High Levels Of Spending Research Articles

Dementia and out-of-pocket spending on health care services

BackgroundHigh levels of out-of-pocket (OOP) spending for health care may lead patients to forego needed services and medications as well as hamper their ability to pay for other essential goods. Because it leads to disability and the loss of independence, dementia may put patients and their families at risk for high OOP spending, especially for long-term care services. MethodsWe used data from the Aging, Demographics, and Memory Study, a nationally representative subsample (n = 743) of the Health and Retirement Study, to determine whether individuals with dementia had higher self-reported OOP spending compared with those with cognitive impairment without dementia and those with normal cognitive function. We also examined the relationship between dementia and utilization of dental care and prescription medications—two types of health care that are frequently paid for OOP. Multivariate and logistic regression models were used to adjust for the influence of potential confounders. ResultsAfter controlling for demographics and comorbidities, those with dementia had more than three times the yearly OOP spending compared with those with normal cognition ($8216 for those with dementia vs. $2570 for those with normal cognition, P < .01). Higher OOP spending for those with dementia was mainly driven by greater expenditures on nursing home care (P < .01). Dementia was not associated with the likelihood of visiting the dentist (P = .76) or foregoing prescription medications owing to cost (P = .34). ConclusionsDementia is associated with high levels of OOP spending but not with the use of dental care or foregoing prescription medications, suggesting that excess OOP spending among those with dementia does not “crowd out” spending on these other health care services.

Relating R&D and investment policies to CCS market diffusion through two-factor learning

Carbon capture and storage (CCS) has the potential to play a major role in the stabilization of anthropogenic greenhouse gases. To develop the capture technology from its current demonstration phase towards commercial maturity, significant funding is directed to CCS, such as the EU’s €4.5bn NER300 fund. However, we know little about how this funding relates to market diffusion of CCS. This paper addresses that question. We initially review past learning effects from both capacity installations and R&D efforts for a similar technology using the concept of two-factor learning. We apply the obtained learning-by-doing and learning-by-searching rates to CCS in the electricity market model Hector, which simulates 19 European countries hourly until 2040, to understand the impact of learning and associated policies on CCS market diffusion. We evaluate the effectiveness of policies addressing learning-by-doing and learning-by-searching by relating the policy budget to the realized CCS capacity and find that, at lower policy cost, both methods are about equally effective. At higher spending levels, policies promoting learning-by-doing are more effective. Overall, policy effectiveness increases in low CO2 price scenarios, but the CO2 price still remains the key prerequisite for the economic competitiveness, even with major policy support.

Mutual Funds and Individual Investors: Advertising and Behavioral Issues

The study reviews important interactions between mutual funds and individual investors in choosing equity mutual funds. An important question is why both sophisticated and unsophisticated investors continue to invest in actively managed funds that generally underperform. Actively managed funds have histories of high levels of spending on advertising because they know it works in increasing assets under management. Fund managers have learned that investors chase past performance in the mistaken belief that the past predicts future performance. Funds further take advantage of investors by increasing advertising when current past performance is high. Advertising encourages individual investors to make fund choices in specific funds because they are generally unsophisticated, uninformed, and have low financial literacy, including a lack of knowledge of both transparent and opaque fund expenses and fees. Any persistence in high fund performance is also much more likely due to luck than portfolio manager skill. The Securities and Exchange Commission has also failed to prohibit performance advertising or to require it to be unambiguous.

