Joan Costa-i-Font, Edward C. Norton, Luigi Siciliani, 12 September 2017

Long-term care services are at the forefront of a new wave of reforms extending public intervention into healthcare, but it is unclear how the government should intervene to fund and organise such services. This column suggests some strengths and weaknesses of public financing and organisation of long-term care, including its weak financial sustainability and some potential knock-on effects on saving behaviour. However, publicly funded systems deliver better equity of access. Non for profit and autonomous organisations provide better care.

Laurent Gobillon, Carine Milcent, 21 July 2017

It is widely believed that the goal of keeping health expenditures under control while increasing the quality of the healthcare system can best be achieved by giving a greater role to market forces. This column evaluates the effect of a pro-competition reform implemented in France over 2004-2008 on hospital quality. It finds that the impact on quality depends on the managerial autonomy of hospitals. And due to the French healthcare market structure, the overall effect of the reform has been limited.

Margaret Kyle, Heidi Williams, 22 May 2017

Despite higher per capita healthcare spending, US health outcomes compare poorly with other developed nations. One potential reason is that the US healthcare system creates incentives that promote the faster adoption of medical technologies with minimal benefits. This column tests this claim using data on the quality and diffusion of new pharmaceuticals in the US and four other countries. The results suggest that compared to Australia, Canada, Switzerland, and the UK, low-quality drugs diffuse more quickly in the US relative to high-quality drugs.

Travers Child, 21 May 2017

The pervasive ‘hearts and minds’ theory guiding counterinsurgency doctrine contends that military-led reconstruction reduces violence in post-conflict settings. Using rare data from Afghanistan, this column questions the theoretical and empirical basis of that perspective. Military-led projects in the health sector are found to successfully alleviate violence, whereas those in the education sector actually provoke conflict. The destabilising effects of education projects are strongest in conservative areas, where public opinion polls suggest education projects breed antipathy towards international forces.

Micael Castanheira, Carmine Ornaghi, Georges Siotis, 01 March 2017

Conventional wisdom holds that increased competition improves market outcomes. This column argues that the link from competitiveness to allocative efficiency is weaker than this wisdom would suggest. Using evidence of generic substitutes of previously patent-protected drugs, it shows that firms can use non-price instruments which affect – or even reverse – the way competitive shocks alter market outcomes, with significant welfare implications.

Michael Callen, Saad Gulzar, Muhammad Yasir Khan, Ali Hasanain, 21 August 2016

Government employee absenteeism is often a serious problem in developing countries. One potential reason is government positions being appointed as a kind of patronage to reward political loyalty. This column presents the results of an intervention designed to address government doctor absenteeism in Punjab, Pakistan. The programme provided government inspectors with a smartphone app to streamline information flows, and improved inspection rates. The results support the political patronage hypothesis and provide encouraging support for data-driven policymaking.

Terence Cheng, Joan Costa-i-Font, Nattavudh Powdthavee, 31 July 2015

Economists have traditionally viewed healthcare as a luxury good – consumption of it will increase more than proportionally as income rises. This column challenges this view, exploiting the windfall of lottery winnings to estimate elasticities for healthcare demand in the UK. Results suggest that income elasticities for public healthcare services are close to zero. A medium to large windfall is found instead to increase the uptake of private health insurance and preventative services. This suggests that rising incomes will increase private sector demand, but will leave public healthcare demand unchanged.

Rena Conti, Ernst Berndt, David Howard, 25 March 2015

Total US prescription drug spending rose 13% in 2014, the biggest increase in a decade. Driving this trend is spending on branded specialty drugs, which rose an unprecedented 31%. This column discusses recent research into the relationship between inflation-adjusted launch prices and survival benefits and approval year for 58 anticancer drugs approved in the US between 1995 and 2013. The authors find that launch prices are going up by $8,500 per year, approximately 12% year over year.

Iain Cockburn, Jean Lanjouw, Mark Schankerman, 22 November 2014

Patented pharmaceuticals diffuse across international borders slowly, and sometimes not at all. This column analyses the effect of patent protection and price regulation on the speed of and extent to which drugs enter new markets. There is a fundamental tradeoff between affordability – taking the form of low patent protection and strong price regulation – and rate of entry into a national market.

