The impact of healthcare spending on health outcomes: A meta-regression analysis

Do expenditures on public health reduce preventable mortality in the long run? Evidence from the Canadian provinces

BACKGROUND

Investments in public health - prevention of illnesses, and promotion, surveillance, and protection of population health - may improve population health, however, effects may only be observed over a long period of time.

OBJECTIVE

To investigate the potential long-run relationship between expenditures on public health and avoidable mortality from preventable causes.

METHODS

We focused on the country spending the most on public health in the OECD, Canada. We constructed a longitudinal dataset on mortality, health care expenditures and socio-demographic information covering years 1979-2017 for the ten Canadian provinces. We estimated error correction models for panel data to disentangle short-from long-run relationships between expenditures on public health and avoidable mortality from preventable causes. We further explored some specific causes of mortality to understand potential drivers. For comparison, we also estimated the short-run relationship between curative expenditures and avoidable mortality from treatable causes.

RESULTS

We find evidence of a long-run relationship between expenditures on public health and preventable mortality, and no consistent short-run associations between these two variables. Findings suggest that a 1% increase in expenditures on public health could lead to 0.22% decrease in preventable mortality. Reductions in preventable mortality are greater for males (-0.29%) compared to females (-0.09%). These results are robust to different specifications. Reductions in some cancer and cardiovascular deaths are among the probable drivers of this overall decrease. By contrast, we do not find evidence of a consistent short-run relationship between curative expenditures and treatable mortality, except for males.

CONCLUSION

This study supports the argument that expenditures on public health reap health benefits primarily in the long run, which, in this case, represents a reduction in avoidable mortality from preventable causes. Reducing public health expenditures on the premise that they have no immediate measurable benefits might thus harm population health outcomes in the long run.

Systematic review of the impact of health care expenditure on health outcome measures: implications for cost-effectiveness thresholds

OBJECTIVE

Empirical estimates of the impact of healthcare expenditure on health outcome measures may inform the cost-effectiveness threshold (CET) for guiding funding decisions. This study aims to systematically review studies that estimated this, summarize and compare the estimates by country income level.

METHODS

We searched PubMed, Scopus, York Research database, and [anonymized] for Reviews and Dissemination database from inception to 1 August 2023. For inclusion, a study had to be an original article, estimating the impact of healthcare expenditure on health outcome measures at a country level, and presented estimates, in terms of cost per quality-adjusted life year (QALY) or disability-adjusted life year (DALY).

RESULTS

We included 18 studies with 385 estimates. The median (range) estimates were PPP$ 11,224 (PPP$ 223 - PPP$ 288,816) per QALY gained and PPP$ 5,963 (PPP$ 71 - PPP$ 165,629) per DALY averted. As ratios of Gross Domestic Product per capita (GDPPC), these estimates were 0.376 (0.041-182.840) and 0.318 (0.004-37.315) times of GDPPC, respectively.

CONCLUSIONS

The commonly used CET of GDPPC seems to be too high for all countries, but especially low-to-middle-income countries where the potential health losses from misallocation of the same money are greater.

REGISTRATION

The review protocol was published and registered in PROSPERO (CRD42020147276).

A global comparative study of wealth-pain gradients: Investigating individual- and country-level associations

Pain is a significant yet underappreciated dimension of population health. Its associations with individual- and country-level wealth are not well characterized using global data. We estimate both individual- and country-level wealth inequalities in pain in 51 countries by combining data from the World Health Organization's World Health Survey with country-level contextual data. Our research concentrates on three questions: 1) Are inequalities in pain by individual-level wealth observed in countries worldwide? 2) Does country-level wealth also relate to pain prevalence? 3) Can variations in pain reporting also be explained by country-level contextual factors, such as income inequality? Analytical steps include logistic regressions conducted for separate countries, and multilevel models with random wealth slopes and resultant predicted probabilities using a dataset that pools information across countries. Findings show individual-level wealth negatively predicts pain almost universally, but the association strength differs across countries. Country-level contextual factors do not explain away these associations. Pain is generally less prevalent in wealthier countries, but the exact nature of the association between country-level wealth and pain depends on the moderating influence of country-level income inequality, measured by the Gini index. The lower the income inequality, the more likely it is that poor countries experience the highest and rich countries the lowest prevalence of pain. In contrast, the higher the income inequality, the more nonlinear the association between country-level wealth and pain reporting such that the highest prevalence is seen in highly nonegalitarian middle-income countries. Our findings help to characterize the global distribution of pain and pain inequalities, and to identify national-level factors that shape pain inequalities.

[Health expenditure and health outcomes in Latin America and the CaribbeanGastos em saúde e resultados de saúde na América Latina e no Caribe]

Objective

To determine the effect of public and private health expenditure on health outcomes in Latin American and Caribbean countries from 2000 to 2019.

Methods

A health production function was used, wherein life expectancy at birth and infant mortality rate were considered as indicators of health outcomes. Panel data econometrics were applied, using data from a 33-country sample for the period from 2000 to 2019.

Results

According to estimates, a 1% increase in public health expenditure is associated with a 0.019% increase in life expectancy, and a 1% increase in private health expenditure increases life expectancy by 0.023%. At the same time, a 1% increase in public health expenditure reduces the infant mortality rate by -0.168%, whereas the effect of private health expenditure on infant mortality is not statistically significant.

Conclusions

The results provide evidence of the effect of public health expenditure in reducing infant mortality and increasing life expectancy, while private health expenditure has a positive effect only on the latter metric. The findings have important political implications for the countries of the Region in the post-pandemic context of limited fiscal space.

