Physicians' conflicts of interest in Japan and the United States: lessons for the United States

Japanese health policy shows that even with physician ownership and the absence of for-profit, investor-owned health care, physicians' conflicts of interest thrive. Physician dispensing of drugs and ownership of hospitals and clinics were justified in Japan as ways to avoid commercialization of medicine. Instead, they create physicians' conflicts and fuel patient overuse of services. Japan's Ministry of Health and Welfare (MHW) has responded by introducing per-diem payment, thereby creating incentives to decrease services in ways similar to those of American managed care organizations, but with none of their benefits, such as coordination of care, oversight of physicians practices, and quality assurance. Although the United States and Japanese health care systems are organized and financed differently there is convergence in the source of their physicians' conflicts and the way they are addressed. The United States is starting to integrate institutional and physician payment and align their incentives, in a traditional Japanese way. In so doing, the United States creates new physicians' conflicts and reduces the role of countervailing incentives and power, an advantage of previous policy. Japan, in turn, has combined incentives to increase and decrease services, thus moving closer to the U.S. policy.     

ERISA, agency costs, and the future of health care in the United States

Because so many Americans receive health insurance through their employers, the Employee Retirement Income Security Act (ERISA) of 1974 plays a dominant role in the delivery of health care in the United States. The ERISA system enables employers and insurers to save money by providing inadequate health care to employees, thereby creating incentives for these agents to act contrary to the interests of their principals. Such agency costs play a significant role in the current health care crisis and require attention when considering reform. We evaluate the two major health care reform movements by exploring the extent to which each reduces agency costs. We find that agency cost analysis clarifies the benefits, limits, and uncertainties of each approach.     

Inching toward incrementalism: federalism, devolution, and health policy in the United States and the United Kingdom

In the United States, the recently enacted Patient Protection and Affordable Care Act of 2010 envisions a significant increase in federal oversight over the nation's health care system. At the same time, however, the legislation requires the states to play key roles in every aspect of the reform agenda (such as expanding Medicaid programs, creating insurance exchanges, and working with providers on delivery system reforms). The complicated intergovernmental partnerships that govern the nation's fragmented and decentralized system are likely to continue, albeit with greater federal oversight and control. But what about intergovernmental relations in the United Kingdom? What impact did the formal devolution of power in 1999 to Scotland, Wales, and Northern Ireland have on health policy in those nations, and in the United Kingdom more generally? Has devolution begun a political process in which health policy in the United Kingdom will, over time, become increasingly decentralized and fragmented, or will this "state of unions" retain its long-standing reputation as perhaps the most centralized of the European nations? In this article, we explore the federalist and intergovernmental implications of recent reforms in the United States and the United Kingdom, and we put forward the argument that political fragmentation (long-standing in the United States and just emerging in the United Kingdom) produces new intergovernmental partnerships that, in turn, produce incremental growth in overall government involvement in the health care arena. This is the impact of what can be called catalytic federalism.     

Coroners' autopsies: quality concerns in the United Kingdom

Safety in health care has increasingly become a key focus of health care providers. Data on "patient outcomes" and evidence-based clinical decision-making have led to real changes in health care policy and care provision. Specialist groups such as the National Patient Safety Agency which operates the National Confidential Enquiry into Patient Outcome and Death (NCEPOD) in the United Kingdom are reliant on good information in order to identify factors that lead to poor patient care. In a recent study the NCEPOD reviewed the quality of coroners' autopsy reports on which they rely for much of their core data. The study found that just over half of the reports (52%) were considered satisfactory by the reviewers, 19% were good and 4% were excellent. However, over a quarter of autopsies were marked as poor or of an unacceptable standard. While analysing the factors associated with poor-quality autopsies, comments and recommendations were made with regard to the processes of death investigation and the degree to which the coroner's death investigation meets the needs of health care services.     

A consideration of user financial incentives to address health inequalities

Health inequalities and user financial incentives to encourage health-related behavior change are two topical issues in the health policy discourse, and this article attempts to combine the two; namely, we try to address whether the latter can be used to reduce the former in the contexts of the United Kingdom and the United States. Payments for some aspects of medical adherence may offer a promising way to address, to some extent, inequalities in health and health care in both countries. However, payments for more sustained behavior change, such as that associated with smoking cessation and weight loss, have thus far shown little long-term effect, although more research that tests the effectiveness of different incentive mechanism designs, informed by the findings of behavioral economics, ought to be undertaken. Many practical, political, ethical, and ideological objections can be waged against user financial incentives in health, and this article reviews a number of them, but the justifiability of and limits to these incentives require more academic and public discourse so as to gain a better understanding of the circumstances in which they can legitimately be used.     

