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Flat-of-the-curve medicine: a new perspective on the production of health

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  • Johannes Schoder
  • Peter Zweifel

Abstract

Health economists have studied the determinants of the expected value of health status as a function of medical and non-medical inputs, often finding small marginal effects of the former. However, medical inputs may have an additional benefit in the form of a reduced variability of health status. Using the standard deviation of life expectancy in 24 OECD countries between 1960 and 2005, a 10 percent increase of health care expenditure is associated with a decrease of an estimated 0.42 percent. Willingness to pay for such a reduction of uncertainty may well exceed the extra health care expenditure in the United States and Switzerland. This implies that even in these two countries with very high health care expenditure per capita, flat-of-the-curve medicine need not be wasteful. JEL-Classification: I12, J10 Copyright Schoder and Zweifel; licensee Springer. 2011

Suggested Citation

  • Johannes Schoder & Peter Zweifel, 2011. "Flat-of-the-curve medicine: a new perspective on the production of health," Health Economics Review, Springer, vol. 1(1), pages 1-10, December.
    • Handle: RePEc:spr:hecrev:v:1:y:2011:i:1:p:1-10:10.1186/2191-1991-1-2
    DOI: 10.1186/2191-1991-1-2
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    Cited by:

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    2. Wittmann, Nadine, 2014. "Economic reasoning on the correlation between life expectancy and economic development: Exploring alternative routes," Economics Discussion Papers 2014-43, Kiel Institute for the World Economy (IfW Kiel).
    3. Tim Bersak & Lyudmyla Sonchak‐Ardan, 2022. "Prenatal care: Mechanisms and impacts on infant health and health care utilization," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 48-65, January.
    4. Christopoulos, Konstantinos & Eleftheriou, Konstantinos, 2020. "The fiscal impact of health care expenditure: Evidence from the OECD countries," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 195-202.
    5. Syeda Hassan & Khalid Zaman & Sajid Zaman & Muhammad Shabir, 2014. "Measuring health expenditures and outcomes in saarc region: health is a luxury?," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1421-1437, May.
    6. Valeria D’Amato & Emilia Di Lorenzo & Marilena Sibillo, 2018. "Dread Disease and Cause-Specific Mortality: Exploring New Forms of Insured Loans," Risks, MDPI, vol. 6(1), pages 1-21, February.

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    More about this item

    Keywords

    production of health; control over health status; willingness to pay;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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