In introducing this Special Issue on Social Capital and Health, this article tracks the popularization of the term ‘social capital’ and sheds light on the controversy surrounding the term and its definitions. It sets out four mechanisms that link social capital with health: making information available to community members, impacting social norms, enhancing the health care services and their accessibility in a community, and offering psychosocial support networks. Approaches to the measurement of social capital include the Social Capital Community Benchmark Survey (SCCBS) developed by Robert Putnam, and the Petris Social Capital Index (PSCI), which looks at community voluntary organizations using public data available for the entire United States. The article defines community social capital (CSC) as the extent and density of trust, cooperation, and associational links and activity within a given population. Four articles on CSC are introduced in two categories: those that address behaviors – particularly utilization of health services and use of tobacco, alcohol, and drugs; and those that look at links between social capital and physical or mental health. Policy implications include: funding and/or tax subsidies that would support the creation of social capital; laws and regulations; and generation of enthusiasm among communities and leaders to develop social capital. The next steps in the research programme are to continue testing the mechanisms; to look for natural experiments; and to find better public policies to foster social capital.

This paper presents an economic model to connect with the substantial empirical literature on social capital and health that exists largely outside of economics. Representative papers from that literature are reviewed and these show that disagreements exist on the nature and definition of social capital. The paper presents a new line of reasoning to support the view of social capital as a network of interpersonal bonds to include the bonds of family and close friends, not just the community at large. It then adapts and extends the work of Becker and Murphy on social economics to explain the demand for health goods as well as health bads in the presence of increased social capital. It further develops choice under risk to explain the demand for goods that entail a risk of death, such as cigarettes, illegal drugs, or excessive drinking. Empirical examples, including new statistical analyses are presented to illustrate the derivations.

Poorer resident care in US for-profit relative to not-for-profit nursing homes is usually blamed on the profit motive. But US nursing home performance may relate to Medicaid public financing in a manner qualifying the relationship between ownership and quality. We investigated effects of Medicaid resident census, Medicaid payment, and occupancy on performance. Resource dependence theory implies these predictors may affect discretion in resources invested in resident care across for-profit and not-for-profit facilities. Models on physical restraint use and registered nurse (RN) staffing were studied using generalized estimating equations with panel data derived from certification inspections of nursing homes. Restraint use increased and RN staffing levels decreased among for-profit and not-for-profit facilities when the Medicaid census increased and Medicaid payment decreased. Interaction effects supported a theory that performance relates to available discretion in resource allocation. Effects of occupancy appear contingent on the dependence on Medicaid. Poorer performance among US for-profit nursing homes may relate to for-profit homes having lower occupancy, higher Medicaid census, and operating in US states with lower Medicaid payments compared to not-for-profit homes. Understanding the complexity of factors affecting resources expended on resident care may further our understanding of the production of quality in nursing homes, whether in the US or elsewhere.

Despite myriad programs aimed at increasing access to essential medicines in the developing world, the global drug gap persists. This paper focuses on the major legal and political constraints preventing implementation of coordinated global policy solutions – particularly, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and bilateral and regional free trade agreements. We argue that several policy and research routes should be taken to mitigate the restrictive impact of TRIPS and TRIPS-plus rules, including greater use of TRIPS flexibilities, advancement of human rights, and an ethical framework for essential medicines distribution, and a broader campaign that debates the legitimacy of TRIPS and TRIPS-plus standards themselves.

Effective antitrust enforcement is of crucial importance for countries with a market-based health care system in which hospitals are expected to compete. Assessing hospital market power – a central issue to competition policy – is, however, complicated because the presence of third party payers and the general unobservability of prices make it difficult to apply the standard methods of market definition. Alternative, less formal methods historically employed in the hospital industry have proven inaccurate; these methods were even called inapplicable in a recent US court decision. In this paper, we discuss the strengths and weaknesses of several new approaches to defining hospital markets that are suggested in the recent economic literature. In particular, we discuss the applicability of the time-elasticity approach, competitor-share approach, and option-demand approach to the recently partly deregulated Dutch hospital market. We conclude that the appropriate approach depends crucially on how health insurers contract with hospitals and how patients select their hospital.

Focusing on the problem of pharmaceutical R&D for drugs and vaccines against neglected diseases in developing countries, this article argues that the effectiveness of global health partnerships potentially lies in their capacity to address the problem of dual market failures: on a first level they may tackle the poverty induced lack of effective demand for health products which impedes the creation of market-financed innovative products. On a second level, they may help overcoming hold-up problems and underinvestment induced by the complexity of neglected diseases R&D. Yet, organizing transactions within a partnership is not a panacea against these problems: a crucial determinant of success is proper ownership structures. They need to respond to (i) the degree to which the respective parties value the partnership outcome, (ii) the relative importance of the investment of the parties, and (iii) the nature of the partnership outcome. The argument developed in the analysis is built on an integrated framework combining insights from incomplete contracting theory and public goods economics. It is supported by a preliminary statistical analysis of 17 GHPs.

