Outcome-based pricing for new pharmaceuticals via rebates

The price of new brand-name prescription drugs has been rising fast in the United States. For example, the Amgen cholesterol drug Repatha had an initial list price of $14,523 per year. Patients, even with insurance coverage, must pay out of pocket a significant portion of this price. The treatment might not be successful, and this possibility reduces risk-sensitive patients’ incentives to purchase the drug. The high price together with the chance of negative treatment outcomes may lead payers to deny coverage for the drug. Outcome-based pricing has been proposed as a way to reallocate the risks and improve both payer resource allocation and patient access to drugs. According to an outcome-based rebate contract between Amgen and Harvard Pilgrim Healthcare, if a patient on Repatha suffers a heart attack or a stroke, both patient and insurer are refunded the cost of the drug. We use a stylized model to analyze the effect of outcome-based pricing via rebates. Our model captures the interaction between heterogenous, price-sensitive, risk-sensitive patients who decide whether to purchase the drug; a payer deciding whether to provide coverage for the drug; and a price-setting pharmaceutical firm seeking to maximize expected profits. We find that, in many cases, a pharmaceutical firm and payer cannot simultaneously benefit from outcome-based pricing, and who will benefit is determined by the probability of treatment success. Outcome-based pricing thus appears unlikely to solve the issues of high drug prices and high payer expenditures. However, supplementing outcome-based pricing with a transfer payment from firm to payer can make payer and firm (but not necessarily the patients) better off than under uniform pricing when the drug has a low chance of success

Why markdown as a pricing modality?

Markdown as a pricing modality is ubiquitous in retail whereas everyday low price (EDLP) remains relatively rare (despite its several advantages, such as simplicity). This paper explores whether and why retailers can use either of these pricing modalities as an effective defense against a competitor entering the market with the alternative pricing modality. Various studies have shown that consumers are strategic and heterogeneous in their valuation of a product. Consumers are also shown to be regret-prone, and anticipation of regret affects their purchase decisions. Consumers experience availability regret when they are unable to purchase products due to stockouts and high-price regret when they miss an opportunity to purchase products at low prices. Considering such factors, consumers decide whether, when, and from which retailer to purchase the product. In such a market environment, we find that the possible entry of a competitor should deter retailers from using the EDLP pricing modality but not markdown. We also identify a new reason for the markdown retailer to ration stock (in addition to the reason for discouraging consumers to wait for the markdown). In particular, we show that the markdown retailer can use inventory rationing to preclude a cutthroat competition and bankruptcy after the entry of an EDLP retailer. We also quantify how consumer regret affects both retailers' decisions and resulting profits. In particular, in a competitive market, the EDLP retailer cannot simply disregard consumers' availability and high-price regret (even when it stocks ample inventory and does not discount prices). We show that high-price regret and availability regret have complementary effects on the markdown retailer's rationing strategy and the EDLP retailer's price decision. Finally, using a proprietary price data set from a large department store, we show that ignoring regret factors causes the markdown retailer to leave up to 20% of its profits on the table. In addition, in a competitive market, the markdown retailer rations too aggressively when regret is ignored and, as a result, leaves some of the forgone profit to its competitor-the EDLP retailer. The retail industry is often characterized by its slim profit margins. In such an environment, the aforementioned results also suggest that retailers should seriously consider investing in developing the capacity to estimate and quantify the role of regret in consumers' purchase decisions

