Economics

Higher Fees Paid to US Physicians Drive Higher Spending for Physician Services Compared to Other Countries

Higher Fees Paid to US Physicians Drive Higher Spending for Physician Services Compared to Other Countries
Health Affairs, 2011. Volume 30 / Issue 09 / September 2011, pp 1647-1656, Published online

Sherry Glied and Miriam Laugesen
09/08/2011

Higher health care prices in the United States are a key reason that the nation’s health spending is so much higher than that of other countries. Our study compared physicians’ fees paid by public and private payers for primary care office visits and hip replacements in Australia, Canada, France, Germany, the United Kingdom, and the United States. We also compared physicians’ incomes net of practice expenses, differences in financing the cost of medical education, and the relative contribution of payments per physician and of physician supply in the countries’ national spending on physician services. Public and private payers paid somewhat higher fees to US primary care physicians for office visits (27 percent more for public, 70 percent more for private) and much higher fees to orthopedic physicians for hip replacements (70 percent more for public, 120 percent more for private) than public and private payers paid these physicians’ counterparts in other countries. US primary care and orthopedic physicians also earned higher incomes ($186,582 and $442,450, respectively) than their foreign counterparts. We conclude that the higher fees, rather than factors such as higher practice costs, volume of services, or tuition expenses, were the main drivers of higher US spending, particularly in orthopedics.

Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?

Does Regulatory Supervision Curtail Microfinance Profitability and Outreach?
World Development 39(6): 949-965, June 2011

Cull, Robert; Asli Demirgüç-Kunt; and Jonathan Morduch
06/01/2011

We combine two datasets to examine whether the scale of an economy’s banking system affects the profitability and outreach of microfinance institutions. We find evidence that competition matters. Greater bank penetration in the overall economy is associated with microbanks pushing toward poorer markets, as reflected in smaller average loans sizes and greater outreach to women. The evidence is particularly strong for microbanks that rely on commercial-funding, use traditional bilateral lending contracts (rather than group lending methods favored by microfinance NGOs), and take deposits. We consider plausible alternative explanations for the correlations, including relationships that run through the nature of the regulatory environment and the structure of the banking environment, but we fail to find strong support for these alternative hypotheses.

The Oxford Handbook of Health Economics

The Oxford Handbook of Health Economics
Oxford University Press.

Glied, Sherry and Peter C. Smith
04/07/2011

The Oxford Handbook of Health Economics provides an accessible and authoritative guide to health economics, intended for scholars and students in the field, as well as those in adjacent disciplines including health policy and clinical medicine. The chapters stress the direct impact of health economics reasoning on policy and practice, offering readers an introduction to the potential reach of the discipline. Contributions come from internationally-recognized leaders in health economics and reflect the worldwide reach of the discipline. Authoritative, but non-technical, the chapters place great emphasis on the connections between theory and policy-making, and develop the contributions of health economics to problems arising in a variety of institutional contexts, from primary care to the operations of health insurers. The volume addresses policy concerns relevant to health systems in both developed and developing countries. It takes a broad perspective, with relevance to systems with single or multi-payer health insurance arrangements, and to those relying predominantly on user charges; contributions are also included that focus both on medical care and on non-medical factors that affect health. Each chapter provides a succinct summary of the current state of economic thinking in a given area, as well as the author's unique perspective on issues that remain open to debate. The volume presents a view of health economics as a vibrant and continually advancing field, highlighting ongoing challenges and pointing to new directions for further progress.

Efficient Funding: Auditing in the Nonprofit Sector

Efficient Funding: Auditing in the Nonprofit Sector
Manufacturing & Service Operations Management. 13(4) 471-488.

N. Privett and F. Erhun
04/01/2011

Nonprofit organizations are a critical part of society as well as a growing sector of the economy. For funders there is an increasing and pressing need to ensure that society reaps the most social benefit for their money while also developing the nonprofit sector as a whole. By routinely scrutinizing nonprofit reports in an effort to deduce whether a nonprofit organization is efficient, funders may believe that they are, in fact, giving responsibly. However, we find that these nonprofit reports are unreliable, supporting a myriad of empirical research and revealing that report-based funding methods do not facilitate efficient allocation of funds. In response, we develop audit contracts that put funders in a position to enact change. Auditing, perhaps obviously, supports funders; however, we find that it also benefits the population of nonprofits. Moreover, auditing results in improved efficiency for the nonprofit sector overall. Indeed, our conclusions indicate that nonprofits may want to work with funders to increase the use of auditing, consequently increasing efficiency for the sector overall and impacting society as a whole.

Credit is Not a Right

Credit is Not a Right

Gershman, John and Jonathan Morduch.
01/01/2011

Is credit a human right? Muhammad Yunus, the most visible leader of a global movement to provide microcredit to world’s poor, says it should be. NYU’s John Gershman and FAI’s Jonathan Morduch disagree. In their new paper, Credit is Not a Right, they ask whether a rights-based approach to microcredit will in fact be effective in making quality, affordable credit more available to poor families – and, more importantly, whether it is a constructive step in terms of the broader goal of global poverty reduction. Jonathan Morduch argues his case in this video.

Economics of children's environmental health

Economics of children's environmental health
Mt Sinai J Med. 2011 Jan-Feb;78(1):98-106

Trasande L
01/01/2011

Economic analyses are increasingly appearing in the children's environmental-health literature. In this review, an illustrative selection of articles that represent cost analyses, cost-effectiveness analyses, and cost-benefit analyses is analyzed for the relative merits of each approach. Cost analyses remain the dominant approach due to lack of available data. Cost-effectiveness and cost-benefit analyses in this area face challenges presented by estimation of costs of environmental interventions, whose costs are likely to decrease with further technological innovation. Benefits are also more difficult to quantify economically and can only be partially alleviated through willingness-to-pay approaches. Nevertheless, economic analyses in children's environmental health are highly informative and important informants to public-health and policy practice. Further attention and training in their appropriate use are needed.

The Great Recession's Impact on New York City's Budget.

The Great Recession's Impact on New York City's Budget.
Municipal Finance Journal 32(1): 89-113.

Miller, Lawrence J. and Daniel L. Smith.
01/01/2011

Strong property tax growth and proactive policies - including beginning the recession with a substantial surplus of $5.3 billion (9 percent of revenues) - offset a severe contraction in income tax receipts, protecting the City's budget such that it never contracted in absolute terms during or immediately following the Great Recession. Policymakers increased property and sales tax rates, utilized fund balances, cut agency budgets repeatedly, and re-appropriated retiree health benefits in response to the fiscal challenges brought about by the Great Recession. Whether one attributes it to compliance with a strong, state-mandated, balanced budget rule or adept leadership, New York City certainly appears to be dealing effectively with the Great Recession's impact on its budget. However, City leaders have asked lower income residents to bear a substantial portion of the burden by favoring more regressive tax policies and by cutting the social service agency's budget substantially. With forecast budget gaps of $3 billion and $4 billion in FY 2012 and FY 2013, the long-term impact of the Great Recession on New York City's budget remains an open question.

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