Obesity is widely recognized as a chronic disease characterized by an elevated risk of adverse health conditions in association with excess body fat accumulation. Obesity prevalence reached epidemic proportions among adults in the developed world during the second half of the 20th century, and it has since become a major public health concern around the world, particularly among children and adolescents. The economics of childhood and adolescent obesity is a multi-faceted field of study that considers the numerous determinants, consequences, and interventions related to obesity in those populations.
The central economic framework for studying obesity is a life-cycle decision-making model of health investment. Health-promoting investments, such as nutritional food, healthcare, and physical activity, interact with genetic structure and risky health behaviors, such as unhealthy food consumption, to generate an accumulation or decumulation of excess body fat over time. Childhood and adolescence are the primary phases of physical and cognitive growth, so researchers study how obesity contributes to, and is affected by, the growth processes. The subdiscipline of behavioral economics offers an important complementary perspective on health investment decision processes, particularly for children and adolescents, because health investments and participation in risky health behaviors are not always undertaken rationally or consistently over time.
In addition to examining the proximate causes of obesity over the life cycle, economists study obesity’s economic context and resulting economic burden. For example, economists study how educational attainment, income, and labor market features, such as wage and work hours, affect childhood and adolescent obesity in a household. Once obesity has developed, its economic burden is typically measured in terms of excess healthcare costs associated with increased health risks due to higher obesity prevalence, such as earlier onset of, and more severe, diabetes. Obesity among children and adolescents can lead to even higher healthcare costs because of its early influence on the lifetime trajectory of health and its potential disruption of healthy development.
The formulation of effective policy responses to the obesity epidemic is informed by economic research. Economists evaluate whether steps to address childhood and adolescent obesity represent investments in health and well-being that yield private and social benefits, and they study whether existing market structures fail to appropriately motivate such investments. Potential policy interventions include taxation of, or restricting access to, obesogenic foods and other products, subsidization of educational programs about healthy foods and physical activity inside and outside of schools, ensuring health insurance coverage for obesity-related preventive and curative healthcare services, and investment in the development of new treatments and medical technologies.
Fabrizio Mazzonna and Franco Peracchi
Population aging, the combined effect of declining fertility and rising life expectancy, is one of the fundamental trends observed in developed counties and, increasingly, in developing countries as well. A key aspect of the aging process is the decline of cognitive ability. Cognitive aging is an important and complex phenomenon, and its risk factors and economic consequences are still not well understood. For instance, the relationship between cognitive aging and productivity matters for long-term economic growth. Cognitive functioning is also crucial for decision-making because it influences individuals’ ability to process information and to make the right choices, and older individuals are increasingly required to make complex financial, health, and long-term-care decisions that might affect their health, resources, and welfare. This article presents evidence from economics and other fields that have investigated this phenomenon from different perspectives.
A common empirical finding is the hump-shaped profile of cognitive performance over the life cycle. Another is the large variability of observed age profiles, not only at the individual level but also across sociodemographic groups and countries. The age profiles of cognitive performance also vary depending on the cognitive task considered, reflecting the different combinations of cognitive skills that they require. The literature usually distinguishes between two main types of cognitive skills: fluid intelligence and crystallized intelligence. The first consists of the basic mechanisms of processing new information, while the second reflects acquired knowledge. Unlike fluid intelligence, which declines rapidly as people get older, crystallized intelligence tends to be maintained at older ages. Differences in the age profiles of cognitive performance across tasks partly reflect differences in the importance of these two types of intelligence. For instance, tasks where learning, problem-solving, and processing speed are essential tend to be associated with a faster decline, while tasks where experience matters more tend to be associated with a slower decline. Various life events and behaviors over the life cycle also contribute to the large heterogeneity in the observed age profiles of cognitive performance. This source of variation includes not only early-life events and investments (e.g., formal education), but also midlife and later-life events (e.g., health shocks) and individual choices (e.g., health behaviors or retirement).
From an economic viewpoint, cognitive abilities may be regarded as one dimension of human capital, along with education, health, and noncognitive abilities. Economists have mainly focused their attention on human capital accumulation, and much less so on human capital deterioration. One explanation is that early-life investments appears to be more profitable than investments later in life. However, recent evidence from neuropsychology suggests that the human brain is malleable and open to enhancement even later in adulthood. Therefore, more economic research is needed to study how human capital depreciates over the life cycle and whether cognitive decline can be controlled.
