The National Institute for Health and Clinical Excellence (NICE) provides guidance to the National Health Service (NHS) in England and Wales on funding and use of new technologies. This study examined the impact of evidence, process and context factors on NICE decisions in 2004–2009. A data set of NICE decisions pertaining to pharmaceutical technologies was created, including 32 variables extracted from published information. A three-category outcome variable was used, defined as the decision to ‘recommend’, ‘restrict’ or ‘not recommend’ a technology. With multinomial logistic regression, the relative contribution of explanatory variables on NICE decisions was assessed. A total of 65 technology appraisals (118 technologies) were analysed. Of the technologies, 27% were recommended, 58% were restricted and 14% were not recommended by NICE for NHS funding. The multinomial model showed significant associations (p ⩽ 0.10) between NICE outcome and four variables: (i) demonstration of statistical superiority of the primary endpoint in clinical trials by the appraised technology; (ii) the incremental cost-effectiveness ratio (ICER); (iii) the number of pharmaceuticals appraised within the same appraisal; and (iv) the appraisal year. Results confirm the value of a comprehensive and multivariate approach to understanding NICE decision making. New factors affecting NICE decision making were identified, including the effect of clinical superiority, and the effect of process and socio-economic factors.

Health financing reforms have recently received much attention in developing countries. However, out-of-pocket payments remain substantial. When such payments involve expenditures above some given proportion of household resources, they are often deemed ‘catastrophic’. The research literature on defining catastrophe leaves open a number of important questions and as a result there still exists a lack of consensus on the issue. This paper argues that there is a need to examine the question of what might constitute fair indices of catastrophic payment, which explicitly recognize diminishing marginal utility of income as reflected in some principle of vertical equity. It proposes the use of rank-dependent weights to allow variations in threshold payment levels across individuals on the income ladder. These are then applied to a Nigerian data set. It emerged that the catastrophic headcount (positive gap) obtained using a fixed threshold – weighted or not by the concentration index – is lower (higher) than that predicted by the rank-dependent threshold. More fundamentally there is a need for more research effort to take the ideas in this paper further and examine in various different contexts what a fair construct of catastrophe might look like.

To progress toward universal health coverage and promote inclusive social and economic development, it will be necessary to strengthen domestic resource mobilization for health. In this paper, we examine options for increasing domestic government revenue in low- and middle-income countries. We analyze the relationship between level of economic development and levels of government revenue and expenditure, and show that a country’s level of economic development does not predetermine its spending levels. Government revenue can be increased through improved tax compliance and efficiency in revenue collection, maximizing revenue from mineral and other natural resources, and increasing tax rates where appropriate. The emphasis should be on increasing revenue through the most progressive means possible; the purpose of raising government spending on health would be defeated if that spending were funded by increasing the relative tax burden of those who are meant to benefit. Increasing government revenue through taxation or other sources is first and foremost a fiscal policy choice or political decision and should be supported through concerted global action.

In 2006, the Dutch health insurance system was radically reformed to strengthen competition among health insurers as purchasers of health services. This article considers whether purchaser competition has improved efficiency in health-care provision. Although supply and price regulation still dominates the allocation of health services, purchaser competition has already significantly affected the provision of hospital care, pharmaceuticals and primary care, as well as efforts to gather and disseminate information about quality of care. From this perspective, the glass is half full. However, based on the crude performance indicators available, the reforms have not yet demonstrated significant effects on the performance of the Dutch health system. From this perspective the glass is half empty. The article concludes that the effectiveness of purchaser competition depends crucially on the success of ongoing efforts to improve performance indicators, product classification and the risk equalisation scheme.

Health technology assessment (HTA) has assumed an increasing role in health systems in recent years, with many countries establishing agencies or programmes to evaluate health technology and other interventions to inform policy decisions and clinical practice. This paper reflects upon its development and evolution in Europe over the last decade, with a focus on England, France, Germany and Sweden. In particular, we explore how HTA has evolved over time as well as its impact on policy and practice. While countries share many of the same objectives, there are differences in the way HTA agencies and programmes are organised, operate, and influence decision making. Despite these differences, all systems are faced with opportunities and challenges related to stakeholder involvement and acceptance, the suitability and transparency of assessment requirements and methods, balancing evidence and values in decision making, and demonstrating impact.

Contingent valuation (CV) has been argued to have theoretical advantages over other approaches for benefit valuation used by health economists. Yet, in reality, the technique appears not to have realised these advantages when applied to health-care issues, such that its influence in decision-making at national levels has been non-existent within the health sector. This is not a result of a lack of methodological work in the area, which has continued to flourish. Rather, it is a result of such activities being undertaken in a rather uncoordinated and unsystematic fashion, leading CV to be akin to a ‘ship without a sail’. This paper utilises a systematic review of the CV literature in health to illustrate some important points concerning the conduct of CV studies, before providing a comment on what the remaining policy and research priorities are for the technique, and proposing a guideline for such studies. It is hoped that this will initiate some wider and rigorous debate on the future of the CV technique in order to make it seaworthy, give it direction and provide the right momentum.