An Evaluation Of The Prospects For The Euro Currency In 2012-2013

The 2008 global Financial Crisis and the subsequent relative collapse of the financial and economic markets, including the government bond markets, in Greece, Ireland, and Portugal as well as economic weakness in other Western European economies have called into question the viability, going forward, of the Euro Currency. The so called PIIGS countries of Portugal, Ireland, Italy, Greece, and Spain are thought to be financially vulnerable because of high levels of government spending and resulting deficit levels and inefficient labor markets and tax collection policies among other factors. Those five countries, along with the stronger economies of France and Germany, comprise 7 of the 17 countries in the Eurocurrency Union. Any weakness in the 5 country group can have a contagion effect on the rest and if the recent financial bailouts by the IMF and the European Central Bank in Greece, Portugal and Ireland are not effective then there is a real danger that one of more of the GIP (Greece, Ireland and Spain) countries may have to abandon or be forced to abandon the Euro. Because there is no provision for a country leaving the Eurocurrency Union this is uncharted territory and could lead to the weakening or even demise of the Euro depending upon circumstances. The fact that there are also significant financial linkages and related default risk connecting the five countries to the sounder economies of Germany and France increases the risks. This paper will evaluate the likelihood that the Eurocurrency will be substantially weakened or abandoned over the next 18 months. The evaluation will be highly dependent upon the forecasts for the 5 countries economic prospects, especially the very large economies of Italy and Spain as well as the likely responses of Germany and France to future default like events in the five countries. Metrics utilized will include the trend in economic indicators like long term government bond yields, deficit spending, tax collections, economic growth, and financial linkages and dependence among the seven countries. European Central Bank data and information from related sources like the IMF will be utilized.

Reforming the Tax Preference for Employer Health Insurance

Executive SummaryThe tax preference for employer-sponsored health insurance contributes to the very high level of health spending in the United States. In this paper, we consider the consequences for spending of one approach to reducing this preference: giving people with health insurance an additional deduction for their expected out-of-pocket spending, that is, an additional deduction that declines as the actuarial value of their insurance rises. We show that this approach would reduce health spending more and have a smaller budget cost than the deduction for actual out-of-pocket spending analyzed by Cogan, Hubbard, and Kessler by encouraging a shift to higher-copayment health insurance. We estimate that a deduction for expected out-of-pocket expenses would reduce private health spending by $86 billion in 2010 at a budget cost of approximately $5 billion. We conclude that, under reasonable assumptions about consumers’ valuation of this incremental spending and the cost of public funds, such a deduction ...

Choosing Wisely

WHILE THE UNITED STATES GRAPPLES WITH THE challenge of health care costs that contribute to high rates of poor-quality care, burdens to business competitiveness, and looming government deficits, clearly there are areas in which health care spending does not add to the health of individuals and communities. The polarizing political environment makes it difficult to conduct rational public discussions about this issue, but clinicians and consumers can change the nature of this debate to the potential benefit of patients, the medical profession, and the nation. The initial focus should be on overuse of medical resources, which not only is a leading factor in the high level of spending on health care but also places patients at risk of harm. In fact, some estimates suggest that as much as 30% of all health care spending is wasted. To reduce unnecessary tests and procedures, physicians will need to play a leading role—their decisions account for about 80% of health care expenditures. Yet physicians do not always have the most current effectiveness data, and despite acting in good faith, they can recommend diagnostic or therapeutic interventions that are no longer considered essential. Also, research shows that physicians may need help communicating these matters to their patients. This may be especially difficult when clinicians and consumers are deluged with advertising and promotion. Clinicians often report feeling compelled to accommodate patients’ requests for interventions they know are unnecessary. At the same time, patients need trustworthy information to help them better understand that more care is not always better care, and in some cases can actually cause more harm than good. A major goal of health care reform is enhancing “patientcentered care.” Patients, and consumer groups representing them, express increasing interest in forging true partnerships with their clinicians, with real-time access to their own medical records, to science-based comparative effectiveness information, and to health care delivery environments built to enhance both comfort and personalization of medical care. Patient engagement, as 1 of the 6 major initiatives of the National Priorities Partnership of the National Quality Forum, promises more informed and involved patients as decision makers. To make good on this promise requires transparent and credible information about the relative value and risk of various medical diagnostic and therapeutic interventions. To help reduce waste in the US health care system and promote physician and patient conversations about making wise choices about treatments, 9 medical specialty societies have joined the ABIM (American Board of Internal Medicine) Foundation and Consumer Reports in the first phase of the Choosing Wisely campaign, including the following: American Academy of Allergy, Asthma & Immunology; American Academy of Family Physicians; American College of Cardiology; American College of Physicians; American College of Radiology; American Gastroenterological Association; American Society of Clinical Oncology; American Society of Nephrology; and the American Society of Nuclear Cardiology. As part of Choosing Wisely, each society has developed a list of 5 tests, treatments, or services that are commonly used in that specialty and for which the use should be reevaluated by patients and clinicians. Those lists were released on April 4, 2012, at a national event in Washington, DC. Additionally, other societies, consumer organizations, and physician organizations have asked how they can become part of this effort to engage physicians and patients in conversations about tests and procedures that should rarely be used. The early origins of this campaign can be found in “Medical Professionalism in the New Millennium: A Physician Charter.” Authored in 2002 by the ABIM Foundation, American College of Physicians Foundation, and European Federation of Internal Medicine, the charter has as its fundamental principles the primacy of patient welfare, pa-

Diabetes, its treatment, and catastrophic medical spending in 35 developing countries.