Bundled Payment vs. Fee-for-Service: Impact of Payment Scheme on Performance

Healthcare reimbursements in the United States have been traditionally based on a fee-for-service (FFS) scheme, providing incentives for high volume of care, rather than efficient care. The new healthcare legislation tests new payment models that remove such incentives, such as the bundled payment (BP) system. We consider a population of patients (beneficiaries). The provider may reject patients based on the patient’s cost profile and selects the treatment intensity based on a risk-averse utility function. Treatment may result in success or failure, where failure means that unforeseen complications require further care. Our interest is in analyzing the effect of different payment schemes on outcomes such as the presence and extent of patient selection, the treatment intensity, the provider’s utility and financial risk, and the total system payoff. Our results confirm that FFS provides incentives for excessive treatment intensity and results in suboptimal system payoff. We show that BP could lead to suboptimal patient selection and treatment levels that may be lower or higher than desirable for the system, with a high level of financial risk for the provider. We also find that the performance of BP is extremely sensitive to the bundled payment value and to the provider’s risk aversion. The performance of both BP and FFS degrades when the provider becomes more risk averse. We design two payment systems, hybrid payment and stop-loss mechanisms, that alleviate the shortcomings of FFS and BP and may induce system optimum decisions in a complementary manner. This paper was accepted by Serguei Netessine, operations management

"One Muslim is Enough!" - Evidence from a Field Experiment in France

Anti-Muslim prejudice is widespread in Western countries. Yet, Muslims are expected to constitute a growing share of the total population in Western countries over the next decades. This paper predicts that this demographic trend will increase anti-Muslim prejudice. Relying on experimental games and a formal model, we show that the generosity of rooted French toward Muslims is significantly decreased with the increase of Muslims in their midst, and demonstrate that these results are driven by the activation of rooted French taste-based discrimination against Muslims when Muslim numbers increase. Our findings call for solutions to anti-Muslim prejudice in the West.discrimination, Islam, France, group salience, experimental economics, economic theory, group threat theory, intergroup contact theory

Identifying barriers to Muslim integration in France

Is there a Muslim disadvantage in economic integration for secondgeneration immigrants to Europe? Previous research has failed to isolate the effect that religion may have on an immigrant family's labor market opportunities because other factors, such as country of origin or race, confound the result. This paper uses a correspondence test in the French labor market to identify and measure this religious effect. The results confirm that in the French labor market, antiMuslim discrimination exists: a Muslim candidate is 2.5 times less likely to receive a job interview callback than is his or her Christian counterpart. A high-n survey reveals, consistent with expectations from the correspondence test, that second-generation Muslim households in France have lower income compared with matched Christian households. The paper thereby contributes to both substantive debates on the Muslim experience in Europe and methodological debates on how to measure discrimination. Following the National Academy of Sciences' 2001 recommendations on combining a variety of methodologies and applying them to real-world situations, this research identifies, measures, and infers consequences of discrimination based on religious affiliation, controlling for potentially confounding factors, such as race and country of origin.Muslim immigrants ; Integration ; France

Women, Muslim immigrants, and economic integration in France

Muslim immigrants to Europe display distinctive attitudes toward women in a wide range of survey data. This study investigates whether this translates into distinctive behavior. Relying on a dictator game in France and an identification strategy that isolates the effect of religion from typical confounds such as race, we compare the donations of matched Christian and Muslim immigrants and rooted French to in-group and out-group men vs. women. Our results indicate that Muslim immigrant participants deviate from Christian immigrant and rooted French partici pants in their behavior toward women: while the latter favor women over men, Muslim immigrants favor men over women

Gender, economic development and Islam: A perspective from France

Muslims do less well on the French labor market than their non Muslim counterparts. One explanation for this relative failure can be characterized by the following syllogism: (1) the empowerment of women is a sine qua non for economic progress; (2) in-group norms among Muslims do not empower women; and hence (3) Muslim communities will underperform economically relative to non-Muslim communities. This paper, relying on a unique identification strategy that isolates religion from national origin and ethnicity, and on experimental as well as survey evidence collected in France, puts this syllogism to a test. Our data show that Muslim and Christian gender norms are as postulated. However, the correlations between Muslim vs. Christian immigrants and the channels purported to link in-group gender norms to economic progress are weak and inconsistent. Speculations are offered on the intervening variables that mitigate the effect of Muslim gender norms on economic performance

