaginal births. Sample is restricted to single births, unscheduled c-sections and vaginal births (excluding breech vaginal babies).

We argue that, given the medical shift structure in public hospitals and the larger time-cost of surveillance implied by vaginal deliveries, doctors’ incentives to perform c-sections in ambiguous cases may be higher during these times. In fact, we are not the first to document peaks in the unplanned c-section rate during the early night. Previous studies interpret this variation as evidence that convenience and doctors’ demand for leisure influence timing and mode of delivery (Brown, 1996; Fraser et al., 1987; Hueston, McClaflin, & Claire, 1996; Spetz, Smith, & Ennis, 2001).

We take advantage of this exogenous variation and use time of day as an instrument for the probability of having an unplanned c-section. This allows us to compare mothers that give birth in the same hospital and have similar observable characteristics, differing only in the time of delivery. Our results suggest that these non-medically indicated c-sections lead to a significant worsening of Apgar scores of approximately one standard deviation, but we do not find effects on more extreme outcomes such as needing reanimation, being admitted to the ICU or on neonatal death. This is an important finding, given that previous studies in the medical literature documented an association between c-sections and an increased risk of serious respiratory morbidity and subsequent admission to neonatal ICU (Grivell & Dodd, 2011). Their findings are consistent with the results of our OLS estimation, suggesting that former analysis might have been capturing the underlying health status of newborns who need a medically necessary cesarean.

A few words on the publication process and media coverage

Given that it was a health-oriented paper, we decided to target a top field journal in health economics. We were very lucky and all the publication process went very fast and smoothly.  We had to revise the paper once and get additional data in order to be able to address some of the reviewers’ comments.

When it was published, with the help of UPF’s communication unit we sent a press release and our paper got attention from the Spanish media.  We knew that it was a controversial topic (especially from the doctors’ perspective) so we chose our words carefully, but still we got some slightly sensationalist headlines.  We learnt the lesson: you have to choose a catchy punchline yourself, or they will pick their own (and you won’t always like it).

Overall, it has been an intense and fruitful experience!

References:

Brown, H. S. (1996). Physician demand for leisure: Implications for cesarean section rates. Journal of Health Economics, 15(2), 233–242. https://doi.org/10.1016/0167-6296(95)00039-9

Costa-Ramón, A. M., Rodríguez-González, A., Serra-Burriel, M., & Campillo-Artero, C. (2018). It’s about time: Cesarean sections and neonatal health. Journal of Health Economics, 59. https://doi.org/10.1016/j.jhealeco.2018.03.004

Fraser, W., Usher, R. H., McLean, F. H., Bossenberry, C., Thomson, M. E., Kramer, M. S., … Power, H. (1987). Temporal variation in rates of cesarean section for dystocia: Does “convenience” play a role? American Journal of Obstetrics and Gynecology, 156(2), 300–304. https://doi.org/http://dx.doi.org/10.1016/0002-9378(87)90272-9

Grivell, R. M., & Dodd, J. M. (2011). Short- and long-term outcomes of cesarean section. Expert Review of Obsetrics and Gynecology, 6(2), 205–216.

Hueston, W. J., McClaflin, R. R., & Claire, E. (1996). {V}ariations in cesarean delivery for fetal distress. The Journal of Family Practice, 43(5), 461–467.

Keag, O. E., Norman, J. E., & Stock, S. J. (2018). Long-term risks and benefits associated with cesarean delivery for mother, baby, and subsequent pregnancies: Systematic review and meta-analysis. PLoS Medicine, 15(1), 1–22. https://doi.org/10.1371/journal.pmed.1002494

OECD. (2013). Health at a Glance 2013: OECD Indicators. Paris: OECD Publishing.

Spetz, J., Smith, M. W., & Ennis, S. F. (2001). Physician Incentives and the Timing of Cesarean Sections: Evidence from California Physician Incentives and the Timing of Cesarean Sections Evidence From California. Source: Medical Care MEDICAL CARE, 39(6), 536–550. https://doi.org/10.1097/00005650-200106000-00003

 

Why more educated individuals are not always healthier

Caleb Hia (Economics ’18) wrote the following article on health economics from his research for his undergraduate dissertation at the University of Edinburgh.

BGSE Voice

Caleb Hia ’18 wrote the following article on health economics from his research for his undergraduate dissertation at the University of Edinburgh.


