Hans Olav Melberg
End-of-life spending is commonly defined as all health costs in the 12 months before death. Typically, the costs represent about 10% of all health expenses in many countries, and there is a large debate about the effectiveness of the spending and whether it should be increased or decreased. Assuming that health spending is effective in improving health, and using a wide definition of benefits from end-of-life spending, several economists have argued for increased spending in the last years of life. Others remain skeptical about the effectiveness of such spending based on both experimental evidence and the observation that geographic within-country variations in spending are not correlated with variations in mortality.
Economists have long regarded health care as a unique and challenging area of economic activity on account of the specialized knowledge of health care professionals (HCPs) and the relatively weak market mechanisms that operate. This places a consideration of how motivation and incentives might influence performance at the center of research. As in other domains economists have tended to focus on financial mechanisms and when considering HCPs have therefore examined how existing payment systems and potential alternatives might impact on behavior. There has long been a concern that simple arrangements such as fee-for-service, capitation, and salary payments might induce poor performance, and that has led to extensive investigation, both theoretical and empirical, on the linkage between payment and performance. An extensive and rapidly expanded field in economics, contract theory and mechanism design, had been applied to study these issues. The theory has highlighted both the potential benefits and the risks of incentive schemes to deal with the information asymmetries that abound in health care. There has been some expansion of such schemes in practice but these are often limited in application and the evidence for their effectiveness is mixed. Understanding why there is this relatively large gap between concept and application gives a guide to where future research can most productively be focused.
Elisa Tosetti, Rita Santos, Francesco Moscone, and Giuseppe Arbia
The spatial dimension of supply and demand factors is a very important feature of healthcare systems. Differences in health and behavior across individuals are due not only to personal characteristics but also to external forces, such as contextual factors, social interaction processes, and global health shocks. These factors are responsible for various forms of spatial patterns and correlation often observed in the data, which are desirable to include in health econometrics models.
This article describes a set of exploratory techniques and econometric methods to visualize, summarize, test, and model spatial patterns of health economics phenomena, showing their scientific and policy power when addressing health economics issues characterized by a strong spatial dimension. Exploring and modeling the spatial dimension of the two-sided healthcare provision may help reduce inequalities in access to healthcare services and support policymakers in the design of financially sustainable healthcare systems.