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Estimating the marginal productivity of the English National Health Service from 2003/04 to 2012/13

Author

Listed:
  • James Lomas

    (Centre for Health Economics, University of York, York, UK)

  • Stephen Martin

    (Department of Economics and Related Studies, University of York, York, UK)

  • Karl Claxton

    (Centre for Health Economics, University of York, York, UK)

Abstract

Estimates of the marginal productivity of the health sector are required for a wide range of resource allocation decisions. Founding these estimates on robust empirical analysis can inform these decisions and improve allocative efficiency as a result. This paper estimates the marginal productivity of the English NHS for a ten year period between 2003/04 and 2012/13. Data on expenditure and mortality by programme budget categories from this period are used in conjunction with socio-economic and demographic variables from the censuses from 2001 and 2011, as part of an econometric strategy that employs an established instrumental variable approach that is subjected to a number of sensitivity analyses. The results of the econometric analysis, along with additional data on burden of disease, are used to generate an estimate of marginal productivity. This paper finds that the point estimates of the amount of resources, in nominal terms, to produce an additional unit of health benefit has ranged from £5,000 to £15,000 per quality-adjusted life year between 2003/04 and 2012/13. These results are discussed in the context of the existing literature, and the potential policy implications for decisions about resource allocation are explored.

Suggested Citation

  • James Lomas & Stephen Martin & Karl Claxton, 2018. "Estimating the marginal productivity of the English National Health Service from 2003/04 to 2012/13," Working Papers 158cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:158cherp
    as

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    File URL: https://www.york.ac.uk/media/che/documents/policybriefing/CHERP158_estimating_marginal_productivity_NHS.pdf
    File Function: First version, 2018
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    References listed on IDEAS

    as
    1. Propper, Carol, 1995. "Agency and incentives in the NHS internal market," Social Science & Medicine, Elsevier, vol. 40(12), pages 1683-1690, June.
    2. repec:wly:hlthec:v:27:y:2018:i:6:p:1017-1023 is not listed on IDEAS
    3. Breusch, Trevor & Qian, Hailong & Schmidt, Peter & Wyhowski, Donald, 1999. "Redundancy of moment conditions," Journal of Econometrics, Elsevier, vol. 91(1), pages 89-111, July.
    4. Martin, Stephen & Rice, Nigel & Smith, Peter C., 2008. "Does health care spending improve health outcomes? Evidence from English programme budgeting data," Journal of Health Economics, Elsevier, vol. 27(4), pages 826-842, July.
    5. Stephen Martin & Nigel Rice & Peter C Smith, 2008. "The link between health care spending and health outcomes for the new English Primary Care Trusts," Working Papers 042cherp, Centre for Health Economics, University of York.
    6. Hahn, Jinyong & Hausman, Jerry, 2002. "Notes on bias in estimators for simultaneous equation models," Economics Letters, Elsevier, vol. 75(2), pages 237-241, April.
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    10. Jessica Ochalek & James Lomas & Karl Claxton, 2015. "Cost per DALY averted thresholds for low- and middle-income countries: evidence from cross country data," Working Papers 122cherp, Centre for Health Economics, University of York.
    11. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    12. Gallet, Craig A. & Doucouliagos, Hristos, 2017. "The impact of healthcare spending on health outcomes: A meta-regression analysis," Social Science & Medicine, Elsevier, vol. 179(C), pages 9-17.
    13. Hauck, K. & Martin, S. & Smith, P.C., 2016. "Priorities for action on the social determinants of health: Empirical evidence on the strongest associations with life expectancy in 54 low-income countries, 1990–2012," Social Science & Medicine, Elsevier, vol. 167(C), pages 88-98.
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    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Brendan Collins’s journal round-up for 18th March 2019
      by Bren Collins in The Academic Health Economists' Blog on 2019-03-18 12:00:58

    More about this item

    Keywords

    productivity; econometric modelling; programme budgeting; health opportunity costs; allocative efficiency;

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