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Asymmetric Information and The Production of Health

Lundbäck, Mattias LU (2000) In Lund economic studies
Abstract (Swedish)
Popular Abstract in Swedish

Det samlade temat för de sju artiklarna i denna avhandling är att se på hur modern national-ekonomiska teori, som behandlar problem rela-terade till förekomsten av asymmetrisk infor-mation, kan användas för att studera insatser för åstadkomma bättre hälsa. Artiklarna rör dels vård på sjukhus,dels produktionen av läkemedel. För sjukhusen handlar det om hur man via olika be-löningssystem kan styra produktionen att bli så effektiv som möjlig och hur man ska få bästa möjliga kvalitet. När det gäller produktionen av läkemedel handlar diskussionen om hur ersätt-ningar till producenter och konsumenter skall utformas för att bästa möjliga resultat ska kunna åstadkommas. Avhandlingen består av sju olika... (More)
Popular Abstract in Swedish

Det samlade temat för de sju artiklarna i denna avhandling är att se på hur modern national-ekonomiska teori, som behandlar problem rela-terade till förekomsten av asymmetrisk infor-mation, kan användas för att studera insatser för åstadkomma bättre hälsa. Artiklarna rör dels vård på sjukhus,dels produktionen av läkemedel. För sjukhusen handlar det om hur man via olika be-löningssystem kan styra produktionen att bli så effektiv som möjlig och hur man ska få bästa möjliga kvalitet. När det gäller produktionen av läkemedel handlar diskussionen om hur ersätt-ningar till producenter och konsumenter skall utformas för att bästa möjliga resultat ska kunna åstadkommas. Avhandlingen består av sju olika delar. Del 1 är en introduktion till restenav artiklarna där metodologi och syfte klargörs. Del 2 behandlar prissättningen av läkemedel i Sverige. Artikeln tar ett helhetsgrepp på frågorna om ersättning till producenterna, subvention av konsumenterna samtincitament för forskning och utveckling. Slutsatserna är att staten bör begränsa sig till att reglera priserna för preparat som är mycket kostsamma, eftersom en fri prissättning och höga gränser för högkostnadsskyddet räckerför att få en press nedåt på priserna för de flesta läke-medel. Del 3 är en teoretisk modell som syftar till att belysa hur utvecklingen av nya läkemedel bäst stimuleras genom prissättning och subsidier från staten när ett patent väl beviljats. Modellen behandlar en sluten marknad där man kan väga behoven av att ha hög kvalitet för läkemedel mot kostnaden för att utveckla dessa. Del 4 är en översikt av tidigare forskning om ersättning till sjukvårdsproducenter. Där behandlas frågor om "icke-observerbar/verifierbar kvalitet", "yardstick competition" och teorier som bygger på att läkaren agerar som garant för kvaliteten i vården, s k "agentteorier". Del 5 är en kombi-nation av agentteorierna inom hälsoekonomin och Laffont & Tiroles regleringsteori. Modellen inleds med en situation där det endast råder osäkerhet om kvaliteten när det gäller vården. Detta visar sig ge samma resultat som Ellis & McGuires (1986) modell där den optimala ersätt-ningen är en blandning av kostnadsersättning och fasta priser. Sedan tillåter jag möjligheten att producenterna inte är fullt effektiva. De kan då utöva "effort" för att sänka kostnaden. Den optimala ersättningen blir i detta fall mer fastprisersättning och mindre av kostnadser-sättning. Slutligen analyserar jag situationen där det råder osäkerhet om vilken effektivitet som pro-ducenten kan uppnå. Det visar sig då att de optimala kontrakten skiljer sig mellan produ-center som är olika effektiva. Generellt för-skjuts de optimala kontrakten mot mer av kostnads-ersättning. Mer effektiva producenter kommer också att få mer av fasta priser, medan in-effektiva producenter får mer av kostnadser-sättning. Del 6 utvidgar modellen från del 5 och analyserar vad som händer om det är möjligt att behandla olika patientgrupper med olika hög kvalitet (så kallad skimping). Modellen syftar till att förklara dagens utformning av patientklassifikationssystem och kanske ge underlag till förbättringar av dessa. Del 7 är en tillämpning av "dubbelagentmodellen" för att belysa skillnader mellan vinstdrivande och icke-vinstdrivande sjukhus. Det visar sig att sätten att styra och reglera dessa två sjukhustyper måste skilja sig åt, i och med att vinstmotivet som är signal för inträde när det gäller sjukhus som drivs med syfte att skapa vinst, inte fungerar på samma sätt för icke-vinstdrivande sjukhus. Icke-vinstdrivande sjukhus, å andra sidan, tar ersättningen som given och anpassar kvaliteten till givna resurser. (Less)
Abstract
