Public Finance and The Size of Government: A Literature Review and Econometric Results for Fiji

This paper analyses current government expenditure in Fiji using annual time series data for the period 1969-1999. Alternative theories of government expenditure are reviewed and a distinction is made between economic/apolitical determinants and institutional/political determinants. Categorising the literature in this way suggests the application of non-nested tests in empirical work. The first step is to estimate the two models separately. All four test statistics for non-nested hypotheses lead to the conclusion of double rejection. A parsimonious comprehensive model, encompassing both economic and institutional variables, is preferred as it passes all diagnostic tests and involves the acceptance conclusion from pairwise non-nested tests.

Health outcome and higher medical qualifications: An economic conception and notes on implementation

A major policy issue in the health sector is the relationship between the outcomes of a medical procedure provided by differently qualified medical personnel, and in which the medical service supplied by the different groups of providers are differently priced. This problem, which exists in health systems which have providers' remuneration based on either fee-for-service or salaries, has not been explicitly considered by economists. Although this question has been indirectly treated in the economic literature on occupational regulation, and directly in the medical literature on quality assessment, both literatures are deficient in different respects. This paper applies the characteristics theory of consumer demand to the problem. A procedure for establishing the nature of the relationship between levels of qualifications and health outcome in an illustrative case of discrete choice is outlined. It is emphasised that the nature of this relationship must be established empirically. It is shown that in this illustrative situation there are four distinct cases that can arise and that under certain circumstances the analysis of the problem can be appropriately conducted in terms of a single dimension of health status. Different prices for the medical service are introduced and the conditions under which a higher price for a service provided by a medical practitioner with higher qualifications can be justified in terms of consumer welfare are considered. The paper concludes with a discussion of some issues associated with an empirical application of the conceptual framework

Note on medical workforce data in Australia

This paper is concerned with describing, and then analysing, the available sources of data on the supply of medical practitioners in Australia. It is shown that one data set can be regarded as an overestimate and another data set as an underestimate of the medical workforce. These benchmarks enable the accuracy of a third source of data to be determined. Statistical analysis indicates that there are significant differences between the three sources of data. The paper considers all medical practitioners, all specialists and two specialties viz., radiology and internal medicine

Economic Analysis and End-Stage Renal Disease - An Australian Study

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Medical diagnosis as a problem in the economics of information

Although medical diagnosis has been given some attention by economists in particular contexts, the phenomenon has not received the attention it deserves. This paper is an attempt to redress this imbalance. As with most real phenomena, there are special issues that characterise diagnosis. It is argued that the output of a diagnostic test is information about a person's disease status. This information is measured probabilistically in two ways viz. the predictive value of positive and negative tests results. The economic analysis of diagnosis involves a relevant combination of characteristics and Hicksian demand theory. It is shown that the purpose of undertaking diagnostic tests is crucial to the consumer's judgement of the importance of the two measures of diagnostic output. The argument is illustrated by reference to three alternative technologies for diagnosis of the upper gastrointestinal tract viz. single and double contrast barium meal radiology and fibre optic endoscopy

Substitutability of a process innovation in medical diagnosis: some empirical results

The health sectors in many countries have been increasing in relative size, and medical innovations have been identified by some as a factor contributing to the rise in health expenditures. This paper begins by reviewing the various approaches that economists have employed to determine the connection, if any, between rising health expenditures and new medical technologies. It is then argued that another way to approach the issue is to determine if innovations have substituted for previously existing technologies. Thus this method cannot be applied to product innovations: it is restricted to process innovations. This procedure is applied to the innovation of fibre optic colonoscopy, a procedure for diagnosing diseases/conditions in the lower gastrointestinal tract. The data relate to private medical practice in Australia which operates on a fee-for-service basis. The empirical results indicate no evidence of substitution of the 'new' for the 'old' technology. Thus, there is some reason to believe that this innovation will have contributed to rising health expenditures for diagnosis of the lower gastrointestinal tract. The paper concludes by considering policy options that could address the issue

Medicare and Private and Public Medical Practice: Utilisation and Substitution

The Commonwealth Government is currently undertaking a review of various issues in the health sector. A recently published study byJohn Deeble has analysed expenditures, utilisation, workforce issues etc. under Australia's current health insurance arrangements (Medicare) for the provision of medical services remunerated on a fee-for-service basis. This study has highlighted increased utilisation of services as a major "management issue". It is demonstrated here that the data on which these conclusions are based are deficient in several respects. By analysis of other data it is indicatcd that the picture of fee-for-service medical practice under Medicare presented by Deeble is out of focus in several important dimensions. More specifically, the high utilisation rates have been obtained by "adjusting" data and ignoring substitution behaviour between services provided by outpatient departments at public hospitals and services provided on a fee-for-service basis. Also the Deeble analysis has ignored institutional changes that involve "transfers" of health expenditures from one goverenment entity to another. This study shows that on the basis of empirical data, Deeble has considerably overestimatcd the growth of percapitautilisation of medical services in Australia since the introduction of Medicare. It also casts doubt on the need for "reform"

Economic Analysis and End-Stage Renal Disease - An Australian Study

Governments in Australia have made decisions to allocate the resources necessary to keep alive those people subject to end-stage renel disease. This is now possible as a result of improvements of various kinds in medical technology. The increased commitment of resources suggests that economic analysis of the alternative methods of treatment may produce useful results in terms of governmental decisions in the allocation of resources for the treatment of end stage renal disease. Cost-effectiveness analysis is applied to the alternative methods of treatment and a ranking of the alternatives in terms of minimum cost per life-year saved is obtained. This ranking suggests that emphasis in the allocation of resources should be placed on the transplantation alternatives