Australia has a national, compulsory and universal health insurance scheme, called Medicare. In 1996 the Government changed the Medicare Benefit Schedule Book in such a way as to create different financial incentives for consumers or producers of out-of-hospital private psychiatric services, once an individual consumer had received 50 such services in a 12-month period. The Australian Government introduced a new Item (319) to cover some special cases that were affected by the policy change. At the same time, the Commonwealth introduced a ‘fee-freeze’ for all medical services. The purpose of this study is two-fold. First, it is necessary to describe the three policy interventions (the constraints on utilization, the operation of the new Item and the general ‘fee-freeze’.) The new Item policy was essentially a mechanism to ‘dampen’ the effect of the ‘constraint’ policy, and these two policy changes will be consequently analysed as a single intervention. The second objective is to evaluate the policy intervention in terms of the (stated) Australian purpose of reducing utilization of psychiatric services, and thus reducing financial outlays. Thus, it is important to separate out the different effects of the three policies that were introduced at much the same time in November 1996 and January 1997. The econometric results indicate that the composite policy change (constraining services and the new 319 Item) had a statistically significant effect. The analysis of the Medicare Benefit (in constant prices) indicates that the ‘fee-freeze’ policy also had a statistically significant effect. This enables separate determination of the several policy changes. In fact, the empirical results indicate that the Commonwealth Government underestimated the ‘savings’ that would arise from the ‘constraint’ policy.

In recent years, Medicaid has experienced a dramatic increase in spending on prescription drugs in general and psychotropic medications in particular. The purpose of this study is to examine the effects of increased Medicaid spending on psychotropic drugs on improving the mental health and well-being of participants at the population level. Specifically, we study the effect on outcomes that are strongly correlated with mood disorders, including depression and Attention Deficit/Hyperactivity disorder, controlling for concomitant increases in Medicaid eligibility thresholds and expansion into managed care for mental health services. Knowledge of the effects of changes in the Medicaid program is crucial to policymakers as they consider implementing and expanding mental health services. Our results show that increased spending on antidepressants and stimulants are associated with improvements in some outcomes, but not in others.

The empirical association between high hospital procedure volume and lower mortality rates has led to recommendations for the regionalization of complex surgical procedures. While regionalization may improve outcomes, it also reduces market competition, which has been found to lower prices and improve health care quality. This study estimates the potential net benefits of regionalizing the Whipple surgery for pancreatic cancer patients. We confirm that increased hospital volume and surgeon volume are associated with lower inpatient mortality rates. We then predict the price and outcome consequences of concentrating Whipple surgery at hospitals that perform at least two, four, and six procedures respectively per year. Our consumer surplus calculations suggest that regionalization can increase consumer surplus, but potential price increases extract over half of the value of reduced deaths from regionalization. We reach three conclusions. First, regionalization can increase consumer surplus, but the benefits may be substantially less than implied by examining only the outcome side of the equation. Second, modest changes in outcomes due to regionalization may lead to decreases in consumer surplus. Third, before any regionalization policy is implemented, a deep and precise understanding of the nature of both outcome/volume and price/competition relationships is needed.

Cross-national comparisons that assess dimensions of health system performance indicate that the US provides higher rates of revascularization procedures than France and other developed nations, but we believe these findings are misleading. In this paper, we compare the use of these procedures in the US, France and their two world cities, Manhattan and Paris. In doing so, we address a number of limitations associated with existing cross-national comparisons of heart disease treatment. After adjusting for the prevalence of disease in these nations and cities, we found that residents of France aged 45–64 years receive more revascularization procedures than residents of the US and that Parisians receive more revascularizations than residents of Manhattan. Older residents 65 years and over (65+) in the US receive more of these procedures than their French counterparts, but the differences are not nearly as great as previous studies suggest. Moreover, our data on Manhattan and Paris where the population and level of health resources are more comparable, indicate that older Parisians obtain more revascularization procedures than older Manhattanites. Finally, we found that the use of revascularization procedures is significantly lower in Manhattan among persons without private health insurance and among racial and ethnic minorities.

Over the last two decades, there has been an increased focus among the health policy and research communities upon improving efficiency, in terms of activity levels and health outcomes, in the health care systems of the EU member states. In this article, some of these developments are described and to some extent assessed, and an attempt is made to highlight how they may serve to undermine more fundamental aspects of these systems: namely, that access to health care be universal and affordable at the point of use.