Presenter:

Christine Huttin

Authors:

Christine Huttin

Mon June 5, 2006 9:30-10:45 Room Alumni Lounge

Rational: This paper presents a generalization of the construction of a cost sensitivity index that analyzes the influence of implicit financial and economic information on physicians. The use of an adaptation of the Lens model on physicians’ choices allows describing how such type of cost information could interact with clinical information. It may be controversial to integrate implicit financial or economic information and cognitive knowledge in current measurement of price and cost in health care. However, the application of the Lens model on physicians’ choices from a European pilot study presented at the Brunswik society tended to show that it may capture significant behavioral changes (for up to 1/3 of the sampled physicians in some of the surveyed countries). The use of such information can also increase the explanatory power of current demand models for health care services and current measured effects of out of pocket payment and prices.

Objective: This paper will present the construction of this new type of cost index, based on cost cognitive cues and will discuss how to combine this type of measure with current information on price and cost. Traditional measures used to assess responses of agents to monetary value of goods and services are prices and costs. These prices can be changed in order to take into account psychological effects of a measure on a consumer, but they will still be measured by traditional objective price and cost information collected through official agencies or company surveys. In health care, net price to consumer reflects very poorly the information used by either the patient or his physician.

Methodology: The type of information used in this index is described in verbal terms, can use monetary values, but not always. Measures are based on thresholds and intervals that represent decisions’ shifts, not represented by traditional distance measurement. New weighting systems within cost cues and between modules of cost cues are also used, based on market survey research techniques such as conjoint analysis (or other statistical procedures that are used to test judgment analysis designs)

Results: The current development of the index is based on results from the pilot study from the allergy study on a European health care system and a disease economic model tested on NAMCS US data. The methodology integrates stated and revealed physicians’ preference with the new type of cost information. Validation stages are currently in process in the US with new sets of data and some results on sources of biases will be presented (for instance, the existence of systematic bias between internet and mail surveys).

Conclusions: This paper aims to propose an integration of implicit cost information in current measurement systems of price and cost of health care, when current accounting systems are insufficient to forecast health care expenditures. Such conditions for instance refer to economic change or periods of transitions that totally modify the relative cost structure and economics of both providers and patients.