How Do Doctors Behave When Some (But Not All) of Their Patients are in Managed Care?

Most physicians today treat a variety of patients within their practices and operate in markets where a variety of insurance arrangements co-exist. In this paper, we propose several theoretical explanations for physician treatment patterns when the patient population is heterogeneous at the practice and market level. Data from the 1993-1996 National Ambulatory Medical Care Survey (NAMCS) are used to test how practice-level and market-level HMO penetration affect treatment intensity. Practice composition has strong effects on treatment. HMO-dominated practices have shorter, but otherwise more treatment intensive visits than do other practices. Market characteristics are less important determinants of treatment. As HMO practice share rises, the differences between the treatment of non-HMO and HMO patients are attenuated. These results provide strong evidence for a model of physician behavior with fixed costs of effort in the form of visit duration. For tests ordered, medications prescribed, and return visits specified, the empirical evidence supports a model with marginal cost pricing for excess capacity. HMO and non-HMO treatment patterns are most distinct at the level of the practice, not the patient. HMO-dominated practices appear to use a practice style that is quite different from that used in other practices. These findings suggest that practices are likely to become more segregated over time.

ECONOMICS OF INNOVATION The Effects of Prize Structures on Innovative Performance

Successful innovation is essential for the survival and growth of organizations, but how best to incentivize innovation is poorly understood. We compare how two common incentive schemes affect innovative performance in a field experiment run in partnership with a large life sciences company. We find that a winner-takes-all compensation scheme generates significantly more novel innovation relative to a compensation scheme that offers the same total compensation but shares it across the ten best innovations. Moreover, the winner-takes-all scheme does not reduce innovative output on average and, among teams of innovators, generates more output than the less risky prize structure

Outcome Versus Service Based Payment in Health Care: Lessons from African Traditional Healers

We compare the more common physician compensation method of fee-for-service to the less common payment-for-outcomes method. This paper combines an investigation of the theoretical properties of both of these payment regimes with a unique data set from rural Cameroon in which patients can choose between outcome and service based payments. We show that consideration of the role of patient effort in the production of health leads to important differences in the performance of these contracts. Theory and empirical evidence show that when illnesses require (or are responsive to) large amounts of both patient and practitioner effort, outcome based payment schemes are superior to effort based schemes. The traditional healer -- a practitioner who offers health services on an outcome-contingent basis -- is advanced as an important example of how patient effort can be better understood and tapped in health care.

AIDS Treatment and Intrahousehold Resource Allocations: Children's Nutrition and Schooling in Kenya

The provision of life-saving antiretroviral (ARV) treatment has emerged as a key component of the global response to HIV/AIDS, but very little is known about the impact of this intervention on the welfare of children in the households of treated persons. We estimate the impact of ARV treatment on children’s schooling and nutrition outcomes using longitudinal household survey data collected in collaboration with a treatment program in western Kenya. We find that children’s weekly hours of school attendance increase by over 20 percent within six months after treatment is initiated for the adult household member. For boys in treatment households, these increases closely follow their reduced market labor supply. Similarly, young children’s short-term nutritional status—as measured by their weight-for-height Z-score—also improves dramatically. We also present evidence that the impact of treatment is considerably larger when compared to the counterfactual scenario of no ARV treatment. The results illustrate how intrahousehold allocations of time and resources are altered in response to significant health improvements. Since the improvements in children’s schooling and nutrition at these critical early ages will affect their socio-economic outcomes and wellbeing in adulthood, the widespread provision of ARV treatment is likely to generate significant long-run welfare benefits.antiretroviral drugs, ARVs, HIV/AIDS, Kenya, children school attendance, children nutrition,