Hans Olav Melberg
End-of-life spending is commonly defined as all health costs in the 12 months before death. Typically, the costs represent about 10% of all health expenses in many countries, and there is a large debate about the effectiveness of the spending and whether it should be increased or decreased. Assuming that health spending is effective in improving health, and using a wide definition of benefits from end-of-life spending, several economists have argued for increased spending in the last years of life. Others remain skeptical about the effectiveness of such spending based on both experimental evidence and the observation that geographic within-country variations in spending are not correlated with variations in mortality.
Susan Averett and Jennifer Kohn
An individual’s health is produced in large part by family investments that start before birth and continue to the end of life. The health of an individual is intertwined with practically every economic decision including education, marriage, fertility, labor market, and investments. These outcomes in turn affect income and wealth and hence have implications for intergenerational transfer of economic advantage or disadvantage. A rich body of theoretical and empirical work considers the role of the family in health production over the life cycle and the role of health in household economic decisions. This literature starts by considering family inputs regarding health at birth, then moves through adolescence and midlife, where relationship decisions affect health. After midlife, health, particularly the health of family members, becomes an input into retirement and investment decisions. The literature on family and health showcases economists’ skills in modeling complex family dynamics, deriving theoretical predictions, and using clever econometric strategies to identify causal effects.
Economics can make immensely valuable contributions to our understanding of infectious disease transmission and the design of effective policy responses. The one unique characteristic of infectious diseases makes it also particularly complicated to analyze: the fact that it is transmitted from person to person. It explains why individuals’ behavior and externalities are a central topic for the economics of infectious diseases. Many public health interventions are built on the assumption that individuals are altruistic and consider the benefits and costs of their actions to others. This would imply that even infected individuals demand prevention, which stands in conflict with the economic theory of rational behavior. Empirical evidence is conflicting for infected individuals. For healthy individuals, evidence suggests that the demand for prevention is affected by real or perceived risk of infection. However, studies are plagued by underreporting of preventive behavior and non-random selection into testing. Some empirical studies have shown that the impact of prevention interventions could be far greater than one case prevented, resulting in significant externalities. Therefore, economic evaluations need to build on dynamic transmission models in order to correctly estimate these externalities. Future research needs are significant. Economic research needs to improve our understanding of the role of human behavior in disease transmission; support the better integration of economic and epidemiological modeling, evaluation of large-scale public health interventions with quasi-experimental methods, design of optimal subsidies for tackling the global threat of antimicrobial resistance, refocusing the research agenda toward underresearched diseases; and most importantly to assure that progress translates into saved lives on the ground by advising on effective health system strengthening.
Courtney Van Houtven, Fiona Carmichael, Josephine Jacobs, and Peter C. Coyte
Across the globe, the most common means of supporting older disabled adults in their homes is through “informal care.” An informal carer is a family member or friend, including children or adults, who help another person because of their illness, frailty, or disability. There is a rich economics literature on the direct benefits of caregiving, including allowing the care recipient to remain at home for longer than if there was no informal care provided. There is also a growing literature outlining the associated costs of care provision. Although informal care helps individuals with disabilities to remain at home and is rewarding to many carers, there are often negative effects such as depression and lost labor market earnings that may offset some of these rewards. Economists have taken several approaches to quantify the net societal benefit of informal care that consider the degree of choice in caregiving decisions and all direct and indirect benefits and costs of informal care.
Norman Bannenberg, Martin Karlsson, and Hendrik Schmitz
Long-term care (LTC) is arguably the sector of the economy that is most sensitive to population aging: its recipients are typically older than 80 years whereas most care providers are of working age. Thus, a number of ongoing societal trends interact in the determination of market outcomes in the LTC sector: trends in longevity and healthy life expectancy interact with changing family structures and norms in shaping the need for services. The supply side is additionally affected by changes in employment patterns, in particular regarding the transition into retirement, as well as by cross-regional imbalances in demographic and economic conditions. The economic literature on long-term care considers many of these issues, aims at understanding this steadily growing sector, and at guiding policy. Key economic studies on long-term care address determinants of the demand for long-term care, like disability and socio-economic status; the two most important providers: informal family caregivers and nursing homes; and the financing and funding of LTC.