Most health economists recommend that improvements in health be valued by asking members of the general public to imagine themselves in different states of health and then to think about how many years of life they would give up or what risk of death they would be willing to accept in order to be in full health. In this paper, I argue that preferences are not a very good guide to future experiences and a more suitable way to value health is to ask people in different states of health how they think and feel about their lives. Valuing health in this way may result in greater priority being given to mental health services. Whatever the precise implications, it is my contention that it is much better to ration health care according to real experiences rather than according to hypothetical preferences.

We test whether individual health status is related to area-level social capital measured by rates of voting participation in municipal political elections, controlling for personal characteristics, where health status is measured by mapping responses to interview survey questions into the generic health-related quality of life measure (HRQoL) the EQ-5D in order to derive the health state scores. The analysis is based on unbalanced panel data from Statistic Sweden's Survey of Living Conditions (the ULF survey) and a 3-level multilevel regression analysis, where level 1 consists of a total of 31,585 observations for 24,419 individuals at level 2 nested within 275 Swedish municipalities at level 3. We find that the health state scores increase significantly with municipality election rates. This result is robust to a number of measurement and specification issues explored in a sensitivity analysis. However, almost all variation in health status exists across individuals (more than 98%), which demonstrates that even if social capital (and other contextual variables) may be significant it is of less importance, at least at the municipality level in Sweden.

Why are researchers studying the health effects of economic change reaching markedly varying conclusions? To understand these differences, we first systematically searched Web of Science for the literature on recessions and health yielding 461 articles and 14,401 cited documents. We then undertook a network analysis of co-citation pattern by disciplines, journals and backgrounds of the authors, followed by a chronological review of the literature, to trace the evolution of ideas. We then examined the extent to which earlier literature predicted what has happened in the 2007–2012 crisis. Our analysis finds the literature is dominated by disciplinary silos, with economics studies predominantly citing each other and relative isolation of psychiatry and substance abuse journals. Different philosophical approaches to assessing causality appear to contribute to varying interpretations, a tendency that is unlikely to be resolved without a shift in research norms. We conclude by calling for more inter-disciplinary research that combines empirical findings with a search for plausible mechanisms. This approach would evaluate not only the effects of economic shocks but also the mechanisms that offer protection against them.

This paper presents an economic model to connect with the substantial empirical literature on social capital and health that exists largely outside of economics. Representative papers from that literature are reviewed and these show that disagreements exist on the nature and definition of social capital. The paper presents a new line of reasoning to support the view of social capital as a network of interpersonal bonds to include the bonds of family and close friends, not just the community at large. It then adapts and extends the work of Becker and Murphy on social economics to explain the demand for health goods as well as health bads in the presence of increased social capital. It further develops choice under risk to explain the demand for goods that entail a risk of death, such as cigarettes, illegal drugs, or excessive drinking. Empirical examples, including new statistical analyses are presented to illustrate the derivations.

In this paper, we characterise the risk-sharing contracts that health authorities can design when they face a regulatory decision on drug pricing and reimbursement in a context of uncertainty. We focus on two types of contracts. On the one hand, the health authority can reimburse the firm for each treated patient regardless of health outcomes (non risk-sharing). Alternatively, the health authority can pay for the drug only when the patient is cured (risk-sharing contract). The optimal contract depends on the trade-off between the monitoring costs, the marginal production cost and the utility derived from treatment. A non-risk-sharing agreement will be preferred by the health authority, if patients who should not be treated impose a relatively low cost to the health system. When this cost is high, the health authority would prefer a risk-sharing agreement for relatively low monitoring costs.

Infectious diseases are among the main causes of death and disability in developing countries, and they are a major reason for the health disparity between rich and poor countries. One of the reasons for this public health tragedy is a lack of lifesaving essential medicines, which either do not exist or badly need improvements. In this article, we analyse which of the push and pull mechanisms proposed in the recent literature may serve to promote research into neglected infectious diseases. A combination of push programmes that subsidise research inputs through direct funding and pull programmes that reward research output rather than research input may be the appropriate strategy to stimulate research into neglected diseases. On the one hand, early-stage (basic) research should be supported through push mechanisms, such as research grants or publicly financed research institutions. On the other hand, pull mechanisms, such as prize funds that link reward payments to the health impacts of effective medicines, have the potential to stimulate research into neglected diseases.

There are four basic models of health service delivery: those that rely on trust, on command and control, on voice, and on choice and competition. All have their merits and demerits; but there are both theoretical and empirical arguments for preferring choice and competition in many situations. However, the relevant policies do have to be properly designed.