Muslims in France: identifying a discriminatory equilibrium

We analyze the assimilation patterns of Muslim immigrants in Western countries with a unique identification strategy. Survey and experimental data collected in France in 2009 suggest that Muslims and rooted French are locked in a sub-optimal equilib- rium whereby (i) rooted French exhibit taste-based discrimination against those they are able to identify as Muslims and (ii) Muslims perceive French institutions as system- atically discriminatory against them. This equilibrium is sustained because Muslims, perceiving discrimination as institutionalized, are reluctant to assimilate and rooted French, who are able to identify Muslims as such due to their lower assimilation, reveal their distaste for Muslims

DEMOS-2:scalable E2E verifiable elections without random oracles

Recently, Kiayias, Zacharias and Zhang-proposed a new E2E verifiable e-voting system called 'DEMOS' that for the first time provides E2E verifiability without relying on external sources of randomness or the random oracle model; the main advantage of such system is in the fact that election auditors need only the election transcript and the feedback from the voters to pronounce the election process unequivocally valid. Unfortunately, DEMOS comes with a huge performance and storage penalty for the election authority (EA) compared to other e-voting systems such as Helios. The main reason is that due to the way the EA forms the proof of the tally result, it is required to {\em precompute} a number of ciphertexts for each voter and each possible choice of the voter. This approach clearly does not scale to elections that have a complex ballot and voters have an exponential number of ways to vote in the number of candidates. The performance penalty on the EA appears to be intrinsic to the approach: voters cannot compute an enciphered ballot themselves because there seems to be no way for them to prove that it is a valid ciphertext. In contrast to the above, in this work, we construct a new e-voting system that retains the strong E2E characteristics of DEMOS (but against computational adversaries) while completely eliminating the performance and storage penalty of the EA. We achieve this via a new cryptographic construction that has the EA produce and prove, using voters' coins, the security of a common reference string (CRS) that voters subsequently can use to affix non-interactive zero-knowledge (NIZK) proofs to their ciphertexts. The EA itself uses the CRS to prove via a NIZK the tally correctness at the end. Our construction has similar performance to Helios and is practical. The privacy of our construction relies on the SXDH assumption over bilinear groups via complexity leveraging

Hubungan Jasa Pelayanan Kesehatan dengan Kepuasan Pasien di Puskesmas Masaran I Sragen

Puskesmas sebagai salah satu pelayanan kesehatan masyarakat mempunyai tugas pokok memberikan pembinaan kesehatan masyarakat dan pelayanan kesehatan dasar. Dalam pratiknya pemberianpelayanan kesehatan seringkali mendapatkan penilaiandari pasien terhadap kinerja pelayanan kesehatan yang diberikan. Hasil studi pendahuluan diperoleh data bahwa Hasil survey oleh peneliti dari 5 responden, 4 diantaranya mereka mengatakan tidak puas dikarenakan menunggu yang terlalu lama mengantri diloket dan petugas kesehatan (perawat, bidan dan dokter) dalam pelayanannya juga menunggu terlalu lama. Tujauan penelitian adalah untuk mengetahui hubungan jasa pelayanan kesehatan yang diberikan oleh staf puskesmas dengan kepuasan pasien Di Puskesmas Masaran I Sragen. Penelitian dengan deskriptif metode Korelasi. Data diambil dengan memberikan kuesioner kepada 99 responden yang menggunakan kesehatan jasa pelayanan kesehatan dan kuesioner kepuasan. Pengambilan sampel menggunakan Consecutive Sampling. Data penelitian dianalisis dengan dengan menggunakan uji fiser exact . Hasil uji fiser exact menunjukkan. 62 responden (62,4%) memiliki penilaian terhadap petugas kesehatan baik dokter, perawat atau petugas instalasi farmasi adalah kategori tidak baik. 72 responden (72,3%) merasa tidak puas atas jasa pelayanan kesehatan yang diterimanya. Hasil uji statistik menunjukkan nilai =7,597 dengan nilai p = 0,006 yang artinya terdapat hubungan antara jasa pelayanan kesehatan dengan kepuasan pasien di Puskesmas Masaran I Sragen