Bénédicte Apouey, Gabriel Picone, and Joshua Wilde
Malaria is a potentially life-threatening disease transmitted through the bites of female anopheline mosquitos infected with protozoan parasites. Malaria remains one of the major causes of mortality by infectious disease: in 2015, there were an estimated 212 million cases and 429,000 deaths globally, according to the 2016 World Malaria Report. Children under 5 years in sub-Saharan Africa bear the greatest burden of the disease worldwide.
However, most of these cases could be prevented or treated. Several methods are highly effective in preventing malaria: in particular, sleeping under an insecticide-treated mosquito net (ITN), indoor residual spraying (IRS), and taking intermittent preventive treatment for pregnant women (IPTp). Regarding treatment, artesiminin-based combination therapy (ACT) is recommended as first-line treatment in many countries.
Compared with other actions, malaria prevention behaviors have some specific features. In particular, they produce public health externalities. For example, bed net usage creates positive externalities since bed nets not only directly protect the user, but also reduce transmission probabilities through reduction in the number of disease hosts, and in the case of ITNs, reduction of the vector itself. In contrast, ACT uptake creates both positive externalities when individuals with malaria are treated, and negative externalities in the case of overtreatment that speeds up the spread of long-run parasite resistance. Moreover, ITNs, IPTp, and ACTs are experience goods (meaning individuals only ascertain their benefits upon usage), which implies that current preventive actions are linked to past preventive behaviors.
Malaria prevention and eradication produce unambiguous benefits across various domains: economic conditions, educational outcomes, survival, fertility, and health. However, despite the high private returns to prevention, the adoption of antimalarial products and behaviors remains relatively low in malaria-affected areas.
A variety of explanations have been proposed for low adoption rates, including financial constraints, high prices, and absence of information. While recent studies highlight that all of these factors play a role, the main barrier to adoption is probably financial constraints. This finding has implications regarding the appropriate pricing policy for these health products. In addition, there is a shortage of causally identified research on the effect of cultural and psychological barriers to the adoption of preventive behaviors. The literature which does exist is from a few randomized control trials of few individuals in very specific geographic and cultural contexts, and may not be generalizable. As a result, there are still ample opportunities for research on applying the insights of behavioral economics to malaria-preventive behavior in particular. Moreover, little research has been done on the supply side, such as whether free or heavily subsidized distribution of prevention technologies is fiscally sustainable; finding effective methods to solve logistical problems which lead to shortages and ineffective alternative treatments to fill the gap; or training sufficient healthcare workers to ensure smooth and effective delivery. Given these gaps in the literature, there are still multiple fruitful avenues for research which may have a first-order effect on reducing the prevalence of malaria in the developing world.
Philip DeCicca, Donald S. Kenkel, Michael F. Lovenheim, and Erik Nesson
Smoking prevention has been a key component of health policy in developed nations for over half a century. Public policies to reduce the physical harm attributed to cigarette smoking, both externally and to the smoker, include cigarette taxation, smoking bans, and anti-smoking campaigns, among other publicly conceived strategies to reduce smoking initiation among the young and increase smoking cessation among current smokers. Despite the policy intensity of the past two decades, there remains debate regarding whether, and to what extent, the observed reductions in smoking are due to such policies. Indeed, while smoking rates in developed countries have fallen substantially over the past half century, it is difficult to separate secular trends toward greater investment in health from actual policy impacts. In other words, smoking rates might have declined in the absence of these anti-smoking policies, consistent with trends toward other healthy behaviors. These trends also may reflect longer-run responses to policies enacted many years ago, which also poses challenges for identification of causal policy effects. While smoking rates fell dramatically over this period, the gradient in smoking prevalence has become tilted toward lower socioeconomic status (SES) individuals. That is, cigarette smoking exhibited a relatively flat SES gradient 50 years ago, but today that gradient is much steeper: relatively less-educated and lower-income individuals are many times more likely to be cigarette smokers than their more highly educated and higher-income counterparts. Over time, consumers also have become less price-responsive, which has rendered cigarette taxation a less