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Economics and health: 1993, proceedings of the fifteenth australian conference of health economists
154
Book Reviews
On the other hand, Professor Gilbert repeatedly quotes medical authorities regarding the general symptoms associated with, say Addison's disease in the Kennedy example, and assumes that these were displayed in the particular patient. This is an argument familiar to geographically trained readers, very similar to the so called ecological fallacy! Again in the diflicult area of psychological medicine Professor Gilbert comes across as Freudian in his interpretation, assuming that the eminent soldier Eisenhower was driven by a sense of duty instilled by his mother rather than his military background and that Ronald Reagan's alcoholic father crippled him for life with respect to his concept of legitimate relationships (p. 227). Moreover, apart from references to Nancy Reagan, Presidential figures are presented as lacking any familial support in either sickness or health. This study does, however, paint a clear picture of the position of power enjoyed by medical men in the United States, persons presumably at the top of their profession, who decide what to do, and not to do, on behalf of their client, even should that client be the President. As a treatise in political science, the book clearly argues for reform in the top echelons of the American state.
Non-American readers, throughout the study will marvel at the extent of power concentrated in the American trying to function as the nation's 'chief administrator', who we are told may have to read and act on up to 60 or 70 documents a day as well as perform political and public roles. For persons who have almost necessarily weathered the storms of political life for years and are therefore rarely in their prime physiologically, to handle this load is asking too much. Clearly delegation, marshalling of expert advice and a small cohort of White House staff managed by a highly competent chief of staff are essential for the system to work inspite of political pressures to appoint political supporters to these positions. The notion of the President as an autocratic dictatorial leader with all the power associated with Middle American states, is but thinly veiled despite all the trappings of American democracy at least in the mindset of some Americans who clamor for the attention of their President, who is clearly as fallable and human as the rest of us. I have rarely read such a thought provoking book.
Economics and Health: 1993, Proceedings of the Fifteenth Australian Conference of Health Economists, edited by C. Selby Smith. Public Sector Management Institute, Clayton (Victoria) and National Centre for Health Program Evaluation, Fairfield (Victoria), 1994. 277 pp. (paperback) [price not known].
derives the motivation for this paper from the recent foundation of the Centre for Health Program Evaluation in Melbourne. Focusing on studies on health services labor requirements and noting that prior values and beliefs as well as institutional arrangements can importantly shape the impact of scientific research on policy-making, Selby Smith asks himself why some studies have been far more influential than others. Among eight determining factors, the extent to which a study serves the objectives of some powerful lobby turns out to be crucial, whereas quality of methods used seems to be of minor importance. Of course, this tends to undercut the argument of the first-mentioned survey paper, which revolves exclusively around good evaluation practice. After this somewhat sobering experience, the reader is now invited to sample some of the applied research studies, such as "A cost-effectiveness study of alternative measures for preventing the Wernicke-Korsakoff syndrome" by L. Connelly. First of all, we learn that this syndrome has to do with thiamin deficiency (a substance more commonly known as vitamin B1). It may cause Wernicke's encephalopathy ("cerebral beriberi") or Korsakoff's psychosis (amnesic disorder often observed in alcoholics) and may be counteracted by minimum content regulation for flour ('bread') or alcoholic beverages ('beer'). The policy issue is whether foodstuffs or drinks should be fortified with BI at all and if so, whether preference should be given to the 'bread' or the 'beer' alternative. The problem with the second choice is that it may make beer look like a health drink, causing alcohol intake to increase. The author goes on to write down two production functions, with the number of persons affected by each of the two conditions as the output and BI intake (plus one additional factor each) as inputs. Unfortunately, he fails to document the empirical implementation of these functions, making it diflicult for the reader to follow up on results. However, across a total of 75 scenarios (5 fortification alternatives, 3 tiers of sensitivity and 5 rates of time preference), enriching alcoholic beverages ('beer') comes out consistently as the alternative entailing minimum and enriching flour ('bread') as the one entailing maximum cost per case averted, with the difference amounting to a factor of 18 at least. Having modeled physician behavior himself, this reviewer read "The influence of fee descriptors and of the supply of general practitioners on treatment choices in general practice" by A. Scott and A. Shiell with particular interest.
