Health Economists’ View of Policy Questions

1. Health Economists’ View of Policy Questions AcademyHealth Annual Meeting – Seattle, WA June 24, 2006 Michael A. Morrisey University of Alabama at Birmingham and John Cawley Cornell University

2. AcademyHealth iHEA Advisory Committee: Roger Feldman Richard Arnould Kate Bundorf Michael Hagan David Knutson Kristine Metter Sharron Arnold Thanks to:

3. Survey Issues: • Web based survey: • Invitation & two follow-up emails issued • October 21 – November 21, 2005 • Sample Universe: • All U.S. members of iHEA • All members of AcademyHealth Health Economics Interest Group • Unduplicated total . . . . . . . . . . . . . . . . . . . . . 1,439 • Response Rate. . . . . . . . . . . . . . . . . . . . . . 32 %

4. Do You Consider Yourself To Be: • A health economist 53% • An economist who works in health 21% • Neither 26% For this presentation we exclude those answering neither.

5. Outline • Report policy views of health economists • Use factor analysis and probit regression to identify patterns of responses • Identify the extent to which health economists participate in policy discussions

6. We asked 19 Questions About Views on Health Policy Questions or the Effects of Open Empirical Questions in Health Economics • We substantially agree on 8 • We modestly agree on 4 • We substantially disagree on 7

7. Substantial Agreement

8. “Workers pay for employer-sponsored health insurance in the form of lower wages or reduced benefits” Percent

9. “Education has a causal impact on health” Percent

10. “Recent horizontal and vertical integration in the health care sector is driven by the pursuit of market power” Percent

11. “Health insurance premiums charged to individuals born with genetic defects that result in above-average use of medical care should be higher than those charged to individuals without such defects.” Percent

12. “Health insurance premiums should be higher for those who engage in unhealthy behaviors (e.g., smoking, excess drinking, obesity)” Percent

13. “Rapidly advancing medical technology is the most important cause of rising health care spending in the U.S.” Percent 46% in 1989

14. “Insurance markets suffer significantly from adverse selection” Percent

15. “Third-party payment results in patients using services whose costs exceed their benefits, and this excess of costs over benefits amounts to at least 5 % of total health care expenditures” Percent

16. Modest Agreement

17. “The U.S. should permit ‘re-importation’ of pharmaceuticals” Percent

18. “Physicians induce substantial demand for their services” Percent 81% in 1989

19. “Controlling for the average income in an area, greater income inequality worsens health” Percent

20. “The U.S. should continue to subsidize graduate medical education” Percent

21. Substantial Disagreement

22. “The U.S. should continue the current tax treatment of employer-sponsored health insurance” Percent

23. “The U.S. should adopt a Canadian-style system of universal and compulsory health insurance” Percent 52% in 1989

24. “The U.S. should require employers to provide a minimum level of health insurance for their workers” Percent 38% in 1989

25. “The U.S. should implement a refundable tax credit to encourage people to buy private health insurance” Percent

26. “The current profits of pharmaceutical companies are necessary to give them incentives for optimal R&D” Percent

27. “The benefits of the Medicare prescription drug benefit exceed the costs” Percent

28. “If a payer (e.g., an HMO) negotiates a lower price for hospital services, the hospital will raise prices to other payers” Percent 63% in 1989

29. Factor Analysis of Disagreement and Modest Agreement Issues • Views do not particularly “lump” • Factor 1 • Agree on cost shifting • Agree on employer mandates • Agree on Canadian system • Agree that income inequality affects health • Factor 2 • Disagree on profits and Pharm R&D • Agree on drug re-importation • Agree on Canadian system

30. Probit Descriptive Analysis of Disagreement and Modest Agreement • Agree = f (degree type, training, experience, demographics, and employment setting) • No consistent pattern of responses across issues • Few statistically significant associations

31. Health Economists’ Impact on Policy Discussions • 85.5% of health economists report having some impact on policy discussions • Measured as responding affirmatively to at least one of the 7 questions we asked about involvement 296 respondents to these questions

32. Health Economists’ Impact on Policy Discussions

33. Health Economists’ Impact on Policy Discussions

34. Who Participates? • Using the same descriptive probit model used with the views on policy… • Those with MDs more likely to participate • Those with master’s degrees less likely • Those with less than 4 years of experience are less likely to participate

35. Overall • Health economists agree on a number of important policy questions • We disagree on many topics as well, but there seems to be little systematic disagreement • We are active in promoting our research in the policy arena