effective policy tool with which to reduce smoking. The emergence of tax avoidance strategies such as casual cigarette smuggling (e.g., cross-tax border purchasing) and purchasing from tax-free outlets (e.g., Native reservations in Canada and the United States) have likely contributed to reduced price sensitivity. Such behaviors have been of particular interest in the last decade as cigarette taxation has roughly doubled cigarette prices in many developed nations, creating often large incentives to avoid taxation for those who continue to smoke. Perhaps due to the perception that traditional policy has been ineffective, recent anti-smoking policy has focused more on the direct regulation of cigarettes and smoking behavior. The main non-price-based policy has been the rise of smoke-free air laws, which restrict smoking behavior in workplaces, restaurants, and bars. These regulations can reduce smoking prevalence and exposure to secondhand smoke among nonsmokers. However, they may also shift the location of smoking in ways that increase secondhand smoke exposure, particularly among children. Other non-tax regulations focus on the packaging (e.g., the movement towards plain packaging), advertising, and product attributes of cigarettes (e.g., nicotine content, cigarette flavor, etc.), and most are attempts to reduce smoking by making it less desirable to the actual or potential smoker. Perhaps not surprisingly, research in the economics of smoking prevention has followed these policy developments, though strong interest remains in both the evaluation of price- and non-price policies as well as any offsetting responses among smokers that may undermine the effectiveness of these regulations. While the past two decades have provided fertile ground for research in the economics of smoking, we expect this to continue, as governments search for more innovative and effective ways to reduce smoking.
Dominic Hodgkin and Hilary S. Connery
Drug and alcohol use disorders, also called substance use disorders (SUD), are among the major health problems facing many countries, contributing a substantial burden in terms of mortality, morbidity, and economic impact. A considerable body of research is dedicated to reducing the social and individual burden of SUD.
One major focus of research has been the effectiveness of treatment for SUD, with studies examining both medication and behavioral treatments using randomized, controlled clinical trials. For opioid use disorder, there is a strong evidence base for medication treatment, particularly using agonist therapies (i.e., methadone and buprenorphine), but mixed evidence regarding the use of psychosocial interventions. For alcohol use disorder, there is evidence of modest effectiveness for two medications (acamprosate and naltrexone) and for various psychosocial treatments, especially for less severe alcohol use disorder syndromes. An important area for future research is how to make treatment more appealing to clients, given that client reluctance is an important contributor to the low utilization of effective treatments.
A second major focus of research has been the availability of medication treatments, building on existing theories of how innovations diffuse, and on the field of dissemination and implementation research. In the United States, this research identifies serious gaps in both the availability of SUD treatment programs and the availability of effective treatment within those programs. Key barriers include lack of on-site medical staff at many SUD treatment programs; restrictive policies of private insurers, states, and federal authorities; and widespread skepticism toward medication treatment among counseling staff and some administrators. Emerging research is promising for providing medication treatment in settings other than SUD treatment programs, such as community mental health centers, prisons, emergency departments, and homeless shelters.
There is still considerable room to make SUD treatment approaches more effective, more available, and—most importantly—more acceptable to clients.
The Effect of Education on Health and Mortality: A Review of Experimental and Quasi-Experimental Evidence
Titus Galama, Adriana Lleras-Muney, and Hans van Kippersluis
Education is strongly associated with better health and longer lives. However, the extent to which education causes health and longevity is widely debated. We develop a human capital framework to structure the interpretation of the empirical evidence and review evidence on the causal effects of education on mortality and its two most common preventable causes: smoking and obesity. We focus attention on evidence from randomized controlled trials, twin studies, and quasi-experiments. There is no convincing evidence of an effect of education on obesity, and the effects on smoking are only apparent when schooling reforms affect individuals’ track or their peer group, but not when they simply increase the duration of schooling. An effect of education on mortality exists in some contexts but not in others and seems to depend on (i) gender, (ii) the labor market returns to education, (iii) the quality of education, and (iv) whether education affects the quality of individuals’ peers.