This is a selection of 12 papers given at the 1993 Australian Conference of Health Economists held in Canberra, each accompanied by a commentary. The scope of issues covered is truly continental, ranging from "How do we measure the size of the public hospital sector in the hospital industry?" (by D. P. Doessel) to "Health, safe water, and sanitation: a cost minimisation" (by D. H. Wibowo, a guest speaker from Jakarta). The papers broadly fall into two groups, surveys and original research papers devoted to a policy issue. The first survey paper is by G. Satkeld, P. Davey and G. Arnolda, "A critical review of health-related economic evaluations conducted in Australia since 1978". The authors begin by determining the criteria of good evaluation practice, such as ensuring that the control group is well defined or that marginal costs are distinguished from average costs. In keeping with much of the medical literature, they praise the randomized controlled trial as the 'gold standard' of evaluation studies. In the opinion of this reviewer, perfect randomization is unattainable (if only for attrition effects). Therefore, emphasis should rather be put on a careful specification of the sample selection mechanisms at work, permitting to correct the structural estimates for sample selection bias (usually by adding the inverse of the Mill's ratio as a regressor). While the authors find most of the 33 studies reviewed deficient in one or several dimensions, they offer some valuable advice to future evaluators in the final section. "The rhetoric of cost utility analysis of health care" by R. J. Kemp looks like a fine complement to the first paper. Kemp cautions medical readers against the economists' use of the term 'utility' as well as the interpersonal weighting that tends to creep into practical cost utility analysis. Apart from this, however, this contribution is not as provocative and searching as promised by its provocative title. C. Selby Smith addresses the one-thousand-dollar question head-on, "From research to action: does economic evaluation affect health policy or practice?" He clearly
Department of Geography University of Windsor Windsor, ON Canada NgB 31>4
Frank Innes
Book Reviews
155
Whereas physician density has long been suspected of triggering 'supplier-induced demand' across the board, fee descriptors may be expected to have a more targeted influence on treatment choices. In a multivariate logit analysis, physician density was found to neither increase the propensity to accept for treatment, to counsel, to prescribe, or to follow up on cases. However, physicians billing their patients on a contents-based rather than a time-based fee schedule (this is the meaning of 'fee descriptors' here) were found to be more likely to prescribe drugs and possibly to provide advice, in keeping with the stated hypothesis. Finally, a topic of interest to all readers familiar with insurance-based health care systems is "The determinants of the demand for private health insurance under Medicare" by S. Hopkins and M. P. Kidd. To them, the two main research questions are whether those having supplementary private insurance are motivated by health concerns or just financial opportunity. The authors define "[t]he direct cost of private health insurance [as] the insurance premium itself" (p. 186) which is common belief but nevertheless wrong. Since the greater part of the insurance premium is used to cover the expected value of claims, the direct cost (or more precisely: price) of insurance is the so-called
loading (for administrative and sales expense, risk to the owners of the insurance company, and profit). Apart from this minor slip, a substantiative problem with this (otherwise well-done) paper is that the sample boils down from some 54,000 to some 16,500 individuals, which raises the specter of selection mechanisms that may importantly bias econometric estimates (see the point made above). Therefore, the authors' finding (aptly presented in tables showing the marginal impact of several characteristics on probability of purchase) that above all the sicklier, but to some extent also the well-to-do are more likely to purchase supplementary private health insurance must be regarded as provisional. In conclusion, this volume testifies of the high level of expertise of health economics as performed in Australia, especially with regard to applied, policy-oriented research. It can be recommended to anyone desirous to keep track of the economic and welfare consequences of a continental health policy that has gone through several changes during the last two decades.
History, edited by Virginia Berridge and Philip Strong. Cambridge University Press,
of several diseases, attempts to intervene in the epidemics, and the formulation of both national and international policies by health authorities. The latter part--titled 'AIDS as history'--deals with more contemporary issues such as British drug policy, New York needle trial and the formulation of AIDS-specific policies in several countries. Having myself studied both geography and history, I appreciate the large scope of the book. All articles have been carefully written for an international audience. Writers also provide all the information needed for understanding the local and national settings described in the texts. I was also impressed by how powerful contemporary historical analysis can be. Instead of only putting together a number of loosely connected articles, the editors have succeeded in combining the two sections of the book--the past and the present--in an efficient, revealing and inspiring way. Past decision making and the reasoning behind it are compared with today's policy formulation using several illustrative examples. AIDS has become almost an unavoidable part of everyday life in many countries. As a subject of scientific study it has attracted researchers far beyond the biomedical and epidemiological realm. Health authorities responsible for formulating national policies are faced with a growing number of multidisciplinary information often with contradicting messages. History cannot provide direct answers to present questions, but knowing and understanding the decisions made by previous generations do help us. AIDS and Contemporary History is a well-written and carefully edited collection of articles every researcher and health officer working with AIDS should read.