OBJECTIVETo assess the individual financial impact of having diabetes in developing countries, whether diabetic individuals possess appropriate medications, and the extent to which health insurance may protect diabetic individuals by increasing medication possession or decreasing the risk of catastrophic spending.RESEARCH DESIGN AND METHODSUsing 2002–2003 World Health Survey data (n = 121,051 individuals; 35 low- and middle-income countries), we examined possession of medications to treat diabetes and estimated the relationship between out-of-pocket medical spending (2005 international dollars), catastrophic medical spending, and diabetes. We assessed whether health insurance modified these relationships.RESULTSDiabetic individuals experience differentially higher out-of-pocket medical spending, particularly among individuals with high levels of spending (excess spending of $157 per year [95% CI 130–184] at the 95th percentile), and a greater chance of incurring catastrophic medical spending (17.8 vs. 13.9%; difference 3.9% [95% CI 0.2–7.7]) compared with otherwise similar individuals without diabetes. Diabetic individuals with insurance do not have significantly lower risks of catastrophic medical spending (18.6 vs. 17.7%; difference not significant), nor were they significantly more likely to possess diabetes medications (22.8 vs. 20.6%; difference not significant) than those who were otherwise similar but without insurance. These effects were more pronounced and significant in lower-income countries.CONCLUSIONSIn low-income countries, despite insurance, diabetic individuals are more likely to experience catastrophic medical spending and often do not possess appropriate medications to treat diabetes. Research into why policies in these countries may not adequately protect people from catastrophic spending or enhance possession of critical medications is urgently needed.

Expert Politicians, Electoral Control, and Fiscal Restraints

Fiscal restraints have been argued to force today's governments to internalize the externalities that result from extensive borrowing on future electorates and governments as well as on other countries by causing fiscal instability. In this article we provide an alternative argument for fiscal restraints which is based on an agency perspective on government. A budget maximizing politician is better informed than the electorate about the necessary spending to ensure the states ability to provide services for the economy. In this respect, the politician is an expert in the meaning of the credence good literature. The electorate, being able to observe the budget but not the necessary level of spending, will reelect a government if its budget does not exceed a critical level. A fiscal restraint limits the maximum spending a government will choose if the reelection level is not sufficient to ensure the state's ability to provide services to the economy. We determine when such a fiscal restraint improves voter welfare and discuss the role of the opposition in situations where very high levels of spending are required.