Ayman Chit and Paul Grootendorst
Drug companies are profit-maximizing entities, and profit is, by definition, revenue less cost. Here we review the impact of government policies that affect sales revenues earned on newly developed drugs and the impact of policies that affect the cost of drug development. The former policies include intellectual property rights, drug price controls, and the extension of public drug coverage to previously underinsured groups. The latter policies include regulations governing drug safety and efficacy, R&D tax credits, publicly funded basic research, and public funding for open drug discovery consortia.
The latter policy, public funding of research consortia that seek to better understand the cellular pathways through which new drugs can ameliorate disease, appears very promising. In particular, a better understanding of human pathophysiology may be able to address the high failure rate of drugs undergoing clinical testing. Policies that expand market size by extending drug insurance to previously underinsured groups also appear to be effective at increasing drug R&D. Expansions of pharmaceutical intellectual property rights seem to be less effective, given the countervailing monopsony power of large public drug plans.
Hope Corman, Dhaval Dave, and Nancy E. Reichman
Prenatal care, one of the most frequently used forms of healthcare in the United States, involves a series of encounters during the gestational period, educates women about pregnancy, monitors existing medical conditions, tests for gestational health conditions, and refers expectant mothers to services such as support groups and social services. However, an increasingly methodologically rigorous literature suggests that the effects of prenatal care timing and quantity on birth outcomes, particularly low birthweight, are modest at the population level. A review and synthesis of the literature suggests that the questions typically being asked may be too narrow and that more attention should be paid to the characterization of infant health, characterization of the content and quality of prenatal care, potential heterogeneous effects, potential indirect effects on health behaviors that may benefit offspring, potential long-term effects, potential spillover effects (i.e., on mothers and their subsequent children), effects of preconceptional and lifetime care, and intergenerational effects.
Florence Jusot and Sandy Tubeuf
Recent developments in the analysis of inequality in health and healthcare have turned their interest into an explicit normative understanding of the sources of inequalities that calls upon the concept of equality of opportunity. According to this concept, some sources of inequality are more objectionable than others and could represent priorities for policies aiming to reduce inequality in healthcare use, access, or health status.
Equality of opportunity draws a distinction between “legitimate” and “illegitimate” sources of inequality. While legitimate sources of differences can be attributed to the consequences of individual effort (i.e. determinants within the individual’s control), illegitimate sources of differences are related to circumstances (i.e. determinants beyond the individual’s responsibility).
The study of inequality of opportunity is rooted in social justice research, and the last decade has seen a rapid growth in empirical work using this literature at the core of its approach in both developed and developing countries. Empirical research on inequality of opportunity in health and healthcare is mainly driven by data availability. Most studies in adult populations are based on data from European countries, especially from the UK, while studies analyzing inequalities of opportunity among children are usually based on data from low- or middle-income countries and focus on children under five years old.
Regarding the choice of circumstances, most studies have considered social background to be an illegitimate source of inequality in health and healthcare. Geographical dimensions have also been taken into account, but to a lesser extent, and more frequently in studies focusing on children or those based on data from countries outside Europe. Regarding effort variables or legitimate sources of health inequality, there is wide use of smoking-related variables.
Regardless of the population, health outcome, and circumstances considered, scholars have provided evidence of illegitimate inequality in health and healthcare. Studies on inequality of opportunity in healthcare are mainly found in children population; this emphasizes the need to tackle inequality as early as possible.
Mental illnesses are highly prevalent and can have considerable, enduring consequences for individuals, families, communities, and economies. Despite these high prevalence rates, mental illnesses have not received as much public policy commitment or funding as might be expected. One result is that mental illness often goes unrecognized and untreated. The resultant costs are felt not only in healthcare systems, but across many other sectors, including housing, social care, criminal justice, welfare benefits, and employment.
This article sets out the basic principles of economic evaluation, with illustrations in this mental health context. It also discusses the main practical challenges when conducting and interpreting evidence from such evaluations.
Decisions about whether to spend resources on a treatment or prevention strategy are based on whether it is likely to be effective in avoiding, reducing, or curing symptoms, improving quality of life, or achieving other individual-level outcomes. The economic evaluation question is whether the outcomes achieved are sufficient to justify the cost that is incurred in delivering the intervention.