From 2006 to 2007, almost half of the UK’s National Health Service’s (NHS) costs were attributed to behavioural risk factors: diet-related sickness, sedentary lifestyles, smoking, alcohol and obesity cost more than £15 billion (Scarborough et al., 2011). This mammoth sum, deemed an economic burden on public resources, attracted the government’s attention. In the recent Budget, the Chancellor introduced a tax on the sugar content of soft drinks from 2018 to tackle childhood obesity aimed at compelling individuals to consider external costs associated with its consumption which they do not bear such as the publicly-funded health costs of treating diet-related diseases. The effectiveness of this or any further government intervention in an attempt to correct this “externality” will influence the way the NHS allocates its limited resources in healthcare provision.

Beyond this political issue runs an underlying discussion of the social determinants of health which have long been studied (Wilkinson and Marmot, 2003; Adams et al., 2003). In particular, the effects of education on health has been of interest since the inception of Grossman’s (1972) health model. Grossman’s model suggests health can be maintained by health investments, depending on goods and activity consumption, which affect health although health depreciates as individuals age. As better health gives an individual more time to work and enjoy consumption, more educated individuals are expected to demand more health and invest more in their health. This implies more educated individuals are also more efficient health producers.

A possible causal link between education and health exists possibly because higher productivity from more education directly translates to a higher level of health production through allocative efficiency (Kenkel, 1991; Rosenzweig, 1995) and productive efficiency (Grossman, 1972). For example, low literacy is associated with a poor understanding of hospitals’ discharge instructions (Spandorfer et al., 1995) while higher educated individuals are more likely to follow medical treatments (Goldman and Smith, 2002). Relatedly, higher educated people spend more time on health-related activities because they are better at allocating inputs (Grossman, 1972). Additionally, higher educated individuals use their higher earnings to purchase healthier lifestyles (Glied and Lleras-Muney, 2003) which entail more expensive medical treatments, healthier food consumption and living in healthier areas.

I use a natural experiment in England, the increase in compulsory schooling laws from fifteen to sixteen years old following the Raising of School Leaving Age Order in 1972, and an instrumental variable (IV) regression model to examine the relationship between education and health in greater detail. My sample incorporates additional years of data from Health Survey England between 1991 and 1993 which were not analysed before. I measure various health-related measures and behaviours including Body Mass Index (BMI) which has not been considered before. I run Ordinary Least Squares (OLS) and two-stage least squares (2SLS) regressions in a sample containing all individuals and a discontinuity sample comprising individuals born only in January and February using February-born individuals as my instrument. I show education has no causal effect on various health-related measures and behaviours.

A possible explanation for this lies in time inconsistent preferences supported by behavioural economics. Quasi-hyperbolic discounting (Phelps and Pollak, 1968; Laibson, 1997) induces dynamically inconsistent preferences contrary to geometric discounting. The following payoff matrices models a hypothetical situation where an individual fails to quit smoking due to quasi-hyperbolic discounting:

Under geometric discounting where ∝ ≈ 1 and β ≈ 0.8,

he makes time consistent choices regardless of when benefits to those choices are delayed. Since he gets more utility from quitting in both periods, he quits immediately.

However, under Quasi-hyperbolic discounting where ∝ ≈ 1 and β ≈ 0.8,

he changes his choices based on his distance in the future. Unlike geometric discounting, he gets more utility from quitting only in future and not at present and hence do not quit.

The empirical evidence from Gruber and Köszegi’s (2001) addictive behaviour model which incorporates time-inconsistent preferences to the standard “rational addiction” model (Becker et al., 1994) suggests smokers exhibit forward-looking behaviour with time inconsistent preferences concerning smoking. Thus, individuals start smoking often as adolescents when they are most present biased (Hammond, 2005) and do not anticipate the difficulty of quitting.

Therefore, lifestyle habits may not be correlated with education. In the case of smoking, individuals who quit smoking successfully may have used commitment devices (Ashraf et al., 2006; Kaur et al., 2010; Beshears et al., 2011) like quitting with friends to constrain their own future choices by deciding ahead of time to make future deviations costly. Increasing the education budget may be a sound way to promote public health but understanding behaviours and exploring policies to incentivise individuals to adopt healthy habits may be more effective in the long-run.