AIDS and Contemporary
Cambridge, U.K. 1993. 284 pp., U.S. $54.95 (hardbound). Since the first patients were diagnosed in the early 1980s, AIDS has become a phenomenon. A phenomenon not only reaching global proportions in terms of epidemiology, but also in terms of scientific and ethical debates, conflicting interests, and an unforeseen medical race to mention but few. During the first decade, some 15,000 scholarly articles and books concerning AIDS and H1V have been published. Despite massive research activity, it may well take another decade until the biomedical sciences have succeeded in solving the final mysteries of this fatal virus. Until then, we must learn to live with a growing number of AIDS patients in all societies round the world. When facing new challenges, we often look into the history to seek for advice; how did individuals and societies react in similar situations in the past. And knowing the history---e.g, the history of the tuberculosis epidemic-certainly helps at least by providing thought-provoking examples. But times change and history is never repeated. Thus, decisions made in the past, e.g. to intervene in harmful epidemics, cannot be copied as such and used as models for decision making in the contemporary context. We can only learn from the past through carefully conducted professional analysis and interpretation of historical data for the modern society. The coeditors of this book have taken up the challenge of producing a multidisciplinary collection of articles to help us understand and evaluate the past experiences during the AIDS era. They have organized the book by dividing the articles into two groups. The first one--titled as 'The prehistory of AIDS'--is made of articles dealing with the history
Evaluating the National Health Service Reforms, edited by Ray Robinson and Julian Le Grand. Transaction Books, New Brunswick (U.S.A.) and Oxford (U.K.) 1994. 228 pp., no price given. The U.K. National Health Service (NHS) reforms were introduced in 1991, after being promulgated in 1989. For the
Institute of Empirical Research in Economics University of Zurich Blumlisalpstr. 10 Zurich, Switzerland
Department of Geography University of Turku FIN-20500 Turku Finland
P. Zweifei
Markku l.~yt6nen
non-aficionado it is important to understand what they were. A comprehensive National Health Service was introduced in the U.K. in 1948. Within 6 years of its inception problems of funding developed and have continued. Changes in structure and organization occurred in 1974 and 1981, after consultation and agreement with most health care workers. The 1989 'reforms' were introduced by a
Book Reviews
On the other hand, Professor Gilbert repeatedly quotes medical authorities regarding the general symptoms associated with, say Addison's disease in the Kennedy example, and assumes that these were displayed in the particular patient. This is an argument familiar to geographically trained readers, very similar to the so called ecological fallacy! Again in the diflicult area of psychological medicine Professor Gilbert comes across as Freudian in his interpretation, assuming that the eminent soldier Eisenhower was driven by a sense of duty instilled by his mother rather than his military background and that Ronald Reagan's alcoholic father crippled him for life with respect to his concept of legitimate relationships (p. 227). Moreover, apart from references to Nancy Reagan, Presidential figures are presented as lacking any familial support in either sickness or health. This study does, however, paint a clear picture of the position of power enjoyed by medical men in the United States, persons presumably at the top of their profession, who decide what to do, and not to do, on behalf of their client, even should that client be the President. As a treatise in political science, the book clearly argues for reform in the top echelons of the American state.
Non-American readers, throughout the study will marvel at the extent of power concentrated in the American trying to function as the nation's 'chief administrator', who we are told may have to read and act on up to 60 or 70 documents a day as well as perform political and public roles. For persons who have almost necessarily weathered the storms of political life for years and are therefore rarely in their prime physiologically, to handle this load is asking too much. Clearly delegation, marshalling of expert advice and a small cohort of White House staff managed by a highly competent chief of staff are essential for the system to work inspite of political pressures to appoint political supporters to these positions. The notion of the President as an autocratic dictatorial leader with all the power associated with Middle American states, is but thinly veiled despite all the trappings of American democracy at least in the mindset of some Americans who clamor for the attention of their President, who is clearly as fallable and human as the rest of us. I have rarely read such a thought provoking book.
