Health Economists: Who We Are, What We Do, and How Much We Earn Michael A. Morrisey, Ph.D. University of Alabama at Birmingham and John Cawley, Ph.D. Cornell University

Thanks to: AcademyHealth AcademyHealth iHEA iHEA Advisory Committee: Roger Feldman Richard Arnould Kate Bundorf Michael Hagan David Knutson Kristine Metter Sharron Arnold

Surveying Issues: Web based survey: Web based survey: Invitation & two follow-up s issued Invitation & two follow-up s issued October 21 – November 21, 2005 October 21 – November 21, 2005 Sample Universe: Sample Universe: All U.S. members of iHEA All U.S. members of iHEA All members of AcademyHealth All members of AcademyHealth Health Economics Interest Group Health Economics Interest Group Unduplicated total ,439 Unduplicated total ,439 Response Rate % Response Rate %

Do You Consider Yourself To Be: A. A health economist53% B. An economist who works in health21% C. Neither26% For this presentation we exclude those answering neither.

Who Are Health Economists? Gender & Age Gender & Age Race & Ethnicity Race & Ethnicity Marital Status Marital Status Dual Career Status Dual Career Status

- Gender - 62% 38%

- Age - Age Group

Are More Women Entering the Field? Age Group Percent Women

- Race & Ethnicity - Asian 10.5 % Black or African-American 1.3 % 1.3 % White 88.2 % Hispanic or Latino 4.1 % 4.1 % Not Hispanic or Latino 95.9 %

- Marital Status and Dual Careers - Dual Career Couples: 70% Of Dual Career Couples: 27% dual academic 10% dual economics

- Education and Training - Degrees & fields of study Degrees & fields of study Formal field offered/taken Formal field offered/taken Health dissertation Health dissertation Top econ schools for health economists Top econ schools for health economists

- Degrees Received - Percent Masters only 3 Doctoral only Ph.D. Ph.D. Other Other873 Doctoral Plus - MD - MD - RN - RN - JD - JD310 Professional only 2

- Ph.D. Field of Study % in 1989

- Formal Health Economics Field - Of those with an academic doctoral degree -- Health economics field offered % Health economics field offered % Health economics field completed... 30% Health economics field completed... 30% Completed a health dissertation % Completed a health dissertation %

Schools Awarding 5 or More PhDs in Economics to Health Economists Wisconsin -16 Wisconsin -16 Chicago -11 Chicago -11 Michigan -9 Michigan -9 Yale -9 Yale -9 Harvard - 8 Harvard - 8 MIT - 8 MIT - 8 Washington - 8 Washington - 8 CUNY - 7 Maryland - 7 Berkeley - 6 Stanford - 6 Boston U - 5 Washington U - 5 St Louis 48 % of PhDs in economics reported by health economists granted by these 13 schools

How Are Health Economists Employed? Employment by sector Employment by sector Time spent in research, etc. Time spent in research, etc. Hours worked per week Hours worked per week Time spent consulting Time spent consulting External funding expectations External funding expectations Amount of teaching Amount of teaching

Where Do Health Economists Work?

Of Those in Academia… 24% are in Economics Departments Economics departments may be in A&S or B-Schools

Faculty Rank of Those in Academia… 51% Tenured 35% Tenure Track 14% ~ Tenure Track 8% Dept Chair 15% Center Director

Of Those in Government & Private Sector… 35% also have an academic appointment

How Do We Spend Our Professional Time?

How Much Of Our Time Do We Spend? Hours Per Week AcademiaGov’t Private Sector <40 10% 10% 12% 12% 11% 11% Overall Mean = 47.2 hours Overall Median = 50 hours

How Much Consulting Do We Do? Average Days/Year Median Days/Year All Respondents Academic Respondents Average consulting income of those with any: $19,445

How Much Grant/Contract Coverage? Expected Mean [Median] Actual 3-year Average All Academics 28% [20%] 39% [30%] Medical School 49% [50%] 61% [70%] Public Health 48% [50%] 62% [70%] 31 % report explicit rewards or penalties tied to salary coverage

How Much Did We Teach in Last 2 Years? Median Percentage = 0 Undergrad Courses Taught 1 46 % Graduate Courses Taught 222% Doctoral Committees 141% * Excludes readings and independent study courses Academics only.

