The Director of the Asia Health Policy Program, Karen Eggleston, served as guest editor of the International Journal of Healthcare Finance and Economics for the June 2009 issue. The eight papers of that issue evaluate different provider payment methods in comparative international perspective, with authors from Hungary, China, Thailand, the US, Switzerland, and Canada. These contributions illustrate how the array of incentives facing providers shapes their interpersonal, clinical, administrative, and investment decisions in ways that profoundly impact the performance of health care systems.

The collection leads off with a study by János Kornai, one of the most prominent scholars of socialism and post-socialist transition, and the originator of the concept of the soft budget constraint. Kornai’s paper examines the political economy of why soft budget constraints appear to be especially prevalent among health care providers, compared to other sectors of the economy.

Two other papers in the issue take up the challenge of empirically identifying the extent of soft budget constraints among hospitals and their impact on safety net services, quality of care, and efficiency, in the United States (Shen and Eggleston) and – even more preliminarily – in China (Eggleston and colleagues, AHPP working paper #8).

The impact of adopting National Health Insurance (NHI) and policies separating prescribing from dispensing are the subject of Kang-Hung Chang’s article entitled “The healer or the druggist: Effects of two health care policies in Taiwan on elderly patients’ choice between physician and pharmacist services” (AHPP working paper #5).

In “Does your health care depend on how your insurer pays providers? Variation in utilization and outcomes in Thailand” (AHPP working paper #4), Sanita Hirunrassamee of Chulalongkorn University and Sauwakon Ratanawijitrasin of Mahidol University study the impact of multiple provider payment methods in Thailand, providing striking evidence consistent with standard predictions of how payment incentives shape provider behavior. For example, patients whose insurers paid on a capitated or case basis (the 30 Baht and social security schemes) were less likely to receive new drugs than those for whom the insurer paid on a fee-for-service basis (civil servants). Patients with lung cancer were less likely to receive an MRI or a CT scan if payment involved supply-side cost sharing, compared to otherwise similar patients under fee-for-service. (This article is open access.)

The fourth paper in this special issue is entitled “Allocation of control rights and cooperation efficiency in public-private partnerships: Theory and evidence from the Chinese pharmaceutical industry” (AHPP working paper #6). Zhe Zhang and her colleagues use a survey of 140 pharmaceutical firms in China to explore the relationships between firms’ control rights within public-private partnerships and the firms’ investments.

Hai Fang, Hong Liu, and John A. Rizzo delve into another question of health service delivery design and accompanying supply-side incentives: requiring primary physician gatekeepers to monitor patient access to specialty care (AHPP working paper #2).

Direct comparisons of payment incentives in two or more countries are rare. In “An economic analysis of payment for health care services: The United States and Switzerland compared,” Peter Zweifel and Ming Tai-Seale compare the nationwide uniform fee schedule for ambulatory medical services in Switzerland with the resource-based relative value scale in the United States.

Several of the papers featured in this special issue were presented at the conference “Provider Payment Incentives in the Asia-Pacific” convened November 7-8, 2008 at the China Center for Economic Research (CCER) at Peking University in Beijing. That conference was sponsored by the Asia Health Policy Program of the Shorenstein Asia-Pacific Research Center at Stanford University and CCER, with organizing team members from Stanford University, Peking University, and Seoul National University.

As Eggleston notes in the guest editorial to the special issue, AHPP and the other scholars associated with the issue “hope that these papers will contribute to more intellectual effort on how provider payment reforms, carefully designed and rigorously evaluated, can improve ‘value for money’ in health care.”

The Walter H. Shorenstein Asia-Pacific Research Center is pleased to announce that Jim Hoesterey has been awarded the Shorenstein Fellowship for 2009-2010. This Fellowship is made possible through the generosity of Walter H. Shorenstein. The Fellowship supports a scholar to conduct research and writing on contemporary political, economic, or social change in the Asia-Pacific region, or topics in international relations and international political economy.

Jim Hoesterey is a cultural anthropologist whose research explores the burgeoning industry of Islamic self-help in contemporary Indonesia. He is completing a Ph.D. in Anthropology at the University of Wisconsin-Madison where he also received a M.A. in Anthropology. Jim also holds an M.A. in Anthropology from the University of South Carolina and a B.A. in Psychology from Marquette University.

