Greg L. Stoddart

A re-examination of the meaning and importance of supplier-induced demand.

Despite twenty years of work on supplier-induced demand (SID) there has been little discussion or investigation of how inducement affects the health of patients. We develop a conceptual framework for SID which includes the clinical effectiveness of the health services utilized as well as the effectiveness of the agency relationship between the physician and the patient. The framework is used to identify several conceptually distinct types of utilization--each with its own policy implications--which have been intermingled in the SID literature. After examining each type of utilization, we conclude that a continued focus by health economists on the phenomenon of inducement (even within an extended conceptual framework) may be too limited for the development of policies regarding health service utilization.

Guidelines for the clinical and economic evaluation of health care technologies

The health care system is routinely confronted with promising new technologies. In the past, most new technologies have been integrated into clinical practice without a rigorous demonstration of their effectiveness or efficiency. In order to provide a more rational approach to the adoption and utilization of health technology a comprehensive set of guidelines for both clinical and economic evaluation is proposed. While conceived of as an ideal that is unlikely to be universally met in practice, it is argued that decision making can be improved by striving towards this goal. The clinical guidelines stress the advantages of subjecting major new technologies to randomized controlled trials and insisting upon a demonstration of patient benefit in the application of diagnostic technologies. The economic guidelines stress comparisons with relevant alternative uses of the resources and the assessment of the impact on the quality of life. While application of the guidelines will produce rigorous and useful evidence, the final decisions concerning the allocation of health care resources must rest fundamentally on social value judgements and not solely, or even primarily, on informed expert opinion.

Economic analysis and clinical trials

Given the increasing interest in the economics of health care, the incorporation of economic analysis in clinical trials is more often being considered, both by medical researchers and by research funding bodies. This article proposes criteria for judging the appropriateness of including economic analysis in a given trial, suggests how that analysis could be phased in order to minimize the work involved, and discusses the wider implications for medical research of more frequent attention to economic concepts.

Health Economics: An Introduction for Clinicians

Economic issues have had a growing importance in the health care field as the sectors share of the gross national product has risen. Clinicians are under increasing pressure to adopt more cost-effective treatment practices as a result of initiatives being taken by the major third-party payers, government, and business. However, recent publications suggest that there are some misconceptions about economics in health care and the extent to which it is in conflict with good clinical practice. To provide a foundation for the understanding of this field by clinicians, we have outlined several basic notions of health economics.

Unemployment and health: contextual-level influences on the production of health in populations

While there is a large and growing literature investigating the relationship between an individuals employment status and health, considerably less is known about the effect on this relationship of the context in which unemployment occurs. The aim of this paper is test for the presence and nature of contextual effects in the ways unemployment and health are related, based on a simple underlying model of stress, social support and health using a large population health survey. An individuals health can be influenced directly by own exposure to unemployment and by exposure to unemployment in the individuals context, and indirectly by the effects these exposures have on the relationship between other health determinants and health. Based on this conceptualization an empirical model, using multi-level analysis, is formulated that identifies a five-stage process for exploring these complex pathways through which unemployment affects health. Results showed that the association of individual unemployment with perceived health is statistically significant. Nevertheless, this study did not provide evidence to support the hypothesis that the association of unemployment with health status depends upon whether the experience of unemployment is shared with people living in the same environment. Above all, this study demonstrates both the subtlety and complexity of individual- and contextual-level influences on the health of individuals. Our results caution against simplistic interpretations of the unemployment-health relationship and reinforce the importance of using multi-level statistical methods for investigation of it.