Quantifying the causal impact of biological risk factors on healthcare costs

Understanding the causal impact that clinical risk factors have on healthcare-related costs is critical to evaluate healthcare interventions. Here, we used a genetically-informed design, Mendelian Randomization (MR), to infer the causal impact of 15 risk factors on annual total healthcare costs. We calculated healthcare costs for 373,160 participants from the FinnGen Study and replicated our results in 323,774 individuals from the United Kingdom and Netherlands. Robust causal effects were observed for waist circumference (WC), adult body mass index, and systolic blood pressure, in which a standard deviation increase corresponded to 22.78% [95% CI: 18.75-26.95], 13.64% [10.26-17.12], and 13.08% [8.84-17.48] increased healthcare costs, respectively. A lack of causal effects was observed for certain clinically relevant biomarkers, such as albumin, C-reactive protein, and vitamin D. Our results indicated that increased WC is a major contributor to annual total healthcare costs and more attention may be given to WC screening, surveillance, and mitigation.

Health insurance, endogenous medical progress, health expenditure growth, and welfare

We study the impact of health insurance expansion on medical spending, longevity and welfare in an OLG economy in which individuals purchase health care to lower mortality and medical progress is profit-driven. Three sectors are considered: final goods production; a health care sector, selling medical services to individuals; and an R&D sector, selling increasingly effective medical technology to the health care sector. We calibrate the model to the development of the US economy/health care system from 1965 to 2005 and study numerically the impact of the insurance expansion. We find that more extensive health insurance accounts for a large share of the rise in US health spending but also boosts the rate of medical progress. A welfare analysis shows that while the subsidization of health care through health insurance creates excessive health care spending, the gains in life expectancy brought about by induced medical progress more than compensate for this.

Health sector funding in Ghana: The effect of IMF conditionalities

Purpose

This paper examines the factors influencing government health spending in Ghana with a particular focus on IMF conditionalities.

Design/methodology/approach

We estimate four simultaneous equations using three-stage least squares (3SLS) estimator. The data used cover the period 1980-2014.

Findings

After controlling for some other factors affecting government health spending, the results show that democracy and foreign aid significantly increase public sector health funding. IMF programs with its associated conditionalities insignificantly reduce public health spending Ghana.

Originality/value

This study provides important evidence on the impact of IMF conditionalities on health sector funding in Ghana. The results will serve as guide to policymakers when negotiating for IMF credit so that such arrangements do not obstruct health sector funding.

The impact of ambulatory care spending, continuity and processes of care on ambulatory care sensitive hospitalizations

Ambulatory care sensitive hospitalizations are widely considered as important measures of access to as well as quality and performance of primary care. In our study, we investigate the impact of spending, process quality and continuity of care in the ambulatory care sector on ambulatory care sensitive hospitalizations in patients with type 2 diabetes. We used observational data from Germany's major association of insurance companies from 2012 to 2014 with 55,924 patients, as well as data from additional sources. We conducted negative binomial regression analyses with random effects at the district level. To control for potential endogeneity of spending and physician density in the ambulatory care sector, we used an instrumental variable approach. We controlled for a wide range of covariates, such as age, sex, and comorbidities. The results of our analysis suggest that spending in the ambulatory care sector has weak negative effects on ambulatory care sensitive hospitalizations. We also found that continuity of care was negatively associated with hospital admissions. Patients with type 2 diabetes are at increased risk of hospitalization resulting from ambulatory care sensitive conditions. Our study provides some evidence that increased spending and improved continuity of care while controlling for process quality in the ambulatory care sector may be effective ways to reduce the rate of potentially avoidable hospitalizations among patients with type 2 diabetes.

Estimating the Health Effects of Expansions in Health Expenditure in Indonesia: A Dynamic Panel Data Approach

BACKGROUND

The marginal productivity of a country's healthcare system refers to the health gains produced per unit change in the level of spending. In budget-constrained settings, this metric reflects the opportunity cost, in terms of health gains forgone, of committing additional or existing resources to alternative uses within the healthcare system. It can therefore assist in evidence-based decisions on whether different interventions represent good value for money.

OBJECTIVE

The aim of this paper was to estimate the marginal productivity of the Indonesian healthcare system using subnational data, and to use this to inform health opportunity costs in the country.

METHODS

We define a dynamic health production function to model the stream of effects of current and prior public health spending decisions on population under-five mortality. To estimate the model, we use data from the 33 Indonesian provinces for the 2004-2012 period. The estimated elasticity is then translated into gains in terms of cost per DALY (disability-adjusted life-year) averted. We use dynamic panel data methods to address potential endogeneity issues in the model.

RESULTS

Our base-case estimates suggest that a 1% expansion in the level of health spending reduces under-five mortality by 0.38% (95% CI 0.00-0.76), which translates into a cost of averting one DALY of $235 (2019 US$).

CONCLUSION

With Indonesia aiming for universal health coverage, our results support these efforts by highlighting the associated benefits resulting from increases in public health expenditure and have the potential to inform the decision-making process about a suitable locally relevant cost-effectiveness threshold.

Relationship between health spending, life expectancy and renewable energy in China: A new evidence from the VECM approach

There has been a growing trend in health spending and renewable energy consumption in China over the past few decades, which has positive implications for health outcomes, such as life expectancy. Therefore, the main objective of this study is to empirically analyze the impact of health expenditures and renewable energy on life expectancy in China. We used the time series data from 2000Q1 to 2020Q4 and applied the VECM approach for the data analysis. The results of this study suggest a long run association between health spending, life expectancy and renewable energy. The increase in health spending improves life expectancy, while renewable energy consumption also positively affects life expectancy in China. Therefore, the government should allocate sufficient funding to the health sector in order to attain higher life expectancy in the country. In addition, the government should also provide incentives for the consumption and production of renewable energy, which could help to achieve the sustainable development goal and life expectancy.

