Thomas Getzen

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Thomas E. Getzen, Ph.D., is emeritus Professor of Risk, Insurance and Health Management at the Fox School of Business, Temple, University, and has been visiting professor at the Woodrow Wilson School of Public Policy at Princeton University, the Wharton School of the University of Pennsylvania, the University of Toronto, and the Centre for Health Economics at the University of York. Founder and former Executive Director of the International Health Economics Association, he has collaborated with scholars from many countries and his textbook Health Economics: Fundamentals and Flow of Funds (Wiley

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Papers by Thomas Getzen

Growth of Global Health Spending Share in Low and Middle Income Countries

Frontiers in Pharmacology, 2016

HISTORICAL PATTERNS OF GLOBAL HEALTH SPENDING Over the past century medical technology has provid... more HISTORICAL PATTERNS OF GLOBAL HEALTH SPENDING Over the past century medical technology has provided bold gains extending human longevity for almost several decades in most welfare economies worldwide. These public health victories came at the cost of huge increase in health spending. The USA, the largest health care market where total health expenditure (THE) grew from 4% of GDP to 15%, may serve as an example of such changes. The secular trend consisting of rising wages and incomes constitutes major factor in the rising resources dedicated to the medical care. Business cycle booms and recessions affected health care spending slowly and with a significant lag. In this sense health expenditures should not be compared to short term, quarterly or yearly fluctuations in Gross Domestic Product (GDP) but correlates well to "smoothed" income over the previous 3-6 years (Getzen, 1990). Growth of health expenditure is driven by several underlying issues: population birth rates, per-capita income, inflation and so called "excess growth" that is mostly explained by medical technology advances or increased patient demand for services. This "excess growth" is responsible for raising the share of health care in national GDP, and thus challenging fiscal sustainability. Evidence of excess growth is seen in health insurance premiums that persistently rise faster than tax revenues or wages. Isolated excess cost growth was the key underlying reason for the surmountable surge in health care costs visible in the United States since the late 1950s. Unlike the contemporary post WWII era, previous historical records testify of stable medical costs of about 4% of GDP from 1929 to the late 1950s. U.S. Census records of employment in clinical medicine and published consumer expenditure evidence from 1850-1950 show that these costs were mostly keeping pace with wages. If they were slightly exceeding wages it was only about 0.5% annually thus it took more than a century for them to double, much slower than the quadrupling from 1960 to 2000 (Getzen, 2000). Major causes of such a sudden rise in health expenditures were huge economic development, distinctively extended longevity, control of contagious diseases, rising availability of income used to fund research in medicine, effective financing instruments, and ultimately significant discoveries in medical technologies that supported public willingness for further investment into potential novel biological drugs, implants, robotic surgery, radiation therapy, organ transplants, and other wonder technologies (Getzen, 2014). With several decades delay, due to dissemination of knowledge and improved societal welfare across the globe, similar developments began at the far smaller scale in a large number of low and middle income world economies. Among 160 such nations in the beginning of 1990s long term trends have revealed 16 countries which made greater investments in health care and its core outcomes than most comparable nations. These countries were described by Goldman-Sachs as the world's leading emerging markets. They are listed under the acronyms BRICS

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The Hungarian Care Managing Organization Pilot Program

by Thomas Getzen and Csaba Dózsa

Value in Health Regional Issues, 2015

The aim of this article was to provide a description of the Hungarian care managing organization ... more The aim of this article was to provide a description of the Hungarian care managing organization (CMO) pilot program and its environment, incentive structure, and preliminary outcomes. The need to change the behavior of doctors to increase the effectiveness and cost-effectiveness of the system was the key rationale for the Hungarian CMO pilot program. After an application process, nine CMOs were entitled to enter into the system in July 1999. By 2006, there were 14 CMOs covering 2.1 million people. The Hungarian CMO program tried to combine the advantages of both the US managed care programs and the UK general practitioner fundholding system, within the constraints and opportunities of a Central-European country committed to a single-payer health insurance system. The revenue of CMOs derived from a risk-adjusted capitation. The capitation formula was weighted only by age and sex. The expenditures of the CMOs included all the health expenditures on their patients that occurred in any part of the health care system. The average savings rate for all CMOs for the fiscal years 1999 to 2007 was 4.94%. The highest rates of savings were realized in chronic and acute inpatient care and medical devices. The pilot was discontinued in 2008 without a comprehensive evaluation of the experience. We can conclude that this pilot had a significant contribution to the modernization of the Hungarian health care system.

On the money: making forecasts what they should be

Healthcare financial management : journal of the Healthcare Financial Management Association, 2005

A forecast is an extrapolation from data describing what has happened in the past. Most healthcar... more A forecast is an extrapolation from data describing what has happened in the past. Most healthcare organizations can perform all of the forecasting they require on a spread-sheet without use of special software. To ensure objectivity, managers should create the forecasts, and executives should evaluate them.