Economics and Health: 1993, Proceedings of the Fifteenth Australian Conference of Health Economists, edited by C. Selby Smith. Public Sector Management Institute, Clayton (Victoria) and National Centre for Health Program Evaluation, Fairfield (Victoria), 1994. 277 pp. (paperback) [price not known].
derives the motivation for this paper from the recent foundation of the Centre for Health Program Evaluation in Melbourne. Focusing on studies on health services labor requirements and noting that prior values and beliefs as well as institutional arrangements can importantly shape the impact of scientific research on policy-making, Selby Smith asks himself why some studies have been far more influential than others. Among eight determining factors, the extent to which a study serves the objectives of some powerful lobby turns out to be crucial, whereas quality of methods used seems to be of minor importance. Of course, this tends to undercut the argument of the first-mentioned survey paper, which revolves exclusively around good evaluation practice. After this somewhat sobering experience, the reader is now invited to sample some of the applied research studies, such as "A cost-effectiveness study of alternative measures for preventing the Wernicke-Korsakoff syndrome" by L. Connelly. First of all, we learn that this syndrome has to do with thiamin deficiency (a substance more commonly known as vitamin B1). It may cause Wernicke's encephalopathy ("cerebral beriberi") or Korsakoff's psychosis (amnesic disorder often observed in alcoholics) and may be counteracted by minimum content regulation for flour ('bread') or alcoholic beverages ('beer'). The policy issue is whether foodstuffs or drinks should be fortified with BI at all and if so, whether preference should be given to the 'bread' or the 'beer' alternative. The problem with the second choice is that it may make beer look like a health drink, causing alcohol intake to increase. The author goes on to write down two production functions, with the number of persons affected by each of the two conditions as the output and BI intake (plus one additional factor each) as inputs. Unfortunately, he fails to document the empirical implementation of these functions, making it diflicult for the reader to follow up on results. However, across a total of 75 scenarios (5 fortification alternatives, 3 tiers of sensitivity and 5 rates of time preference), enriching alcoholic beverages ('beer') comes out consistently as the alternative entailing minimum and enriching flour ('bread') as the one entailing maximum cost per case averted, with the difference amounting to a factor of 18 at least. Having modeled physician behavior himself, this reviewer read "The influence of fee descriptors and of the supply of general practitioners on treatment choices in general practice" by A. Scott and A. Shiell with particular interest.
This is a selection of 12 papers given at the 1993 Australian Conference of Health Economists held in Canberra, each accompanied by a commentary. The scope of issues covered is truly continental, ranging from "How do we measure the size of the public hospital sector in the hospital industry?" (by D. P. Doessel) to "Health, safe water, and sanitation: a cost minimisation" (by D. H. Wibowo, a guest speaker from Jakarta). The papers broadly fall into two groups, surveys and original research papers devoted to a policy issue. The first survey paper is by G. Satkeld, P. Davey and G. Arnolda, "A critical review of health-related economic evaluations conducted in Australia since 1978". The authors begin by determining the criteria of good evaluation practice, such as ensuring that the control group is well defined or that marginal costs are distinguished from average costs. In keeping with much of the medical literature, they praise the randomized controlled trial as the 'gold standard' of evaluation studies. In the opinion of this reviewer, perfect randomization is unattainable (if only for attrition effects). Therefore, emphasis should rather be put on a careful specification of the sample selection mechanisms at work, permitting to correct the structural estimates for sample selection bias (usually by adding the inverse of the Mill's ratio as a regressor). While the authors find most of the 33 studies reviewed deficient in one or several dimensions, they offer some valuable advice to future evaluators in the final section. "The rhetoric of cost utility analysis of health care" by R. J. Kemp looks like a fine complement to the first paper. Kemp cautions medical readers against the economists' use of the term 'utility' as well as the interpersonal weighting that tends to creep into practical cost utility analysis. Apart from this, however, this contribution is not as provocative and searching as promised by its provocative title. C. Selby Smith addresses the one-thousand-dollar question head-on, "From research to action: does economic evaluation affect health policy or practice?" He clearly
Department of Geography University of Windsor Windsor, ON Canada NgB 31>4
Frank Innes
Book Reviews
155
Whereas physician density has long been suspected of triggering 'supplier-induced demand' across the board, fee descriptors may be expected to have a more targeted influence on treatment choices. In a multivariate logit analysis, physician density was found to neither increase the propensity to accept for treatment, to counsel, to prescribe, or to follow up on cases. However, physicians billing their patients on a contents-based rather than a time-based fee schedule (this is the meaning of 'fee descriptors' here) were found to be more likely to prescribe drugs and possibly to provide advice, in keeping with the stated hypothesis. Finally, a topic of interest to all readers familiar with insurance-based health care systems is "The determinants of the demand for private health insurance under Medicare" by S. Hopkins and M. P. Kidd. To them, the two main research questions are whether those having supplementary private insurance are motivated by health concerns or just financial opportunity. The authors define "[t]he direct cost of private health insurance [as] the insurance premium itself" (p. 186) which is common belief but nevertheless wrong. Since the greater part of the insurance premium is used to cover the expected value of claims, the direct cost (or more precisely: price) of insurance is the so-called
loading (for administrative and sales expense, risk to the owners of the insurance company, and profit). Apart from this minor slip, a substantiative problem with this (otherwise well-done) paper is that the sample boils down from some 54,000 to some 16,500 individuals, which raises the specter of selection mechanisms that may importantly bias econometric estimates (see the point made above). Therefore, the authors' finding (aptly presented in tables showing the marginal impact of several characteristics on probability of purchase) that above all the sicklier, but to some extent also the well-to-do are more likely to purchase supplementary private health insurance must be regarded as provisional. In conclusion, this volume testifies of the high level of expertise of health economics as performed in Australia, especially with regard to applied, policy-oriented research. It can be recommended to anyone desirous to keep track of the economic and welfare consequences of a continental health policy that has gone through several changes during the last two decades.