Download the full paper:

The causal relationship between education and health-related measures and behaviours: Evidence from England

2017 Competition Curtain Raiser, Part 1: Excessive Pricing

1168_1epanutin-anti-epilepsy-drug-spl-c0068990Photo credit: Pulse.

This is the first in a series of posts highlighting competition issues and cases that are set to drive the debate in Europe this year.

Pfizer and Flynn Pharma: a major decision from the CMA

On 7 December 2016, the United Kingdom’s (UK’s) Competition and Markets Authority (CMA) issued a potentially precedent-setting decision against pharmaceutical producer Pfizer and distributor Flynn Pharma, imposing a fine of nearly £90 million for excessive pricing.

In September 2012, Pfizer sold the distribution rights to its anti-epilepsy drug Epanutin (phenytoin sodium) to Flynn Pharma, which debranded (or “genericised”) the drug, with the effect that it was no longer subject to price regulation. Following the sale, Pfizer increased its price for phenytoin sodium to Flynn Pharma by between 780% and 1,600% relative to the price at which it had previously sold the drug in the UK, and in turn Flynn Pharma increased the wholesale price of the drug to between 2,300% and 2,600% of the former price.

A key feature of phenytoin sodium appears to be that patients taking the drug cannot readily switch to the same drug manufactured by another producer, since even minor differences in production processes could affect the efficacy of the drug in treating epilepsy in individual patients. Therefore, despite the fact that the drug was genericised, the CMA appears to have found that Pfizer and Flynn Pharma retained a de facto monopoly over the sale of the drug to existing patients taking Epanutin. Such a finding would also imply that alternative epilepsy treatments were not viable substitutes for phenytoin sodium in respect of the relevant patients, and were therefore not included in the definition of the relevant market.

The excessive pricing debate

The prohibition of excessive or unfair pricing by dominant firms is a controversial part of UK and European competition law (it has no meaningful counterpart in US legislation or case law). On the one hand, there are strong economic arguments, at least from a static point of view, for preventing a dominant firm from exploiting its monopoly position by charging prices higher than the theoretical competitive price. One of the key results of microeconomic theory (and indeed the foundation of competition policy) is that monopoly pricing lowers overall welfare compared to a competitive market outcome, since the monopoly maximises profits by producing a less-than-efficient quantity of the relevant good and selling it at a higher-than-efficient price.

However, enforcing a prohibition against excessive pricing presents various difficulties. One of these is to establish a benchmark price against which the actual price charged by the dominant firm is to be evaluated, and deciding whether the margin above this benchmark is excessive. According to the CMA press release, it appears to have had regard both to the initial regulated price of phenytoin sodium, and the price charged by Pfizer in other European countries, in reaching a finding of excessive pricing.

It is important to note, however, that there is no inherent reason why such prices should represent useful comparators. In other words, although a price increase of 2,600% naturally appears alarming at first glance, a range of factors could have resulted in the initial price being very low, especially if it was regulated. In this case, Pfizer and Flynn Pharma argue that the regulated price of Epanutin in the UK prior to September 2012 had been loss-making. It remains to be seen how the CMA established a relevant benchmark when its non-confidential decision is made public.

A further risk in enforcing a prohibition of excessive pricing, partly related to the issue discussed above, is that it could have a negative impact on firms’ dynamic incentives to invest across the economy. For example, over-enforcement could prevent a firm from earning economic profits where it has innovated in order to gain a temporary competitive advantage. More generally, over-enforcement runs the risk of creating uncertainty, and thereby lowering incentives to invest, if businesses fear that their future profits will be capped by a competition authority at a level which they cannot predict in advance.

For such reasons, economists such as Massimo Motta and Jorge Padilla (both teaching in the Competition masters at BGSE)  have proposed that excessive pricing provisions should be enforced only in cases where there is little or no prospect of the relevant market eventually correcting itself, and where a sector regulator would not be better placed than the competition authority to intervene (among further restrictive conditions). In this case the CMA may have concluded that the inability of other phenytoin sodium producers to compete for existing Epanutin patients created such a situation where entry is infeasible. Even so, the question remains whether this issue could not better be addressed through amending existing drug price regulation. The release of the CMA’s final decision is likely shed more light on this issue.

