infonet-economy

The book provides graduate students and researchers with an up-to-date survey of statistical and econometric techniques for the analysis of count data, with a focus on conditional distribution models. Proper count data probability models allow for rich inferences, both with respect to the stochastic count process that generated the data, and with respect to predicting the distribution of outcomes. The book starts with a presentation of the benchmark Poisson regression model. Alternative models address unobserved heterogeneity, state dependence, selectivity, endogeneity, underreporting, and clustered sampling. Testing and estimation is discussed from frequentist and Bayesian perspectives. Finally, applications are reviewed in fields such as economics, marketing, sociology, demography, and health sciences. The fifth edition contains several new topics, including copula functions, Poisson regression for non-counts, additional semi-parametric methods, and discrete factor models. Other sections have been reorganized, rewritten, and extended.

The objective of this text is to develop the theory of social health insurance (SHI; the expression used especially in the United States is “public health insurance,” which will be viewed as one variant of SHI here). While a good deal is known about the demand and supply of private insurance, the theoretical basis of SHI is much more fragile. Specifically, on the demand side, what are the reasons for social (or public) health insurance to exist, even to dominate private health insurance in most developed countries? With regard to supply, what do we know about the objectives and constraints of SHI managers? Finally, economists can predict properties of the equilibrium characterizing private health insurance (PHI). However, what is the likely outcome (“performance”) of SHI? At the normative level, one may ask, Should the balance be shifted from SHI to PHI?

This paper revisits the debate on the red herring, viz. the claim that population ageing will not have a significant impact on health care expenditure (HCE). It decomposes HCE into seven components, includes both survivors and deceased individuals, and estimates a two-part model of the demand for health care services, using a large Swiss data set for 1999. It finds no or weak age effects on HCE for the components of HCE when proximity to death is controlled for, and points to differences between users and non-users of long-term care (LTC). For deceased non-users of LTC services, a falling age curve for all components of HCE except for inpatient care is observed, while survivors show a weak age effect in ambulatory and inpatient care once proximity to death is controlled for. As to surviving users of LTC services, their probability of incurring LTC expenses markedly increases in old age, while most of the components of their conditional HCE show a decreasing age profile. Thus, a school of red herrings can be claimed to exist-with the possible exception of LTC, where ageing might matter regardless of proximity to death.

DEUTSCH: Gesundheitsleistungen erinnern an eine Sisyphusarbeit. Um die Analogie zu begreifen,
betrachte man eine Entscheidung, mehr Mittel für Gesundheit zur Verfügung zu stellen.
Dies führt zu einer höheren Zahl von Überlebenden, die eine Mehrnachfrage nach Gesundheitsleistungen ausüben. Die Aufwendungen für die Gesundheit steigen, und der Kreis schließt sich. Die Zielsetzung dieses Beitrages besteht darin, frühere Untersuchungen zu verbessern, welche den Nachweis eines Sisyphus-Syndroms in den Industrieländern
nicht erbringen konnten. Dieses Mal gibt es Hinweise auf ein solches Syndrom, das erst nach 10 Jahren seine Virulenz verliert.

ENGLISH: Health care may be similar to the work Sisyphus, a Greek hero who was condemned by the Gods to push a big rock up a hill only to see it slip out of his hands before making it to the top. To see why there my be a Sisyphus syndrome in health, consider an initial decision to devote more resources to health. The likely consequence is an increased number of survivors, who exert political pressure in favor of even more health care. If they succeed, the cycle goes into its next round and might even prove explosive. Earlier research failed to identify this political feedback in industrial countries. Using improved model formulation, data, and econometric methodology, this contribution does find evidence suggesting the existence of a Sisyphus syndrome. However, the good news is that the cycle seems to be dampened rather than explosive.

