In this relatively well-insured population, annual health care utilization significantly increases primarily because of more intensive use of outpatient care at retirement. This increase in outpatient care stems from a decline in the patient cost-sharing rate, the reduced time constraints upon retirement, and the interaction of these factors with supply-side incentives such as prescribing antibiotics. There is no evidence of change in inpatient care at retirement.

The economics of medical expenditure growth and its interaction with population aging is of considerable policy importance for countries in all income groups. “Our findings may provide useful evidence as one consideration for policymakers in other cities in China and elsewhere looking to increase insurance benefits and control medical spending for burgeoning elderly populations.

India is facing a mounting burden of noncommunicable diseases (NCDs) such as diabetes, cancers, and cardiovascular diseases. NCDs affect more than 20 percent of the Indian population and their prevalence is projected to expand substantially as the population aged 60 and over increases. Left unchecked, the costs of managing chronically ill and aging sectors of the population grow exponentially.

To control costs and address the growing chronic disease burden, India’s public programs must integrate curative hospital services with the most cost-effective preventive and primary interventions, argue Karen Eggleston, APARC’s deputy director and the director of the Asia Health Policy Program (AHPP), and Radhika Jain, a postdoctoral research fellow with AHPP. India must also urgently expand and improve the evidence base on economic evaluations of both preventive and curative health interventions in the country.

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In a correspondence piece published by BMC Medicine, Eggleston and Jain examine the features and limitations of a study that takes an important first step in that direction: a cost-effectiveness study of the Kerala Diabetes Prevention program (K-DPP) that adds such evidence on how to prevent diabetes cost-effectively in India and other low- and middle-income countries.

The study’s authors present a cost-effectiveness analysis of 1007 participants in the K-DPP, and their estimates indicate that K-DPP was cost-effective. Indeed, Eggleston and Jain determine that the analysis shows potential cost-effectiveness in “nudging” the participants towards a healthier lifestyle through suggestive reductions in tobacco and alcohol use and waist circumference. The results of the cost-effectiveness analysis of the K-DPP “highlight the importance of continued research on community-based promotion of healthy lifestyles,” say Eggleston and Jain.

Evidence-based approaches to chronic noncommunicable disease intervention are essential for providing cost-effective care and creating models for future programs like the K-DPP. Eggleston and Jain conclude that future studies advancing evidence-based approaches to chronic noncommunicable disease intervention — ones that cover larger and more representative populations over longer time periods — remain important for more generalizable assessments to inform policy decisions.

In this recent lecture at Cornell University’s Contemporary China Initiative, Karen Eggleston, Shorenstein APARC deputy director and the Asia Health Policy Program director, talks about China’s health system reforms, including progress to date in achieving effective universal coverage, priorities set in the national health meetings, Healthy China 2030 goals, and local experiments in strengthening patient-centered integrated care.

CCCI October 1, 2018: Karen Eggelston from Cornell East Asia Program.

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Rural areas of China have made remarkable progress in reducing adult mortality within the past 15 years yet broadened health insurance was not a casual factor in that decline, according to a new study by an international research team that includes Asia Health Policy Program Director Karen Eggleston.

The New Cooperative Medical Scheme (NCMS), a government-subsidized insurance program that began in 2002-03, expanded to cover all of rural China within a decade. Examining NCMS and cause-specific mortality data for a sample of 72 counties between 2004 and 2012, the researchers found that there were no significant effects of health insurance expansion on increased life expectancy.

The study, published in the September issue of Health Affairs, showed results consistent with previous studies that also did not find a correlation between insurance and survival, although much research confirms NCMS increased access to healthcare, including preventive services, and shielded families from high health expenditures.

Commenting on the study, Eggleston said population health policies remain central to China’s efforts to increase life expectancy and to bridge the gap between rural and urban areas.

Eggleston also noted that multiple factors beyond the availability of health care determine how long people live, and anticipates the research team will continue to explore the impacts of NCMS by extending the study to look at infants and youth.

Read the study (may require subscription) and view a related article on the Stanford Scope blog.

The Asia Health Policy Program at Stanford’s Shorenstein Asia-Pacific Research Center, in collaboration with scholars from Stanford Health Policy's Center on Demography and Economics of Health and Aging, the Stanford Institute for Economic Policy Research, and the Next World Program, is soliciting papers for the third annual workshop on the economics of ageing titled Financing Longevity: The Economics of Pensions, Health Insurance, Long-term Care and Disability Insurance held at Stanford from April 24-25, 2017, and for a related special issue of the Journal of the Economics of Ageing.

