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Centre for Health Economics NEWS FROM THE MONASH

IN THIS ISSUE

NEW RESEARCH

COMMENCES

REGIONAL

COMPARISONS

QUALITY OF LIFE

RESEARCH

REPORTING

HETEROGENEITY

IN THE PRESS

UPCOMING EVENTS

AWARDS,

PUBLICATIONS

& PRESENTATIONS

Issue

04

Sept 2014

New Research Commences

burden due to preventable maternal

mortality and morbidity.

Professor Anthony Harris has received a grant through Medibank’s new

Health Research Fund (MHRF), one of only nine awarded Australia-wide. The

grant will fund development of an online tool to assist in the routine collection

of outcome data by healthcare providers, insurers and fund holders to help

improve the allocation of resources in the healthcare sector. The project is

part of a wider research program at the Centre for Health Economics into the

measurement of health-related quality of life and wellbeing and its social

value, and in particular an extension of the Multi-Instrument Comparison

(MIC) program initiated by Professor Jeff Richardson.

A/Prof Paula Lorgelly and Katherine Gilbert have been awarded funding

from a new grant scheme, initiated by the Faculty of Business and Economics

to encourage interdisciplinary collaboration. The grant supports collaboration

between CHE researchers and specialists in public health, development

studies and international health. CHE researchers will work closely with Prof

Jane Fisher (School of Public Health and Preventive Medicine, Faculty of

Medicine, Nursing and Health Sciences), Dr Elissa Kennedy (Centre for

International Health, Burnet Institute) and Dr Divi Ogaoga (Ministry of Health

and Medical Services, Solomon Islands) to investigate the determinants,

impacts and costs of unsafe abortion in the Solomon Islands. Findings from

the study will help policy makers and providers in the Solomon Islands to

mount a better public health response, helping to address the significant

International comparisons of living standards, ranking of countries by GDP, and comparisons of

inequality or poverty across countries all require conversion of one currency into another. An

important drawback of purchasing power parities (PPPs) and other conversion factors is that they

treat each country as a single identity, ignoring the fact that prices may be higher in London than in

Birmingham and lower in Wagga Wagga than in Sydney. They ignore the fact that in large

countries, such as Brazil and India, there is much greater variation in prices and consumer

preferences between states or provinces than there is between many smaller countries. Cross-

country comparisons between Adelaide and London, Sydney and Birmingham, or between Brasilia

and New Delhi may therefore be confounded by differences in purchasing power and consumer

preferences even after converting currencies into international dollars using standard PPP

conversion factors. What’s more, comparisons within countries will suffer from similar problems

unless corrected for the fact that a dollar is worth less in Sydney than in Wagga Wagga and for the

fact that the consumption patterns of Sydneysiders are different in kind than consumption patterns

in country and regional New South Wales.

Contributing to recent literature modelling spatial variation in prices within countries, Kompal

Sinha from the Centre for Health Economics along with Ranjan Ray (Economics, Monash

University) and Amita Majumder (Indian Statistical Institute, India) have recently conducted

research, published in Macroeconomic Dynamics and Review of Income and Wealth that derives

spatial prices (within-country conversion factors) and uses them for welfare comparisons within

countries and across countries. This research departs from the previous literature on PPPs in

proposing a demand system based methodology for calculating conversion factors that takes

account of consumer preferences and allows for the substitution effect of price changes. It shows

how unit values obtained from expenditure and quantity information on purchases can be used to

provide the necessary price information after adjusting for quality and demographic characteristics,

and describes the procedure of generating quality-adjusted unit values as prices. The usefulness of

this approach is shown by making ‘corrected’ expenditure comparisons of food items between

states of India, demonstrating that this type of correction may be just as important for price and

expenditure comparisons within countries as it is for comparisons between countries. Applying this

approach more broadly could make exercises such as the World Bank’s ICP even more useful for

evidence-based policy making.

The role that PPPs perform in converting an internationally denominated poverty line, for example, US$1 a day, into a poverty line in Indian rupees or Solomon Island dollars is much the same as the role that spatial prices play inside a country in converting the national poverty line into regional poverty lines, taking into account regional prices and preferences. ”

“

Including quality of life in economic evaluations of new

technologies raises a number of difficult questions. In order to

determine whether services are above or below a funding

threshold quality of life must be reduced to a single number:

itself a controversial issue.