The Growth of Health Spending in the USA: 1776 to 2026

SSRN Electronic Journal

This review utilizes a number of historical and contemporary sources to trace the growth of natio... more This review utilizes a number of historical and contemporary sources to trace the growth of national health expenditures in the United States from 1776 to 2026, supporting four empirical generalizations: 1) Expenditures follow a typical S-shaped exponential growth curve; a long slow rise followed by a period of rapid increase that eventually moderates and stabilizes. 2) There are lags between macroeconomic fluctuations and corresponding changes in health expenditure. Examination of annual data can estimate business cycle lags on the order of 3 to 6 years with confidence. There may also be low-frequency lags over multiple decades that cannot yet be clearly delineated with the available data. 3) The health share of GDP remained relative stable from 1930-1955, rising only slightly despite major advances in technology, organization and financing. 4) Peak rates of growth occurred during the decade 1960-1970 as the modern national health system took shape. This surge in spending was fostered by large public investments in workforce training, buildings, equipment and research that began prior to the implementation of Medicare and Medicaid. 5) Growth was significantly more rapid from 1975-1995 than from 1995-2015 for reasons that are not fully clear. Modern medical care in 2015 is still recognizably close in form to the 1970 version, much more so than medical practice in 1970 was to that in 1925 or even in 1945. Highly organized and regulated, with academic medical centers at the core, there is "almost" universal insurance coverage for more than 80% of the population that subsidizes a safety net for the remainder. This patchwork of public and private insurance has cracked and frayed as the health share of GDP expanded toward 20% of GDP making the current system appear unsustainable and portending major revisions within the next twenty years. Issues regarding measurement of national health expenditures, market definition, demographic effects, temporal dynamics, and spending decomposition are discussed, with appendices providing more detail on methods and data sources.

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The Hungarian Care Managing Organization Pilot Program

Value in Health Regional Issues, 2015

U.S. health service employment: A response

Health Economics, 1995

Are the Correct Economic Factors Influencing Point-of-Care Testing?

Point of Care, 2002

Dr. Boone is at the Centers for Disease Control, Atlanta, Georgia. Dr. Hay is at the Department o... more

The coming physician shortage

Health Affairs, 2002

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Two Hundred Years of Health and Medical Care: The Importance of Medical Care for Life Expectancy Gains

At least one co-author has disclosed a financial relationship of potential relevance for this res... more At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nber.org/papers/w25330.ack NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Measuring and Forecasting Global Health Expenditures

(A 3-Volume Set), 2016

Utilization of Medical Care by College Students

Journal of the American College Health Association, 1977

EJ166837 - Utilization of Medical Care by College Students.

Health economics : fundamentals and flow of funds

... 7.7 PRACTICE VARIATIONS. 7.8 INSURANCE, PRICE COMPETITION, AND THE STRUCTURE OF MEDICAL MARKE... more

Forecasting Health Expenditures: Short, Medium and Long (Long) Term

Journal of Health Care Finance, Feb 1, 2000

As the forecasting perspective changes from short to medium to long run, the appropriate measure ... more As the forecasting perspective changes from short to medium to long run, the appropriate measure of health spending and the choice of which variables to hold constant and which to include changes. In the short run, current dollar spending is the best unit and the primary factors affecting spending are contracts (insurance, labor) and inflation. In the medium run, real per capita health expenditures are a better measure and prior growth of income is the primary factor. In the long run, the percentage of gross domestic product is the best measure and the structure of the health system and operation of budget constraints become the most important determinants. Accuracy of +/- 1-2 percent per year is obtainable. A major issue is whether the recent moderation in the rate of growth of spending is a pause or a turning point.

Accuracy of Long-Range Actuarial Projections of Health Care Costs

North American Actuarial Journal, 2016

Hazardous immorality: strategic externalization of risk and credit pricing

The Journal of Risk Finance, 2012

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Public Health Security and Forecasting Economic Trends

Procedia - Social and Behavioral Sciences, 2010

The company you keep: spreading effects of financial fraud on investor trust

Journal of health care finance, 2007

Investor trust is valuable to health care organizations. Without it, they may face higher capital... more Investor trust is valuable to health care organizations. Without it, they may face higher capital costs. This study explores recent cases of fraud and the appearance of impropriety by health care organizations, focusing on the manners in which trust was violated, the systems that allowed those violations, and the effects on financial markets. Increases in the incidence and scale of such transgressions may be harbingers of worse times ahead. This article examines how recent events have affected the cost of capital, and what health care organizations can do to avoid being judged by the company they keep.

On the money: making forecasts what they should be

Healthcare financial management : journal of the Healthcare Financial Management Association, 2005

Bariatric surgery and the financial reimbursement cycle

Journal of health care finance, 2005

Financial reimbursement for new health care services tends to progress through a predictable cycl... more Financial reimbursement for new health care services tends to progress through a predictable cycle. Initially, requests for payment are often honored in full based on the assumption that generous reimbursement is necessary to bring about an expansion of supply, and that pioneering providers have incurred losses while the technology was developed and disseminated. As total third-party payments escalate, concerns regarding the relationship between costs and price are pushed to the fore. Allegations of profiteering, overuse, and abuse spread. These concerns often lead to a set of externally imposed restrictions on payment, with limits placed first on prices, and then usually on quantities and/or aggregate totals as well. In this article, we examine how one new technology, bariatric surgery, is progressing through the reimbursement cycle. Key words: bariatric surgery, obesity, reimbursement.