Supply-Side Cost-Effectiveness Thresholds: Questions for Evidence-Based Policy

There is growing interest in cost-effectiveness thresholds as a tool to inform resource allocation decisions in health care. Studies from several countries have sought to estimate health system opportunity costs, which supply-side cost-effectiveness thresholds are intended to represent. In this paper, we consider the role of empirical estimates of supply-side thresholds in policy-making. Recent studies estimate the cost per unit of health based on average displacement or outcome elasticity. We distinguish the types of point estimates reported in empirical work, including marginal productivity, average displacement, and outcome elasticity. Using this classification, we summarise the limitations of current approaches to threshold estimation in terms of theory, methods, and data. We highlight the questions that arise from alternative interpretations of thresholds and provide recommendations to policymakers seeking to use a supply-side threshold where the evidence base is emerging or incomplete. We recommend that: (1) policymakers must clearly define the scope of the application of a threshold, and the theoretical basis for empirical estimates should be consistent with that scope; (2) a process for the assessment of new evidence and for determining changes in the threshold to be applied in policy-making should be created; (3) decision-making processes should retain flexibility in the application of a threshold; and (4) policymakers should provide support for decision-makers relating to the use of thresholds and the implementation of decisions stemming from their application.

Health expenditures and causa mortis: an investigation on municipalities of the State of Paraná, Brazil

The Brazilian government shares the responsibility of financing public health among federal, state, and municipal levels. Health expenditures are thus uneven across the country and cannot contribute equally to health outcomes across disease categories. This study aims to identify how the health expenditures of municipalities affect the mortality rate in the state of Paraná by causa mortis. We considered years of life lost for each municipality, the chapters of the International Classification of Diseases (10th revision), and the elasticity of this measure in relation to public health expenditure. Considering the possibility of endogeneity, this study follows the instrumental variable approach in a panel of generalized method of moments - instrumental variable (GMM-IV) with fixed effects. Our results show that a 1% increase in health expenditure could decrease the average number of years lost specifically for some causes from 0.176% to 1.56% at the municipal level. These findings could elucidate policy perspective within state finance.

Impacts of Economic Freedom, Health, and Social Expenditures on Well-Being Measured by the Better Life Index in OECD Countries

The Organization for Economic Co-operation and Development (OECD) has developed the Better Life Index (BLI), which is a multidimensional approach to well-being. This study aims to investigate the impact of health and social expenditures as well as the economic freedom index on well-being measured by BLI among 34 OECD countries for 2013-2017 period. We estimated panel models to observe the social and health expenditure effects according to their sources and the overall impact of economic changes among countries. We find that public and private social expenditures have a positive and statistically significant impact on BLI at 1% significance level. Additionally, whereas public health expenditure has a positive and statistically significant impact on BLI at 1% significance level, the effects of private health expenditure are statistically significant at 10% significance level. The economic freedom index has a positive and statistically significant impact on BLI in both models. Both social and health expenditures should take a prominent position in policy debates for a better life.

Fiscal Decentralization, Public Health Expenditure and Public Health-Evidence From China

Since the beginning of the COVID-19 outbreak and the launch of the "Healthy China 2030" strategy in 2019, public health has become a relevant topic of discussion both within and outside China. The provision of public health services, which is determined by public health expenditure, is critical to the regional public health sector. Fiscal decentralization provides local governments with more financial freedom, which may result in changes to public health spending; thus, fiscal decentralization may influence public health at the regional level. In order to study the effects of fiscal decentralization on local public health expenditure and local public health levels, we applied a two-way fixed effect model as well as threshold regression and intermediate effect models to 2008-2019 panel data from China's 30 mainland provinces as well as from four municipalities and autonomous regions to study the effects of fiscal decentralization on public health. The study found that fiscal decentralization has a positive effect on increasing public health expenditure. Moreover, fiscal decentralization can promote improvements in regional public health by increasing public health expenditure and by improving the availability of regional medical public service resources. In addition, fiscal decentralization has a non-linear effect on public health.

The effect of health on economic growth: a meta-regression analysis

The main objective of this study is to examine the effect of health on economic growth based on 719 estimates obtained from 64 studies from all over the world. We find evidence of a publication bias towards a positive estimated effect of health on economic growth. After accounting for heterogeneity of the estimates, we show that health has a genuine positive effect on economic growth. Less developed countries seem to enjoy a higher effect of health on growth driven by the ongoing economic-demographic transition in those countries. The variation of the health effect on economic growth is also influenced by the available data, estimation procedure, model specification, publication channel, and country characteristics in each study. Studies that do not account for endogeneity seem to create an upward bias. Studies with more comprehensive variables seem to increase the estimated effect of health on growth. A higher number of years of compulsory education, longer working experience, and more favourable environmental conditions also increase the effect size. Overall, our results confirm the key role of the health factor in explaining economic growth across countries.

Opioid mortality, public health care expenditures, and cross-national homicide rates: findings from 25 OECD countries, 2000-2017

PURPOSE

This study assesses the relationship between opioid mortality and homicide rates across 25 member countries of the organization for economic co-operation and development (OECD) over time and investigates the role of country-level public health expenditures in this relationship.

METHODS

Fixed effects linear regression is used to assess the longitudinal association between opioid mortality and cross-national homicide rates in 25 OECD countries between 2000 and 2017. Moderation analyses are conducted to assess the interaction between opioid mortality rates and public health expenditures per capita.

RESULTS

Study findings revealed a positive bivariate association between opioid mortality and homicide rates. However, this association became null after controlling for public health expenditures. Moderation analyses revealed that there is a strong positive association between opioid mortality and homicide rates when public health expenditures are low, which becomes gradually weaker at higher levels of health expenditures.

CONCLUSION

This study suggests one consequence of the opioid epidemic may be increased homicide rates, and this association is stronger in countries with lower public health expenditures. These findings highlight the potential role of governments to combat the associated harms of rising opioid use through greater investments in public health care.

National Health Spending, Health-Care Resources, Service Utilization, and Health Outcomes

Cross-national studies of the linkage of health-care spending with population health have found surprisingly limited evidence of benefits. In this study, we investigated associations between national health spending and key health resources (numbers of hospital beds, physicians, and nurses) and utilization of cost-effective health services (antenatal care, attendance of trained staff at childbirth, and measles vaccination), sometimes in ways that curtail the benefits of that expenditure. Using annual panel data from 1990-2014 covering 140 countries, we show that variation in health spending as a share of gross domestic product is not associated with decreased mortality rates. It is also very weakly associated with increased health-care resources and health service utilization (elasticity smaller than 0.08), with the association being close to 0 in low-income countries. In addition, countries with a higher share of out-of-pocket spending have a significantly lower level of health resources and service utilization. These findings, rather than the ineffectiveness of health care, could explain the lack of impact of health spending. In contrast, gross domestic product per capita is significantly associated with increased health resources, a higher rate of service utilization, and lower mortality rates, suggesting that income is an important determinant of public health.

