Health

In an ideal world, consumers' choices in relation to the incremental costs of producing goods and services would dictate what gets produced, and at what price. Choices should tell us about preferences. But it's not an ideal world and it is harder for analysts to uncover preferences when there are arbitrary, institutionally-imposed, incentives or distorted messages. In his keynote presentation at the 18th Annual Health Economics Conference, W. P. Carey Economics Professor Kerry Smith addressed the issue of how to determine whether consumers' health spending choices were the result of institutionally-imposed incentives, misleading messages, or rational behavior.

While many scientists applaud former Vice President Al Gore and his documentary, "An Inconvenient Truth," some scientists have said that the film exaggerates the nature of environmental problems and/or makes conclusions that the science doesn't uphold. Part of the problem may be that scientists and policymakers don't speak the same language. The controversy highlights an enduring problem: how to translate the highly specialized language of science. The 18th Annual Health Economics Conference hosted by the School of Health Management and Policy at the W. P. Carey School of Business recently tackled this problem in the context of health policy.

Americans currently spend about 15 percent of gross domestic product (GDP) on health care, but new research is projecting that by 2050, we'll be spending more than 30 percent of our income on health. "It's true that the Congressional Budget Office's long-range forecast shows the deficit exploding due to health spending that's increasing faster than GDP," said economist Charles Jones of the University of California, Berkeley. "But before we think about what the solution is, understanding why health shares are rising is a critical ingredient."

Research co-authored by marketing Professor Rajiv K. Sinha of the W. P. Carey School of Business shows that the later in life people start smoking, the more likely they are to quit. And, the longer people wait to light up, the more likely it is that they never will smoke at all. But those who take that first puff early in life are most likely to be doomed to a lifelong addiction. "Our findings support the congressional move to further limit cigarette advertising, as they provide evidence that targeting youth has the potential of converting 'never smokers' to 'forever smokers,'" Sinha says.

President Bush's private-insurance initiative, unveiled during the 2007 State of the Union address, keeps alive the debate over how to get at least some of the estimated 47 million uninsured Americans into the system. Experts at the School of Health Management and Policy at the W. P. Carey School of Business offer two perspectives. Bradford Kirkman-Liff, professor of health policy and biotechnology, sees the president's initiative as a missed opportunity. School director and Professor Marjorie L. Baldwin views it as a constructive step toward expanding health care coverage through market solutions.