An economic evaluation has five elements: clarification of the question to be addressed; specification of the intervention to be evaluated and with what alternative it is being compared; the outcomes to be measured; the costs to be measured (including the cost of implementing the intervention and any savings that might accrue); and finally, how outcome and cost findings are to be blended to make a recommendation to the decision-maker. Sometimes, if an evaluation finds that one intervention has better outcomes but higher costs, then the evaluation should also how one (the outcomes) might be trade-off for the other (the costs).
The article illustrates how economic evaluations have been undertaken and employed to address a range of questions, from the very strategic issue to the more specific clinical question. The purpose of the study can, to some extent, determine the type of evaluation that is needed.
Examples of evaluations are given in a number of areas: perinatal maternal mental illness; parenting programs for conduct disorder; anti-bullying programs in schools; early intervention services for psychosis; individual placement and support; collaborative care for physical health problems; and suicide prevention. The challenges of economic evaluation are discussed, specifically in the mental health field.
Gerard J. van den Berg and Maarten Lindeboom
Modern-day famines are caused by unusual impediments or interventions in society, effectively imposing severe market restrictions and preventing the free movement of people and goods. Long-run health effects of exposure to famine are commonly studied to obtain insights into the long-run effects of malnutrition at early ages. This line of research has faced major methodological and data challenges. Recent research in various disciplines, such as economics, epidemiology, and demography, has made great progress in dealing with these issues. Malnutrition around birth affects a range of later-life individual outcomes, including health, educational, and economic outcomes.
Financial protection is claimed to be an important objective of health policy. Yet there is a lack of clarity about what it is and no consensus on how to measure it. This impedes the design of efficient and equitable health financing. Arguably, the objective of financial protection is to shield nonmedical consumption from the cost of healthcare. The instruments are formal health insurance and public finances, as well as informal and self-insurance mechanisms that do not impair earnings potential. There are four main approaches to the measurement of financial protection: the extent of consumption smoothing over health shocks, the risk premium (willingness to pay in excess of a fair premium) to cover uninsured medical expenses, catastrophic healthcare payments, and impoverishing healthcare payments. The first of these does not restrict attention to medical expenses, which limits its relevance to health financing policy. The second rests on assumptions about risk preferences. No measure treats medical expenses that are financed through informal insurance and self-insurance instruments in an entirely satisfactory way. By ignoring these sources of imperfect insurance, the catastrophic payments measure overstates the impact of out-of-pocket medical expenses on living standards, while the impoverishment measure does not credibly identify poverty caused by them. It is better thought of as a correction to the measurement of poverty.
One of the most fundamental results in health economics is that a greater socio-economic status is associated with better health outcomes. However, the experience of financial pressure and lack of resources transcends the notion of low income and poverty. Families of all income categories can experience financial pressure and lack of resources. This article reviews the literature examining the relationship between financial strain and various health outcomes. There are three main approaches to the measurement of financial strain found in the research literature, each one capturing a slightly different aspect: the family’s debt position, the availability of emergency funds, and inability to meet current financial obligations.
There are two main hypotheses explaining how financial strain may affect health. First, financial strain indicates a lower amount of financial resources available to individuals and families. This may have a dual impact on health. On the one hand, lower financial resources may lead to a decrease in consumption of substances such as tobacco that are harmful to health. On the other hand, lower financial resources may also negatively affect healthcare access, healthcare utilization, and adherence to treatment, with each contributing to a decline in health. Second, financial strain may produce greater uncertainty with regard to the availability of financial resources at present as well as in the future, thereby resulting in elevated stress, which may, in turn, result in poorer health outcomes. Examining the relationship between financial strain and health is complicated because it appears to be bidirectional. It is not only the case that financial strain may impact health but that health may impact financial strain.
The research literature consistently finds that financial strain has a detrimental impact on a variety of mental health outcomes. This relationship has been documented for a variety of financial strain indicators, including non-collateralized (unsecure) debt, mortgage debt, and the inability to meet current financial obligations. The research on the association between financial strain and health behavior outcomes is more ambiguous. As one example, there are mixed results concerning whether financial strain results in a higher likelihood of obesity. This research has considered various indicators of financial strain, including credit card debt and the inability to meet current financial obligations. It appears that both among adults and children there is no consistent evidence on the impact of financial strain on body weight. Similarly, the results on the impact of financial strain on alcohol use and substance abuse are mixed.