How to dampen the surge of non-communicable diseases in Southeast Asia: insights from a systematic review and meta-analysis

Non-communicable diseases (NCDs), such as diabetes, cancer, cardiovascular diseases and chronic respiratory diseases, have overtaken infectious diseases as the number one cause of death worldwide. The rise of these diseases is especially grave in Southeast Asia, where existing research however falls short on offering guidance on how policy can best prevent and control NCDs in the region. Additionally, low- and middle-income countries in Southeast Asia cannot directly incorporate lessons drawn from interventions in richer countries, since health system capacities and human and financial resources are thoroughly different. Preventive interventions, thus, need to correspond to local capacities and require contextual solutions. In this article, we provide a systematic review of a wide scope of NCD interventions conducted in Southeast Asia to inform about existing intervention designs and to derive sound evidence of their effectiveness. Our literature search results in 51 studies from five Southeast Asian countries from which we can extract 204 estimates. We sort the studies into six intervention categories and analyse them with respect to 23 different health and behavioural outcomes. While we find positive and significant average effects across all six types of interventions, we also document evidence of substantial publication bias. Using a meta-regression approach in which we correct for the publication bias, we instead fail to confirm positive average effects for some interventions. Especially dietary and physical activity interventions fail to achieve improvements in analysed health outcomes, while programs focusing on smoking cessation, on the take-up of preventive screening activities or educating patients on how to cope with NCDs achieve sizeable effects. We also present evidence that the size of the effect differs with the participants' characteristics as well as with design features of the intervention. For local policymakers, the results provide important knowledge on how to address the increasing NCD burden in the coming years.

Macro-level efficiency of health expenditure: Estimates for 15 major economies

The coronavirus disease 2019 (COVID-19) pandemic highlights the importance of strong and resilient health systems. Yet how much a society should spend on healthcare is difficult to determine because additional health expenditures imply lower expenditures on other types of consumption. Furthermore, the welfare-maximizing ("efficient") aggregate amount and composition of health expenditures depend on efficiency concepts at three levels that often get blurred in the debate. While the understanding of efficiency is good at the micro- and meso-levels-that is, relating to minimal spending for a given bundle of treatments and to the optimal mix of different treatments, respectively-this understanding rarely links to the efficiency of aggregate health expenditure at the macroeconomic level. While micro- and meso-efficiency are necessary for macro-efficiency, they are not sufficient. We propose a novel framework of a macro-efficiency score to assess welfare-maximizing aggregate health expenditure. This allows us to assess the extent to which selected major economies underspend or overspend on health relative to their gross domestic products per capita. We find that all economies under consideration underspend on healthcare with the exception of the United States. Underspending is particularly severe in China, India, and the Russian Federation. Our study emphasizes that the major and urgent issue in many countries is underspending on health at the macroeconomic level, rather than containing costs at the microeconomic level.

The effects of health spending on the propagation of infectious diseases

We explore the discontinuity in the allocation of the main federal grant to Brazilian municipalities to identify the local effects of health spending and the spillovers into the bordering jurisdictions. Fiscal reactions are asymmetric: small neighbors reduce health spending, while we do not find a significant budgetary response in the largest neighbor. Our results suggest a reduction in the spread of infectious diseases in the neighbors, with fewer residents hospitalized with gastrointestinal infections. In addition, the elderly demand less hospitalization in the largest bordering jurisdictions due to respiratory infectious diseases. Finally, we find a direct and significant reduction in infant mortality, consistent with the observed pediatricians' increase, while the spillover effects on neighbors' mortality rates are not conclusive.

Is Health Contagious?-Based on Empirical Evidence From China Family Panel Studies' Data

This study empirically analysed the contagion of health using data from China Family Panel Studies. We first controlled variables related to health behaviour, medical conditions, individual characteristics, household characteristics, group characteristics, and prefecture/county characteristics and then employed multiple methods for estimation. The estimates showed that the average health level of others in the community had a significant positive effect on individual self-rated health-health was contagious. The measurement results remained robust after the endogeneity of the core explanatory variables was controlled using two-stage least squares. Furthermore, by analysing the heterogeneity of health contagion, we found that the contagion effect of health varied with the level of medical care, household affiliation, gender, rural/urban areas, and age groups. The contagion effect of health was more pronounced in the elderly population and the rural areas of the central region, where the level of medical care is relatively low, whereas it did not differ significantly between genders. Finally, the learning or imitation mechanism and social interaction mechanism of health contagion were examined.

Impact of Healthcare Expenditures on Healthcare Outcomes in the Middle East and North Africa (MENA) Region: A Cross-Country Comparison, 1995-2015

The association between healthcare expenditures and outcomes, mainly mortality and life expectancy, is complex. The real explanation for this association is not clear, especially in the Middle East and North Africa (MENA) region. This study assesses the impact of health expenditures on improving healthcare systems and health status and finds a relationship between health expenditures and health outcomes across different region. Annual time series data on healthcare spending and outcomes from 1995 to 2015 were used for MENA region in comparison to developed and developing countries. Health expenditure was adjusted by the consumer price index equation to the 2015 US dollar eliminate the impact of inflation on our results. For many countries, spending on healthcare continues to rise, Among MENA countries, we found that the United Arab Emirates and Kuwait spent more per capita on health, $1,711 and $1,420, respectively, than any other countries in the region. Although this study demonstrated a relationship between total healthcare expenditure and outcomes, some countries spend more on healthcare but have shorter life expectancy. In most countries, efficient and effective utilization of healthcare resources is the key strategy for improving health outcomes in any country. The lack of a positive correlation between healthcare spending and life expectancy may indicate that health resources are not allocated effectively. In those cases, increasing health spending does not guarantee that there is any kind of improvement in healthcare.

