Volume 10, Issue 1

This study examines the impact of pharmaceutical innovation and other factors on the survival of U.S. cancer patients during the period 1992-2003. In particular, it investigates whether cancer survival rates increased more for those cancer sites that had the largest increases in the proportion of chemotherapy treatments that were "new" treatments. We control for other types of medical innovation, i.e. other pharmaceutical innovation, and innovation in surgical procedures, diagnostic radiology procedures, and radiation oncology procedures.Data on observed survival rates, the number of people diagnosed, mean age at diagnosis, and stage distribution are obtained from the National Cancer Institute’s SEER public-use data. Estimates of rates of innovation in chemotherapy and other treatment and diagnostic procedures are constructed from the MEDSTAT MarketScan database and other data sources. Treatment innovation indicators based on MEDSTAT data are likely to be useful, albeit noisy, indicators of the treatment innovation experienced by patients in SEER registries. This sampling error is likely to bias the coefficients on the treatment innovation measures towards zero.We compute weighted least-squares estimates of 6 versions of a survival model, based on different survival intervals and functional forms. The chemotherapy vintage coefficient is positive and significant in every model. This indicates that the cancer sites whose chemotherapy vintage (measured by the share of post-1990 treatments) increased the most during the period 1992-2003 tended to have larger increases in observed survival rates, ceteris paribus.We estimate how much lower the survival rate from all cancer sites combined would have been during 1993-2001 in the absence of post-1992 chemotherapy innovation. The estimates indicate that chemotherapy innovation accounted for 74% of the increase in the 1-year observed survival rate for all cancer sites combined during the period 1992-2001. Chemotherapy innovation accounted for smaller fractions of the increases in the 2-year and 3-year observed survival rates for all cancer sites combined during the same period: 51% and 29%, respectively.The coefficients on measures of non-pharmaceutical medical innovation (in radiation oncology, diagnostic radiology, and surgery innovation) are generally not significant. However these measures may be less reliable than the drug innovation measure. They were based upon the year in which the AMA established a new procedure code, which may be a far less meaningful indicator of innovation than the year in which the FDA first approved a drug. This topic warrants further research.

Many believe the high level of United States health care costs compared with other countries is attributable to high administrative costs inherent in our pluralistic health care financing system. Instead of the well known statistics examining the percentage of GDP that various countries spend on health care, which show the US as a large outlier, we show the percentage of Gross State Product various states spend on health care. Even adjusting for age and income, there is considerable variation across the states in spending levels, with the lowest quintile of states spending approximately the same percentage as the higher spending OECD countries other than the US. This implies that the US' pluralistic financing system may not be an important cause of the large percentage of GDP that the US devotes to health care. Even in the low spending states, however, absolute amounts of spending are higher than in other OECD countries. Although a more centralized payment system may be a sufficient condition to spend at the percentages of GDP found in northern Europe, it is not a necessary condition.

It is often alleged that Canada's publicly-funded, single payer health care system, delivers better health outcomes, and distributes health resources more fairly than the mainly private U.S. multi-payer system. Our findings contradict these allegations. Differences between the U.S. and Canada in infant mortality and life expectancy --the two indicators most commonly used as evidence of better health outcomes in Canada—cannot be attributed to differences in the effectiveness of the two health care systems because they are strongly influenced by differences in cultural and behavioral factors such as the relatively high U.S. incidence of obesity and of accidents and homicides. Moreover, direct measures of the effectiveness of medical care, show that five-year relative survival rates for individuals diagnosed with various types of cancer are higher in the U.S. than in Canada as are infant survival rates of low-birth weight babies. These successes are consistent with the greater U.S. availability of high level technology, higher rates of screening for cancers, and higher treatment rates of the chronically ill. The need to ration when care is delivered "free" ultimately leads to long waits. Waiting times for medical services are a major problem in Canada and a source of unmet needs. In the U.S. costs are more often cited as a source of unmet needs. Nonetheless, with respect to the issue of inequality, we find that the health-income gradient is at least as prominent in Canada as it is in the U.S. When asked about satisfaction with health services and the ranking of the quality of services recently received, more U.S. residents than Canadians respond that they are fully satisfied and rank quality of care as excellent. To address these issues we use the Joint Canada/ U.S. Survey of Health (JCUSH) along with other data sources.

The U.S. is the only developed country without some form of national health insurance. Yet, public opinion polls have consistently reported solid majorities in favor of such a system. In this paper, we examine whether attitudes toward different roles of government and beliefs that may be related to those attitudes are consistent with widespread support for national health insurance. Our analysis is based on the premise that a system of national health insurance would require government redistribution and government intervention in health care markets. We find that people who have favorable attitudes toward government economic intervention are 27 percentage points more likely and those with favorable attitudes toward government economic intervention are 18 percentage points more likely to favor national health insurance than those with unfavorable attitudes. The most intense support for national health insurance, strongly favoring as opposed favoring it, is among people with favorable attitudes toward both roles of government. Consistent with research from other social programs, we find that the beliefs regarding racial minorities, as well as beliefs regarding individual control over life, limit support for national health insurance in the U.S. On the other hand, negative beliefs regarding businesses are an important source of support for national health insurance. We conclude that significant changes in either attitudes and beliefs or their relationship with support for national health insurance are probably necessary to create a strong majority in support of such legislation.

We compare and contrast the labor market and distributional impact of three common approaches to state and federal health insurance expansion: public insurance expansions, refundable tax credits for low income people, and employer and individual mandates. We draw on existing estimates from the literature and individual-level data on the non-institutionalized population aged 64 and younger from the 2005 Current Population Survey to estimate how each approach affects (1) the number of people insured; (2) private and public health spending; (3) employment and wages; and (4) the distribution of subsidies across families based on income in relation to the federal poverty level and work status of adult family members. Employer mandates expand coverage to the largest number of previously insured relative to public insurance expansions and individual tax credits, but with potentially negative labor market consequences. Medicaid expansions could achieve moderate reductions in the share of the uninsured with neutral labor market consequences, and by definition, they expand coverage to the poorest groups regardless of work status. Tax credits extend coverage to relatively few uninsured, but with neutral effects on the labor market. Both Medicaid expansions and tax credits offer moderate redistribution to previously insured individuals who are poor or near-poor. None of the three policies significantly expand insurance coverage among poor working families. Our findings suggest that no single approach helps the working poor in exactly the ways policy makers might hope. To the extent that states are motivated to help the uninsured in poor working families, health reforms must find ways to include those unlikely to take up optional policies, and states must address the challenge of the many uninsured likely to be excluded from policies based on part-time work status, firm size, or immigration status.