This Spring quarter, while our seminar series took a break, Terry Winograd and Joshua Cohen taught a new course at the Hasso Plattner Institute of Design (the d.school): Designing Liberation Technologies.

During this class, small interdisciplinary teams focus on a term-long design project, taking advantage of the design process structures and methods that have been developed in the d.school. This year's course developed as a collaboration between Stanford, the University of Nairobi and Nokia Africa Research Center.  The focus area was finding ICT solutions to the healthcare needs of people living in Kibera slum outside Nairobi.

Under the guidance of Jussi Impiö at Nokia and the Computer Science faculty, 27 students from the University of Nairobi Computer Science department conducted need finding studies at a number of health-related sites, including clinics, hospitals, community health workers, community leaders, and government offices. They read background materials, made observations, and talked with a wide variety of stakeholders. Their reports became the basis of the Stanford teams' initial understanding of users and needs. Communication with the group in Nairobi was also maintained throughout the course, using a Facebook group to facilitate discussions, as well as several teleconference sessions.

Working in small teams, 20 Stanford students from a wide range of disciplines worked over 10 weeks to develop initial design concepts to respond to some of the needs that had been identified. Click on the title of each project to view their final presentations:

• mNote: an online archive for community health worker notes. This application empowers community health workers by preserving the flexibility and control they appreciate in their current paper notebooks, but adding digital knowledge management capabilities.
• M-MAJI ("mobile water"): an electronic information system that allows people to use their mobile phones to identify clean water sources in their community. The application seeks to decrease the time and money spent searching for water, improve water quality, and foster vendor accountability by providing a mechanism for user feedback.
• Babybank: a dedicated savings plan designed specifically for pregnant women in the slums of Nairobi. By leveraging a popular cell phone payment system, M-Pesa, the application aims to make savings easier, so that expecting mothers can afford the services that will keep themselves and their babies healthy.
• Mazanick: an application to provide support and advice to pregnant women via SMS, with the aim of helping motivate them to attend prenatal appointments.
• PillCheck (Kifaa cha Tenbe): a mobile application to help people in Kibera find information on the availability and pricing of malaria drugs quickly.
• PatientMap :a system to make the waiting process in clinics more transparent, and to increase patient trust in the medical system.

This summer, two follow up trips are planned, with Nairobi students due to spend several weeks at Stanford, while a number of students from the Stanford group will visit Nairobi to explore possibilities for developing their projects further. Building on the success and lessons learnt so far, the Designing Liberation Technologies course will be open to a new set of students next academic year. 

In early spring, historic health reform passes, extending insurance to millions of uninsured. Despite problems with workplace-based coverage, controversy over government subsidies for insurance premiums, and disparities across a large and diverse nation, dramatic shift to a single-payer system was seen as impractical.

Instead, reforms focus on expanding current social insurance programs as well as new initiatives to cover the uninsured, improve quality, and control spending. They provide a basic floor, subsidized for the poorest, but preserve consumer freedom to choose in health care. No government body dictates choice of doctor or hospital; investor-owned and private not-for-profits compete alongside government-run providers like community health centers and rural hospitals.

Left to be addressed in later phases are the difficult questions of how to slow the relentless pace of health care spending increases -- driven in part by technological change and population aging, but also perverse incentives embedded in fee-for-service payment and fragmented delivery. Pushed through despite multiple crises confronting the leadership, the final landmark health reform works in conjunction with measures enacted as part of the fiscal stimulus package to strengthen the healthcare system. Some provisions take effect immediately; others will take many years to unfold.

President Obama’s triumph on his top domestic priority? Actually, there were no votes along partisan lines, no controversy over abortion. I am describing health reform in China, which was announced almost exactly a year ago.

We do not hear much about the parallels in the US and Chinese social policy. But we cannot fully understand each other if we ignore these commonalities. We do not hear much about those who, in both societies, have been rendered destitute merely because they or a family member became sick or injured in a system with a social safety net full of gaping holes.

It will surprise many Americans to know that government financing as a share of total health spending was lower in socialist China over the last decade than in the United States. Now China has pledged about US$124 billion over 3 years to expand basic health insurance, strengthen public health and primary care, and reform public hospitals.

In China, the injustice of differential access to life-saving healthcare had sparked cases of social unrest. The April 2009 reform announcement was the culmination of years of post-SARS (2003) soul searching for a healthcare system befitting China’s dynamically transforming society. Special interests block change. (Sound familiar?) The CPC Central Committee and the State Council acknowledge that successful health reform will be “an arduous and long-term task”.  

If the US can pass sweeping health reform despite an unprecedented financial crisis, and China can envision universal health coverage for 1.3 billion while “getting old before getting rich,” then together we should be able to look past our many differences to focus on our common interests. Our two proud nations must work together to confront numerous challenges, such as upholding regional stability (e.g. on the Korean peninsula); redressing global economic imbalances (increasing health insurance can help spur China towards more domestic consumption); and investing in “green tech” for a warming planet and “grey tech” for an aging society.

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When searching for insights about how other countries deal with similar challenges, Americans often look to Europe and Canada. Rarer is the comparison to counterparts across the Pacific. Yet President Obama has clearly articulated the vision of the US as a Pacific Nation, and there are developments around the Pacific Rim that merit consideration in our debates.  

Australia pioneered cost-effectiveness in health care purchasing, while the US continues to debate whether cost should be part of comparative effectiveness research and policy decisions.

