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.
Michael Callen, Saad Gulzar, Muhammad Yasir Khan, Ali Hasanain, 21 August 2016
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.
Amanda Goodall, 21 July 2011
Are hospitals better run by former doctors or by specialist managers? This column looks at the top-ranking hospitals in the US and finds that hospital-quality scores are about 25% higher in physician-run hospitals than in the average hospital.
James Banks, Zoë Oldfield, James P Smith, 21 July 2011
How much of our health in adulthood and old age is determined by our childhood? Using decades of data from the US and England, this column shows that the US excess in disease is common throughout the age distribution of the population. Moreover, poor childhood health tends to worsen adult health more in the US.
Joan Costa-i-Font, Nebibe Varol, Alistair McGuire, 08 July 2011
Pharmaceutical price regulations make drugs more accessible to consumers – if the products are brought to market. This column explores how price regulation affects the diffusion of pharmaceutical treatments. It finds that more regulated, lower-price markets experience the longest delays in launching new medications.
Anupam Jena, Jonathan Skinner, Amitabh Chandra, 19 June 2011
How much healthcare to provide and how to pay for it are two questions at the heart of the public sector. This column argues that by using comparative effectiveness research, policymakers can better understand those healthcare initiatives that work and those that do not. In doing so, the research can give rise to the often-cited but rarely-seen efficiency gains.
Friedrich Breyer, Stefan Felder, Joan Costa-i-Font, 14 May 2011
Over the last half century, life expectancy in the industrialised world has risen dramatically – and so has the healthcare bill. Is population ageing the main reason? This column argues that while ageing does affect health spending, it is far less important than many think. It adds that obsession with an ageing population is a dangerous red herring that prevents dealing with the real culprits of rising costs.