Why is the number of COVID-19 cases lower than expected in Sub-Saharan Africa? A cross-sectional analysis of the role of demographic and geographic factors

Unlike initially predicted by WHO, the severity of the novel coronavirus pandemic has remained relatively low in Sub-Saharan Africa, more than two months after the first confirmed cases were identified. In this paper, we analyze the extent to which demographic and geographic factors associated to the disease explain this phenomenon. We use publicly available data from a cross-section of 182 countries worldwide, and we employ a regression analysis that accounts for possible misreporting of COVID-19 cases, as well as a Ramsey-type specification that preserves degree of freedom. We found that proportion of population aged 65+, population density, and urbanization are significantly positively associated with high numbers of active infected cases, while mean temperature around the first quarter (January-March) is negatively associated to this COVID-19 outcome. These factors are those for which Africa has a comparative advantage. In contrast, factors for which Africa has a relative disadvantage, such as income and quality of health care infrastructure, are found to be insignificant predictors of the spread of the pandemic. These results hold even when accounting for possible underreporting, as well as differences in the duration of the epidemic in each country, as measured by the time elapsed since the first confirmed case occurred. We conclude that differences in demographic and geographic characteristics help understand the relatively low progression of the pandemic in sub-Saharan Africa as well as the gap in the number of active cases between this region and the rest of the World. We also found, however, that this gap is insignificant beyond these factors, and is expected to narrow over time as the pandemic evolves. These results provide insights for relevant urban policies and kinds of development planning to consider in the fight against disease spreads of the coronavirus type.

Estimating a cost-effectiveness threshold for health care decision-making in South Africa

Cost-effectiveness thresholds are important decision rules that determine whether health interventions represent good value for money. In low- and middle-income countries, the World Health Organization (WHO) one to three times per capita gross domestic product (GDP) per disability-adjusted life years (DALYs) averted has been the most widely used threshold for informing resource allocation decisions. However, in 2016, the WHO withdrew recommendations for using this threshold, creating a significant vacuum in South Africa and many countries that rely on results of cost-effectiveness analyses for making resource allocation decisions. This study estimates a cost-effectiveness threshold that reflects the health opportunity cost of health spending in South Africa using a three-step approach. First, marginal returns to health spending was estimated as health spending elasticity for crude death rates using a fixed effect estimation approach. Second, the opportunity cost of health spending was estimated as DALYs averted. Finally, a cost per DALY averted threshold was estimated as the inverse of the marginal product of health spending. We show that 1% of total health spending in 2015 (equivalent to approximately ZAR 1.54 billion/USD 120.7 million) averted 1050 deaths, 34 180 years of life lost, 5880 years lived with disability and 40 055 DALYs. The cost-effectiveness threshold was estimated at approximately ZAR 38 500 (USD 3015) per DALY averted, ∼53% of South Africa's per capita GDP in 2015 (ZAR 72 700/USD 5700) and lower than the previously recommended one to three times per capita GDP. As South Africa moves towards implementing universal health coverage reforms through National Health Insurance by 2025, the adoption of a threshold that reflects health opportunity costs will be crucial for ensuring efficiency in the allocation of scarce resources. This study provides useful insight into the magnitude of the health opportunity cost of health spending in South Africa and highlights the need for further research.

Death by austerity? The impact of cost containment on avoidable mortality in Italy

Does austerity in health care affect health and healthcare outcomes? We examine the intended and unintended effects of the Italian austerity policy Piano di Rientro aimed at containing the cost of the healthcare sector. Using an instrumental variable strategy that exploits the temporal and geographical variation induced by the policy rollout, we find that the policy was successful in alleviating deficits by reducing expenditure, mainly in the southern regions, but also resulted in a 3% rise in avoidable deaths among both men and women, a reduction in hospital capacity and a rise in south-to-north patient migration. These findings suggest that-even in a high-income country with relatively low avoidable mortality like Italy-spending cuts can hurt survival.

Informing a Cost-Effectiveness Threshold for Health Technology Assessment in China: A Marginal Productivity Approach

BACKGROUND

Health technology assessment has been increasingly used in China, having been legally mandated in 2019, to inform reimbursement decisions and price negotiations between the National Healthcare Security Administration and pharmaceutical companies around the price of new pharmaceuticals. The criteria currently used to judge cost effectiveness and inform pricing negotiations, 3 × GDP per capita, is based on the rule of thumb previously recommended by the World Health Organization rather than an estimate based on an empirical assessment of health opportunity costs.

OBJECTIVE

The objective of this study was to inform a cost-effectiveness threshold for health technology assessment in China that accounts for health opportunity cost.

METHODS

The elasticity of health outcomes with respect to health expenditure was estimated using variations across 30 provincial-level administrative divisions in 2017 controlling for a range of other factors and using an instrumental variable approach to account for endogeneity to assess robustness of results. The estimated elasticity was then used to calculate the cost per disability-adjusted life-year (DALY) averted by variations in Chinese health expenditure at the margin.

RESULTS

The range estimated from this study, 27,923-52,247 (2017 RMB) (central estimate 37,446) per DALY averted or 47-88% of GDP per capita (central estimate 63%), shows that a cost per DALY averted cost-effectiveness threshold that reflects health opportunity costs is below 1 × GDP per capita.

CONCLUSION

Our results suggest that the current cost-effectiveness threshold used in China is too high; continuing to use it risks decisions that reduce overall population health.

