This article uses incomplete contract theory to study the allocation of control rights in public-private partnerships (PPPs) between pharmaceutical enterprises and nonprofit organizations; it also investigates how this allocation influences cooperation efficiency. We first develop a mathematic model for the allocation of control rights and its influence on cooperation efficiency, and then derive some basic hypotheses from the model. The results of an empirical test show that the allocation of control rights influences how enterprises invest in PPPs. A proper allocation provides incentives for firms to make fewer self-interested and more public-interested investments. Such an allocation also improves the cooperation efficiency of PPPs.

Published: Zhang, Zhe, Ming Jia, and Difang Wan. "Allocation of control rights and cooperation efficiency in public-private partnerships: theory and evidence from the Chinese pharmaceutical industry." International journal of health care finance and economics 9.2 (2009): 169-182.

Hospitals in Thailand operate in a multiple insurance payment environment. This paper examines 1) access to medicines and other medical technologies, 2) treatment outcomes, and 3) efficiency in resource use, among beneficiaries of the three government health insurance schemes in Thailand. Using 2003-2005 inpatient data for patients with three tracer diseases from three government hospitals, we find that utilization of more expensive items differs between patients whose insurers pay on a closed- or open-ended basis. Where new vs. conventional drugs are both available, patients whose insurer pays on a fee-for-service basis tend to have greater access to new drugs, compared to patients whose insurer pays on a capitated or case basis. Similar patterns were found where there are options between originator vs. generic drugs, drugs in different dosage forms, and more vs. less advanced diagnostic technologies. Effects of insurance payment are more pronounced where price gaps among the medical technologies are significant. Efficiency results are mixed, depending on nature of the disease conditions and type of resources required for treatment.

Published: Hirunrassamee, Sanita, and Sauwakon Ratanawijitrasin. "Does your health care depend on how your insurer pays providers? Variation in utilization and outcomes in Thailand." International journal of health care finance and economics 9.2 (2009): 153-168.

To analyze the impact of population aging on medical costs in South Korea, the authors use several approaches. Observation of the medical cost profile by age showed that, as the data was closer to the present, the medical costs for older people increased. The treatment quantity excluding price index was also increasing for older people. This implies that the medical resources that are allocated to older people are increasing, due to the increased resources applied to extend the expected life span that was enabled through higher income levels, rather than by aging itself.

Since the mid-1980s, health maintenance organizations (HMOs) have grown rapidly in the United States.  Despite initial successes in constraining health care costs, HMOs have come under increasing criticism due to their restrictive practices.  To remain viable, this would seem to suggest that HMOs have to change at least some of these behaviors.  However, there is little empirical evidence on how restrictive aspects of HMOs may be changing.  The present study investigates one mechanism for constraining costs that is often associated with HMOs – the role of the primary care physician as a gatekeeper (e.g., monitoring patients’ use of specialist physicians).  In particular, we estimate the effect of primary care physician involvement with HMOs on the percentage of their patients for whom these physicians serve as gatekeepers.  We examine these relationships over two time periods: 2000-2001 and 2004-2005.  Because physicians can choose whether and to what extent they will participate in HMOs, we employ instrumental variables (IV) estimation to correct for endogeneity of the HMO measure.  Although the single-equation estimates suggest that the role of HMOs in terms of requiring primary care physicians to serve as gatekeepers diminished modestly over time, the endogeneity-corrected estimates show no changes between the two time periods.  Thus, one major tool used by HMOs to constrain health care costs – the physician as gatekeeper – has not declined even in the era of managed care backlash.

Published: Fang, Hai, Hong Liu, and John A. Rizzo. "Has the use of physician gatekeepers declined among HMOs? Evidence from the United States." International journal of health care finance and economics 9.2 (2009): 183-195.

Embedded in traditional culture perpetuating family-centered elderly care, informal care is still viewed as a family or moral issue rather than a social and policy issue in South Korea. Using newly available microdata from the Korean Longitudinal Study of Aging, this study investigates the effect of informal caregiving on labor market outcomes in South Korea. By doing so, this study provides evidence to inform elderly long-term care policy in South Korea, and also fills a gap in the international literature by providing results from an Asian country. Empirical analyses address various methodological issues by investigating gender differences, by examining both extensive and intensive labor market adjustments with two definitions of labor force participation, by employing different functional forms of care intensity, and by accounting for the potential endogeneity of informal care as well as intergenerational co-residence. Robust findings suggest negative effects of informal caregiving on labor market outcomes among women, but not among men. Compared with otherwise similar non-caregivers, female intensive caregivers who provide at least more than 10 hours of care per week are at an increased risk of being out of the labor force by 15.2 percentage points. When examining the probability of employment in the formal sector only, the effect magnitude is smaller. Among employed women, more intensive caregivers receive lower hourly wages by 1.65K Korean Won than otherwise similar non-caregivers. Informal care is already an important economic issue in South Korea even though aging is still at an early stage.

The economic approach of comparative and historical institutional analysis (Aoki 2001, Greif 2006) has virtually never been used in theoretical studies of healthcare incentives. This paper seeks to help fill this gap by exploring the explanatory power of such an approach for understanding incentives in China’s healthcare delivery system. It focuses on positive analysis of why China’s health system incentives evolved the way they did. The first section analyzes the institution of physician dispensing (MDD) and reforms toward separation of prescribing from dispensing (SPD), in historical and comparative perspective. It shows, for example, how MDD was a self-reinforcing institution; the longer a society remains under MDD, the higher the associated costs of supplier-induced demand can be before implementing SPD becomes the efficient self-enforcing social institution. Rapid technological change and adoption of universal coverage are likely to trigger SPD reforms. The second section seeks to explain the pattern and impact of price regulation and hospital payment reforms in contemporary China, which also reflect the legacy of MDD.