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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Health Economics, Volume 20, Issue 5, September 2001, Pages 847–854
This review is divided into three parts. The first is a broad-brush summary and evaluation of the Handbook of Health Economics, as a whole. The second consists of some rather picky and, perhaps, petty quibbles about the final product. The third airs some thoughts that occurred to me while reading the Handbook of Health Economics.
The two volumes of the Handbook of Health Economics testify to the flowering of health economics as sub-discipline of economics. The editors are at pains to point out the size, diversity, and newness of the literature subsumed under the heading “health economics”. They are justified in doing so. The Handbook is staggering for a number of reasons. One is sheer size and cost. The two volumes consist of 35 chapters by a total of 55 authors (36 from the USA, 11 from the UK, two each from Sweden, Finland, The Netherlands, and one each from Canada and Switzerland) divided into nine ‘parts’: (1) overview and paradigms; (2) demand and reimbursement for medical services; (3) insurance markets, managed care, and contracting; (4) specific populations; (5) the medical care market; (6) law and regulation; (7) health habits; (8) health and (9) equity. The text comprises of 1910 pages of text and references and 86 pages of indexes. The two volumes, 1a and b, weigh in at just over 9 pounds. If this is a Handbook, the thought of an Encyclopedia of Health Economics is positively terrifying. While these volumes will add weight (in at least two senses) to their owners’ library shelves, they will lighten their wallets to the tune of $250 for the set. The more important reason why attention must be paid is the high quality and enormous breadth of the contents. The roster of authors includes a large proportion of the major contributors to the health economics literature. The essays, which vary widely in length (ranging from 26 to 92 pages), style, and readability, provide a comprehensive guide to health care economics. This collection may not find its way into every economist’s personal library, but individual chapters will appear on course reading lists for years. In fact, it would be possible to put together a quite respectable course in health economics built solely around assigned and optional readings selected from these volumes. Indeed, catering to students is an explicit objective of the editors, who say that the authors were asked to write for 1st year US graduate or UK masters students. Given the variability of 1st year graduate programs in USA, one can say that virtually all of the essays hit this commodious target. In choosing among the essays, readers will have their own favorites. My required-reading list would include the following. Thomas McGuire’s chapter on physician agency explores the issue of induced demand, covers an enormous range, and nicely balances reviews of theory and empirical findings. David Cutler’s and Richard Zeckhauser’s chapter on health insurance provides a judicious balance of institutional information and basic theory wrapped in a pedagogically elegant package. Jon Gruber’s chapter examines health insurance and the labor market, subtly examines job lock and its welfare implications, and concludes with three good pages of unanswered research questions to challenge new entrants to the health economics field. Patricia Danzon’s chapter on liability for medical malpractice should permanently innoculate readers against the simplistic analyses so common in medical journals, newspapers, and even informal discussions among some economists. It uses international comparisons more effectively than most other contributions to this collection (so does Donald Kenkel’s chapter on prevention) to illuminate the difficult problem of what malpractice insurance should do and what it does do. Unfortunately, many other chapters were written without regard for experience outside USA and few went beyond the English-speaking world. In some cases, such ethnocentrism is defensible, but in others the intellectual fences are confining. Martin Gaynor’s and William B. Vogt’s chapter on antitrust and competition may be an even more valuable addition to industrial organization than to those of health economics, because it may entice general IO economists to mine the rich vein of peculiar problems encountered in health markets. It is distinguished by breadth of coverage and clarity of its prose. Paul Dolan’s chapter on measurement of the health-related quality of life provides fascinating, if frustrating, explanations of the vexing philosophical, psychological, and psychometric problems raised by attempts to rank and measure the value added of medical interventions. Other chapters will find their way onto supplemental reading lists. A teacher determined to make students in macro-economics think hard about their national income statistics could do no better than to assign the chapter by Ernst Berndt et al. on medical care prices and output. It bears the same relation to price indices as Upton Sinclair’s ‘The Jungle’ does to sausage making; it is a hugely informative description of an inherently messy activity in which standards of (intellectual) sanitation have been grossly inadequate. The only difference is that Berndt and his colleagues are actually cleaning up the mess, with their own research. Michael Grossman’s chapter on the human capital model of health care is an authoritative description from the man who invented it. Students who want to learn this model will find the syllabus here. Unfortunately, the chapter suffers from excessive length and exhibits a fascination with particular methodological issues that not all readers will share. Frederic Scherer’s chapter on the pharmaceutical industry is a rich trove of fact and institutional detail but is short on theory. The twin chapters by Frank Chaloupka and Kenneth Warner on smoking and by Philip Cook and Michael Moore on alcohol are also teeming with factual detail and lay bare the difficulties of determining whether and how taxes should be levied on these products. In all of these cases, and other chapters not cited here, the lists of references, which are encyclopedic, will guide researchers and students for years and save them countless hours of otherwise duplicative effort. I found some of the other aspects of the Handbook to be major disappointments, however. My greatest dissatisfaction was the absence of a chapter devoted exclusively to the economics of medical research. In health care, more than in most other fields with which economics deals, the welfare effects of even modest changes in scientific advance dwarf the welfare effects of even large changes in the static resource allocation. Even in chapters where an examination of research might have starred, it put in, at most, a cameo appearance and mostly remained in the wings. For example, one of the classic issues in determining patent policy is the goal of providing socially optimal incentives for research (dynamic efficiency) together with socially optimal incentives for production and distribution (static efficiency). Yet, this issue receives little attention in chapters on drugs, industrial organization, and antitrust and competition. A second disappointment concerns the failure of any chapter to examine the question of quality in a serious and complete fashion. The term is ambiguous when applied to health care services, but its meaning is critical, whether one is measuring prices and therefore quantities (Berndt et al.), cost effectiveness (Garber), diffusion of best practice (Phelps), managed care (Glied), or numerous other topics. Similar problems may arise with respect to other services, but they are particularly intense with respect to health care. A third disappointment can be captured by the old saying “less is more”. A shorter handbook would have been a more useful handbook. Some chapters are just too long for the message they are carrying. Some of the problems arise from slipshod line-editing. A sharp red-pencil could have reduced some essays by 20%, or more. In other cases, issues are treated incompletely several times that could have been covered completely once. The papers as a whole suffer from considerable overlap and repetition. And some of the authors spend a great deal of time on issues that clearly fascinate them but may not be equally captivating to most other readers. Correcting such problems is enormously time-consuming, however, and would have delayed publication, thereby reducing the timeliness and usefulness of the essays. Ulf-G. Gerdtham and Bengt Jönsson address international comparisons of health expenditure, a topic that has been the subject of numerous articles employing more or less sophisticated statistical techniques in an effort to relate national health expenditure to different variables. In the end, however, I failed to detect anything to justify 44 pages of text. Alan Garber’s chapter on cost-effectiveness analysis is a sophisticated and clear exposition of the strengths and weaknesses of cost-effectiveness analysis and amply rewards the reader, but it is loosely written, returning repeatedly to certain topics (such as which down-stream medical costs should be included) without summarizing which issues are settled and which are open. Mark Pauly’s chapter on insurance examines abstract principles of insurance without relating them to actual behavior of insurers or the insured and left me puzzled about what I was supposed to take away from the essay. Tomas Philipson points out that individual efforts to avoid disease are positively related to the prevalence of the disease. As a result, public efforts to fight disease will be offset, in part and to the extent that they are effective, by reduced private anti-disease efforts. Analyses that ignore this effect will overstate the efficacy of disease-prevention efforts. This point is valid and can be stated succinctly. However, Philipson repeats it numerous times without cumulative additional effect and without clarifying the policy implications of the theoretical point.