Market failure in long-term private health insurance markets: a proposed solution

Recently, private health insurance rates have declined in many countries. In places requiring community rating in their health insurance premiums, a major cause is age-based adverse selection. However, even in countries without community rating, a de facto type of partial community rating tends to occur. In this note, a modified version of Pauly et al.'s guaranteed renewability model, which addresses the problem of age-based adverse selection (Pauly et al., 1995) is presented. Their model is extended from three to 35 periods. Also, probabilities are allowed to increase by age for low-risk types using actual age-based probabilities. This extension of their work shows that private health insurance contracts available stray far from optimal contracts that deal with age-based adverse selection. This suggests that government actions to affect private insurance options are warranted.

Influence of socioeconomic deprivation on the primary care burden and treatment of patients with a diagnosis of heart failure in general practice in Scotland: population based study

Objectives To examine whether there are socioeconomic gradients in die incidence, prevalence, treatment, and follow up of patients with heart failure in primary care. Design Population based study. Setting 53 general practices (307741 patients) participating in the Scottish continuous morbidity recording project between 1 April 1999 and 31 March 2000. Participants 2186 adults with heart failure. Main outcome measures Comorbid diagnoses, frequency of visits to general practitioner, and prescribed drugs. Results 2186 patients with heart failure were seen (prevalence 7.1 per 1000 population, incidence 2.0 per 1000 population). The age and sex standardised incidence of heart failure increased with greater socioeconomic deprivation, from 1.8 per 1000 population in the most affluent stratum to 2.6 per 1000 population in the most deprived stratum (odds ratio 1.44, P=0.0003). On average, patients were seen 2.4 times yearly, but follow up rates were less frequent with increasing socioeconomic deprivation (from 2.6 yearly in the most affluent subgroup to 2.0 yearly in the most deprived subgroup, P=0.00009). Overall, 812 (80.6%) patients were prescribed diuretics, 396 (39.3%) angiotensin converting enzyme inhibitors, 216 (21.4%) beta blockers, 208 (20.7%) digoxin, and 86 (8.5%) spironolactone. The wide discrepancies in prescribing between different general practices disappeared after adjustment for patient age and sex. Prescribing patterns did not vary by deprivation categories on univariate or multivariate analyses. Conclusions Compared with affluent patients, socioeconomically deprived patients were 44% more likely to develop heart failure but 23% less likely to see their general practitioner on an ongoing basis. Prescribed treatment did not differ across socioeconomic gradients.

Uncovering a hidden epidemic: A study of the current burden of heart failure in Australia

Background. Australia, like other countries, is experiencing an epidemic of heart failure (HF). However, given the lack of national and population-based datasets collating detailed cardiovascular-specific morbidity and mortality outcomes, quantifying the specific burden imposed by HF has been difficult. Methods. Australian Bureau of Statistics (ABS data) for the year 2000 were used in combination with contemporary, well-validated population-based epidemiologic data to estimate the number of individuals with symptomatic and asymptomatic HF related to both preserved (diastolic dysfunction) and impaired left ventricular systolic (dys)function (LVSD) and rates of HF-related hospitalisation. Results. In 2000, we estimate that around 325,000 Australians (58% male) had symptomatic HF associated with both LVSD and diastolic dysfunction and an additional 214,000 with asymptomatic LVSD. 140,000 (26%) live in rural and remote regions, distal to specialist health care services. There was an estimated 22,000 incidents of admissions for congestive heart failure and approximately 100,000 admissions associated with this syndrome overall. Conclusion. Australia is in the midst of a HF epidemic that continues to grow. Overall, it probably contributes to over 1.4 million days of hospitalization at a cost of more than $1 billion. A national response to further quantify and address this enormous health problem is required.

Economics and health promotion

Health promotion activities consume a growing proportion of health sector spending in most developed countries. Yet, there is still considerable debate in the non-economic literature about exactly what health promotion constitutes and precisely how its role is to be conceived. This paper provides one economic answer to such questions. It sets out an argument that health promotion may be viewed, through the lens of traditional welfare economics, as a response to problems of market failure. A Grossman-type health investment model is invoked to analyse individual deviations from equilibrium and the possible instruments and targets of health promotion policy. The paper concludes by suggesting some of the alternative conceptual approaches that might be brought to bear, as well as some ideas for empirical research.

CHARMed - the effects of candesartan in heart failure

The Candesartan in Heart failure: Assessment of Reduction in Mortality and mortality (CHARM) programme has already shown that candesartan is an effective alternative to angiotensin-converting enzyme (ACE) inhibitors (CHARM-Alternative), that additional benefits can be achieved by adding candesartan to ACE inhibitors (CHARM-Added), and that in patients with a preserved cardiac output there are reduced hospital admissions (CHARM-Preserved). Further recent analysis of the CHARM programme has shown that of the cardiovascular deaths, the benefit of candesartan was due to a reduction in sudden death and progressive heart failure, and that these reductions were observed in the -Alternative and -Added but not -Preserved components. Combination of the CHAR M-Alternative and -Added trials confirmed this reduction of cardiovascular deaths, and also demonstrated that candesartan reduced hospital admissions. There were also improvements in the New York Heart Association functional class of heart failure in the -Alternative and -Added, but not -Preserved, components of CHARM. The benefits of candesartan in heart failure are maintained in the presence of an ACE inhibitor and P-blocker. So far, all of the findings with candesartan in the CHARM programme have been favourable/CHARMed, although the beneficial effects in patients with a preserved cardiac output are limited.