The effects of ageing population on health expenditure and economic growth in China: A Bayesian-VAR approach

The increasing proportion of the population aged 65 or over has generated a global rise of health spending due to higher demand for medical and long-term care services, which has become a growing challenge to the sustainability of public finances across countries. This phenomenon is especially prominent in China, which has experienced accelerated rates of both economic growth and population ageing over the past four decades. Using Bayesian-VAR (B-VAR) models we compute the impulse response functions (IRFs) and the forecast error variance decomposition functions (FEVDs) to empirically examine the dynamic relationships between ageing index, life expectancy, economic growth and health expenditure in China. We compare China with the USA which has distinct trajectories of population structure and economic development to better understand the former's dynamic patterns. We find a pronounced response for both the USA and China of ageing index to life expectancy and of health spending per capita to GDP per capita, while ageing population induces a relatively strong reaction from health expenditure per capita in China. Our results are robust with either nominal or real variables. These findings suggest that, in China, a well-rounded policy accommodating economic, social and health factors is needed to improve the quality of life of the ageing population for a sustainable development of the economy.

Road to family planning and RMNCHN related SDGs: Tracing the role of public health spending in India

Globally, public health expenditure (PHE) is closely associated with Reproductive, Maternal, Newborn, Child Health, and Nutrition (RMNCHN) and Family Planning (FP) outcomes. In India, the role of PHE in shaping the progress towards the attainment of RMNCHN and FP-related Sustainable Development Goals (SDGs) is not widely documented. Using the four consecutive rounds of National Family Health Survey (NFHS), we have investigated the progress in RMNCHN and FP indicators and their association with PHE by applying robust econometric modelling. The findings suggest that although there is noticeable progress in the RMNCHN indicators from 1992-93-2015-16, India has failed to achieve RMNCHN targets related to Millennium Development Goals (MDGs). Lack of noteworthy correlation between FP indicators and PHE supports the argument that post National Rural Health Mission (2005), the core family welfare expenditure suffered a setback despite the absolute rise in PHE. However, correlation plots and the multivariate panel data regression analyses affirm that even with a moderate rise, PHE emerges as an important predictor of RMNCHN outcomes in the country. Thus, the road to achieving RMNCHN and FP-related SDGs demands to avoid austerity on PHE and strengthen the integration of RMNCHN and FP programmes at the operational level.

Value-based tiered pricing for universal health coverage: an idea worth revisiting

The pricing of medicines and health products ranks among the most hotly debated topics in health policy, generating controversy in richer and poorer markets alike. Creating the right pricing structure for pharmaceuticals and other healthcare products is particularly important for low- and middle-income countries, where pharmaceuticals account for a significant portion of total health expenditure; high medicine prices therefore threaten the feasibility and sustainability of nascent schemes for universal health coverage (UHC). We argue that a strategic system of value-based tiered pricing (VBTP), wherein each country would pay a price for each health product commensurate with the local value it provides, could improve access, enhance efficiency, and empower countries to negotiate with product manufacturers. This paper attempts to further understanding on the potential value of tiered pricing, barriers to its implementation, and potential strategies to overcome those.

Value-based tiered pricing for universal health coverage: an idea worth revisiting

The pricing of medicines and health products ranks among the most hotly debated topics in health policy, generating controversy in richer and poorer markets alike. Creating the right pricing structure for pharmaceuticals and other healthcare products is particularly important for low- and middle-income countries, where pharmaceuticals account for a significant portion of total health expenditure; high medicine prices therefore threaten the feasibility and sustainability of nascent schemes for universal health coverage (UHC). We argue that a strategic system of value-based tiered pricing (VBTP), wherein each country would pay a price for each health product commensurate with the local value it provides, could improve access, enhance efficiency, and empower countries to negotiate with product manufacturers. This paper attempts to further understanding on the potential value of tiered pricing, barriers to its implementation, and potential strategies to overcome those.

Value-based tiered pricing for universal health coverage: an idea worth revisiting

The pricing of medicines and health products ranks among the most hotly debated topics in health policy, generating controversy in richer and poorer markets alike. Creating the right pricing structure for pharmaceuticals and other healthcare products is particularly important for low- and middle-income countries, where pharmaceuticals account for a significant portion of total health expenditure; high medicine prices therefore threaten the feasibility and sustainability of nascent schemes for universal health coverage (UHC). We argue that a strategic system of value-based tiered pricing (VBTP), wherein each country would pay a price for each health product commensurate with the local value it provides, could improve access, enhance efficiency, and empower countries to negotiate with product manufacturers. This paper attempts to further understanding on the potential value of tiered pricing, barriers to its implementation, and potential strategies to overcome those.

Demographic transition and economic growth: Evidence from China and United States

In the context of todays ageing population, this paper uses the connectedness network model proposed by Diebold and Yilmaz in 2014 to analyse the directionality and degree of interaction between the population ageing index, life expectancy, per capita gross domestic product, and per capita health expenditure from a systematic perspective for China; then, these results from China are compared with the United States. A number of new findings can be identified, as follows: (1) for China and the United States, economic growth may promote the growth of health expenditure and increased life expectancy may cause an increase in the ageing population; (2) China's population age structure has already led to some constraints on economic growth, whereas the United StatesUS's population age structure has had a weak impact on its economic growth; and (3) the ageing population structure for China has a net impact on per capita health expenditure, whereas no such net directional impact was found in the United States. These findings support the idea that policy synergies should be strengthened in the economic, social, and health fields in order to promote both the quality of life of the ageing population and the sustainable development of the economy.

The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function

New technologies may displace existing, higher-value care under a fixed budget. Countries aim to curtail adoption of low-value technologies, for example, by installing cost-effectiveness thresholds. Our objective is to estimate the opportunity cost of hospital care to identify a threshold value for the Netherlands. To this aim, we combine claims data, mortality data and quality of life questionnaires from 2012 to 2014 for 11,000 patient groups to obtain quality-adjusted life-year (QALY) outcomes and spending. Using a fixed effects translog model, we estimate that a 1% increase in hospital spending on average increases QALY outcomes by 0.2%. This implies a threshold of €73,600 per QALY, with 95% confidence intervals ranging from €53,000 to €94,000 per QALY. The results stipulate that new technologies with incremental cost effectiveness ratios exceeding the Dutch upper reference value of €80,000 may indeed displace more valuable care.