In this study, Markowitz mean-variance portfolio theory is applied to electricity-generating technologies of the United States and Switzerland. Both an investor (focused on changes in return) and a current user (focused on return in levels) view are adopted to determine efficient frontiers of electricity generation technologies in terms of expected return and risk as of 2003. Since shocks in generation costs per kWh (the inverse of returns) are correlated, Seemingly Unrelated Regression Estimation (SURE) is used to filter out the systematic components of the covariance matrix. Results suggest that risk-averse investors and risk-neutral current users in the United States are considerably closer to their efficiency frontier than their Swiss counterparts. This may be due to earlier and more thorough deregulation of electricity markets in the United States.

In this contribution, portfolio theory is applied to power technologies of the United States and Switzerland. A current user view is adopted to determine the efficient frontier of generation technologies in terms of expected return and risk. Since shocks in generation costs per kWh (the inverse of expected returns) are correlated, seemingly unrelated regression estimation (SURE) is applied to filter out the systematic components of the covariance matrix. Since some of the portfolios of particular interest (minimum variance, maximum expected return) call for a high share of one technology, security of supply becomes an issue. Shannon-Wiener and Herfindahl-Hirschman indices
are calculated to see the trade-off between efficiency and security of supply. Results suggest that riskaverse
utilities (and ultimately, consumers) in the United States would have gained from adopting a feasible portfolio containing more coal, gas and oil at a price of a somewhat reduced security of supply. In the case of Switzerland, the realistic portfolio consists of nuclear, storage hydro, run of river and solar, with shares identical to those of the actual portfolio in 2003. Therefore, the current mix of
Swiss generating technologies in Switzerland may be deemed efficient.

This chapter describes how economic theory (and experience) of the demand for insurance predicts that risk-averse individuals purchase coverage if available at so-called fair premiums, which amount to no more than the expected value of the loss to be covered. In the case of health, additional fi nancial means (provided by coverage) may be even more important when a person is ill than when he or she is healthy. If so, demand for health insurance, even in
low-income countries, could be high.

Every insurer needs to charge a “loading” for administrative expense, compensation for risk, and profi t (in the case of a public insurer, the loading amounts
to the effi ciency loss caused by taxation needed to finance the insurer’s operations). Therefore, the behavior of health insurance suppliers becomes of crucial importance. The loading contained in their premiums (or contributions) is just one of several supply dimensions, which include comprehensiveness of benefits, amount of risk selection effort, degree of vertical integration with health
services providers, and degree of seller concentration in the market. This chapter addresses these dimensions of supply and the powerful effect on them of moral hazard (the tendency of consumers to underinvest in prevention, choose
the most intensive treatment alternative, and push for application of the latest medical technology). In the presence of marked moral hazard effects, health
insurers are well advised to include only a few items in their benefi t list, because each of these items tends to increase in price, quantity, and hence expenditure. Moreover, premium regulation induces risk selection efforts. If allowed to charge contributions according to true risk, health insurers will set premiums such that
high and low risks yield the same contribution margin on expectation. In that event, risk selection (“cream skimming”) is not worthwhile. These phenomena hold not only for private health insurance in low-income countries but also for community-based and public health insurance.

Because little empirical data on the supply of health insurance exist, case studies, mainly of low-income countries, are used to illustrate theoretical predictions.
On the whole, the limited empirical evidence suggests that the theory developed in this chapter may be suffi ciently descriptive to provide some guidelines for policy.

This paper applies the five modified standard criteria generally used in economics for assessing system performances to gauge the contribution of Managed Care to the performance of three health care systems, viz. Germany, the Netherlands and the United States. The maximum contribution of Managed Care to the performance of the health care system is found for the United States and the Netherlands. The Health Maintenance Organization (U.S.) and the gatekeeper model (the Netherlands) score 10 and 9 out of 15 points, respectively, importantly due to a market-oriented environment. By way of contrast, the so-called ‘structured treatment programs’ of the German health care system score only 4 out of 15 points. Not only the more tightly regulated environment but also the lack of consideration of consumer preferences and of incentives for service providers to participate in the programs contributed to poor performance.