During two years of ethnographic fieldwork (2005-07) at the Islamic school and “Heart Management” training complex of television preacher Abdullah Gymnastiar, Jim sought to understand how a new generation of popular preachers and Muslim “trainers” has garnered novel forms of psycho-religious authority within the market niche of Islamic self-help.

As a postdoctoral fellow at the Shorenstein Asia-Pacific Research Center, Jim will work on his book manuscript, Sufis and Self-help Gurus: Postcolonial Psychology, Religious Authority, and Muslim Subjectivity in Indonesia.

Under the aegis of the Forum on Contemporary Europe, Ambassador Jan Eliasson, former U.N. Special Envoy to Darfur, visited Stanford and FSI to offer a new model for global crisis management of a wide range of issues, from piracy to global poverty.   As the former president of the U.N. General Assembly, Eliasson called for concerted action by NATO, the European Union, the U.N., and other actors on pressing security and humanitarian issues.  Arguing that current security and humanitarian challenges are greater than at any time in recent memory, Eliasson urged that world powers, along with international institutions, seek new leadership from the Obama administration grounded in recognition of the global impact of regional crises. 

To make his case for seeing the global in the regional, Eliasson raised the specter of the escalating sea piracy off the coast of Somalia.  Pirates in that region launch from the shores of a failed state – a polity that has degenerated into rival war-lord militias after combined forces of U.N. and Western powers lost their appetite for engagement, and turned their attention elsewhere.  While much of the world is refocused on the wars in Iraq and Afghanistan, multinational corporations are increasingly subject to and pay out multi-million dollar ransoms for the release of ship crews and cargoes that include the world’s commercial arms shipments.  The piracy has grown beyond instances of local plunder, into crime that threatens one of the most heavily trafficked shipping lanes between western and emerging markets.  Merchant marine as well as naval fleets have been forced to change course, altering global transportation and security routes.  Most recently, Eliasson’s call for international leadership would seem to have been heeded by nations attending the international summit in Brussels on the piracy crisis.  At the summit, the E.U. foreign policy chief, the U.N. Secretary General, and U.S. officials joined with more than sixty countries – including Iraq – to pledge over $200 million in aid to the Somali government for security and development.  This international cooperation, and attention to root causes, would seem to be the first sign of the kind of vision that Ambassador Eliasson urges for new and more comprehensive response.

Ambassador Eliasson completed his depiction of the most effective international policy responses with a focus on the world problem of poverty.  Drawing on his years of experience in the international and Swedish diplomatic corps, Eliasson explained that in the most impoverished areas of the world, the most effective investment in international aid is that which funds the education of girls and young women.  Teach a girl essential education, and she herself, along with her family, and her community, benefits in manifold ways. Raising his glass, Eliasson noted that great numbers of peoples still do not have access to cheap and clean water – an essential provision for health and development.  Water, and access to its diminishing supply, must be understood by the world’s new leaders as the high stake behind multiple border wars. 

The Forum hosted Ambassador Eliasson at FSI and Stanford for two days of talks to reach multiple audiences.  At a Stanford Speakers Bureau event, Ambassador Eliasson addressed an overflow crowd of students and offered  insights into the crisis in Darfur.  The Forum welcomed the opportunity to bring Ambassador Eliasson, so recently from his mission in Darfur, to spur student interest in the role of international (U.N.) and regional (European Union and African Union) peace keeping operations.  During the same visit to Stanford, the Forum on Contemporary Europe hosted Kerstin Eliasson, Board Member of the European Commission Joint Research Center, and former Assistant Undersecretary of the Swedish Ministry of Education and Science, to speak on research reforms in the European higher education system.  Kerstin Eliasson’s public address was co-hosted with the Forum by the faculty seminar series of the Stanford Institute for Higher Education Research.  The visit by Ambassador Eliasson, and Kerstin Eliasson, was a highlight of spring 2009 research and public dissemination of the Program on Sweden, Scandinavia, and the Baltic Region at the Forum on Contemporary Europe.