Paper [I] presents an economic federation model which resembles the situation in, for example, Sweden. In the model the state governments provide health care, the federal government provides a sickness benefit and both levels tax labor income. The results show that the states can have either an incentive to under- or over-provide health care. The federal government can, by introducing an intergovernmental transfer, induce the state governments to provide the socially optimal amount of health care.

In Paper [II] the effect of aggregated public health care expenditure on absence from work due to sickness or disability was estimated. The analysis was based on data from a panel of the Swedish municipalities for the period 1993-2004. Public health care expenditure was found to have no statistically significant effect on absence and the standard errors were small enough to rule out all but a minimal effect. The result held when separate estimations were conducted for women and men, and for absence due to sickness and disability.

The purpose of Paper [III] was to study the effects of the introduction of fixed pharmaceutical budgets for two health centers in Västerbotten, Sweden. Estimation results using propensity score matching methods show that there are no systematic differences for either price or quantity per prescription between health centers using fixed and open-ended budgets. The analysis was based on individual prescription data from the two health centers and a control group both before and after the introduction of fixed budgets.

In Paper [IV] the introduction of the Swedish substitution reform in October 2002 was used as a natural experiment to examine the effects of increased consumer information on pharmaceutical prices. Using monthly data on individual pharmaceutical prices, the average reduction of prices due to the reform was estimated to four percent for both brand name and generic pharmaceuticals during the first four years after the reform. The results also show that the price adjustment was not instant.

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Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 710.

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Length: 129 pages
Date of creation: 16 May 2007
Date of revision:
Handle: RePEc:hhs:umnees:0710

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Related research

Keywords: vertical fiscal externalities; sickness absence; sickness benefits; health care expenditure; fixed budgets; pharmaceuticals; cost containment; dynamic panel data models; endogeneity; propensity score matching;

Find related papers by JEL classification:
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
I12 - Health, Education, and Welfare - - Health - - - Health Production
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology

This paper has been announced in the following NEP Reports:

• NEP-ALL-2007-05-26 (All new papers)
• NEP-HEA-2007-05-26 (Health Economics)
• NEP-IAS-2007-05-26 (Insurance Economics)
• NEP-PBE-2007-05-26 (Public Economics)

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