The Effects of Delisting Publicly Funded Health Care Services

1
The Effects of De-listing Publicly Funded Health
Care Services

• Mark Stabile
• Department of Economics and
• Center for Economics and Public Affairs
• University of Toronto
• and
• NBER
•  
•  
• Courtney Ward
• Department of Economics
• University of Toronto
• Thank you to Mary Unsworth for excellent research
  assistance.

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Which services do we fund?

• Governments that finance health care services are
  continually in a position of trying to determine
  what to include in their basket of publicly
  funded health care.
• Do we fund new, often expensive technology, AND
  all existing services?
• E.g. 2004 Ontario budget

3
Public Response

• Any time a government decides to stop funding
  services it faces a host of criticism.
• Providers of those services will naturally be
  critical.
• Critics of privately financed health care systems
  will claim that any de-listing is the start of a
  decline in publicly funded health care.
• Critics suggest that individuals may move from
  preventative to acute care, eventually increasing
  costs.

4
Evidence?

• Usually not cited.
• May not be available before hand.
• Reason to have greater program evaluation.
• Motivation for this paper.

5
All things to all people?

• De-listings recognize that public health care
  systems are not in a position to offer all health
  services to all people.
• Even if it were possible, tax burden would be too
  high wouldnt remain competitive in other
  areas.
• Need to consider opportunity cost of decisions.
  Including those outside health e.g. education and
  social services.

6
Role of the public insurance program

• As the technology of health care delivery
  continues to evolve, some services once deemed
  effective and necessary may no longer be
  cost-effective to provide.
• Any insurance program, public or private, must
  continually evaluate which services it will fund
  and which services it will not fund.

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Trade-off faced by government.

• Can fund as broad a range of services as possible
  and ration availability.
• Or, can focus on core, medically necessary
  services and use partial or full private
  financing to fund the remaining services.
• Single payer system for ALL services will
  necessarily involve a quantity-quality trade-off,
  either within health or across the public service
  more broadly. We are seeing this now.
• Canadas system originally defined as the second
  (too rigidly) and is moving towards the first.

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De-listing services

• We argue that governments therefore must consider
  de-listing some services.
• At least 4 things we would like to know as we
  consider de-listing services (necessary but not
  sufficient)
• Medically beneficial and cost effective ?
• How does de-listing alter the demand for the
  service?
• How desirable is this demand response?
• Are there differences in the demand response
  across individuals and should this inform policy?
  

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Contributions of this paper

• Provide some evidence regarding points 2 and 4.
• Partial or full delisting of services have
  occurred frequently over the past 15 years across
  the 10 provinces.
• Exploits variation in de-listings across the
  provinces to provide empirical estimates of the
  behavioural response.
• Evidence is a first step towards understanding
  the longer term consequences of delisting
  services.

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Services we investigate

• Four types of health professionals
• Physiotherapists
• Speech therapists
• Optometrists
• Chiropractors
• Characterize any decrease in public coverage for
  these services as a delisting (e.g. lower
  reimbursement, reduce frequency, etc).

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De-listings across provinces
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Empirical Methods

• Graphical analysis of changes in mean service
  use.
• Econometric analysis of decision to use any
  services and number of services used.
• Control for differences in service use over time.
• Control for difference in service use between
  provinces.
• Control for observable characteristics of the
  population.
• Remaining variation here is within provinces over
  time.

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Data Used

• 2 data sources
• NPHS 1994, 1996, 1998
• CCHS 2000
• Each contain info on service use for all 4 areas
  we investigate
• Each contain info on province, and health,
  education, income, and demographics.

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Graphical Results - Quebec
15
Ontario
16
Manitoba
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Alberta
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Why might we observe this?

• Strong trends in use over time?
• Changes in demographics or income?
• Other changes in prices?
• Private Health Insurance?
• Some of these issues can be resolved using
  multivariate estimation.

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Multivariate Results

• Findings, other variables
• Income gradient for any use of most services,
  not speech therapy, no real gradient for number
  of visits.
• Education strong gradient by education for any
  use of all services, much less so for number of
  visits.
• Age strong positive correlation for
  physiotherapy and chiropractor, less so for other
  services.

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Findings De-listings

• Effect of de-listings on the probability that you
  use the service at all
• Physiotherapist negative
• Optometry negative
• Speech Therapist positive
• Chiropractor none

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Findings De-listings cont.

• Effect of de-listings on the use of services for
  people who go at least once in the year
• Physiotherapist positive
• Optometry none
• Speech Therapist positive
• Chiropractor negative

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Explanation for strange results?

• Hypothesis
• Low supply with effective price of zero causes
  shortages.
• With positive prices fewer people use services.
• Individuals who are most needy increase their use
  as shortages ease.

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Findings by Income (gt30,000)

• Any visit none
• Number of Visits
• Physiotherapist increase is concentrated among
  low income!
• Optometry decrease concentrated among low income
  use
• Speech Therapist no difference by income
• Chiropractor none (decrease slightly
  concentrated among low income)

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By age youth

• Only really see an effect for physiotherapy where
  kids under 20 were less likely than average to
  use services following delisting.
• (Small positive effect for chiropractors).

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By age elderly

• Again, only find results for physiotherapy where
  elderly as less likely to use any services than
  the average.

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Note on elderly

• Target needy elderly instead of all elderly
• More effective with means testing instead of age
  testing.
• Our results present some evidence consistent with
  this, though not entirely.
• Consumption versus Investment strategy

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Conclusions

• We outline four areas of research that should be
  required to make informed policy decisions about
  de-listing.
• We provide evidence on 2 of these areas in the
  context of recent provincial de-listings.
• Find that de-listings did affect utilization, but
  that this effect was not uniform across services
  or populations.

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Conclusions Cont.

• For example, while the demand for physiotherapy
  and eye exams decreased, the demand for speech
  therapy services, and chiropractic services
  increased in some cases.
• Nor did people adjust along all margins. E.g.
  while the number of people using any
  physiotherapy services decreased, the number of
  visits among those who did use physiotherapy
  services increased.

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Conclusions Cont.

• Some differences across services by age and
  income.
• Results suggest that policy makers should be
  aware that the demand response differs
  significantly by service and by individual
  characteristics. This information should be
  considered as services are considered for
  (continued) public funding.
• Further research is required to determine whether
  changes in demand across services and across the
  population results in long term benefits or costs
  in health outcomes.