What to look out for in 2017

In the meantime, Flynn Pharma has appealed the CMA’s decision to the Competition Appeals Tribunal (CAT). 2017 could therefore reveal how the CAT views the different considerations surrounding excessive pricing, and to what extent the CMA decision will be applicable to other drugs and industries. The finding of excessive pricing also raises the prospect that Flynn Pharma’s customers, and specifically the UK Department of Health, could sue it for damages resulting from the high price, which would raise further interesting issues in so-called “private”  excessive pricing enforcement.

References

Evans, D.S. & Padilla, A.J. 2005. “Excessive Prices: Using Economics to Define Administrable Legal Rules”. Journal of Competition Law and Economics 1(1), pp. 97–122.

Motta, M & de Streel, A. 2007. “Excessive Pricing in Competition Law: Never say Never?” The Pros and Cons of High Prices, pp. 14-46. Swedish Competition Authority.

Convenience Effect on Birth Timing Manipulation: Evidence from Brazil

According to the United Nations Children’s Fund, Brazil ranked first place with the highest cesarean section rate among 139 countries in the world for the period of 2007-2012.[1] In 2009, the number of surgical births surpassed vaginal deliveries. During the years of 2012-2014, cesarean delivery (CD) corresponded to 57% of all registered births in the country. Another less but still invasive medical intervention is labor induction. This is a technique used to bring on or speed up contractions and thus anticipate vaginal births. For the period of 2012-2014, 33% of all registered normal deliveries in the country occurred after induced labor. Therefore, only 29 out of 100 births in Brazil occurred in the form of natural birth, through a spontaneous (non-induced) vaginal delivery.[2]

Such medical interventions (CD and labor induction) allow for manipulation in the timing of birth. Although birth timing can be altered due to medical reasons (e.g., when labor could be dangerously stressful or in case of post-term pregnancies), the existing evidence suggests that it is also manipulated for reasons other than the health of the fetus or of the mother. Mothers’ incentives to intervene in the timing of their deliveries are usually financial when compensations are involved, such as baby bonuses (Gans and Leigh, 2009) or tax savings (Dickert-Conlin and Chandra, 1999), or even related to cultural issues (Lo, 2003). Doctors’ incentives tend to be determined by risk-aversion (Fabbri et. al, 2015) or convenience (Gans et al., 2007).

As CD can be scheduled for medical reasons, a concentration of scheduled CD’s in convenient moments does not constitute enough evidence to suggest that deliveries are being scheduled due to convenience motivations. However, since complications during delivery that require an emergency CD should be randomly distributed across time, a concentration of unplanned CD’s during convenient times indicates that reasons other than the protocol are playing a role. Brown (1996) and Lefèvre (2014) show evidence on this matter. Both papers suggest that physicians induce CD in the labor room during convenient moments. Thus, physicians’ convenience motivations as well as other incentives correlated to convenient moments could be at play.

Convenient times usually coincide with times when it might be safer to deliver. It is also during non-leisure days and usual business hours that the largest capacity of hospital staff is on-shift and medical staff is fresher. If this is the case, then doctors who are risk-averse or altruistic might have preferences to allocate complex deliveries on those moments when risk can be minimized. Fabbri et al. (2015) provide evidence of risk aversion attitudes for a sample of women admitted at the onset of labor in a public hospital in Italy.

In my thesis from UFRJ, I tested whether convenience effects play any relevant role in birth-timing manipulation in Brazil. More specifically, I investigated if births that would have occurred after spontaneous labor during inconvenient times are anticipated to convenient times. I adopted several strategies in order to isolate the convenience effect from potential risk aversion attitude.

First, I used a new type of inconvenient days that may attenuate risk aversion attitudes in manipulating the timing of births: business days in-between holidays. As these are business days, hospitals should be fully-staffed. However, risk-averse physicians may still manipulate the timing of births in order to eliminate the possibility of women going spontaneously into labor on the surrounding leisure days. Second, I analyzed the results by hospital funding. Public funded hospitals provide a context where women do not actively participate in the decision-making process. This scenario enabled me to attribute the results to physicians. Third, I further investigated the results by level of risk. While birth timing manipulation motivated by convenience should happen mostly among low-risk births, timing manipulation guided by risk aversion should be concentrated in high-risk births – as in this latter case the goal is to minimize the risk of low quality hospital services.

Using daily data on birth records, I constructed a daily panel of number of deliveries by hospitals for the period 2012-2014, with information on hospitals, deliveries (e.g. type of birth procedure and nature of labor), pregnancy, mothers and newborns. Having classified births as low-risk and high-risk according to observable variables (e.g. mother’s age below 18 or above 35 years old, multiple pregnancy, newborn with congenital anomaly), I ended up with daily panels of number of high and low-risk deliveries by hospital.

