TAILIEUCHUNG - Schoder and Zweifel Health Economics Review 2011, 1:2

Schoder and Zweifel Health Economics Review 2011, 1:2 RESEARCH Open Access Flat-of-the-curve medicine: a new perspective on the production of health Johannes Schoder* and Peter Zweifel Abstract Health economists have studied the determinants of the expected value of health status as a function of medical and non-medical inputs, often finding small marginal effects of the former. However, medical inputs may have an additional benefit in the form of a reduced variability of health status. Using the standard deviation of life expectancy in 24 OECD countries between 1960 and 2005, a 10 percent increase of health care expenditure is associated with a decrease of an. | Schoder and Zweifel Health Economics Review 2011 1 2 http content 1 1 2 o Health Economics Review a SpringerOpen Journal RESEARCH Open Access Flat-of-the-curve medicine a new perspective on the production of health Johannes Schoder and Peter Zweifel Abstract Health economists have studied the determinants of the expected value of health status as a function of medical and non-medical inputs often finding small marginal effects of the former. However medical inputs may have an additional benefit in the form of a reduced variability of health status. Using the standard deviation of life expectancy in 24 OECD countries between 1960 and 2005 a 10 percent increase of health care expenditure is associated with a decrease of an estimated percent. Willingness to pay for such a reduction of uncertainty may well exceed the extra health care expenditure in the United States and Switzerland. This implies that even in these two countries with very high health care expenditure per capita flat-of-the-curve medicine need not be wasteful. JEL-Classification I12 J10 Keywords production of health control over health status willingness to pay Introduction Industrial countries have been spending a rising share of their economic resources on health care. From 1960 to 2004 health care expenditure HCE of OECD countries increased from percent of GDP to percent on average. Over the same period he alth outcomes measured by average life expectancy at birth improved from to years. However this increase has slowed recently. In the United States . it has been percent . between 1980 and 2004 down from between 1960 and 1980. Since HCE continued to grow at a rate of percent . between 1980 and 2004 this has often been interpreted as evidence of decreasing marginal returns flat-of-the-curve medicine 1 2 raising the question of why citizens and governments failed to reallocate resources away from medicine. However calling for .

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