Health care for older persons in England and the United States: a contrast of systems and values

This article extends previous comparisons of access to health care for older persons in England and the United States by comparing rates of avoidable hospital conditions as a proxy for primary care access and by examining the distribution of care within these older populations. Drawing on hospital data from the two countries, we find that older persons in the United States, particularly those over the age of seventy-five, receive far more revascularizations than do older persons in England. Differences in the use of lower-joint replacement are not as great, but we are unable to assess differences in the need for these procedures. Although older persons have greater access to specialty care in the United States, there appears to be much better access to primary care in England. We are unable to draw comparisons on the extent of inequalities in access to health care, although in the United States there is evidence of inequalities in access by race, and in England we confirm earlier studies that find inequalities by level of deprivation. These findings are discussed in the context of the political debates over access to care and rationing in the two countries.     

How Brazil outpaced the United States when it came to AIDS: the politics of civic infiltration, reputation, and strategic internationalization

Using a temporal approach dividing the reform process into two periods, this article explains how both Brazil and the United States were slow to respond to AIDS. However, Brazil eventually outpaced the United States in its response due to international rather than democratic pressures. Since the early 1990s, Brazil's success has been attributed to "strategic internationalization": the concomitant acceptance and rejection of global pressure for institutional change and antiretroviral treatment, respectively. The formation of tripartite partnerships among donors, AIDS officials, and nongovernmental organizations has allowed Brazil to avoid foreign aid dependency, while generating ongoing incentives for influential AIDS officials to incessantly pressure Congress for additional funding. Given the heightened international media attention, concern about Brazil's reputation has contributed to a high level of political commitment. By contrast, the United States' more isolationist relationship with the international community, its focus on leading the global financing of AIDS efforts, and the absence of tripartite partnerships have prevented political leaders from adequately responding to the ongoing urban AIDS crisis. Thus, Brazil shows that strategically working with the international health community for domestic rather than international influence is vital for a sustained and effective response to AIDS.     

Valleys of Death and Darwinian Seas: Financing the Invention to Innovation Transition in the United States

The basic science and technology research enterprise of the United States—sources of funding, performing institutions, researcher incentives and motivations—is reasonably well understood by academics and policy makers alike. Similarly corporate motivations, governance, finance, strategy, and competitive advantage have been much studied and are relatively well understood. But the process by which a technical idea of possible commercial value is converted into one or more commercially successful products—the transition from invention to innovation—is highly complex, poorly documented, and little studied. In this paper we discuss the process by which basic research is converted into successful commercial innovations. Following Arrow (1962) and Zeckhauser (1996), we explore the hypothesis that asymmetries of informaion and motivation, as well as institutional “gaps,” may systematically deter private investment into early stage technology development. We describe the role of governments—federal and state (or provincial)—in promoting the commercial transition from an invention to an innovation. We conclude by suggesting some lessons that may be learned from the experience of the Advanced Technology Program (ATP) of the United States Department of Commerce, among the few Federal programs specifically intended to meet this need.     

Explaining health care system change: problem pressure and the emergence of "hybrid" health care systems

In this article, we will further the explanation of the state's changing role in health care systems belonging to the Organisation for Economic Cooperation and Development (OECD). We build on our analysis of twenty-three OECD countries, which reveals broad trends regarding governments' role in financing, service provision, and regulation. In particular, we identified increasing similarities between the three system types we delineate as National Health Service (NHS), social health insurance, and private health insurance systems. We argue that the specific health care system type is an essential contributor to these changes. We highlight that health care systems tend to feature specific, type-related deficiencies, which cannot be solved by routine mechanisms. As a consequence, non-system-specific elements and innovative policies are implemented, which leads to the emergence of "hybrid" systems and indicates a trend toward convergence, or increasing similarities. We elaborate this hypothesis in two steps. First, we describe system-specific deficits of each health care system type and provide an overview of major adaptive responses to these deficits. The adaptive responses can be considered as non-system-specific interventions that broaden the portfolio of regulatory policies. Second, we examine diagnosis-related groups (DRGs) as a common approach for financing hospitals efficiently, which are nevertheless shaped by type-specific deficiencies and reform requirements. In the United States' private insurance system, DRGs are mainly used as a means of hierarchical cost control, while their implementation in the English NHS system is to increase productivity of hospital services. In the German social health insurance system, DRGs support competition as a means to control self-regulated providers. Thus, DRGs contribute to the hybridization of health care systems because they tend to strengthen coordination mechanisms that were less developed in the existing health care systems.     

Why hasn't integrated health care developed widely in the United States and not at all in England?