Payments for care at private for-profit and private not-for-profit hospitals: a systematic review and meta-analysis

Background: It has been shown that patients cared for at private for-profit hospitals have higher risk-adjusted mortality rates than those cared for at private not-for-profit hospitals. Uncertainty remains, however, about the economic implications of these forms of health care delivery. Since some policy-makers might still consider for-profit health care if expenditure savings were sufficiently large, we undertook a systematic review and meta-analysis to compare payments for care at private for-profit and private not-for-profit hospitals. Methods: We used 6 search strategies to identify published and unpublished observational studies that directly compared the payments for care at private for-profit and private not-for-profit hospitals. We masked the study results before teams of 2 reviewers independently evaluated the eligibility of all studies. We confirmed data or obtained additional data from all but 1 author. For each study, we calculated the payments for care at private for-profit hospitals relative to private not-for-profit hospitals and pooled the results using a random effects model. Results: Eight observational studies, involving more than 350 000 patients altogether and a median of 324 hospitals each, fulfilled our eligibility criteria. In 5 of 6 studies showing higher payments for care at private for-profit hospitals, the difference was statistically significant; in 1 of 2 studies showing higher payments for care at private not-for-profit hospitals, the difference was statistically significant. The pooled estimate demonstrated that private for-profit hospitals were associated with higher payments for care (relative payments for care 1.19, 95% confidence interval 1.07–1.33, p = 0.001). Interpretation: Private for-profit hospitals result in higher payments for care than private not-for-profit hospitals. Evidence strongly supports a policy of not-for-profit health care delivery at the hospital level.

Income Inequality, Household Income, and Health Status in Canada: A Prospective Cohort Study

OBJECTIVES This study sought to determine whether income inequality, household income, and their interaction are associated with health status. METHODS Income inequality and area income measures were linked to data on household income and individual characteristics from the 1994 Canadian National Population Health Survey and to data on self-reported health status from the 1994, 1996, and 1998 survey waves. RESULTS Income inequality was not associated with health status. Low household income was consistently associated with poor health. The combination of low household income and residence in a metropolitan area with less income inequality was associated with poorer health status than was residence in an area with more income inequality. CONCLUSIONS Household income, but not income inequality, appears to explain some of the differences in health status among Canadians.

What determines health? To where should we shift resources? Attitudes towards the determinants of health among multiple stakeholder groups in Prince Edward Island, Canada

The population health perspective has become significant in academic and policy discourse. The purpose of this paper is to assess its significance among health care practitioners and administrators as well as the general public. Respondents in Prince Edward Island, Canada were asked to rank the broad determinants of health and comment on to where resources should be shifted to improve the health of the population. Important variations are noted between the groups with family physicians and front-line staff being similar in perceptions to the general public on most determinants than other groups. The paper concludes with discussion on the relevance of the findings for population health research and health policy.

Assessment of health producing measures across different sectors

To date, economic evaluation of health producing measures has concentrated on health care treatments and technologies. However, it is increasingly being recognized that many health promoting measures are in other sectors, such as education, safety programmes, income maintenance and improvements to the physical environment. This paper examines the principles of assessing health promoting measures across different sectors and reviews current practice. Such assessments pose methodological challenges not often encountered in health care evaluations, in framing the evaluation, in identifying, measuring and valuing costs and benefits, and in interpreting results. It is concluded that intersectoral economic evaluation is unlikely to provide a complete technical solution to the problem of allocating resources within and between sectors of the economy, but that the application of an economic way of thinking could yield benefits. Five proposals are made for taking matters forward. These include undertaking more pilot studies, insisting on a minimum data set to justify spending plans and increasing the incentives for intersectoral collaboration.

Potential savings from the adoption of nurse practitioner technology in the Canadian health care system

An investigation is reported of the potential for reducing aggregate medical costs by the introduction of nurse practitioners into the Canadian health care system to an extent consistent with demonstrated safety and effectiveness. A cost model is developed for this purpose and estimates of its parameters are provided. The cost model is coupled with a demographic projection model and potential cost reductions are simulated over the period 1980-2050, under alternative assumptions. Results suggest that savings could have been in the range 10-15% in 1980 for medical services as a whole, and 16-24% for ambulatory services. The estimated savings percentages are quite insensitive to projected changes in the age structure of the Canadian population.