Health-health analysis (HHA) focuses on statistical lives themselves as a numeraire. The underlying principle is that the expected gains in health and safety of reduced risks in one area may result in increasing risks somewhere else in society. By reducing one risk other risks may increase due to changed individual behaviour. In addition to this direct effect, another indirect effect will also be present. Expenditure on a particular health policy or safety regulation must be financed in one way or another, which will result in an opportunity cost or income effect leaving less resources for other health and safety promoting activities in society. Thus, we will have an effect that reduces safety and health benefits induced by that income loss. Whether the total net health effect from a specific safety regulation or health policy is positive or negative must be empirically analysed. One way of estimating the income loss that induces one death, which we call the value of an induced death (VOID), is to estimate it as a multiple of the traditional value to avert a statistical death, also named the value of a statistical life (VOSL).A contingent valuation (CV) study eliciting the willingness-to-pay (WTP) for reducing the overall risk of dying was performed as a postal questionnaire in Sweden in 1998. By use of data from this study, it was possible to estimate the VOID and the VOSL in Sweden amounting to SEK116 and SEK20.8 million respectively, indicating that the net health result confined to mortality effects, will be negative (more lives will be lost than saved) if a health policy or safety regulation will cost more than SEK116 million per life saved.
This study examines the impact that private financing of prescription drugs in Canada has on equity in the utilization of publicly financed physician services. The complementary nature of prescription drugs and physician service use alongside the reliance on private finance for drugs may induce an income gradient in the use of physicians. We use established econometric methods based on concentration curves to measure equity in physician utilization and its contributors in the province of Ontario. We find that individuals with prescription drug insurance make more physician visits than do those without insurance, and the effect on utilization is stronger for the likelihood of a visit than the conditional number of visits, and stronger for individuals with at least one chronic condition than those with no conditions. Results of the equity analyses reveal that the most important contributors to the pro-rich inequity in physician utilization are income and private prescription drug insurance, while public insurance, which covers older people and those on social assistance, has a pro-poor effect. These findings highlight that inequity in access to and use of publicly funded services may arise from the interaction with privately financed health services that are complements to the use of public services.
This paper presents the findings from simulations of the introduction of publicly funded medical savings accounts (MSAs) in the province of Ontario, Canada. The analysis exploits a unique data set linking population-based health survey information with individual-level information on all physician services and hospital services utilization over a four-year period. The analysis provides greater detail along three dimensions than have previous analyses: (1) the distributional impacts of publicly funded MSAs across individuals of differing health statuses, incomes, ages, and current expenditures; (2) the impact of differing degrees of risk adjustment for MSA contributions; and (3) the impact of MSA funding over multiple years, incorporating year-to-year variation in spending at the individual level. In addition, it analyses more plausible designs for publicly funded MSAs than the existing studies. Government uses information available from year t - 1 to allocate its budget for year t in a manner that is ex ante fiscally neutral for the public sector: the government first withholds funds equal to expected catastrophic insurance payments under the MSA plan, and then allocates only the balance to individual MSA accounts. The government captures the savings associated with reduced health-care utilization under MSAs and we examine deductibles that vary by income rather than by current health-care expenditures. The impacts on public expenditures under these designs are more modest than in the previous studies and under plausible assumptions MSAs are predicted to decrease public expenditures. MSAs, however, are also predicted to have unavoidable negative distributional consequences with respect to both public expenditures and out-of-pocket spending.