What Does It Take To Get Promoted? Percentage of respondents considering activities essential or recommended Percentage of respondents considering activities essential or recommended Research/Teaching/Service Research/Teaching/Service In Which Journals to Publish In Which Journals to Publish

What Does It Take to Get Promoted? Percent Essential or Recommended

What Does It Take to Get Promoted in Academia? Percent Essential or Recommended

Where to Publish to Get Promoted? Percent Essential or Recommended

Where to Publish to Get Promoted in Academia? Percent Essential or Recommended

How Much & Where Do We Actually Publish? Articles and Book Chapters Articles and Book Chapters Career Career Last 5-Years Last 5-Years Mix of Journals Mix of Journals

How Much Do Academics Publish? Mean Number of Articles and Book Chapters

In Which Journals Do Academics Publish? Entire Career Last 5- Years Economics Journals 13.3% 8.9% 8.9% Health Economics Journals Health Services Research Journals Health Policy Journals Medical Journals Percentages within these categories only Percentages within these categories only

How Much Do Academics Publish in These Journals? Mean [Median] Ass’t.Assoc.Full Economics J 1.2 [1] 1.2 [1] 2.2 [1] 2.2 [1] 10.0 [5] Health Econ J 1.7 [1] 1.7 [1] 2.4 [2] 2.4 [2] 7.6 [5] 7.6 [5] Hlth.Serv Res J 3.2 [2] 3.2 [2] 8.1 [5] 8.1 [5] 18.8 [12] Health Policy J 1.6 [1] 1.6 [1] 3.9 [3] 3.9 [3] 9.3 [5] 9.3 [5] Medical J 5.2 [2] 5.2 [2] 11.0 [5] 23.1 [8] Academics only – Career Publications

How Much & Where Do Non-Academics Publish? Government Government Career: 19 Career: 19 Last 5 Years: 8.2 Last 5 Years: 8.2 Private Sector Private Sector Career: 22.5 Career: 22.5 Last 5 Years: 9.6 Last 5 Years: 9.6

What Sort of Training Do We Want for New Hires? Economics Ph.D. with Health Field Economics Ph.D. with Health Field Economics Ph.D. with Health Interest Economics Ph.D. with Health Interest Economics Ph.D. with No Health Economics Ph.D. with No Health Health Services/Health Policy Ph.D. Health Services/Health Policy Ph.D. MD MD

Acceptable Training for New Health Economist Hire Percent Acceptable

Acceptable Training for New Health Economist Hire in Academia Percent Acceptable

Our Perceptions of Professional Experience On publications for promotion On publications for promotion On pressure to cover full indirects On pressure to cover full indirects On likelihood of changing jobs soon On likelihood of changing jobs soon On parental leave On parental leave On journal/conference/grant reviews On journal/conference/grant reviews On professional life On professional life

The quality of publications counts more for promotion and tenure at my institution than does the quantity of publications.

I am pressured to bring in grants/contracts than cover the full indirect rate at my institution.

There is a greater than 50% chance that I will be employed by another organization within 3 years.

The culture in my department is such that colleagues feel pressured to decline parental leave... for fear it would hurt their chances for tenure and/or promotion.

Overall, I am satisfied with the review process at health economics journals.

Overall, I am satisfied with the review process for papers considered for inclusion at health economics conferences.

Overall, I am satisfied with the review process for federal/foundation grants & contracts.

Overall, I am satisfied with my current employment.

What Do We Earn? Mean annual incomes Mean annual incomes By type of employer By type of employer Academic rank & contract Academic rank & contract Type of academic school Type of academic school Mean consulting income Mean consulting income Income and Consulting Regressions Income and Consulting Regressions

Sample Restrictions Self-designated health economists or economists working in health Self-designated health economists or economists working in health Academic doctoral degree holders only Academic doctoral degree holders only Employed only Employed only Exclude: self-employed, retired, unemployed Exclude: self-employed, retired, unemployed Responded to all relevant questions Responded to all relevant questions 222 usable observations in regressions 222 usable observations in regressions 145 academics 145 academics 77 non-academics 77 non-academics

Earnings Definition “In the last 12 months, how much did you earn from your primary employer (including summer support, bonuses, and profit sharing but not housing allowance)?” “In the last 12 months, how much did you earn from your primary employer (including summer support, bonuses, and profit sharing but not housing allowance)?”