Estimating the Marginal Productivity of the English National Health Service From 2003 to 2012

OBJECTIVE

Estimates of the marginal productivity of the health sector are required for a wide range of resource allocation decisions. Founding these estimates on robust empirical analysis can inform these decisions and improve allocative efficiency. This article estimates the annual marginal productivity of the English NHS over a 10-year period (between 2003 and 2012).

METHODS

Data on expenditure and mortality by program budget category are used in conjunction with socioeconomic and demographic variables from the censuses for 2001 and 2011. This article applies an econometric strategy that employs an established instrumental variable approach, which is then subjected to a number of sensitivity analyses. The results of the econometric analysis, along with additional data on the burden of disease, are used to generate an estimate of the marginal productivity for each of the study years.

RESULTS

We find that an additional unit of health benefit has cost between £5000 and £15 000 per quality-adjusted life-year from 2003 to 2012. Over this period these estimates (all in current prices) have increased at a faster rate than NHS price inflation, suggesting an increase in real terms.

CONCLUSIONS

These results are discussed in the context of the existing literature, and the potential policy implications for decisions about resource allocation are explored.

Does the Association Between Age and Major Illness Vary by Healthcare System Quality?

This study builds on research into global aging, by offering a multiple-indicator test of whether national healthcare system quality modifies the association between age and major illness. Recent individual-level data on morbidity among respondents aged 50 or older (16 countries; 2014 European Social Survey) are merged with nation-level healthcare indicators. Healthcare system quality is assessed using a subjective, evaluation-based approach and an objective, attributable-mortality approach. Lagged nation-level economic and health indicators are controlled to help isolate healthcare system effects. Results across subjective and objective approaches to healthcare system quality are strikingly consistent. While older individuals showed approximately a 10% reduction in probability of major illness when residing in countries with higher healthcare quality, associations between age and morbidity indices combining number and severity of illness showed greater modification by healthcare quality, with reductions around 18%. Taken together, results are suggestive of healthcare’s protective role in reducing age-related illness and disability.

Healthcare spending in the State of Louisiana

Background

The State of Louisiana spends the most on Medicare beneficiaries per capita, but reports greater disparities in health status and death rates than other states. This project sought to investigate the associations between healthcare intensity, healthcare spending, and mortality in Louisiana.

Methods

We used a 100% sample of 2014 Medicare claims data with beneficiaries assigned to hospital referral regions in Louisiana using small area analysis. We used simple and multivariable linear regression modelling to evaluate associations between healthcare intensity, healthcare spending rates, and mortality rates. We adjusted for age, sex, race, and population health risk factors.

Results

We found no statistically significant associations between our measured variables when adjusted for age, sex, and race. These results were consistent after further adjusting mortality for population health risk factors.

Conclusions

To our knowledge, no prior studies have investigated the associations between healthcare intensity, healthcare spending, and mortality in Louisiana. Our findings suggest that increased healthcare spending in Louisiana may not improve survival. Identifying more granular aspects of healthcare contributing to spending patterns in Louisiana may provide targets for future quality improvement work.

Estimating the marginal cost of a life year in Sweden's public healthcare sector

Although cost-effectiveness analysis has a long tradition of supporting healthcare decision-making in Sweden, there are no clear criteria for when an intervention is considered too expensive. In particular, the opportunity cost of healthcare resource use in terms of health forgone has not been investigated empirically. In this work, we therefore seek to estimate the marginal cost of a life year in Sweden's public healthcare sector using time series and panel data at the national and regional levels, respectively. We find that estimation using time series is unfeasible due to reversed causality. However, through panel instrumental variable estimation we are able to derive a marginal cost per life year of about SEK 370,000 (EUR 39,000). Although this estimate is in line with emerging evidence from other healthcare systems, it is associated with uncertainty, primarily due to the inherent difficulties of causal inference using aggregate observational data. The implications of these difficulties and related methodological issues are discussed.

An Empirical Investigation of "Physician Congestion" in U.S. University Hospitals

We add a new angle to the debate on whether greater healthcare spending is associated with better outcomes, by focusing on the link between the size of the physician workforce at the ward level and healthcare results. Drawing on standard organization theories, we proposed that due to organizational limitations, the relationship between physician workforce size and medical performance is hump-shaped. Using a sample of 150 U.S. university departments across three specialties that record measures of clinical scores, as well as a rich set of covariates, we found that the relationship was indeed hump-shaped. At the two extremes, departments with an insufficient (excessive) number of physicians may gain a substantial increase in healthcare quality by the addition (dismissal) of a single physician. The marginal elasticity of healthcare quality with respect to the number of physicians, although positive and significant, was much smaller than the marginal contribution of other factors. Moreover, research quality conducted at the ward level was shown to be an important moderator. Our results suggest that studying the relationship between the number of physicians per bed and the quality of healthcare at an aggregate level may lead to bias. Framing the problem at the ward-level may facilitate a better allocation of physicians.

The relationship between parks and recreation per capita spending and mortality from 1980 to 2010: A fixed effects model

Evidence concerning the link between park access, use, programming and health has continued to grow. However, government funding for parks and recreation is highly susceptible to the ebbs and flows of the national economy. Given this, the purpose of this study was to test the relationship between county area spending on parks and recreation operations and all-cause mortality in the United States from the years 1980–2010. Using data from 1980 to 2010 collected from the U.S. Census Bureau and the Institute for Health Metrics and Evaluation, we analyzed the relationship between per capita county area spending on parks and recreation and county-level all-cause age-standardized female, male, and overall mortality using county and year fixed effects as well as relevant time-variant controls. The study was conducted during 2017 and 2018. County area spending on parks and recreation was negatively associated with overall and female-specific mortality from 1980 to 2010. According to our models for female and overall all-cause age-standardized mortality, when holding all else equal, a hundred-dollar increase in 2010 dollars in per capita parks and recreation operational expenditures was associated with an average decrease in morality of 3.9 and 3.4 deaths per 100,000, respectively. Although not commonly viewed as a form of healthcare spending, increased government funding for parks and recreation services had a significant association with decreased county level mortality. Our results suggest higher levels of per capita spending on parks and recreation may lead to lower levels of mortality.