This paper focuses on eliciting the willingness to pay (WTP) for policy measures aimed at improving the health care offered to patients suffering from Alzheimer’s disease (AD). We utilize a discrete choice experiment (DCE) approach for the elicitation of the preferences of the general population for three alternative policies: home care, day care centres, and medium or long-stay centres. The results show that these policies are significantly valued across the surveyed population. The monthly WTP per hour of home care is estimated as €4 per individual, while the monthly WTP values for full population coverage in day centres and medium–long-stay centres are estimated as €0.43 and €0.42 respectively. We compare the results of classical and Bayesian estimation methods, and conclude that the latter provide a better representation of the heterogeneity in the sample. The results are significant for health care, as they enable policymakers to identify the social demand for such services, as well as the relative economic values placed on the alternative policy measures.

This article investigates the current use of Public–Private Partnerships (PPP) in the Danish health sector based on an initial discussion of theoretical approaches that analyze PPP. The empirical analysis concludes that PPP has been used very sparsely in the Danish health sector. There are few examples of large-scale partnership projects with joint investment and risk taking, but a number of smaller partnerships such as jointly owned companies at the regional level. When defining PPP more broadly, we can identify a long tradition for various types of collaboration between public and private actors in health care in Denmark. An analysis of the regulatory environment is offered as an explanation for the limited use of PPPs in Denmark. Major political and institutional actors at the central level differ in their enthusiasm for the PPP concept, and the regulatory framework is somewhat uncertain. A number of general issues and concerns related to PPPs are also discussed. It is suggested that a risk-based framework can be useful for mapping the potential and challenges for both private and public partners. Such a framework can be used to feed into game theoretical models of pros and cons for PPP projects. In general terms, it is concluded that more empirical research is needed for the assessment of the various risk factors involved in using PPPs in health care. Most PPPs are still very young, and the evidence on performance and broader governance issues is only just emerging. Ideally, such assessments should include comparisons with a purely public alternative.

The objective of this study is to estimate associations between social capital and health when other factors are controlled for. Data from the standard-of-living survey by Statistics Norway are merged with data from several other sources. The merged files combine data at the individual level with data that describe indicators of community-level social capital related to each person’s county of residence. Both cross-sectional and panel data are used. We find that one indicator of community-level social capital – voting participation in local elections – is positively associated with self-assessed health in the cross-sectional study and in the panel data study. While we find that religious activity at the community-level has a positive effect in the cross-sectional survey and no effect in the panel survey, we find that sports organizations have a negative effect on health in the cross-sectional survey and no effect in the panel survey. The question is raised whether the welfare state diminishes the effect of structural community social capital, as represented by voluntary organizations, on health.

Many government interventions seek to reduce the risk of death. The value of preventing a fatality (VPF) is the monetary amount associated with each statistical death that an intervention can be expected to prevent. The VPF has been estimated using a preference-based approach, either by observing market behaviour (revealed preferences) or by asking hypothetical questions that seek to replicate the market (stated preferences). The VPF has been shown to differ across and within these methods. In theory, the VPF should vary according to factors such as baseline and background risk, but, in practice, the estimates vary more by theoretically irrelevant factors, such as the starting point in stated preference studies. This variation makes it difficult to choose one unique VPF. The theoretically irrelevant factors also affect the estimates of the monetary value of a statistical life year and the value of a quality-adjusted life year. In light of such problems, it may be fruitful to focus more research efforts on generating the VPF using an approach based on the subjective well-being associated with different states of the world.

Co-payments have been linked to the slowing growth in pharmaceutical spending over the last five years. However, patients with health problems frequently have difficulty affording their pharmacotherapy and fail to take their medication as prescribed. We examine the relationship between co-payment amounts and four types of cost-related underuse: taking fewer doses, postponing taking a medication, failing to fill a prescription at all, and taking medication less frequently than prescribed. We conducted a nationwide survey of US adults age 50 and over who take medication for a chronic condition. Participants provided information on 17 chronic conditions, medication they take for those conditions, and whether they underused any medication due to cost. We analyzed those who reported paying co-payments for their prescriptions (n = 2,869). Analysis involved multivariate logistic regression, with adjustments for survey weights and clustering. Our data show a strong positive association between co-payments and cost-related medication underuse. Although people differ in how they underuse medications, these behaviours are strongly associated with co-payment amount. Realigning the co-payments with cost-effectiveness data, also known as value-based insurance design, warrants further investigation.