The Evolution of Advance Directives

THERE ARE 2 WIDELY KNOWN PROBLEMS WITH END-OFlife care in the United States. First, care often does not reflect patients’ values and preferences. Second, end-of-life care constitutes a disproportionate amount of health care expenditures. There is a need to improve the value of health care spending because of changing economic and political climates and because Medicare and Medicaid costs account for nearly a quarter of the federal budget. Despite recognition that advance directives have conceptual limitations, their appeal persists because of the theoretical possibility that advance directives can simultaneously improve the patient centeredness of care and decrease health care expenditures near the end of life. The evolution of advance directives has mirrored that of many new medical technologies: initial unbridled enthusiasm evolved into skepticism as empirical evidence raised questions about the current practice, followed by a wiser, more constrained application. In contrast to early studies suggesting little benefit of advance directives, recent observational and interventional studies in selected populations suggest that advance directives substantially improve the patient centeredness of care near the end of life. However, the evidence about the effect of advance directives on costs is conflicting and incomplete. In this issue of JAMA, Nicholas and colleagues make an innovative contribution by examining whether the association between advance directives and financial expenditures varies according to a region’s average level of Medicare spending. To accomplish this, the authors linked data from the Health and Retirement Study—in which decedents’ surrogates were queried about whether patients had a treatment-limiting directive—with Medicare claims data. Two findings are especially important. First, in regions characterized by high levels of Medicare spending, treatment-limiting directives were associated with modestly lower levels of Medicare spending, lower likelihood of in-hospital death, and higher use of hospice care; however, similar associations were not observed in low-spending regions. Second, advance directives specifying limits on treatment were more common in areas with lower levels of end-of-life spending. The study is limited by the paucity of information regarding the content of patients’ directives and lingering questions about whether the use of surrogates’ reports about the content of advance directives is a reliable measurement strategy. As the authors note, the observational nature of the data precludes causal inferences about whether interventions to increase the use of advance directives will decrease costs. In light of these limitations and the relatively small absolute magnitude of cost savings observed, these findings are insufficient to justify changes in health policy regarding advance directives. Nevertheless, the authors have opened new avenues of inquiry to understand the effects of advance directives and have highlighted the potential importance of local practice norms on the outcomes associated with advance directives. The results raise several important questions about the “mechanisms of action” of advance directives. First, what might explain the finding of lower end-of-life care costs among patients with treatment-limiting directives in high-spending regions? The most obvious explanation that advance directives reduced the application of expensive life-prolonging technologies prior to death does not appear to be the entire explanation because there was not a significant difference in use between patients with and without treatment-limiting directives. An alternative explanation, which was not assessed in the study, is that treatment-limiting directives affected the duration of use of life support rather than the incidence of its application. This distinction is crucial because it raises the possibility that the work advance directives do may be different from the work they were conceived to do. Advance directives were originally designed to allow patients to determine in advance what treatment they would receive in the event of their incapacity. Instead, it may be that treatment-limiting advance directives work not by making the decisions but by giving surrogates and physicians psychological permission to cease life support at some point. This hypothesis is consistent with substantial empirical evidence that surrogates are reluctant to not do everything for patients and experience substantial distress when they believe they do not understand patients’ values. This distinction is important because it may signal the need to refocus advance care planning efforts to help surrogates and clini-

The Poor of Noakhali: Danish Development Assistance Policy and Rural Development in Bangladesh

AbstractThe Danish integrated rural development project in the Bangladeshi district of Noakhali (1978–92) was in many ways the largest aid project in the history of the Danish aid agency, DANIDA, and was intended to break new ground by reaching the poorest and weakest directly. Despite elaborate planning and a small army of Danish experts, however, the project failed to reach the targeted groups and would ultimately be viewed as a partial fiasco. By analysing the historical context of the project, this article will show how both the project and the problems it encountered were a by-product of the basic principles of the Danish aid policy developed in the 1960s and 1970s: the same factors that produced the high level of Danish aid spending and the will to embrace new agendas in development assistance such as the ‘basic-needs’ approach also created a number of problems with regard to the implementation of Danish policy on the ground.

The Costs and Benefits of Biological Control of Invasive Alien Plants in South Africa

This paper provides a brief review of the environmental and economic costs of invasive alien plants in South Africa as a background to assessments of returns on investment in weed biological control. The understanding of impacts and their economic costs is far from perfect, but estimates indicate that some costs (of lost water, grazing and biodiversity) are currently about R6.5 billion per annum (about 0.3 % of South Africa's GDP of around R2000 billion: R7 = about US$1), and could rise to > 5 % of GDP if invasive plants are allowed to reach their full potential. By comparing the costs of biological control research and implementation to the benefits of restored ecosystem services, or avoided costs, and avoided ongoing control costs, biological control has been shown to be extremely beneficial in economic terms: estimated benefit:cost ratios ranged from 8:1 up to 3726:1. Currently, spending on biological control is far lower than on other forms of control (about 5 % and 14 % of that spent on mechanical and chemical control, respectively), despite the significantly better returns on investment from biological control. In aggregate these assessments indicate that higher levels of spending on biological control research would generate extremely attractive returns on investment.

