Chapter 4 contains the first empirical investigation of drivers of medical travel at the national level. The author proposes a gravity model, provides an introduction to its theoretical underpinnings and discusses its assumptions and applicability to medical travel. A dynamic extension of the gravity model allows the investigation of candidate drivers including cultural proximity, networks and word-of-mouth. Various specifications test the robustness of the results.
This chapter revolves around the feasibility of empirical demand modeling of medical tourism. The author develops a modeling framework that accommodates and structures previously identified candidate drivers of medical tourism along a heterogeneous product dimension and multilevel demand and supply dimensions. He highlights the importance and methodological implications of distinguishing between medical tourists and medical travelers and suggests a three-step process to identify the latter empirically. Taking into account available data sets, ‘The Sum of Its Parts’ concludes by proposing three feasible empirical investigations that sample the modeling framework space.
Whenever processes are reconfigured or new products are designed the needs and preferences of patients and consumers have to be considered. Although at times neglected, this becomes more and more relevant in health care settings: Which modes of health care delivery will be accepted? What are the patients' priorities and what is the willingness to pay? To which degree are patients mobile and for which kind of services are they willing to travel? Preferences, however, are difficult to measure, as they are latent constructs. This becomes even more difficult, when no past choices can be analyzed either as the service or the product is yet to be developed or as in the past there has not been free choice for patients. In such cases, preferences cannot be surveyed directly. Asking individuals openly for their attitudes towards certain services and products, the results are likely biased as individuals are not confronted with budget constraints and trade-offs. For this reason, discrete choice experiments (DCEs) are frequently used to elicit patient preferences. This approach confronts patients with hypothetical scenarios of which only one can be chosen. Over the past few years, this tool to reveal patients' preferences for health care has become very popular in health economics. This contribution aims at introducing the principles of DCEs, highlighting the underlying theory and giving practical guidance for conducting a discrete choice experiment in health economics. Thereby we focus on three major fields of patient demand: designing health insurance, assessing patient utility of new pharmaceuticals and analyzing provider choice. By having a closer look at selected international studies, we discuss the application of this technique for the analysis of the supply and the demand of health care as well as the implications for assessing patient mobility across different health care systems.
This chapter examines patient mobility across Italian regions using data on hospital discharges that occurred in 2008. The econometric analysis is based on Origin-Destination (OD) flow data. Since patient mobility is a crucial phenomenon in contexts of hospital competition based on quality and driven by patient choice, as is the case in Italy, it is crucial to understand its determinants. What makes the Italian case more interesting is the decentralization of the National Health Service that yields large regional variation in patient flows in favor of Centre-Northern regions, which typically are 'net exporters' of hospital treatments. We present results from gravity models estimated using count data estimators, for total and specific types of flows (ordinary admissions, surgical DRGs and medical DRGs). We model cross-section dependence by specifically including features other than geographical distance for OD pairs, such as past migration flows and the share of surgical DRGs. Most of the explanatory variables exhibit the expected effect, with distance and GDP per capita at origin showing a negative impact on patient outflows. Past migrations and indicators of performance at destination are effective determinants of patient mobility. Moreover, we find evidence of regional externalities due to spatial proximity effects at both origin and destination.
According to the economic theory of federalism (Oates 1999), a decentralized decision to collectively fund and supply the quantity and quality of public services will increase economic welfare as long as three conditions are fulfilled: preferences and production costs of the different local constituencies are heterogeneous; local governments are better informed than the central agency because of their proximity to the citizens; and the competition between local governments exerts a significant impact on the performance of the local administration and on the ability of public agencies to implement policy innovation. Federalism also presents some negative aspects, including the opportunity costs of decentralization, which materialize in terms of unexploited economies of scale; the emergence of spillover effects among jurisdictions; and the risk of cost-shifting exercises from one layer of the government to the other. Finally, competition between fiscal regimes can affect the level of equity. The literature considers fiscal federalism as a mechanism for controlling the size of the public sector and for constraining the development of redistributive measures. The present paper reviews the impact that federalism has on the efficiency, equity, and cost containment of the healthcare system in Switzerland, a country with a strongly decentralized political system that is based on federalism and the institutions of direct democracy, a liberal economic culture, and a well-developed tradition of mutualism and social security (generous social expenditure and welfare system). By analyzing the empirical evidence available for Switzerland, we expect to draw some general policy lessons that might also be useful for other countries.
We examine the implications of the EU directive on the application of patients' rights in cross-border healthcare on the German sickness fund system. Since Germany implemented most requirements of the directive already in 2004, we first review Germany's experience with EU cross-border healthcare. We then focus on the possible effects of increased EU cross-border healthcare. While this gives patients more choice, the German sickness fund system faces a number of challenges. EU cross-border care may undermine efforts to keep healthcare expenditure under control. Cross-border care can also increase inequality of access. Furthermore, promoting cross-border care can be a means for sickness funds to attract good risks. We discuss these challenges and point out possible policy responses.