As my goal was to understand if births that would have occurred after spontaneous labor were anticipated, I ran regressions of the number of births after spontaneous labor on days in-between holidays. I found a significant negative result, which suggests that either convenience or risk-aversion motivations were playing a role. Then, I verified that the results were robust to the restricted sample of public funded hospital. Hence, I attributed the results to physicians’ motivations. Finally, I further restricted the sample to low-risk births and re-estimated the results. Having found out that the findings were driven by low-risk deliveries provided further evidence that births were being anticipated due to physicians’ convenience effect. Moreover, I ran the same regressions for the days preceding the leisure period and verified an increase of cesarean sections, which reinforces the previous results that births that would otherwise have happened after spontaneous labor occurred instead by the scheduling of cesarean sections.

 

References

[1] http://data.un.org/Data.aspx?q=cesarean&d=SOWC&f=inID%3a219

[2] CD rates extracted from the Brazilian National System of Information on Birth Records (Datasus/SINASC).

Borra, C., González, L.; Sevilla, A. Birth timing and neonatal health. The American Economic Review, v. 106, n. 5, p. 329-332, 2016.

Borra, C., González, L.; Sevilla, A. The impact of scheduling birth early on infant health. Working Paper presented at Tinbergen Institute, 2016.

Gans, J.S.; Leigh, A. Born on the first of July: An (un)natural experiment in birth timing. Journal of Public Economics, v. 93, n. 1-2, p. 246-263, 2009.

Dickert-Conlin, S.; Chandra A. Taxes and the timing of births. Journal of Political Economy, v. 107, n. 1, p. 161-177, 1999.

Fabbri, D.; Castaldini, I.; Monfardini, C.; Protonotari, A., Caesarean section and the manipulation of exact delivery time. HEDG working paper n.15, University of York, 2015.

Gans, J.S.; Leigh, A.; Varganova, E. Minding the shop: The case of obstetrics conferences. Social Science and Medicine, v. 6, n. 7, p. 1458-1465, 2007.

Brown, H.S. Physician demand for leisure: Implications for cesarean section rates. Journal of Health Economics, v.15, p. 233-242, 1996.

Lefevre, M. Physician induced demand for C-sections: does the convenience incentive matter? HEDG working paper n. 14, University of York, 2014.

What’s behind a number? Information systems and the road to universal health coverage

Adam Aten ’13 (Health Economics and Policy)alumni is a researcher at The Brookings Institution focusing on evidence development and biomedical innovation within the Center for Health Policy. Prior to joining Brookings, he was a civil servant at the U.S. Department of Health and Human Services developing policy expertise in health insurance for low-income populations, digital information systems and information governance, and cost effectiveness of public health programs.

This week he has written a post for the World Bank’s Investing in Health blog on universal health coverage (UHC). Here are some excerpts:

Decision-makers now have many tools at their disposal to analyze trends and take strategic decisions – increasingly in real-time – thanks to the rapid diffusion and adoption of information and communications technologies. New approaches to collect, manage and analyze data to improve health systems learning, such as how the poor are benefitting (or not) from health care services, are helping to ensure the right care is given to the right patient at the right time, every time – the goal of UHC.

It is relatively easy to agree on public health targets, but actual progress requires a management structure supported by dashboards that can allow monitoring of intermediate outcomes in real-time.

Read the full post on the World Bank’s health blog: What’s behind a number? Information systems and the road to universal health coverage

For those interested in current health policy topics, Mr. Aten is also a chapter co-author of the recently published WB/PAHO book, Toward Universal Health Coverage and Equity in Latin America and the Caribbean : Evidence from Selected Countries

Effectiveness of primary care ValCRÒNIC teleHealth program

Editor’s note: This post is part of a series showcasing Barcelona GSE master projects by students in the Class of 2014. The project is a required component of every master program.


Effectiveness of primary care ValCRÒNIC teleHealth program: outcome findings on mortality and healthcare service consumption in patients with high-risk chronic conditions. A cohort study with matched controls in Valencia community, Spain.