A number of significant questions regarding the relationship between financial strain and health remain unresolved. The majority of the existing studies focus on health outcomes among adults. There is a lack of understanding regarding how family exposure to financial strain can affect children. Additionally, very little is known about the implications of long-term exposure to financial strain. There are also some very important methodological challenges in this area of research related to establishing causality. Establishing causality and learning more about the implications of the exposure to financial strain could have important policy implications for a variety of safety net programs.
Alexandrina Stoyanova and David Cantarero-Prieto
Long-term care (LTC) systems entitle frail and disabled people, who experience declines in physical and mental capacities, to quality care and support from an appropriately trained workforce and aim to preserve individual health and promote personal well-being for people of all ages. Myriad social factors pose significant challenges to LTC services and systems worldwide. Leading among these factors is the aging population—that is, the growing proportion of older people, the main recipients of LTC, in the population—and the implications not only for the health and social protection sectors, but almost all other segments of society. The number of elderly citizens has increased significantly in recent years in most countries and regions, and the pace of that growth is expected to accelerate in the forthcoming decades. The rapid demographic evolution has been accompanied by substantial social changes that have modified the traditional pattern of delivery LTC. Although families (and friends) still provide most of the help and care to relatives with functional limitations, changes in the population structure, such as weakened family ties, increased participation of women in the labor market, and withdrawal of early retirement policies, have resulted in a decrease in the provision of informal care. Thus, the growing demands for care, together with a lower potential supply of informal care, is likely to put pressure on the provision of formal care services in terms of both quantity and quality. Other related concerns include the sustainable financing of LTC services, which has declined significantly in recent years, and the pursuit of equity.
The current institutional background regarding LTC differs substantially across countries, but they all face similar challenges. Addressing these challenges requires a comprehensive approach that allows for the adoption of the “right” mix of policies between those aiming at informal care and those focusing on the provision and financing of formal LTC services.
Mónica Hernández Alava
The assessment of health-related quality of life is crucially important in the evaluation of healthcare technologies and services. In many countries, economic evaluation plays a prominent role in informing decision making often requiring preference-based measures (PBMs) to assess quality of life. These measures comprise two aspects: a descriptive system where patients can indicate the impact of ill health, and a value set based on the preferences of individuals for each of the health states that can be described. These values are required for the calculation of quality adjusted life years (QALYs), the measure for health benefit used in the vast majority of economic evaluations. The National Institute for Health and Care Excellence (NICE) has used cost per QALY as its preferred framework for economic evaluation of healthcare technologies since its inception in 1999.
However, there is often an evidence gap between the clinical measures that are available from clinical studies on the effect of a specific health technology and the PBMs needed to construct QALY measures. Instruments such as the EQ-5D have preference-based scoring systems and are favored by organizations such as NICE but are frequently absent from clinical studies of treatment effect. Even where a PBM is included this may still be insufficient for the needs of the economic evaluation. Trials may have insufficient follow-up, be underpowered to detect relevant events, or include the wrong PBM for the decision- making body.
Often this gap is bridged by “mapping”—estimating a relationship between observed clinical outcomes and PBMs, using data from a reference dataset containing both types of information. The estimated statistical model can then be used to predict what the PBM would have been in the clinical study given the available information.
There are two approaches to mapping linked to the structure of a PBM. The indirect approach (or response mapping) models the responses to the descriptive system using discrete data models. The expected health utility is calculated as a subsequent step using the estimated probability distribution of health states. The second approach (the direct approach) models the health state utility values directly.
Statistical models routinely used in the past for mapping are unable to consider the idiosyncrasies of health utility data. Often they do not work well in practice and can give seriously biased estimates of the value of treatments. Although the bias could, in principle, go in any direction, in practice it tends to result in underestimation of cost effectiveness and consequently distorted funding decisions. This has real effects on patients, clinicians, industry, and the general public.
These problems have led some analysts to mistakenly conclude that mapping always induces biases and should be avoided. However, the development and use of more appropriate models has refuted this claim. The need to improve the quality of mapping studies led to the formation of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR) Mapping to Estimate Health State Utility values from Non-Preference-Based Outcome Measures Task Force to develop good practice guidance in mapping.