The Relationship Between Hospital Spending and Mortality in Patients With Sepsis

Sepsis is common, highly morbid, and costly, yet little is known about differences in the care or outcomes of patients with sepsis across hospitals. We sought to characterize variations in hospital spending and mortality rates and to determine whether higher levels of spending are associated with better hospital survival. We conducted a cross-sectional study of hospitals that treated at least 100 adult patients with sepsis between 2004 and 2006. We developed multivariable models for expected patient mortality and costs and calculated standardized mortality and cost ratios for each hospital. We defined clinically significant variation as observed outcomes that differed from expected outcomes by at least 10%. We examined the association between hospital-level spending and mortality rate using a model that adjusted for hospital characteristics. Among 166,931 patients with sepsis at 309 hospitals, we observed wide variations in hospital-level mortality and cost. Of 61 hospitals (19%) at the median expected mortality, observed mortality ranged from 9% to 32%. More than a third (34%) of hospitals exceeded expected costs by at least 10%, with a median average excess cost of $5207. We found lower-than-expected costs and mortality rates at 22 hospitals (7%). An adjusted model did not show a significant association between hospital spending and mortality. Hospital spending and adjusted mortality rates for patients with sepsis vary substantially, but higher hospital expenditures are not associated with better survival. Efforts to enhance the value of sepsis care could be modeled on hospitals that achieve lower-than-expected mortality and costs.

Policy Regimes and Normative Conceptions of Nationalism in Mass Public Opinion

The effect of policy regimes on immigrant incorporation has been the subject of extensive debate. Despite much theoretical literature on the subject, the relationships between specific national policies in various domains and outcomes broadly related to social solidarity have not been well explored empirically. The present work develops measures tapping the priority of “ascriptive” traits defining membership in the national community. It tests the expectations of the theoretical literature on multiculturalism, citizenship policy, and social welfare redistribution against these measures across 18 immigrant-receiving democracies. Cross-sectional analyses on, 2003 data indicate that both jus soli citizenship regimes and high levels of social spending are related to more immigrant-inclusive definitions of the national community, but the effect of multiculturalism is inconsistent. Examined longitudinally, the effect of a jus soli citizenship regime and social spending remains consistent, but citizens in multicultural countries appear to have become substantially more “ascriptive” on these outcomes over time.

What works for threatened species recovery? An empirical evaluation for Australia

Despite the growing numbers of threatened species and high levels of spending on their recovery worldwide, there is surprisingly little evidence about which conservation approaches are effective in arresting or reversing threatened species declines. Using two government data sets, we examined associations between population trends for 841 nationally-threatened terrestrial species in Australia, and four measures of conservation effort: (a) how much their distribution overlaps with strictly protected areas (IUCN I–IV), (b) and other protected areas (IUCN V–VI), (c) the number of recovery activities directed at the species, and (d) numbers of natural resource conservation activities applied in areas where populations of the threatened species occur. We found that all populations of 606 (72%) species were in decline. Species with greater distributional overlap with strictly protected areas had proportionately more populations that were increasing or stable. This effect was robust to geographic range size, data quality differences and extent of protection. Measures other than strictly protected areas showed no positive associations with stable or increasing trends. Indeed, species from regions with more natural resource conservation activities were found to be more likely to be declining, consistent with differential targeting of such generalised conservation activities to highly disturbed landscapes. Major differences in trends were also found among the different jurisdictions in which species predominantly occurred, which may be related to different legislative protections against habitat destruction. Although we were not able to test causation, this research corroborates other evidence that protected areas contribute to the stabilization or recovery of threatened species, and provides little empirical support for other conservation approaches.

Justice Reinvestment: Can it Deliver More for Less?

Recent years have seen high levels of public spending on criminal justice but to relatively little effect. Prison numbers have risen sharply and public confidence in the criminal justice system remains relatively low. Although crime has fallen there is limited evidence to suggest that this is because of increased criminal justice activity. Justice reinvestment (JR) is a concept that has been widely touted as an approach that might help UK authorities deliver ‘more for less’ at a time when public sector spending is being cut. It has been used widely in the USA with seemingly promising results. Although elements of JR have been tried in the UK, a full-scale implementation has yet to be attempted. Such an attempt will have to give careful consideration to a variety of practical implementation challenges and methodological issues which range from the potential unification and devolution of criminal justice budgets, to the transferability of a predominantly USA-originating evidence base to the UK. This article identifies a number of such issues and attempts to set out an agenda for academic discourse on JR.