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Higher per-capita parks and recreation spending was associated with lower all-cause mortality.

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The relationship held for female and overall mortality, but not male.

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Increased parks and recreation spending was associated with decreased mortality.

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Increasing government spending on parks and recreation may improve public health.

Accounting for Timing when Assessing Health-Related Policies

The primary focus of this paper is to offer guidance on the analysis of time streams of effects that a project may have so that they can be discounted appropriately. This requires a framework that identifies the common parameters that need to be assessed, whether conducting cost-effectiveness or benefit-cost analysis. The quantification and conversion of the time streams of different effects into their equivalent health, health care cost or consumption effects avoids embedding multiple arguments in discounting policies. This helps to identify where parameters are likely to differ in particular contexts, what type of evidence would be relevant, what is currently known and how this evidence might be strengthened. The current evidence available to support the assessment of the key parameters is discussed and possible estimates and default assumptions are suggested. Reporting the results in an extensive way is recommended. This makes the assessments required explicit so the impact of alternative assumptions can be explored and analysis updated as better estimates evolve. Some projects will have effects across different countries where some or all of these parameters will differ. Therefore, the net present value of a project will be the sum of the country specific net present values rather than the sum of effects across countries discounted at some common rate.

A cost-effectiveness threshold based on the marginal returns of cardiovascular hospital spending

Traditionally, threshold levels of cost-effectiveness have been derived from willingness-to-pay studies, indicating the consumption value of health (v-thresholds). However, it has been argued that v-thresholds need to be supplemented by so-called k-thresholds, which are based on the marginal returns to health care. The objective of this research is to estimate a k-threshold based on the marginal returns to cardiovascular disease (CVD) hospital care in the Netherlands. To estimate a k-threshold for hospital care on CVD, we proceed in two steps: First, we estimate the impact of hospital spending on mortality using a Bayesian regression modelling framework, using data on CVD mortality and CVD hospital spending by age and gender for the period 1994-2010. Second, we use life tables in combination with quality of life data to convert these estimates into a k-threshold expressed in euros per quality-adjusted life year gained. Our base case estimate resulted in an estimate of 41,000 per quality-adjusted life year gained. In our sensitivity analyses, we illustrated how the incorporation of prior evidence into the estimation pushes estimates downwards. We conclude that our base case estimate of the k-threshold may serve as a benchmark value for decision making in the Netherlands as well as for future research regarding k-thresholds.

Estimating health opportunity costs in low-income and middle-income countries: a novel approach and evidence from cross-country data

The economic evaluation of healthcare interventions requires an assessment of whether the improvement in health outcomes they offer exceeds the improvement in health that would have been possible if the additional resources required had, instead, been made available for other healthcare activities. Therefore, some assessment of these health opportunity costs is required if the best use is to be made of the resources available for healthcare. This paper provides a framework for generating country-specific estimates of cost per disability-adjusted life year (DALY) averted 'thresholds' that reflect health opportunity costs. We apply estimated elasticities on mortality, survival, morbidity and a generic measure of health, DALYs, that take account of measures of a country's infrastructure and changes in donor funding to country-specific data on health expenditure, epidemiology and demographics to determine the likely DALYs averted from a 1% change in expenditure on health. The resulting range of cost per DALY averted 'threshold' estimates for each country that represent likely health opportunity costs tend to fall below the range previously suggested by WHO of 1-3× gross domestic product (GDP) per capita. The 1-3× GDP range and many other previous and existing recommendations about which interventions are cost-effective are not based on an empirical assessment of the likely health opportunity costs, and as a consequence, the health effects of changes in health expenditure have tended to be underestimated, and there is a risk that interventions regarded as cost-effective reduce rather than improve health outcomes overall.

Regional variation in healthcare spending and mortality among senior high-cost healthcare users in Ontario, Canada: a retrospective matched cohort study

Background

Senior high cost health care users (HCU) are a priority for many governments. Little research has addressed regional variation of HCU incidence and outcomes, especially among incident HCU. This study describes the regional variation in healthcare costs and mortality across Ontario’s health planning districts [Local Health Integration Networks (LHIN)] among senior incident HCU and non-HCU and explores the relationship between healthcare spending and mortality.

Methods

We conducted a retrospective population-based matched cohort study of incident senior HCU defined as Ontarians aged ≥66 years in the top 5% most costly healthcare users in fiscal year (FY) 2013. We matched HCU to non-HCU (1:3) based on age, sex and LHIN. Primary outcomes were LHIN-based variation in costs (total and 12 cost components) and mortality during FY2013 as measured by variance estimates derived from multi-level models. Outcomes were risk-adjusted for age, sex, ADGs, and low-income status. In a cost-mortality analysis by LHIN, risk-adjusted random effects for total costs and mortality were graphically presented together in a cost-mortality plane to identify low and high performers.

Results

We studied 175,847 incident HCU and 527,541 matched non-HCU. On average, 94 out of 1000 seniors per LHIN were HCU (CV = 4.6%). The mean total costs for HCU in FY2013 were 12 times higher that of non-HCU ($29,779 vs. $2472 respectively), whereas all-cause mortality was 13.6 times greater (103.9 vs. 7.5 per 1000 seniors).

Regional variation in costs and mortality was lower in senior HCU compared with non-HCU. We identified greater variability in accessing the healthcare system, but, once the patient entered the system, variation in costs was low. The traditional drivers of costs and mortality that we adjusted for played little role in driving the observed variation in HCUs’ outcomes. We identified LHINs that had high mortality rates despite elevated healthcare expenditures and those that achieved lower mortality at lower costs. Some LHINs achieved low mortality at excessively high costs.

Conclusions

Risk-adjusted allocation of healthcare resources to seniors in Ontario is overall similar across health districts, more so for HCU than non-HCU. Identified important variation in the cost-mortality relationship across LHINs needs to be further explored.

Electronic supplementary material

The online version of this article (10.1186/s12877-018-0952-7) contains supplementary material, which is available to authorized users.