The evolution of the Global Burden of Disease framework for disease, injury and risk factor quantification: Developing the evidence base for national, regional and global public health action

Reliable, comparable information about the main causes of disease and injury in populations, and how these are changing, is a critical input for debates about priorities in the health sector. Traditional sources of information about the descriptive epidemiology of diseases, injuries and risk factors are generally incomplete, fragmented and of uncertain reliability and comparability. Lack of a standardized measurement framework to permit comparisons across diseases and injuries, as well as risk factors, and failure to systematically evaluate data quality have impeded comparative analyses of the true public health importance of various conditions and risk factors. As a consequence the impact of major conditions and hazards on population health has been poorly appreciated, often leading to a lack of public health investment. Global disease and risk factor quantification improved dramatically in the early 1990s with the completion of the first Global Burden of Disease Study. For the first time, the comparative importance of over 100 diseases and injuries, and ten major risk factors, for global and regional health status could be assessed using a common metric (Disability-Adjusted Life Years) which simultaneously accounted for both premature mortality and the prevalence, duration and severity of the non-fatal consequences of disease and injury. As a consequence, mental health conditions and injuries, for which non-fatal outcomes are of particular significance, were identified as being among the leading causes of disease/injury burden worldwide, with clear implications for policy, particularly prevention. A major achievement of the Study was the complete global descriptive epidemiology, including incidence, prevalence and mortality, by age, sex and Region, of over 100 diseases and injuries. National applications, further methodological research and an increase in data availability have led to improved national, regional and global estimates for 2000, but substantial uncertainty around the disease burden caused by major conditions, including, HIV, remains. The rapid implementation of cost-effective data collection systems in developing countries is a key priority if global public policy to promote health is to be more effectively informed.

Carvedilol reduces the costs of medical care in severe heart failure: An economic analysis of the COPERNICUS study applied to the United Kingdom

Background: The aim of this study was to determine the effects of carvedilol on the costs related to the treatment of severe chronic heart failure (CHF). Methods: Costs for the treatment for heart failure within the National Health Service (NHS) in the United Kingdom (UK) were applied to resource utilisation data prospectively collected in all patients randomized into the Carvedilol Prospective Randomized Cumulative Survival (COPERNICUS) Study. Unit-specific, per them (hospital bed day) costs were used to calculate expenditures due to hospitalizations. We also included costs of carvedilol treatment, general practitioner surgery/office visits, hospital out-patient clinic visits and nursing home care based on estimates derived from validated patterns of clinical practice in the UK. Results: The estimated cost of carvedilol therapy and related ambulatory care for the 1156 patients assigned to active treatment was 530,771 pound (44.89 pound per patient/month of follow-up). However, patients assigned to carvedilol were hospitalised less often and accumulated fewer and less expensive days of admission. Consequently, the total estimated cost of hospital care was 3.49 pound million in the carvedilol group compared with 4.24 pound million for the 1133 patients in the placebo arm. The cost of post-discharge care was also less in the carvedilol than in the placebo group (479,200 pound vs. 548,300) pound. Overall, the cost per patient treated in the carvedilol group was 3948 pound compared to 4279 pound in the placebo group. This equated to a cost of 385.98 pound vs. 434.18 pound, respectively, per patient/month of follow-up: an 11.1% reduction in health care costs in favour of carvedilol. Conclusions: These findings suggest that not only can carvedilol treatment increase survival and reduce hospital admissions in patients with severe CHF but that it can also cut costs in the process.

Is mortality from heart failure increasing in Australia? An analysis of official data on mortality for 1997-2003

Objective To assess whether trends in mortality from heart failure(HF) in Australia are due to a change in awareness of the condition or real changes in its epidemiology. Methods We carried out a retrospective analysis of official data on national mortality data between 1997 and 2003. A death was attributed to HF if the death certificate mentioned HF as either the underlying cause of death (UCD) or among the contributory factors. Findings From a total of 907 242 deaths, heart failure was coded as the UCD for 29 341 (3.2%) and was mentioned anywhere on the death certificate in 135 268 (14.9%). Between 1997 and 2003, there were decreases in the absolute numbers of deaths and in the age-specific and age-standardized mortality rates for HF either as UCD or mentioned anywhere for both sexes. HF was mentioned for 24.6% and 17.8% of deaths attributed to ischaemic heart disease and circulatory disease, respectively, and these proportions remained unchanged over the period of study. In addition, HF as UCD accounted for 8.3% of deaths attributed to circulatory disease and this did not change materially from 1997 to 2003. Conclusion The decline in mortality from HF measured as either number of deaths or rate probably reflects a real change in the epidemiology of HF. Population-based studies are required to determine accurately the contributions of changes in incidence, survival and demographic factors to the evolving epidemiology of HF.