The common theme of this thesis is the analysis of asymmetric information when applied to the market for health care production. The thesis consists of six more or less independent papers and an introduction to the thesis were purpose and methodology are stated (part one). Part two is an investigation into the pricing of pharmaceuticals in Sweden. This chapter deals with issues such as cost sharing for consumers, incentives for R&D, the principles for reimbursement of costs and the regulation of consumer prices. The policy conclusions are that if the state limits its role in price-regulation to the truly high-cost treatments and substances, a sufficiently high high-cost protection scheme will make price sensitivity large enough to put... (More)
The common theme of this thesis is the analysis of asymmetric information when applied to the market for health care production. The thesis consists of six more or less independent papers and an introduction to the thesis were purpose and methodology are stated (part one). Part two is an investigation into the pricing of pharmaceuticals in Sweden. This chapter deals with issues such as cost sharing for consumers, incentives for R&D, the principles for reimbursement of costs and the regulation of consumer prices. The policy conclusions are that if the state limits its role in price-regulation to the truly high-cost treatments and substances, a sufficiently high high-cost protection scheme will make price sensitivity large enough to put a downward pressure on the prices of most other pharmaceuticals. Part three is a theoretic model about how incentives for development of new pharmaceuticals can be maintained through pricing policy and public subsidies for development of drugs (after a patent is granted). The model is set for a closed market and builds on the idea that there is a trade-off between consumer surplus and incentives for the development of quality of the drug. An expansion is then made for a setting where the regulator is uncertain about the efficiency of the drug manufacturer in development of the drug. Part four of the thesis is an introduction to previous theory of reimbursing hospitals. This part deals with issues such as unobservable quality, yardstick competition and the agency theories of health economics. The agency theory builds on a notion that physicians control quality in treatments. Physicians may also be put under pressure from hospital management to shirk on quality. The setting is thus a situation of "double agency", with conflicting interests of physicians. Part five is a combined model of the agency theories of health economics and the regulatory theory of Laffont & Tirole. The model starts with a situation where the only uncertainty is about the quality of treatments. This basically turns out to be the agency model of Ellis & McGuire (1986), where the optimal reimbursement is a blend of cost reimbursement and fixed payments. Then, I allow the providers to be technically inefficient. They can thus exert effort to decrease the cost of treatments. It then turns out that the optimal reimbursement tilts towards fixed payments, away from cost reimbursement. Finally, I also allow for uncertainty about the efficiency of the providers from the payers' point of view. The result is then that cost reimbursement in general is more advantageous, but also that different cost sharing arrangement for different types is the optimal solution. Generally, less efficient providers get a larger proportion cost reimbursement and providers that are more efficient get more of fixed payments. Part six is a development of the model i part five. In part six I concentrate on explaining the economic rationale of dividing patients into different diagnosis related groups according to their diagnosis at admittance and thus also according to the expected cost of treatments. The economic role of outlier rules (cost limits above which cost reimbursement is used) is explained and principles for the construction of homogeneous resource use groups and optimal outlier rules are derived. Part seven is mainly a formalisation of the theories of Burton Weisbrod about the non-profit firm and its economic rationale. Here I use the agency theory of Ellis & McGuire and the ratchet principle, as formalised by Weitzman, to construct a theory about the behaviour of not-for-profit hospitals, compared with their for-profit counterparts. (Less)
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author
opponent
  • Professor Olsen, Trond E, Bergen
organization
publishing date
type
Thesis
publication status
published
subject
keywords
ekonomisk teori, ekonometri, Nationalekonomi, economic policy, economic theory, economic systems, Economics, econometrics, reimbursement, health care, moral hazard, quality, asymmetric information, ekonomiska system, ekonomisk politik, Hospital science and management, Sjukhusforskning, sjukhusförvaltning, Pharmacological sciences, pharmacognosy, pharmacy, toxicology, Farmakologi, farmakognosi, farmaci, toxikologi
in
Lund economic studies
pages
204 pages
publisher
Department of Economics, Lund Universtiy
defense location
sal 210, EC III, Holger Crafoords Ekonomicentrum
defense date
2000-11-25 10:00
ISSN
0460-0029
language
English
LU publication?