Guatemala: The economic burden of illness and health system implications

To assess the economic burden of ill health in Guatemala, the characteristics of Guatemala's health system that potentially explain this burden, and to identify policies to help ameliorate it. Data from the 2000 and 2006 Living Standard Measurement Surveys are used to assess levels of financial burden from ill health, along with information on health system characteristics of Guatemala and recent reform experiences of several middle- and low-income countries. Despite some gains over the period from 2000 to 2006, there continues to be both a high level and inequitable distribution of financial burden associated with ill health in Guatemala. Low levels of insurance coverage, a heavy concentration of the uninsured among the less well off and rural populations, as well as their low levels of access to public services are important drivers of out of pocket spending on health. Households with older members also appear to be at increased risk for out of pocket payments. High levels of catastrophic health spending and poverty co-exist with significant economic inequality and poverty in Guatemala. With health system features and a large informal sector similar to many other developing countries, recent international experience can provide useful lessons to help Guatemala devise innovative financing and payment mechanisms to address these concerns.

Do Institutions Matter?

This article re-examines whether direct democracy mechanisms influence government fiscal behavior. The study builds on prior research by using a large sample of smaller U.S. cities, spending on specific policy areas, and an additional mechanism—the citizen advisory committee. These committees are included because they are prevalent in local government charters and are employed up front in the decision process. The results indicate that direct democracy mechanisms are either associated with higher spending levels or are not significant factors in spending decisions, indicating that local government fiscal behavior may be somewhat resistant to these types of institutional constraints.

Relating R&amp;D and Investment Policies to CCS Market Diffusion Through Two-Factor Learning

Carbon capture and storage (CCS) technologies have the potential to play a major role in the stabilization of anthropogenic greenhouse gases. To develop the capture technology from its current early pilot phase towards commercial maturity, significant public and private funding is directed towards R&D projects and pilot power plants. However, we know little about how this funding relates to the economics of CCS power plants and their market diffusion. This paper addresses that question. We initially review past learning effects from both capacity installations and R&D efforts for a similar technology, flue-gas desulfurization, using the concept of two-factor learning, and estimate the learning curve. We apply the obtained learning-by-doing rate of 7.1% and the learning-by-researching rate of 6.6% to CCS in the electricity market model HECTOR, which simulates 19 European countries hourly until 2040, to understand the impact of learning and associated policies on the market diffusion of CCS. Simulation results show that the individual impact of learning is similar for both learning rates, regardless of the CO2 price. We then evaluate the effectiveness of policies subsidizing CCS investment costs (addressing learning-by-doing) and of policies providing R&D grants (addressing learning-by-researching) by relating the policy budget to the realized CCS capacity. We find that policies promoting diffusion through subsidies are, at lower policy cost, about equally effective as policies providing R&D funding. At higher spending levels, diffusion-promoting policies are more effective. Overall, policy effectiveness increases in low CO2 price scenarios, but the CO2 price still remains the key prerequisite for the economic competitiveness of CCS, even with major policy support.

Is There a Fiscal Free Lunch in a Liquidity Trap?

This paper uses a DSGE model to examine the effects of an expansion in government spending in a liquidity trap. If the liquidity trap is very prolonged, the spending multiplier can be much larger than in normal circumstances, and the budgetary costs minimal. But given this fiscal free lunch, it is unclear why polic ymakers would want to limit the size of fiscal expansion. Our paper addresses this question in a model environment in which the duration of the liquidity trap is determined endogenously, and depends on the size of the fiscal stimulus. We show that even if the multiplier is high for small increases in government spending, it may decrease substantially at higher spending levels; thus, it is crucial to distinguish between the marginal and average responses of output and government debt.

Cutting Back Public Investment after 1980: Collateral Damage, Policy Legacies and Political Adjustment

AbstractSince the 1980s public investment expenditures have been cut back in many OECD democracies. One explanation is a priority for fiscal stringency in order to curb big government in the context of neo-liberal ideas, which is reinforced by EMU requirements in the 1990s. Another is the potential impact of left and right partisan politics on investment policies. The main finding here is that the overall decrease in public investment expenditure appears to be caused by collateral damage due to the downsizing of total government outlays. This is particularly the case where there is a policy legacy of the Left with high levels of total public spending on the welfare state prior to the 1980s. Where the Right in government has been dominant after 1980, this downward development in public investment is particularly noticeable.