The next epidemic

Health professionals are worried about the growing number of people with tuberculosis. The Health Protection Agency (HPA) website states that “in 1993 the World Health Organization (WHO) declared tuberculosis to be a global emergency.” The HPA reports the following TB statistics. TB cases (thousands) TB infection rate per 100,000 Africa 2573 356 The Americas 363…

Health Wonk Review – 2 Nov 2006 edition

 “Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body – the producers and consumers themselvesâ€? – Herbert Hoover When economists analyze any industry, their first step is to look at the incentives facing the producers and the consumers.…

Do financial incentives affect the type of breast cancer surgery a patient receives?

There are two treatment options for patients with breast cancer.  The first is a breast conserving surgery (BCS) which removes the cancerous lump (lumpectomy) followed by irradiation treatment.  The second option is a mastectomy which removes the entire breast.  Lecia Apantaku claims in the American Family Physician journal in 2002, that “survival rates following breast conservation…

Hausman Endogeneity Test

Ordinary Least Squares  If you have studied basic statistics, its likely that you have come across the ordinary least squares (OLS) estimation technique.  OLS attempts to minimize the squared distance between dependent variables (‘y‘) and the a linear prediction of y (y_hat=xβ).  The parameter vector ‘β_ols‘ minimizes this distance.  The most important assumption in order for β to reflect to true…

Decrease price…increase supply?

In a typical market, an increase in the consumers’ willingness to pay will increase price and increase quantity (see graph).  On the other hand, a decrease in willingness to pay will decrease price and decrease quantity.  This axiom of economics does not hold in the health care market; at least not according to a 1998…

Academic Integrity

In order to prevent fraud, such as in the case of Eric Poehlman, economists use a peer-review system consisting of referee reports.  The referee reports evaluate the merit of a paper and offer suggestions of how to improve the article.  Tyler Cowen of Marginal Revolution gives some good tips on the best way to write referee…

Those annoying HMO patients…

Why do HMO patients receive less care than fee-for-service patients?  Could it be that HMO patients are healthier (adverse selection) or that FFS compensation leads to increased demand for medical services (moral hazard)?  A paper by Shen, et al. (2004) finds that one reason could be that physician compensation could affect a doctor’s desire to perform…