There have been influential advocates for financing and organizing health care in the United States and England based on the model of integrated health care delivery systems (IHCDSs). Despite good evidence that a few IHCDSs provide high-quality health care economically, such organizations are rare and localized in a few market areas in the United States and are absent in the English National Health Service (NHS). The explanation of why this is so includes various contributory factors: the way the development of the medical profession in each country pursued specialization; the division in British medicine between general practitioners and specialists; and the characteristics that we identify of established successful IHCDSs, which created formidable barriers to entry for a new IHCDS. This explains why currently the most promising organizational developments in U.S. health care are hybrids resulting from vertical integration. In England government policies of an "internal market," as adopted in the 1990s and currently, were and are based on a purchaser-provider split with the objectives that providers would compete and be funded by a system in which "money follows the patient." These policies recognize the division in British medicine, which also means that it is difficult to implement a reorganized English NHS based on high-performing IHCDSs.     

Risk,response, and mental health policy: learning from the experience of the United Kingdom

Policy makers in the United States and the United Kingdom recognize that mentally disordered offenders present special challenges to law enforcement, mental health, and social service systems, as well as the community. Although various policy initiatives have advanced over the past twenty years to improve the management of mentally disordered offenders, mental health policy has chronically failed in both countries. Because safety concerns have emerged as the mental health system has been "deinstitutionalized," debate is growing about whether the community-care approach works-for the community. This study argues that mental health policy fails because policy makers focus on the wrong risks and design policies that manage these risks in ways that increase the possibility of adverse clinical and economic outcomes. The argument made here uses the case of persons with severe mental illness in the United Kingdom as an example of the complex relationship between risk and policy making in democratic governance. Emphasis is on the nature of risk in mental health policy and how government responds to policy and political risks. Mental health policy in Britain is then analyzed in terms of its response to and management of risks. Mental health policy has historically mismanaged the risk issue in the United Kingdom and as such has set in motion the growing community-care backlash. The path to a better outcome lies in the responsible management of the right risks. Lessons from the United Kingdom experience can be usefully applied to mental health issues in many industrial democracies.     

Health policy and the politics of research in the United States

During the past decade research has been more important to the health policy-making process in the United States than at any time in the past. This article describes and assesses three competing normative models for research on health affairs: economizing, social conflict, and collective welfare. The three models provide a context for the history of research bearing on health policy in the past half century, with particular pertinence to the years since 1980. The article concludes with a discussion of some of the consequences of the new legitimacy of research.     

The political and economic context of mental health care in the United States

Since the mid-1970s, the mental health treatment system in the U.S. has faced budgetary famine. This is in stark contrast to the growing cornucopia of fiscal resources enjoyed by the overall health care system. This paper explores the complex reasons for this disproportionate allocation in health spending. On the one hand, mental health may suffer from the perception that its diagnoses are largely "subjective" and its treatments do not fit the traditional "medical model" that can be defined precisely and paid for by third-party insurers. But more importantly, the death of mental health resources can be attributed to the peculiar nature and characteristics inherent in American politics. This paper describes the American political environment, from both a historical and a contemporary perspective, to give some insight into the development of policies affecting the mental health system in the U.S. Given the current climate of fiscal conservatism in this country toward any increases in social spending, it is likely that the profound mismatch in need and spending for mental health programs will continue indefinitely.     

Toward a national personal assistance program: the independent living model of long-term care for persons with disabilities.

Long-term care for people with disabilities in this country traditionally has been provided through family members and friends. Federal and state policy has focused primarily on financing professional health care services provided through nursing homes and home health agencies. An alternative to these models of long-term care is the "independent living model," which is based on the provision of services by nonprofessional personal assistants in the disabled person's home. We describe the model and consider why it is not the dominant approach to long-term care in the United States. We go on to assess options for developing a national personal assistance services program based on the independent living framework, discussing how covered services should be defined, how the program should be financed, whether the program should use means testing, how eligibility and level of benefits should be determined, and what role government should play in implementing the program. Several legislative approaches to developing a national program are explored.     

Racial disparities in access to long-term care: the illusive pursuit of equity

While nursing homes were insulated from civil-rights enforcement at the time of the implementation of the Medicare program and lagged behind other parts of the health sector in providing comparable access to minorities, they are the only providers for which current reporting requirements make it possible to fully assess racial disparities in use and quality of care. We find that African Americans' use of nursing homes in 2000 in the United States was 14 percent higher than Caucasians' use. The largest relative African American use of nursing homes in 2000 took place in the South and West. Average nursing-home case-mix acuity for African Americans and Caucasians were essentially identical, suggesting that shifts in payment incentives have eliminated the selective admission of easy-care private-pay (predominantly Caucasian) patients and helped fuel the growth of private pay home care and assisted living for this segment of the population. While these shifts in incentives helped increase the use of nursing homes by African Americans, a high degree of segregation and disparity in the quality of the nursing homes used by African Americans persists. Parity in use is an illusive benchmark for measuring progress in assuring equity in treatment.     