The triumph of longevity can pose a challenge to the fiscal integrity of public and private pension systems and other social support programs disproportionately used by older adults. High-income countries offer lessons – frequently cautionary tales – for low- and middle-income countries about how to design social protection programs to be sustainable in the face of population ageing. Technological change and income inequality interact with population ageing to threaten the sustainability and perceived fairness of conventional financing for many social programs. Promoting longer working lives and savings for retirement are obvious policy priorities; but in many cases the fiscal challenges are even more acute for other social programs, such as insurance systems for medical care, long-term care, and disability. Reform of entitlement programs is also often politically difficult, further highlighting how important it is for developing countries putting in place comprehensive social security systems to take account of the macroeconomic implications of population ageing.

The objective of the workshop is to explore the economics of ageing from the perspective of sustainable financing for longer lives. The workshop will bring together researchers to present recent empirical and theoretical research on the economics of ageing with special (yet not exclusive) foci on the following topics:

• Public and private roles in savings and retirement security
• Living and working in an Age of Longevity: Lessons for Finance
• Defined benefit, defined contribution, and innovations in design of pension programs
• Intergenerational and equity implications of different financing mechanisms for pensions and social insurance
• The impact of population aging on health insurance financing
• Economic incentives of long-term care insurance and disability insurance systems
• Precautionary savings and social protection system generosity
• Elderly cognitive function and financial planning
• Evaluation of policies aimed at increasing health and productivity of older adults
• Population ageing and financing economic growth
• Tax policies’ implications for capital deepening and investment in human capital
• The relationship between population age structure and capital market returns
• Evidence on policies designed to address disparities – gender, ethnic/racial, inter-regional, urban/rural – in old-age support
• The political economy of reforming pension systems as well as health, long-term care and disability insurance programs

Submission for the workshop

Interested authors are invited to submit a 1-page abstract by Sept. 30, 2016, to Karen Eggleston at karene@stanford.edu. The authors of accepted abstracts will be notified by Oct. 15, 2016, and completed draft papers will be expected by April 1, 2017.

Economy-class travel and accommodation costs for one author of each accepted paper will be covered by the organizers.

Invited authors are expected to submit their paper to the Journal of the Economics of Ageing. A selection of these papers will (assuming successful completion of the review process) be published in a special issue.

Submission to the special issue

Authors (also those interested who are not attending the workshop) are invited to submit papers for the special issue in the Journal of the Economics of Ageing by Aug. 1, 2017. Submissions should be made online. Please select article type “SI Financing Longevity.”

About the Next World Program

The Next World Program is a joint initiative of Harvard University’s Program on the Global Demography of Aging, the WDA Forum, Stanford’s Asia Health Policy Program, and Fudan University’s Working Group on Comparative Ageing Societies. These institutions organize an annual workshop and a special issue in the Journal of the Economics of Ageing on an important economic theme related to ageing societies.

More information can be found in the PDF below.

In a Q&A, Stanford postdoctoral fellow Darika Saingam explains why Thailand's battle against drugs continues and what is needed to introduce good policy that works to prevent illegal drug trade and supports recovering addicts.

Despite Thailand’s decade-long crackdown on drugs, demand for illegal substances has risen. A green leaf drug known as ‘kratom’ is a symbol of this rise as young people eagerly adopt the drug for entertainment and join an older generation of laborers who chewed it to survive long hours of work in the fields—and are now heavily addicted. Curtailing substance abuse and its consequences takes good public policy and solutions must be area-specific and evidence-based, according to a Stanford postdoctoral fellow.

Darika Saingam, the 2015-16 Developing Asia Health Policy Postdoctoral Fellow, has conducted two cross-sectional surveys and more than 1,000 interviews with drug users, recovered addicts, and local public officials in an effort to better understand the evolution of substance abuse in southern Thailand.

At Stanford, she is preparing two papers that offer policy options suitable for Thailand and other developing countries in Southeast Asia. Saingam spoke with the Shorenstein Asia-Pacific Research Center (APARC) where she will give a public talk on May 17. The interview text below was edited for brevity.

For decades, Thailand has been an epicenter of drugs. Can you describe the extent of the problem today?

According to a 2014 report, 1.2 million people were involved in illegal drug activities across Thailand. The total number of drug cases saw a 41 percent increase from 2013 to 2014. New groups of drug traffickers are mobilizing while existing groups are still active. Drug users who are young become drug dealers as they get older. The number of drug users below 15 years of age has increased dramatically.

