Tyler Cowen has an interesting interview with Harvard health economist David Cutler speaking about (what else?) health economics. Below is an excerpt: CUTLER: Everything that we know in healthcare is that people have difficulty choosing on the basis of price and quality. It goes back a little bit to some of the behavioral issues that …
I have written previously about the need for distributional cost-effectiveness analysis (DCEA) which would increase the value of treatments who improve the health for individuals who currently have the worst expected quality-adjusted life expectancy (QALE). I’ve written about this in AJMC and Health Affairs among other places. One key question many individuals may have is …
Distributional Cost Effectiveness Analysis: A simple example Read More »
An interesting result from Courbage and Peter (2021): …uncertainty about the probability of side effects and the efficacy of the vaccine always reduces take-up under ambiguity aversion. However, uncertainty about the underlying disease, being the probability of sickness or the probability of a severe course of disease, may either encourage or discourage vaccination. Because vaccination …
COVID-19 has increased job insecurity for many workers around the world. At the same time, after vaccinations, job growth is slowly coming back. Will increased job security undo deleterious impacts of previous job insecurity worries? An interesting finding from Lepinteur (2021) weighs in on the topic: Is workers’ health more sensitive to losses than gains …
Joe Newhouse has a nice overview article on the value of preventive care in the latest edition of the Journal of Economic Literature. He makes three key points: Preventive care may save money, but often does not. That does not mean that they are not high value. Preventive care should be seen as an insurance …
The cost to bring a drug to market is a hotly debated topic. The costs include not only the costs for basic science and clinical trials. However, one must also take into account the cost of capital (since most cost are incurred up front, but revenue begins only after drug approval) and the likelihood of …
Average cost to bring a drug to market is over $1 billion Read More »
Quality of care is difficult to measure. Even if you had a perfect measure of quality in terms of health outcomes, risk adjustment is imperfect. For instance, academic medical centers are often assumed to have high quality, but actual outcomes observed in the data may not be that good if they also receive the sickest, …
Standard cost-effectiveness analysis assumes that any gain in quality-adjusted life years (QALYs) should be valued equally. This does not sound unreasonable, but is it true in practice? Consider two potential violations of constant value of QALY gains: scope insensitivity and severity independence. I define each of these below: Scope insensitivity. This assumes that individuals value …
At first glance, John Cochrane makes a compelling case that pay toilets should not be illegal. The absence of pay toilets is in fact a delightful encapsulation of so much that is wrong with American economic policy these days. Activists decide free toilets are a human right, and successfully campaign to ban pay toilets. For …
A few facts: Pharma is increasingly a key driver of US R&D. Pharmaceutical firms share of R&D increased from <10% in the early 1970s to 24% in 2018 (among firms in Compustat data). Moreover, 5 out of top 10 largest R&D spenders in Compustat in 2010 were pharmaceutical firms. A majority of drugs are targeted …
Why R&D expenses rising and productivity falling could be a good thing Read More »
Once you start trading for yourself, you start thinking for yourself. Yeonmi Park, escapee from North Korea, author of In Order to Live: A North Korean Girl’s Journey to Freedom
Budget impact models aim to let payers know how much a new drug will cost them. Clearly, payer cost depends on the dose. Some drugs are dosed the same for everyone. Other drugs are dosed based on patient weight, body surface area (BSA) or other criteria. If you’re a building a budget impact model, how …
Incorporating weight-based dosing into a budget impact model Read More »
‘If all your friends jumped off a bridge, would you?’ This is a common parenting phrase is meant to motivate kids to reject peer’s actions that are bad behaviors. While this blogger will not comment how effective this parenting phrase is, peer effects are real. Consider the recent NBER working paper by Finkelstein, Gentzkow, and …
From John Maynard Keynes’ Essays in Biography: The study of economics does not seem to require any specialized gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An …
Results from a survey titled “Coronavirus Impact and Recovery of the Small Businesses Economy“, which has collected responses from over 520,000 business owners in the US and Canada. Some general positive trends, but still over 20% of small business owners have concerns of their financial reserves running out and nearly 20% are concerned that the …
COVID-19 impact on small businesses: October 2020 Update Read More »
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