History, edited by Virginia Berridge and Philip Strong. Cambridge University Press,
of several diseases, attempts to intervene in the epidemics, and the formulation of both national and international policies by health authorities. The latter part--titled 'AIDS as history'--deals with more contemporary issues such as British drug policy, New York needle trial and the formulation of AIDS-specific policies in several countries. Having myself studied both geography and history, I appreciate the large scope of the book. All articles have been carefully written for an international audience. Writers also provide all the information needed for understanding the local and national settings described in the texts. I was also impressed by how powerful contemporary historical analysis can be. Instead of only putting together a number of loosely connected articles, the editors have succeeded in combining the two sections of the book--the past and the present--in an efficient, revealing and inspiring way. Past decision making and the reasoning behind it are compared with today's policy formulation using several illustrative examples. AIDS has become almost an unavoidable part of everyday life in many countries. As a subject of scientific study it has attracted researchers far beyond the biomedical and epidemiological realm. Health authorities responsible for formulating national policies are faced with a growing number of multidisciplinary information often with contradicting messages. History cannot provide direct answers to present questions, but knowing and understanding the decisions made by previous generations do help us. AIDS and Contemporary History is a well-written and carefully edited collection of articles every researcher and health officer working with AIDS should read.
AIDS and Contemporary
Cambridge, U.K. 1993. 284 pp., U.S. $54.95 (hardbound). Since the first patients were diagnosed in the early 1980s, AIDS has become a phenomenon. A phenomenon not only reaching global proportions in terms of epidemiology, but also in terms of scientific and ethical debates, conflicting interests, and an unforeseen medical race to mention but few. During the first decade, some 15,000 scholarly articles and books concerning AIDS and H1V have been published. Despite massive research activity, it may well take another decade until the biomedical sciences have succeeded in solving the final mysteries of this fatal virus. Until then, we must learn to live with a growing number of AIDS patients in all societies round the world. When facing new challenges, we often look into the history to seek for advice; how did individuals and societies react in similar situations in the past. And knowing the history---e.g, the history of the tuberculosis epidemic-certainly helps at least by providing thought-provoking examples. But times change and history is never repeated. Thus, decisions made in the past, e.g. to intervene in harmful epidemics, cannot be copied as such and used as models for decision making in the contemporary context. We can only learn from the past through carefully conducted professional analysis and interpretation of historical data for the modern society. The coeditors of this book have taken up the challenge of producing a multidisciplinary collection of articles to help us understand and evaluate the past experiences during the AIDS era. They have organized the book by dividing the articles into two groups. The first one--titled as 'The prehistory of AIDS'--is made of articles dealing with the history
Evaluating the National Health Service Reforms, edited by Ray Robinson and Julian Le Grand. Transaction Books, New Brunswick (U.S.A.) and Oxford (U.K.) 1994. 228 pp., no price given. The U.K. National Health Service (NHS) reforms were introduced in 1991, after being promulgated in 1989. For the
Institute of Empirical Research in Economics University of Zurich Blumlisalpstr. 10 Zurich, Switzerland
Department of Geography University of Turku FIN-20500 Turku Finland
P. Zweifei
Markku l.~yt6nen
non-aficionado it is important to understand what they were. A comprehensive National Health Service was introduced in the U.K. in 1948. Within 6 years of its inception problems of funding developed and have continued. Changes in structure and organization occurred in 1974 and 1981, after consultation and agreement with most health care workers. The 1989 'reforms' were introduced by a