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The impact of NHS expenditure on health outcomes in England: Alternative approaches to identification in all‐cause and disease specific models of mortality

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  • Karl Claxton
  • James Lomas
  • Stephen Martin

Abstract

Several recent studies have estimated the responsiveness of mortality to English National Health Service spending. Although broadly similar, the studies differ in how they identify the outcome equation. One approach uses conventional socio‐economic variables as instruments for endogenous health care expenditure, whereas the other exploits exogenous elements in the resource allocation formula for local budgets. The former approach has usually been applied to specific disease areas (e.g., for cancer and circulatory disease), whereas the other has only been applied to all‐cause mortality. In this letter, we compare the two approaches by using them to estimate the direct all‐cause elasticity as well as disease‐specific elasticities. We also calculate the implied all‐cause elasticity associated with the disease‐specific results. We find that the “funding rule” approach to identification can be successfully replicated and applied to disease area models. This is important because disease area models reduce the danger of aggregation bias present in all‐cause analysis, and they offer the opportunity to link estimated mortality effects to more complete measures of health outcome that reflect what is currently known about the survival and morbidity disease burden in different programmes.

Suggested Citation

  • Karl Claxton & James Lomas & Stephen Martin, 2018. "The impact of NHS expenditure on health outcomes in England: Alternative approaches to identification in all‐cause and disease specific models of mortality," Health Economics, John Wiley & Sons, Ltd., vol. 27(6), pages 1017-1023, June.
  • Handle: RePEc:wly:hlthec:v:27:y:2018:i:6:p:1017-1023
    DOI: 10.1002/hec.3650
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    References listed on IDEAS

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    1. Martyn Andrews & Obbey Elamin & Alastair R. Hall & Kostas Kyriakoulis & Matthew Sutton, 2017. "Inference in the presence of redundant moment conditions and the impact of government health expenditure on health outcomes in England," Econometric Reviews, Taylor & Francis Journals, vol. 36(1-3), pages 23-41, March.
    2. Adrian Towse;Paul Barnsley;Sarah Karlsberg-Schaffer;Jon Sussex, 2013. "Critique of CHE Research Paper 81: Methods for the Estimation of the NICE Cost Effectiveness Threshold," Occasional Paper 000106, Office of Health Economics.
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    1. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for timing when assessing health-related policies," LSE Research Online Documents on Economics 100038, London School of Economics and Political Science, LSE Library.
    2. Francesco Longo & Karl Claxton & Stephen Martin & James Lomas, 2023. "More long‐term care for better healthcare and vice versa: investigating the mortality effects of interactions between these public sectors," Fiscal Studies, John Wiley & Sons, vol. 44(2), pages 189-216, June.
    3. 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.
    4. Jonathan Siverskog & Martin Henriksson, 2019. "Estimating the marginal cost of a life year in Sweden’s public healthcare sector," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(5), pages 751-762, July.
    5. Claxton, Karl & Asaria, Miqdad & Chansa, Collins & Jamison, Julian & Lomas, James & Ochalek, Jessica & Paulden, Mike, 2019. "Accounting for Timing when Assessing Health-Related Policies," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 10(S1), pages 73-105, April.
    6. Francesco Longo & Karl Claxton & James Lomas & Stephen Martin, 2020. "Does public long-term care expenditure improve care-related quality of life in England?," Working Papers 172cherp, Centre for Health Economics, University of York.
    7. Marta O. Soares & Mark J. Sculpher & Karl Claxton, 2021. "Authors’ Response to: “Health Opportunity Costs and Expert Elicitation: A Comment on Soares et al.†by Sampson, Firth, and Towse," Medical Decision Making, , vol. 41(3), pages 258-260, April.
    8. Emanuele Arcà & Francesco Principe & Eddy Van Doorslaer, 2020. "Death by austerity? The impact of cost containment on avoidable mortality in Italy," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1500-1516, December.
    9. Francesco Longo & Karl Claxton & James Lomas & Stephen Martin, 2021. "Does public long‐term care expenditure improve care‐related quality of life of service users in England?," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2561-2581, September.
    10. Stephen Martin & James Lomas & Karl Claxton, 2019. "Is an ounce of prevention worth a pound of cure? Estimates of the impact of English public health grant on mortality and morbidity," Working Papers 166cherp, Centre for Health Economics, University of York.

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