According to your research, what drives Thais toward illegal drug use and the trafficking business?

Adults in Thailand use drugs to relieve stress and counteract the effects of work. Adolescents use them for entertainment. Historically, farmers and laborers from rural areas of Thailand would use opium for pain relief. More recently, a consumable tablet known as yaba has become popular along with crystal methamphetamine and marijuana. Young people are increasingly using yaba and kratom.

Thailand is still a developing country, but it is industrializing quickly. Social and cultural norms have been shifting and people want an improved quality of life. A lot of young people are unemployed and lack social support and are therefore more likely to turn to drug trafficking for economic opportunity. The economic recession and political strife in countries bordering Thailand have exacerbated the situation.

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Photos (left to right): A man holds up a kratom leaf. / Saingam examines kratom leaves as part of her research to understand illegal cultivation practices.

What is kratom and why is it popular?

For nearly a century, the native people of Thailand have chewed kratom. It is a leaf that grows on trees resembling a coffee plant. Historically, kratom was used to reduce strain following physical labor, to be able to work harder and longer, and to better tolerate heat and sunlight. Kratom is also embedded in Thai culture and given as a spiritual offering in religious ceremonies. My field research in the southern province of Nakhon Si Thammarat has shown that these motivations are still true today.

Within the past seven years, kratom use has skyrocketed and people are using it in increasingly harmful ways. Chewing kratom is not immediately harmful to health, but combining it with other substances is. This is the recent trend. Users have created new ways to consume it such as in a drink known as a ‘4x100.’ It contains boiled kratom leaves, cough syrup and soft drinks. Additional methamphetamines and benzodiazepines are sometimes added to that mixture.

What strategies must be employed to control substance abuse?

The first step is to realize that the patterns of substance abuse are specific to each location therefore solving the problem must also be. Drug usage is also dynamic. Placing hard control measures on one substance often provokes the emergence of another in its place therefore a holistic approach is important.

Thailand should employ multiple strategies toward effective prevention and control of substance abuse. These strategies include examining the problem and creating policies from an economic perspective (supply and demand), an institutional perspective (national and international drug control cooperation), and a social perspective (structural supports for recovered addicts and mobilization of public participation).

What is the Thai government doing to address the drug problem, and what could they be doing better?

Politicians in Thailand must do a better job at representing the people. Government health workers are often gathering information, assessing needs, and reporting findings to politicians, but these needs are not being accurately addressed. An example of this is politicians ordering to cut down kratom trees – a public display that does not get at the root cause of the problem. The reality is that drug users will quickly find substitutes. According to my study, of the regular users that stopped using kratom, more than 50 percent turned to alcohol instead and did so on a daily basis. This is merely a shift from one substance to another.

On the upside, a crop substitution program created under King Bhumibol Adulyadej offers a successful working model. The program works to replace opium poppy farming with cash crop production. It began in 1969 and is cited for helping an estimated 100,000 people convert their drug crop production to sustainable agricultural activities. Crops cultivated can be sold for profit in nearby towns. The program has also introduced a wide variety of crops and discouraged the slash-and-burn technique of clearing land. It is win-win because it stymies drug trade and provides economic opportunity while also being ecologically sound. This type of program should continue to be scaled up.

Can this model be co-opted elsewhere? What lessons from other countries could inform Thailand’s approach?

Yes, the model could plausibly be implemented in other areas in Thailand and in other Southeast Asian nations.

I think a judicial mechanism such as the kind seen in France could benefit the rural areas in Thailand. The French government has established centers across the country that act as branches of the court that try delinquency cases of minor to moderate severity, and also recommend support services for drug users. Members of the magistrate and civil society actors manage center operations thus placing some responsibility back onto the local community.

I believe an opportunity also exists for Thailand to legalize kratom. Legalization would show a respect for the cultural tradition of chewing kratom leaves and allow the government to suggest safer ways of using it. Bolivia has created a successful model of this through its legalization of coca leaves. Coca in its distilled form is cocaine, but left as a leaf, it is not a narcotic. Indigenous peoples are allowed to chew coca leaves. The government policy is being credited for a decrease in cocaine production as well.

Nearly 100 health economists from across the United States signed a pledge urging U.S. presidential candidates to make chronic disease a policy priority. Karen Eggleston, a scholar of comparative healthcare systems and director of Stanford’s Asia Health Policy Program, is one of the signatories. 

The pledge calls upon the candidates to reset the national healthcare agenda to better address chronic disease, which causes seven out of 10 deaths in America and affects the economy through lost productivity and disability.

Read the pledge below.