But who should judge the relevant health states – patients, or

the public which pays for the services provided by Medicare?

Should the person making the judgement be asked to evaluate

the health state on behalf of society, hopefully achieving

impartiality in the comparison of different health states (a

social perspective) or should they be asked to adopt a selfish

individual perspective? Which elements of a person’s

wellbeing should be included in the health state evaluation: a

narrow range of symptoms such as pain and physical mobility

or a wider range, including, for example, social relationships

and self-esteem? Once decisions are made with respect to

these questions how do we measure and combine the

elements of the quality of life in a way which is valid and

reliable?

An ongoing program at the CHE led by Professor Jeff

Richardson has been investigating these issues and raising

questions with respect to current measurement procedures. A

new instrument developed at the CHE to measure quality of

life from a social perspective – the Relative Social Willingness

to Pay instrument – suggests that, when it does not concern

themselves directly, individuals place greater emphasis upon

quality of life and less upon life expectancy.(1)

A second instrument, the Assessment of Quality of Life (AQoL-8D) has expanded the number of elements

included in measurement to capture details of a person’s psycho-social wellbeing.(2) The instrument,

which has recently passed a number of rigorous validation tests,(3) demonstrates that these psycho-social

elements are the most important determinants of subjective wellbeing as measured by well-established

psychological instruments. Nevertheless these psycho-social elements are largely omitted from more

established instruments used for current evaluation studies.

The results of recent quality of life research at the CHE suggest the need for a revision of the methods

adopted by economists who evaluate health services. Read more here:

(1) Jeff Richardson, Angelo Iezzi, Kompal Sinha, Munir Khan, John McKie 2014, An Instrument for

measuring the Relative Social Willingness to Pay for health state improvement. Health Economics

23:792-805.

(2) Jeff Richardson, Kompal Sinha, Angelo Iezzi, Munir Khan 2014. Modelling utility weights for the

Assessment of Quality of Life (AQoL) 8D. Quality of Life Research DOI 10.1007/s11136-014-0686-8

(3) Jeff Richardson, Angelo Iezzi, Munir Khan, Aimee Maxwell 2014. Validity and reliability of the

Assessment of Quality of Life (AQoL-8D) multi attribute utility instrument. The Patient: Patient-Centered

Outcomes Research 7:85-96.

Quality of Life Research at the CHE

The EQ-5D, the most commonly used multi-attribute utility instrument, asks respondents to rate their

health using ordered-response categories on five domains: mobility, personal care, usual activities,

pain/discomfort and anxiety/depression. While commonly used in clinical trials, the EQ-5D has also been

included in a number of population health surveys, where it is used to compare health across population

sub-groups.

A limitation with any measure that asks respondents to report on subjective categorical scales, as the EQ-

5D does, is that people may interpret the response categories in different ways. For example, a female

may attach a completely different meaning to what constitutes ‘moderate pain’ compared to a male. This

phenomenon, known as reporting heterogeneity or response scale differential item functioning (DIF), may

lead to conclusions that are misleading in analyses which rely on these measure. Rachel Knott, A/Prof

Paula Lorgelly, Dr Nicole Au from the Centre for Health Economics, and Prof Bruce Hollingsworth from

Lancaster University (UK) have been undertaking ARC funded research to formally test for and adjust

reporting heterogeneity in the EQ-5D-5L, using the anchoring vignettes approach.

In a survey of 2000 Australians they found significant variation in reporting styles across gender, age,

income and country of birth. When adjusting for DIF they found that EQ-5D-5L summary indices are

adjusted upwards across all respondent groups. This reflects a movement of respondents away from the

moderate, severe or extreme problem categories, which impose the highest penalties to EQ-5D-5L

scores. While the inter-group ordering of respondents by EQ-5D-5L indices did not change after

controlling for DIF, relative changes across sub-groups are apparent in their results. For example, the

average difference in EQ-5D-5L score between males and females increased from 0.07 to 0.10; while the

difference between the oldest and youngest age groups reduced from 0.12 to 0.07.