Charles Goodhart, Philipp Erfurth, 04 November 2014

Most of the world is now at the point where the support ratio is becoming adverse, and the growth of the global workforce is slowing. This column argues that these changes will have profound and negative effects on economic growth. This implies that negative real interest rates are not the new normal, but rather an extreme artefact of a series of trends, several of which are coming to an end. By 2025, real interest rates should have returned to their historical equilibrium value of around 2.5–3%.

Charles Manski, 01 October 2014

Clinical practice guidelines recommend treating all patients with similar attributes the same way. This column argues that, under conditions of uncertainty or ambiguity, this may be bad advice. Treating similar patients differently provides two benefits. The first is diversification – assigning similar patients to different treatments limits the consequences of choosing an inappropriate treatment. The second benefit is that randomly assigning treatments helps clinicians learn which ones are most effective.

Daniel Bennett, Wes Yin, 14 August 2014

Many drugs sold in poor countries are counterfeit or substandard, endangering patients’ health and fostering drug resistance. Since drug quality is difficult to observe, pharmacies in weakly regulated markets may have little incentive to improve quality. However, larger markets allow firms to reorganise production and invest in technologies that reduce the marginal cost of quality. This column discusses how the entry of a new pharmacy chain in India led incumbents to both cut prices and raise drug quality.

Joan Costa-i-Font, Alistair McGuire, Nebibe Varol, 10 May 2014

Generic medicines are cheaper than their branded counterparts, offering potential savings in healthcare budgets. Medicine-price regulation plays an important role in the expansion of the market for generic medicines. This column presents new evidence that higher levels of price regulation, by lowering the expected price to generic manufacturers, lead (ceteris paribus) to greater delays in generic entry.

Jeffrey Frankel, 27 February 2014

Market-based mechanisms such as cap-and-trade can tackle externality problems more efficiently than command-and-control regulations. However, politicians in the US and Europe have retreated from cap-and-trade in recent years. This column draws a parallel between Republicans’ abandonment of market-based environmental regulation and their recent disavowal of mandatory health insurance. The author argues that in practice, the alternative to market-based regulation is not an absence of regulation, but rather the return of inefficient mandates and subsidies.

Zack Cooper, 30 October 2012

With over 40 million Americans uninsured and the costs of care at an all time high, healthcare has become a major issue in this year’s presidential race. This column evaluates the ramifications of both candidates’ respective policies.

Joan Costa-i-Font, 22 August 2012

National healthcare systems are under financial pressure around the globe. One commonly suggested reform involves decentralisation. This column argues that the success of healthcare decentralisation depends on the political and design incentives. But if successful decentralisation is achieved, it can result in higher satisfaction and more fairness at no additional cost.

Stefan Dercon, Albert Park, Abhijeet Singh, 25 June 2012

Despite the popularity of school meals, little evidence exists on their effect on health outcomes. This study investigates whether the school meals program in Andhra Pradesh, India, ameliorated the deterioration of health in young children caused by a severe drought.

Peter Diamond, 02 September 2011

Nobel laureate Peter Diamond of MIT talks to Romesh Vaitilingam about of the impact of improved longevity and the resulting demographic change on the retirement and healthcare systems of the advanced economies. The interview was recorded in August 2011 at the Fourth Lindau Meeting on Economic Sciences, which brought together 17 of the 38 living economics laureates with nearly 400 top young economists from around the world. [Also read the transcript]

Timothy Hatton, 05 August 2011

The last century has seen dramatic improvements in the health of Europeans. Young adult males are about 11 centimetres taller than their counterparts were a century ago. This column examines and explains the remarkable long-run trends in the average height of Europeans.

Lucian Cernat, 24 July 2011

Malaria is still a public-health nightmare in many African countries. This column argues for greater coherence between trade, foreign investment, and other malaria-related policy initiatives. In particular, technical assistance should prioritise the removal of "killer tariffs" on mosquito nets.

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