Health Economics Worldwide.

• Author: Ohsfeldt, Robert L.

This book contains 16 chapters selected from about 150 papers presented at the Second World Congress on Health Economics held at the University of Zurich in September of 1990. The contributors primarily are economists affiliated with American or European universities. As the title suggests, many of the chapters attempt to provide an international perspective on their topic by using examples or data from several developed nations. Other chapters simply focus on a single developed nation without providing an international perspective on the topic addressed. The rather disparate topics covered in the book's 16 chapters are presented in four sections broadly defined as issues in health insurance, cost-effectiveness and cost-utility analysis, market and non-market rationing, and issues of health policy. The book lacks features often found in conference volumes, such as published commentaries on chapters with replies from the authors. The editors also eschew the common (but too often perfunctory) introduction or conclusion presenting the editors' views of the commonalities, contradictions, and contributions of the papers in the volume. With each chapter essentially standing alone, the book resembles a (hardbound) academic journal devoted to health economics.

The health insurance section contains four chapters, highlighted by the contributions of Joseph Newhouse and Mark Pauly. Newhouse examines the problem of errors in setting prices in a medical care setting with heterogeneous patients. He concludes that welfare losses from price-setting errors are mitigated by the use of a mixed pricing strategy (partly fee-for-service and partly capitation). Pauly analyzes the positive and normative economics of a health system consisting of publicly-financed guaranteed minimum health benefits with individuals free to purchase upgraded benefits in the market. He finds that such a system generally improves welfare over a pure market system or a fully socialized health system (one with uniform benefits for all individuals). Pauly concludes that, in the absence of altruism, the extent of socialization in political equilibrium increases as the variance in household income increases and as the variance in "tastes" for health decreases. In the other insurance chapters, Van de Ven and Van Vliet focus on the problem of "cream-skimming" among competing insurers when government regulated premiums entail cross-subsidization across risk groups, and Khandker and Manning...