yes
id
0352dc42-0911-4c84-9258-c2dd3abe906d (old id 41120)
date added to LUP
2007-07-31 16:32:54
date last changed
2016-09-19 08:44:58
@phdthesis{0352dc42-0911-4c84-9258-c2dd3abe906d,
  abstract     = {The common theme of this thesis is the analysis of asymmetric information when applied to the market for health care production. The thesis consists of six more or less independent papers and an introduction to the thesis were purpose and methodology are stated (part one). Part two is an investigation into the pricing of pharmaceuticals in Sweden. This chapter deals with issues such as cost sharing for consumers, incentives for R&D, the principles for reimbursement of costs and the regulation of consumer prices. The policy conclusions are that if the state limits its role in price-regulation to the truly high-cost treatments and substances, a sufficiently high high-cost protection scheme will make price sensitivity large enough to put a downward pressure on the prices of most other pharmaceuticals. Part three is a theoretic model about how incentives for development of new pharmaceuticals can be maintained through pricing policy and public subsidies for development of drugs (after a patent is granted). The model is set for a closed market and builds on the idea that there is a trade-off between consumer surplus and incentives for the development of quality of the drug. An expansion is then made for a setting where the regulator is uncertain about the efficiency of the drug manufacturer in development of the drug. Part four of the thesis is an introduction to previous theory of reimbursing hospitals. This part deals with issues such as unobservable quality, yardstick competition and the agency theories of health economics. The agency theory builds on a notion that physicians control quality in treatments. Physicians may also be put under pressure from hospital management to shirk on quality. The setting is thus a situation of "double agency", with conflicting interests of physicians. Part five is a combined model of the agency theories of health economics and the regulatory theory of Laffont & Tirole. The model starts with a situation where the only uncertainty is about the quality of treatments. This basically turns out to be the agency model of Ellis & McGuire (1986), where the optimal reimbursement is a blend of cost reimbursement and fixed payments. Then, I allow the providers to be technically inefficient. They can thus exert effort to decrease the cost of treatments. It then turns out that the optimal reimbursement tilts towards fixed payments, away from cost reimbursement. Finally, I also allow for uncertainty about the efficiency of the providers from the payers' point of view. The result is then that cost reimbursement in general is more advantageous, but also that different cost sharing arrangement for different types is the optimal solution. Generally, less efficient providers get a larger proportion cost reimbursement and providers that are more efficient get more of fixed payments. Part six is a development of the model i part five. In part six I concentrate on explaining the economic rationale of dividing patients into different diagnosis related groups according to their diagnosis at admittance and thus also according to the expected cost of treatments. The economic role of outlier rules (cost limits above which cost reimbursement is used) is explained and principles for the construction of homogeneous resource use groups and optimal outlier rules are derived. Part seven is mainly a formalisation of the theories of Burton Weisbrod about the non-profit firm and its economic rationale. Here I use the agency theory of Ellis & McGuire and the ratchet principle, as formalised by Weitzman, to construct a theory about the behaviour of not-for-profit hospitals, compared with their for-profit counterparts.},
  author       = {Lundbäck, Mattias},
  issn         = {0460-0029},
  keyword      = {ekonomisk teori,ekonometri,Nationalekonomi,economic policy,economic theory,economic systems,Economics,econometrics,reimbursement,health care,moral hazard,quality,asymmetric information,ekonomiska system,ekonomisk politik,Hospital science and management,Sjukhusforskning,sjukhusförvaltning,Pharmacological sciences,pharmacognosy,pharmacy,toxicology,Farmakologi,farmakognosi,farmaci,toxikologi},
  language     = {eng},
  pages        = {204},
  publisher    = {Department of Economics, Lund Universtiy},
  school       = {Lund University},
  series       = {Lund economic studies},
  title        = {Asymmetric Information and The Production of Health},
  year         = {2000},
}