Author:

Sherman Kong

Master Program:

Health Economics and Policy

Paper Abstract:

We analyze the mortality and hospitalization level of 512 patients enrolled in the ValCRÒNIC teleHealth program in Valencia public health region with a matched control of 1023 patients with same risk profiles. We obtain medical records of patient sample for 12 months before start of trial and follow-up on consumption level from hospital and primary care facilities for 12 months during program. We observed utilization level before and after trial and found an increase in primary care nurse and home care visitations. We used logistic and zero-inflated Poisson models to estimate effect of program enrollment to intense acute hospital use, deaths and avoidable hospitalization rate. We found insignificant benefits to reducing mortality and intense acute hospital use.

Author’s note: This paper is a work in progress, pending revision of results.

Read the full paper or view slides below:

A bullet a day keeps the doctor away: the effect of war over health expenditure

Editor’s note: This post is part of a series showcasing Barcelona GSE master projects by students in the Class of 2014. The project is a required component of every master program.


A bullet a day keeps the doctor away: the effect of war over health expenditure

Authors:

Rita Abdel Sater and María José Ospina Fadul

Master Program:

Health Economics and Policy

Project Summary:

Although there is an ongoing debate on how much an increase in health expenditure would actually improve the health condition of its population (as this relation also depends in factor such as efficiency), the truth is that the level of expenditure in many developing countries is still under the basic needed level suggested by the World Health Organization. Furthermore, it has become clear that the public budget plays a fundamental role in the financing of a health system: in fact, the public expenditure on health should increase by 5% on average in these countries to provide the basic conditions in order to accomplish the millennium goals. However, the struggle to achieve acceptable levels of health expenditure has faced several obstacles. This article intends to determine if war is in fact one of them.

Within this context, this article tries to determine the effect of war over health expenditure level and composition, particularly in terms of the public budget participation. So far several articles have examined the effects of war over public health but none have determined the effect that it has over the levels and the composition of the health expenditure. Additionally, this article contributes to the existent literature in the sense that it classifies conflicts as high or low intensity and discerners between these two when determining their effect over health expenditure.

We used panel data on the 27 countries that had both episodes of war and episodes of peace in the period that goes from 1995 to 2008. We applied clustering techniques to classify these conflicts as high or low intensity and after this we used Arellano-Bond estimators to determine the effect of war over the level and composition of health expenditure.

Sample and intensity classification
Sample and intensity classification

 

Surprisingly, we found that low intensity wars have a negative and statistically significant effect over health expenditure while there seems to be no effect when there is a high intensity war. Moreover, we found that public expenditure in health increases when there is a high intensity war while there is no change in the composition when there is a low intensity war. These results suggest that when there is a high intensity conflict the decrease in private investment in health is compensated by an increase in public expenditure, while in countries exposed to low intensity wars the decrease in private expenditure is not equalized by an increase in public expenditure.

Finally, in terms of the compositions of this expenditure we found that the public expenditure in health as a percentage of total public expenditure stays the same in countries exposed to high intensity conflicts while it decreases in countries with low intensity conflicts. These results, in combinations with the former, provide empirical evidence to support Peacock and Wiseman’s expenditure displacement theory according to which public expenditure increases during times of crisis.

 

Healthcare: Are we demanding bad goods?

Details is a trendy American style magazine showcasing movie stars and the latest in everything fashionable and chic. So when they name a health economist as one of the 50 most influential men under 45 it should raise a well-groomed eyebrow (or two).

Submitted by Scott Robertson, Master Program in Health Economics and Policy

Details is a trendy American style magazine showcasing movie stars and the latest in everything fashionable and chic.  So when they name a health economist as one of the 50 most influential men under 45 it should raise a well-groomed eyebrow (or two).

As if that doesn’t give him enough credibility, David Cutler is one of the most-cited minds in modern health economics with a persistent focus on driving the discussion of quality.  Modern Healthcare recently said he is one of the 30 people likely to have a significant impact on the future of healthcare.  Plus he’s a professor at MIT and was an advisor to U.S. Presidents Clinton and Obama.

In short: Cutler is a big deal.  If the UPF, and ostensibly the Barcelona GSE want to prove the profile of their economics program, attracting this star to inaugurate the academic year could be an indicator of success.  The auditorium filled to standing-room only shows the opportunity was not lost on students either.

UPF Economics Department
David Cutler delivers the UPF Economics Department opening lecture in October 2012. Photo credit: UPF

Continue reading “Healthcare: Are we demanding bad goods?”