This work is ongoing, and the next phase will apply the adjustments to an external dataset. If this

application is successful, then researchers will be able to more accurately make inferences about

inequalities in health and what drives them.

…a female may attach a completely different meaning to what

constitutes ‘moderate pain’ compared to a male. This

phenomenon is known as reporting heterogeneity or differential

item functioning (DIF). ”

“

Reporting heterogeneity in the EQ-5D

Original and DIF-adjusted EQ-5D scores

CHE Researchers in the Popular Press

Brian Vandenberg & Dr Anurag Sharma: Alcohol tax reform: a

minimum price is in the public interest

Dr Sonja Kassenboehmer: Being unemployed isn’t as bad as you

think

Dr Agne Suziedelyte: Early start to school a boost for

disadvantaged children

Prof Jeff Richardson: Australia’s ‘unsustainable’ health spending

is a myth

Prof Anthony Harris: On being treated well: reforming Medicare

after 30 years

A/Prof David Johnston, Prof Michael Shields & Jean Spinks: It’s

the quality of school, not its location

Prof Anthony Harris: Commission of Audit’s health hit list: experts

respond

CHE Staff Out + About

A/Prof Paula Lorgelly and Brett Doble presented papers on quality of life

measurement in oncology at the Health Economists’ Study Group (HESG),

2014 Winter Meeting.

Dr Nicole Au and Visiting Professor Fabrice Etile presented papers at the

Fifth Australasian Workshop on Econometrics & Health Economics, Fremantle.

A/Prof Paula Lorgelly and Dr Anurag Sharma presented papers at ASHEcon

2014, Leonard D. Schaeffer Centre for Health Policy & Economics, Los

Angeles, California.

CHE staff met with international collaborators including Prof Jan Olsen, Prof

John Brazier and Prof Julie Ratcliffe at the Special Workshop on the Multi-

Instrument Comparison (MIC) project, Sommarøy, Norway.

Prof Jeff Richardson, Dr Agne Suziedelyte, Angelo Iezzi, Rachel Knott and

A/Prof Paula Lorgelly presented papers at the Joint iHEA & ECHE Congress,

Trinity College, Dublin, Ireland.

Dr Agne Suziedelyte presented a paper on education and health knowledge

at the fourth edition of the Italian Health Econometrics Workshop, Padua, Italy.

Dr Sonja Kassenboehmer presented a paper on re-employment expectations

at SOEP 2014: 11th International German Socio-Economic Panel User

Conference, Berlin.

Dr Kompal Sinha presented a paper on estimation of intra and inter-country

food purchasing power parities at the Texas A&M University under their

Agriculture Economics Department Seminar Program.

Professor Anthony Harris presented a paper entitled Unsustainability of

health expenditure in Australia – the myths and their solutions at a conference

sponsored by The Conversation on The Future of Medicare, Sydney.

Upcoming Events

3 September: Prof Kirsten Howard (Sydney) will present a seminar

entitled ‘Community preferences for organ donation policy: a discrete

choice experiment’ in the CHE Seminars Series.

9 September: Prof Andrew Briggs (Glasgow) will present a seminar in the

CHE Seminar Series.

17 September: Catherine Keating (Deakin) will present a seminar in the

CHE Seminar Series.

24-26 September: Australian Health Economics Doctoral Workshop &

36th Annual Australian Health Economics Society Conference, Adelaide.

15 October: The Centre for Health Economics will host the Victorian Data

Linkage Unit Seminar, with speakers to include A/Prof Paula Lorgelly.

20 October: Prof Jordan Louviere (UniSA) will present a seminar in the

CHE Seminar Series.

28-30 October: A/Prof Paula Lorgelly, A/Prof Duncan Mortimer &

Katherine Gilbert will present at the Solomon Islands Ministry of Health /

World Bank / CHE Workshop on Health Facilities Costing, Honiara.

29 October: A/Prof Anna Peeters (Baker IDI) will present a seminar in the

CHE Seminar Series.

November: Prof Barbara McPake (Nossal Institute) will present a seminar

in the CHE Seminar Series.