This study revisits the debate on the ‘red herring’, i.e. the claim that population aging will not have a significant impact on health care expenditure (HCE), using a Finnish data set. We decompose HCE into several components and include both survivors and deceased individuals into the analyses. We also compare the predictions of health expenditure based on a model that takes into account the proximity to death with the predictions of a naïve model, which includes only age and gender and their interactions. We extend our analysis to include income as an explanatory variable. According to our results, total expenditure on health care and care of elderly people increases with age but the relationship is not as clear as is usually assumed when a naïve model is used in health expenditure projections. Among individuals not in long-term care, we found a clear positive relationship between expenditure and age only for health centre and psychiatric inpatient care. In somatic care and prescribed drugs, the expenditure clearly decreased with age among deceased individuals. Our results emphasize that even in the future, health care expenditure might be driven more by changes in the propensity to move into long-term care and medical technology than age and gender alone, as often claimed in public discussion. We do not find any strong positive associations between income and expenditure for most non-LTC categories of health care utilization. Income was positively related to expenditure on prescribed medicines, in which cost-sharing between the state and the individual is relatively high. Overall, our results indicate that the future expenditure is more likely to be determined by health policy actions than inevitable trends in the demographic composition of the population.

We study the psycho-social determinants of self-assessed health in order to explain social inequalities in health in France. We use a unique general population survey to assess the respective impact on self-assessed health status of subjective perceptions of social capital, social support, and sense of control, controlling for standard socio-demographic factors (SES, income, education, age, and gender). The survey is unique in that it provides a variety of measures of self-perceived psycho-social resources (trust and civic engagement, social support, sense of control, and self-esteem). We find empirical support for the link between the subjective perception of psycho-social resources and health. Sense of control at work is the most important correlate of health status after income. Other important ones are civic engagement and social support. To a lesser extent, sense of being lower in the social hierarchy is associated with poorer health status. On the contrary, relative deprivation does not affect health in our survey. Since access to psycho-social resources is not equally distributed in the population, these findings suggest that psycho-social factors can partially explain of social inequalities in health in France.

Consumer-directed health care (CDHC) is one of the basic ideas that has emerged in recent years as a way of bringing greater efficiency and cost control into health care. Its principal aims are to give patients greater control over their care, economically as well as medically, and to improve competition among providers to increase the range of patient control. Its roots are American, bespeaking a cultural suspicion of government, a worry about rising costs, and an appeal to the popularity of choice in almost all matters, now including health care. CDHC also bespeaks the ideology of market ideology, drawing on both market concepts in economics and a push by American conservatives (particularly President George W. Bush) to privatize as much of American health care as possible). It draws particularly on the business community as a source of ideas and inspiration, assuming that if choice and competition work well in the commercial sector, it will work equally well in health care. A fundamental question, however, is not simply how well business models might work, but also whether thinking of the patient as a savvy consumer could ever make full sense in the face of complicated, emotionally charged illnesses and complex decision-making situations. Skepticism is in order.

Most health economists recommend that improvements in health be valued by asking members of the general public to imagine themselves in different states of health and then to think about how many years of life they would give up or what risk of death they would be willing to accept in order to be in full health. In this paper, I argue that preferences are not a very good guide to future experiences and a more suitable way to value health is to ask people in different states of health how they think and feel about their lives. Valuing health in this way may result in greater priority being given to mental health services. Whatever the precise implications, it is my contention that it is much better to ration health care according to real experiences rather than according to hypothetical preferences.

This paper examines relationships between aging, social capital, and healthcare utilization. Cross-sectional data from the 2001 Canadian Community Health Survey and the Canadian Census are used to estimate a two-part model for both GP physicians (visits) and hospitalization (annual nights) focusing on the impact of community- (CSC) and individual-level social capital (ISC). Quantile regressions were also performed for GP visits. CSC is measured using the Petris Social Capital Index (PSCI) based on employment levels in religious and community-based organizations [NAICS 813XX] and ISC is based on self-reported connectedness to community. A higher CSC/lower ISC is associated with a lower propensity for GP visits/higher propensity for hospital utilization among seniors. The part-two (intensity model) results indicated that a one standard deviation increase (0.13%) in the PSCI index leads to an overall 5% decrease in GP visits and an annual offset in Canada of approximately $225 M. The ISC impact was smaller; however, neither measure was significant in the hospital intensity models. ISC mainly impacted the lower quantiles in which there was a positive association with GP utilization, while the impact of CSC was strongest in the middle quantiles. Each form of social capital likely operates through a different mechanism: ISC perhaps serves an enabling role by improving access (e.g. transportation services), while CSC serves to obviate some physician visits that may involve counseling/caring services most important to seniors. Policy implications of these results are discussed herein.

Adam Smith, The Theory of Moral Sentiments, Chapter 1, Part first.