Health Economists View of Policy Questions Michael A. Morrisey University of Alabama at Birmingham and John Cawley Cornell University AcademyHealth Annual Meeting – Seattle, WA June 24, 2006

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

Survey 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.

Outline Report policy views of health economists Report policy views of health economists Use factor analysis and probit regression to identify patterns of responses Use factor analysis and probit regression to identify patterns of responses Identify the extent to which health economists participate in policy discussions Identify the extent to which health economists participate in policy discussions

We asked 19 Questions About Views on Health Policy Questions or the Effects of Open Empirical Questions in Health Economics We substantially agree on 8 We substantially agree on 8 We modestly agree on 4 We modestly agree on 4 We substantially disagree on 7 We substantially disagree on 7

Substantial Agreement

Workers pay for employer-sponsored health insurance in the form of lower wages or reduced benefits Percent

Education has a causal impact on health Percent

Recent horizontal and vertical integration in the health care sector is driven by the pursuit of market power Percent

Health insurance premiums charged to individuals born with genetic defects that result in above-average use of medical care should be higher than those charged to individuals without such defects. Percent

Health insurance premiums should be higher for those who engage in unhealthy behaviors (e.g., smoking, excess drinking, obesity) Percent

Rapidly advancing medical technology is the most important cause of rising health care spending in the U.S. Percent 46% in 1989

Insurance markets suffer significantly from adverse selection Percent

Third-party payment results in patients using services whose costs exceed their benefits, and this excess of costs over benefits amounts to at least 5 % of total health care expenditures Percent

Modest Agreement

The U.S. should permit re-importation of pharmaceuticals Percent

Physicians induce substantial demand for their services Percent 81% in 1989

Controlling for the average income in an area, greater income inequality worsens health Percent

The U.S. should continue to subsidize graduate medical education Percent

Substantial Disagreement

The U.S. should continue the current tax treatment of employer-sponsored health insurance Percent

The U.S. should adopt a Canadian-style system of universal and compulsory health insurance Percent 52% in 1989

The U.S. should require employers to provide a minimum level of health insurance for their workers Percent 38% in 1989

The U.S. should implement a refundable tax credit to encourage people to buy private health insurance Percent

The current profits of pharmaceutical companies are necessary to give them incentives for optimal R&D Percent

The benefits of the Medicare prescription drug benefit exceed the costs Percent

If a payer (e.g., an HMO) negotiates a lower price for hospital services, the hospital will raise prices to other payers Percent 63% in 1989

Factor Analysis of Disagreement and Modest Agreement Issues Views do not particularly lump Views do not particularly lump Factor 1 Factor 1 Agree on cost shifting Agree on cost shifting Agree on employer mandates Agree on employer mandates Agree on Canadian system Agree on Canadian system Agree that income inequality affects health Agree that income inequality affects health Factor 2 Factor 2 Disagree on profits and Pharm R&D Disagree on profits and Pharm R&D Agree on drug re-importation Agree on drug re-importation Agree on Canadian system Agree on Canadian system

Probit Descriptive Analysis of Disagreement and Modest Agreement Agree = f (degree type, training, experience, demographics, and employment setting) Agree = f (degree type, training, experience, demographics, and employment setting) No consistent pattern of responses across issues No consistent pattern of responses across issues Few statistically significant associations Few statistically significant associations

Health Economists Impact on Policy Discussions 85.5% of health economists report having some impact on policy discussions 85.5% of health economists report having some impact on policy discussions Measured as responding affirmatively to at least one of the 7 questions we asked about involvement Measured as responding affirmatively to at least one of the 7 questions we asked about involvement 296 respondents to these questions

Health Economists Impact on Policy Discussions I have testified before a state or federal agency or committee 34.1% I have discussed my research with agency or legislative staff 60.5% Agency or legislative staff have attended presentations of my work 57.1% Agency or legislative staff have asked for copies of my research 61.5%

Health Economists Impact on Policy Discussions I have discussed my research with private sector organizations such as firms, unions, trade associations, advocacy groups 59.5% My research and/or expertise has led to consulting or related activities with private sector organizations 49.0% My work has been cited by proponents or opponents of legislation 41.9%

Who Participates? Using the same descriptive probit model used with the views on policy… Using the same descriptive probit model used with the views on policy… Those with MDs more likely to participate Those with MDs more likely to participate Those with masters degrees less likely Those with masters degrees less likely Those with less than 4 years of experience are less likely to participate Those with less than 4 years of experience are less likely to participate

Overall Health economists agree on a number of important policy questions Health economists agree on a number of important policy questions We disagree on many topics as well, but there seems to be little systematic disagreement We disagree on many topics as well, but there seems to be little systematic disagreement We are active in promoting our research in the policy arena We are active in promoting our research in the policy arena