The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya

Using longitudinal survey data collected in collaboration with a treatment program, this paper is the first to estimate the economic impacts of antiretroviral treatment in Africa. The responses in two important outcomes are studied: (1) labor supply of adult AIDS patients receiving treatment; and (2) labor supply of children and adults living in the patients' households. We find that within six months after the initiation of treatment, there is a 20 percent increase in the likelihood of the patient participating in the labor force and a 35 percent increase in weekly hours worked. Since patient health would continue to decline without treatment, these labor supply responses are underestimates of the impact of treatment on the treated. The upper bound of the treatment impact, which is based on plausible assumptions about the counterfactual, is considerably larger and also implies that the wage benefit from treatment is roughly equal to the costs of treatment provision. The responses in the labor supply of patients' household members are heterogeneous. Young boys and women work considerably less after initiation of treatment, while girls and men do not change their labor supply. The effects on child labor are particularly important since they suggest potential schooling impacts from treatment.

Risk Aversion, Liability Rules, and Safety

This paper investigates the performance of liability rules in two-party stochastic externality problems where negotiations are feasible and side payments are based on the realized level of externalities. Results show that an increase in polluter liability does not necessarily increase safety or efficiency in cases where the polluter is risk neutral. Complete polluter liability is found to yield Pareto optimality. When either party is risk averse, an increase in polluter liability may sometimes reduce safety and efficiency. If the polluter is risk neutral and the victim is risk averse, Pareto optimality is only achieved by assigning full liability on the polluter, i.e. giving the victim complete property rights to a clean environment. If the polluter is risk averse and the victim is risk neutral, no level of polluter liability is optimal. In this case, optimality can only be achieved through a contract on abatement activities, such that the risk-averse polluter receives a guaranteed payment regardless of the stochastic outcome.

PublicationHarvester: An Open-Source Software Tool for Science Policy Research

We present PublicationHarvester, an open-source software tool for gathering publication information on individual life scientists. The software interfaces with MEDLINE, and allows the end-user to specify up to four MEDLINE-formatted names for each researcher. Using these names along with a user-specified search query, PublicationHarvester generates yearly publication counts, optionally weighted by Journal Impact Factors. These counts are further broken-down by order on the authorship list (first, last, second, next-to-last, middle) and by publication type (clinical trials, regular journal articles, reviews, letters/editorials, etc.) The software also generates a keywords report at the scientist-year level, using the Medical Subject Headings (MeSH) assigned by the National Library of Medicine to each publication indexed by Medline. The software, source code, and user manual can be downloaded at http://www.stellman-greene.com/PublicationHarvester/

Using The Federal Communication Commission’s Tower Construction Notification System As A Model For Siting Nuclear Waste On Native American Land

Since the advent of nuclear power in the United States in the mid-20th century, the federal government has struggled to find a suitable location to store the hazardous waste associated with nuclear power generation. In 1991, in an attempt to solve the problem of storing nuclear waste, the federal government created grant programs which offered funding to states and Native American tribes who volunteered to store nuclear waste on their lands. One tribe in particular, the Skull Valley Goshute of Utah, viewed storing nuclear waste as an opportunity to infuse their reservation with monies. Further, because tribes enjoy sovereign status in the United States, the Goshute believed their application could overcome state and federal opposition. However, the Goshute’s application to store nuclear waste on their reservation was denied by the federal government which used its powers under the Federal Trust Doctrine to rule that storing nuclear waste on the Goshute reservation would adversely affect the health and well-bring of the Goshute tribe. This Note explores the conflict between the Federal Trust Doctrine and tribal sovereignty and how the Federal Communication Commission (FCC) handled this conflict in the siting of cellular towers on Native American land. Further, a proposal for a nuclear waste facility siting system based on the FCC’s Cellular Tower Construction Notification System is presented as a solution to the United States’ nuclear waste storage problem. This new siting system would allow tribes to enter in to lucrative contracts to store nuclear waste on their land while allowing the tribes to maintain their full sovereign rights. In order for this new siting system to work, the conflict between the Federal Trust Doctrine and tribalsovereignty must be reconciled by acknowledging that tribes have full self-determination limited only by externality moderations approved by the tribes