This paper assesses which policy-relevant characteristics of a healthcare system contribute to health-system efficiency. Health-system efficiency is measured using the stochastic frontier approach. Characteristics of the health system are included as determinants of efficiency. Data from 21 OECD countries from 1970 to 2008 are analysed. Results indicate that broader health-system structures, such as Beveridgian or Bismarckian financing arrangements or gatekeeping, are not significant determinants of efficiency. Significant contributors to efficiency are policy instruments that directly target patient behaviours, such as insurance coverage and cost sharing, and those that directly target physician behaviours, such as physician payment methods. From the perspective of the policymaker, changes in cost-sharing arrangements or physician remuneration are politically easier to implement than changes to the foundational financing structure of the system.

We investigate the impact of the transition towards managed competition in the Dutch health care system on health insurers’ contracting behaviour. Specifically, we examine whether insurers have been able to take up their role as prudent buyers of care and examine consumers’ attitudes towards insurers’ new role. Health insurers’ contracting behaviour is investigated by an extensive analysis of available information on purchasing practices by health insurers and by interviews with directors of health care purchasing of the four major health insurers, accounting for 90% of the market. Consumer attitudes towards insurers’ new role are investigated by surveys among a representative sample of enrollees over the period 2005–2009. During the first four years of the reform, health insurers were very reluctant to engage in selective contracting and preferred to use ‘soft’ positive incentives to encourage preferred provider choice rather than engaging in restrictive managed care activities. Consumer attitudes towards channelling vary considerably by type of provider but generally became more negative in the first two years after the reform. Insurers’ reluctance to use selective contracting can be at least partly explained by the presence of a credible-commitment problem. Consumers do not trust that insurers with restrictive networks are committed to provide good quality care. The credible-commitment problem seems to be particularly relevant to the Netherlands, since Dutch enrollees are not used to restrictions on provider choice. Since consumers are quite sensitive to differences in provider quality, more reliable information about provider quality is required to reduce the credible-commitment problem.

The long-term care system in China relies heavily on informal care provided by family members. This study makes projections on the demand for informal care among Chinese older people between 2015 and 2035 and quantifies the level of long-term care resources needed to meet their needs. The data come from longitudinal information in a nationally representative sample, China Health and Retirement Longitudinal Survey 2011 and 2013. The macrosimulation approach (PSSRU model) and the Markov approach are integrated into one Bayesian modelling framework. The Monte Carlo simulation technique is used to capture parameter uncertainty. We project that the demand for informal care will increase from 41.3 million people (95% CI: 39.9–42.7) in 2015 to 82.6 million people (95% CI: 78.3–86.9) in 2035. The long-term care system faces unbalanced pressure of demand for informal care from different groups of older people. The projected demand is sensitive to changes in older people’s disability trajectory and the availability of formal care provided by the government, but less sensitive to an increase in singleton households in the future. We discuss possible policy measures to alleviate the mounting pressure on the demand for informal care.

Effective policymaking in health care systems begins with a clear typology of the terminology – need, demand, supply and access to care – and their interrelationships. However, the terms are contested and their meaning is rarely stated explicitly. This paper offers working definitions of need, demand and supply. We draw on the international literature and use a Venn diagram to explain the terms. We then define access to care, reviewing alternative and competing definitions from the literature. We conclude by discussing potential applications of our conceptual framework to help to understand the interrelationships and trade-offs between need, demand, supply and access in health care.

The National Institute for Health and Clinical Excellence (NICE) routinely publishes details of the evidence and reasoning underpinning its recommendations, including its social value judgements (SVJs). To date, however, NICE's SVJs relating to equity in the distribution of health and health care have been less specific and systematic than those relating to cost-effectiveness in the pursuit of improved total population health. NICE takes a pragmatic, case-based approach to developing its principles of SVJ, drawing on the cumulative experience of its advisory bodies in making decisions that command respect among its broad range of stakeholders. This paper aims to describe the SVJs about equity in health and health care that NICE has hitherto used to guide its decision making. To do this, we review both the general SVJs reported in NICE guidance on methodology and the case-specific SVJs reported in NICE guidance about particular health care technologies and public health interventions.

The new round of health care reforms in China achieved significant initial results. New and emerging problems coinciding with the deepening of the reforms, however, require further institutional changes to strengthen the competition mechanism and promote public hospital efficiency. This paper provides a conceptual framework and preliminary assessment of public hospital competition in China. Specifically, we distinguish between two closely related concepts – competition and privatization, and identify several critical conditions under which hospital competition can be used as a policy instrument to improve health care delivery in China. We also investigate the current performance and identify several unintended consequences of public hospital competition – mainly, medical arms race, drug over-prescription and the erosion of a trusting relationship between patients and physicians. Finally, we discuss the policy options for enhancing the internal competition in China’s hospital market, and conclude that public investment on information provision is key to reaping the positive outcomes of pro-competition policies.