10-12 November: Priorities 2014, 10th Conference of the International

Society on Priorities in Health Care (ISPHC), Melbourne.

26 November: A/Prof Jennifer Whitty (UQ) will present a seminar in the

CHE Seminar Series.

3MT win for CHE

Two of the CHE’s outstanding cohort of PhD students, Brian

Vandenberg (pictured with Faculty 3MT judge, Prof Fang Lee

Cook) and Anthony Niu, recently competed at the Faculty

Three Minute Thesis (3MT) competition.

Brian’s thesis investigates the role of price and income in

alcohol consumption, whereas Anthony is investigating links

between socio-economic status and childhood health, and

between childhood health and health outcomes in adulthood.

Both did an excellent job of summarising their PhD research in

just three minutes flat, with Brian’s presentation making a

particular strong impact on the judges.

Brian took out the Faculty heat and moves on to represent the

Faculty in the cross-faculty competition in mid-September.

Congratulations Brian, good luck in September!

Johnston D, Schurer S, Shields M. 2014, Maternal gender role attitudes, human capital

investment and labour supply of sons and daughters. Oxford Economic Papers, 66:631-659.

Barnieh L, Clement F, Harris A, Blom M, Donaldson C, et al. 2014, A systematic review of cost-

sharing strategies used within publicly-funded drug plans in the OECD. PLoS ONE, 9:e90434.

Richardson J, Iezzi A, Sinha K, Khan M, Mckie J. 2014, An instrument for measuring the social

willingness to pay for health state improvement. Health Economics, 23:792-805.

Ray R, Sinha K. 2014, Multidimensional Deprivation in China, India and Vietnam: A Comparative

Study on Micro Data. Journal of Human Development and Capabilities, 16:3.

Sweeney R, Mortimer D, Johnson D. 2014, Further investigations of the donor-flight response.

Social Science & Medicine, 113:179–182.

Au N, Lorgelly P. 2014, Anchoring vignettes for health comparisons: an analysis of response

consistency. Quality of Life Research, 23:1721-31.

Bosch M, McKenzie J, Mortimer D, et al. 2014, Implementing evidence-based recommended

practices for the management of patients with mild head injuries in Australian emergency care

departments: a CRT study protocol. Trials, 15:281.

Richardson J, Iezzi A, Khan M, Maxwell A. 2014, Validity and reliability of the Assessment of

Quality of Life (AQoL-8D) multi attribute utility instrument. The Patient, 7:85-96.

Au N, Hollingsworth B, Spinks J. 2014, Measuring the efficiency of health services in lower

income countries: The case of Papua New Guinea. Development Policy Review, 32:259-272.

Kassenboehmer S, Sinning M. 2014, Distributional Changes in the Gender Wage Gap. Industrial

and Labor Relations Review, 67:2, 335-361.

Selected recent publications

Doiron D, Fiebig D, Suziedelyte A. 2014, Hips and Hearts: The Variation in Incentive Effects of

Insurance across Hospital Procedures. Journal of Health Economics 37:81-97.

Sharma A, Hauck K, Hollingsworth B, Siciliani L. 2014, The Effects of Taxing Sugar-sweetened

beverages across different income groups. Health Economics, 23:1159-1184.

Frijters P, Johnston D, Shields M. 2014, The Effect of Mental Health on Employment: Evidence

from Australian Panel Data. Health Economics, 23:1058-1071.

Gu Y, Norman R, Viney R. 2014, Estimating Health State Utility Values from Discrete Choice

Experiments – A QALY Space Model Approach. Health Economics, 23:1098-1114.

Bennell KL, Egerton T, Martin J, Abbott JH, Metcalf B, McManus F, Sims K, Pua YH, Wrigley TV,

Forbes A, Smith C, Harris A, Buchbinder R. 2014, Effect of physical therapy on pain and function

in patients with hip osteoarthritis: a randomized clinical trial. Journal of the American Medical

Association, 311:1987-97.

Richardson J. 2014, Can we sustain health spending? Medical Journal of Australia, 200:629-631.

Centre for Health Economics Building 75, Monash University, Clayton 3800 AUSTRALIA

tel: +61 (3) 9905 0733 fax: +61 (3) 99058344 email: che@monash.edu