Missing voices: polling and health care

Examining data on the recent health care legislation, we demonstrate that public opinion polls on health care should be treated with caution because of item nonresponse--or "don't know" answers--on survey questions. Far from being the great equalizer, opinion polls can actually misrepresent the attitudes of the population. First, we show that respondents with lower levels of socioeconomic resources are systematically more likely to give a "don't know" response when asked their opinion about health care legislation. Second, these same individuals are more likely to back health care reform. The result is an incomplete portrait of public opinion on the issue of health care in the United States.     

Informal university technology transfer: a comparison between the United States and Germany

Existing literature has confined university technology transfer almost exclusively to formal mechanisms, like patents, licenses or royalty agreements. Relatively little is known about informal technology transfer that is based upon interactions between university scientists and industry personnel. Moreover, most studies are limited to the United States, where the Bayh-Dole Act has shaped the institutional environment since 1980. In this paper, we provide a comparative study between the United States and Germany where the equivalent of the Bayh-Dole Act has come into force only in 2002. Based on a sample of more than 800 university scientists, our results show similar relationships for the United States and Germany. Faculty quality which is however based on patent applications rather than publications serves as a major predictor for informal technology transfer activities. Hence, unless universities change their incentives (e.g., patenting as one criterion for promotion and tenure) knowledge will continue to flow out the backdoor.     

Preferred providers and the credible commitment problem in health insurance: first experiences with the implementation of managed competition in the Dutch health care system

We investigate the impact of the transition towards managed competition in the Dutch health care system on health insurers' contracting behaviour. Specifically, we examine whether insurers have been able to take up their role as prudent buyers of care and examine consumers' attitudes towards insurers' new role. Health insurers' contracting behaviour is investigated by an extensive analysis of available information on purchasing practices by health insurers and by interviews with directors of health care purchasing of the four major health insurers, accounting for 90% of the market. Consumer attitudes towards insurers' new role are investigated by surveys among a representative sample of enrollees over the period 2005-2009. During the first four years of the reform, health insurers were very reluctant to engage in selective contracting and preferred to use 'soft' positive incentives to encourage preferred provider choice rather than engaging in restrictive managed care activities. Consumer attitudes towards channelling vary considerably by type of provider but generally became more negative in the first two years after the reform. Insurers' reluctance to use selective contracting can be at least partly explained by the presence of a credible-commitment problem. Consumers do not trust that insurers with restrictive networks are committed to provide good quality care. The credible-commitment problem seems to be particularly relevant to the Netherlands, since Dutch enrollees are not used to restrictions on provider choice. Since consumers are quite sensitive to differences in provider quality, more reliable information about provider quality is required to reduce the credible-commitment problem.     

The reform of academic tenure in the United Kingdom

In this paper, we examine the reform of academic tenure in the United Kingdom (UK) after the 1988 Education Reform Act.¹ We test the hypothesis that softening tenure encourages incumbent academics to consolidate their hold on academic life [ Carmichael (1988)]. We also assess the economic significance of the English and American case law on tenure, because an understanding of the legal aspects of tenure is required to identify the possible effects of tenure reform. The years after passage of the Act provide an interesting natural experiment, as the broad effect of the legislation was to soften, though not to remove, tenure in British universities. ² We can find support for the Carmichael hypothesis prereform but do not believe that the Act caused incumbent academics to consolidate their hold on senior posts after the reform.Tenure implies that the holder of a post cannot be removed from it except for good cause, usually based on gross moral turpitude or gross incompetence. Such removal is historically characterized by a costly procedure governed by organizational statutes, as shown in Hines v. Birkbeck College.³ In the United Kingdom, academic tenure has been associated with open-ended contracts of employment and often had a particularly hard form before 1988. In the United States, where it has often been possible to dismiss academics for financial reasons by abolishing whole departments, tenure has taken a softer form (although often harder to obtain) and can still be held to exist even when an employment contract is of a fixed term as long as it is renewable. ⁴ The details of universities’ tenure statutes have always varied between institutions, in both the United Kingdom and United States, which is often overlooked.

Abstract

“Before 1988, could your university make academics redundant by giving notice and paying statutory redundancy pay, or was it extremely hard to sack academics—having to buy them out or use arguments based on gross moral turpitude or incompetence?”     

National health policy: Efficiency-equity synchretism

A new emphasis in national health policy to encourage efficiency has been born in an environment of slower economic growth and an aging population. The increased reliance on market incentives to reduce health care costs does not signal the abandonment of equity as a social objective. To the contrary, the new emphasis on efficiency is intended to provide more and better health care through the generation of savings from the use of management systems to improve productivity. Market incentives and new management systems to increase efficiency are not the antithesis of equity but tools to provide better health care to the poor and to the elderly in an environment of fiscal constraints.