Rising health spending, new medical technology and the Baumol effect

This paper estimates the Baumol effect in health spending, using a panel data set of OECD countries. Health expenditure as a share of GDP rises in most OECD countries. One of the possible causes is the so-called Baumol effect, which may arise if labour productivity in health care grows more slowly than in the overall economy. If in addition demand for health care is inelastic, then the share of health spending in GDP will rise over time. We do indeed find that one percentage growth in economy-wide labour productivity is associated with about 0.5 percent growth in real health spending. This implies that economy-wide productivity growth leads to higher real health spending.

Switch on the competition; causes, consequences and policy implications of consumer switching costs

The success or failure of reforms aimed at liberalising markets depends to an important degree on consumer behaviour. If consumers do not base their choices on differences in prices and quality, competition between firms may be weak and the benefits of liberalisation to consumers may be small. One possible reason why consumers may respond only weakly to differences in price and quality is high costs of switching to another firm. This report presents a framework for analysing markets with switching costs and applies the framework in two empirical case studies. The first case study analyses the residential energy market, the second focuses on the market for social health insurance. In both markets, there are indications that switching costs are substantial. The report discusses policy options for reducing switching costs and for alleviating the consequences of switching costs.

Consumer price sensitivity in health insurance

This CPB Discussion Paper presents new estimates for the price elasticity of the residual demand for health insurance. This elasticity measures the loss in market share of a health insurer as a consequence of a unilateral increase in price, assuming other firms keep their prices constant. The main findings are as follows: the price elasticity of residual demand for social health insurance by enrollees was very low during the period 1996-2002. We find small but significant effects of the price of basic insurance but no robust effect of the price of supplementary insurance. Young enrollees are more price sensitive than older enrollees. However, these findings are conditional on the limited variation in price observed in our data. At larger price differentials, the elasticity may well be higher. This Discussion Paper is based on joint work of Machiel van Dijk, Marc Pomp, Rudy Douven (all three at CPB), Trea Laske-Aldershof, Erik Schut (both Erasmus University), Willem de Boer and Anne de Boo (Vektis). We would like to thank Marieke Smit (Vektis) for her help in getting this project off the ground. We would also like to thank Katie Carman (Tilburg University) for her comments on a previous draft of this paper.

Competition in markets for life insurance

This report presents an empirical analysis of competition in the market for life insurance. In this market, financial advisors play a large role. Therefore, the report devotes considerable attention to the functioning of the market for financial advice. The main findings are as follows. Empirical indicators of competition find only weak competition in the market for life insurance. There are substantial economies of scale, large X-inefficiencies, and limited competition as measured by the Boone-indicator compared to other services sectors. Also, the higher profitability of Dutch life insurers compared to their foreign peers suggests weak competition, although it should be pointed out that this indicator mainly reflects the situation in the past. Better functioning of financial advisors offers a key towards improving competition. Consumers who purchased annuities through advisors are found to achieve lower pay-outs than consumers who purchased directly from life insurers. This finding underlines the importance of more transparency of life insurance products and of independent advice.

An iterative procedure to obtain inverse response functions for thick-target correction of measured charged-particle spectra

A new method for correcting charged-particle spectra for thick target effects is described. Starting with a trial function, inverse response functions are found by an iterative procedure. The variances corresponding to the measured spectrum are treated similiarly and in parallel. Oscillations of the solution are avoided by rebinning the data to finer bins during a correction iteration and back to the original or wider binning after each iteration. This thick-target correction method has been used for data obtained with the MEDLEY facility at the The Svedberg Laboratory, Uppsala, Sweden, and is here presented in detail and demonstrated for two test cases.Comment: 14 pages, 8 figures, submitted to NIM

Tutorial on Neutron Physics in Dosimetry

Almost since the time of the discovery of the neutron more than 70 years ago, efforts have been made to understand the effects of neutron radiation on tissue and, eventually, to use neutrons for cancer treatment. In contrast to charged particle or photon radiations which directly lead to release of electrons, neutrons interact with the nucleus and induce emission of several different types of charged particles such as protons, alpha particles or heavier ions. Therefore, a fundamental understanding of the neutron-nucleus interaction is necessary for dose calculations and treatment planning with the needed accuracy. We will discuss the concepts of dose and kerma, neutron-nucleus interactions and have a brief look at nuclear data needs and experimental facilities and set-ups where such data are measured.Comment: Invited talk at the 11th Neutron and Ion Dosimetry Symposium NEUDOS-11, October 11-16, 2009, Cape Town, South Africa. 14 pages, 8 figures; submitted to Radiation Measurement