Earnings by Type of Employer Mean S. D. N Academic$117,573(43,048)162 Government$104,786(25,018)30 Not-for-profit$122,472(39,504)36 For-profit$170,962(76,456)22 All$119,040(48,005)251

Academic Earnings by Rank & Degree Economics Ph.D.s Other Doctoral Degrees 9-Month12-Month9-Month12-Month Assistant Professor $82,315(29,196)N=21$84,100(23,961)N=16$94,116(22,258)N=12$91,777(21,100)N=18 Associate Professor $91,847(25,867)N=16$108,428(20,851)N=16---$96,167(16,448)N=6 Full Professor $150,645(34,786)N=28$171,357(49,085)N=21$105,000(22,913)N=3$135,600(29,177)N=5

Earnings By Academic Unit A & S B-SchoolSPHMedicine 9-month9-month12-month12-month Assistant Professor $71,917(19,331)N=12$110,561(32,996)N=10$77,588(28,478)N=9$90,428(15,628)N=14 Associate Professor $83,167(23,353)N=6---$102,167(13,763)N=12$111,736(20,824)N=4 Full Professor $144,000(47,571)N=9$135,305(32,637)N=10$151,653(39,859)N=13$194,500(54,881)N=8

Consulting Income Definition “Over the past three years, how much did you earn per year outside of your primary employment (e.g., book royalties, consulting or expert witness fees, etc.)? “Over the past three years, how much did you earn per year outside of your primary employment (e.g., book royalties, consulting or expert witness fees, etc.)?

Consulting Income - Academics Percentage of academics reporting Percentage of academics reporting any consulting income in past 3 years:82.8% any consulting income in past 3 years:82.8% Mean annual consulting income of Mean annual consulting income of those reporting any:$20,602 those reporting any:$20,602(28,590) Median annual consulting income of Median annual consulting income of those reporting any:$10,000 those reporting any:$10,000

Regressions ln Wage = f(education, experience, employer ln Wage = f(education, experience, employer type, effort, publications, type, effort, publications, employment characteristics, employment characteristics, demographics) demographics) Estimated separately for academics and non-academics Estimated separately for academics and non-academics Probit Consulting = f( “ ) Probit Consulting = f( “ ) ln Conditional Consulting $ = f( “ ) ln Conditional Consulting $ = f( “ )

Regression Highlights - Academics 10 more publications increased income at a decreasing rate: 10 more publications increased income at a decreasing rate: With 10 pubs – 10 more increased income 7.2% With 10 pubs – 10 more increased income 7.2% With 50 pubs – 10 more increased income 5.5% With 50 pubs – 10 more increased income 5.5% With 100 pubs – 10 more increased income 3.4% With 100 pubs – 10 more increased income 3.4% Greater percentage of time allocated to research increased income: Greater percentage of time allocated to research increased income: 10% more research time per week associated with 2.5% higher income 10% more research time per week associated with 2.5% higher income

Regression Highlights - Academics No effect of Econ vs HSR vs Other Degree No effect of Econ vs HSR vs Other Degree Marginal MD – 43% higher income Marginal MD – 43% higher income Marginal masters/professional degree – no effect Marginal masters/professional degree – no effect Degree from Top 5 econ dept – 18.5% higher income Degree from Top 5 econ dept – 18.5% higher income Top 6-20 econ dept – no effect Top 6-20 econ dept – no effect

Regression Highlights - Academics Years since degree – no effect Years since degree – no effect Years with current employer – income declines at a decreasing rate for first 15.8 years Years with current employer – income declines at a decreasing rate for first 15.8 years Average hours worked per week – no effect Average hours worked per week – no effect

Regression Highlights - Academics Compared to an Arts & Sciences Econ. Dept.: Compared to an Arts & Sciences Econ. Dept.: B-School – 18.4% higher incomes B-School – 18.4% higher incomes Public health – no effect Public health – no effect Medicine – no effect Medicine – no effect No effects of demographics No effects of demographics

Regression Highlights - Academics Administrative Position – 16% higher income Administrative Position – 16% higher income Tenured – 21% higher income Tenured – 21% higher income No Effects of: No Effects of: Academic rank Academic rank Non-tenure track Non-tenure track 9-month contract 9-month contract

Regression Highlights: Consulting Model does not predict who consults! Model does not predict who consults! Higher consulting income associated with: Higher consulting income associated with: HSR degree HSR degree Male Male Fewer hours worked Fewer hours worked More publications More publications

Conclusions Few differences across schools, degrees, rank and 9 – 12 month contract But: But: Top-5 econ program matters Top-5 econ program matters B-School matters B-School matters Tenure matters Tenure matters Administrative position matters Administrative position matters Marginal MD matters Marginal MD matters Paid for performance Paid for performance