Both Japan and South Korea, like Germany, have enacted long term care insurance to smooth the transition to an aging society. Their experiences might be fruitful as we implement the first national government-run long-term care insurance program, a little-heralded component of the newly passed legislation (and a fitting legacy of Senator Edward Kennedy).

Japan and Singapore provide universal coverage to older populations than ours with health systems that, although surprisingly different from each other in terms of public financing and role of market forces, both ranked among the best in the world -- and far higher than the US -- in the World Health Organization’s ranking of health systems in the year 2000. Although one may quibble with the ranking, it is indisputable that Japan spends a much smaller share of GDP on healthcare than the US does, despite being one of the oldest and longest-lived societies in the history of the world and having (like the US) a fee-for-service payment system.

Japan and South Korea are also democracies, where health policies occasionally engender heated debates. In South Korea, physicians went on nationwide strike three times to oppose the separation of prescribing from dispensing. Although Japan’s incremental reforms rarely spur such drama, the passions aroused by end-of-life care – embodied in the bizarre “death panels” controversy in the US health reform debate of 2009 – has its counterpart in the bitter nickname for Japan’s separate insurance plan for the oldest old: “hurry-up-and-die” insurance.

Yet Japan, Singapore, and Hong Kong all offer health systems that provide reasonable risk protection and quality of care for populations older than ours, with a diverse range of government and market roles in financing and delivery, while spending far less per capita than the US.

No system has all the answers. But the US and our neighbors across the vast Pacific have a common interest in sharing what we’ve found that works for health reform. Despite divergence in our political and economic systems, we all value long, healthy lives for ourselves and our children -- and we’re united in health reforms that try to further that goal.

Malpractice liability, along with medical technology and payment system distortions, regularly figures among the most-cited reasons for escalating health-care spending in the United States. On the one hand, Harvard economist Amitabh Chandra conservatively estimates that upwards of $60 billion, or 3 percent of total health care costs ($1.8 trillion), is spent annually as a result of direct litigation and indirect defensive medicine costs. On the other hand, tort reform advocates place the figure at $200 billion by extrapolating, to the entire U.S. population, the results of research conducted by Stanford professor Dan Kessler and Mark McClellan. Their 1996 study shows that tort reforms reduced provider liability costs for Medicare heart patients by 5 to 9 percent.

At the heart of these debates is the following question. Does medical malpractice liability achieve its dual goal of compensating victims of medical injuries and deterring medical errors, or does it merely encourage wasteful defensive medicine without improving patient health? Despite considerable empirical research, there is little evidence that malpractice litigation deters medical negligence. The evidence is much stronger—though still hotly debated—that malpractice fears actually encourage physicians to engage in defensive medicine. My work at Shorenstein APARC explores whether malpractice pressures affect physician behavior, patient health, and health care costs in Asia. Studying physicians’ response to legal changes in Taiwan, I find that greater malpractice liability may, under certain circumstances, prompt physicians to perform more services without necessarily improving patient health.

In particular, I focus on how increased medical malpractice liability affects physicians in Taiwan who provide treatment to pregnant women. I have studied how a series of court rulings as well as an amendment to Taiwanese law between 1997 and 2004 impacted physicians’ test-ordering behavior and decisions to perform Caesarian sections. Traditionally, Taiwanese doctors are held accountable for medical malpractice under two bodies of law: tort law in the Civil Code, and criminal law for harm resulting from negligent acts in the course of professional operations. The latter, prosecutorial approach is rare among industrialized nations.

In January 1998, a Taipei District Court decision in favor of plaintiffs in a civil suit for damages sent shockwaves through the medical community. The district court judge disregarded the traditional tort requirement of proving the defendant’s negligence (or fault), and applied the “strict liability” doctrine of the Consumer Protection Law to impose liability on a medical provider without any showing of wrongdoing. The court decision—subsequently affirmed by the Taipei High Court on September 1, 1999 and by the Supreme Court on May 10, 2001—sparked resentment among medical professionals. Passions flared in heated debates between medical and legal scholars about whether medical services should be considered a covered “service” under the Consumer Protection Law. Economists and legal academics questioned whether the traditional justifications for imposing strict liability apply in the highly unpredictable practice of medicine, especially in obstetrics. The saga concluded in April 2004, when the legislature amended the Medical Law to require negligence or fault in medical malpractice cases.

My research considers the effect of these court rulings and legal amendments on physicians’ test-ordering behavior and their propensity to perform Caesarean sections. I identify two sources of variation in perceived risks of malpractice liability: (1) the differences between the level of exposure to malpractice risks due to the ownership structure and size of the physicians’ place of practice; and (2) the differences in perceived risks based on the physicians’ geographical location.

My results are consistent with the existence of defensive medicine. First, with respect to their propensity to increase laboratory tests and reduce Caesarean sections, physicians who own their clinics (“physician-owners”) in Taiwan reacted more strongly to the legal changes than did physicians who are salaried employees at larger hospitals (“nonowners”). Physician-owners’ behavior did not change, however, in discretionary expenditures that were not associated with defensive medicine. Second, physician-owners working in areas under the jurisdiction of the Taipei District Court reacted more strongly to legal change than did those practicing in Kaohsiung, Taiwan’s second largest city, at the opposite end of the island.

The negative connection between the likelihood of Caesarean deliveries and increased malpractice liability deserves special mention, since most published studies find a positive association between malpractice liability risks and Caesarean rates. However, economists Janet Currie and Bentley MacLeod at Columbia University suggest that reforms in which liability is closely aligned with defendant’s actual levels of care may produce the opposite effect. In the Taiwan context, increased medical malpractice liability accrues directly to the physician-owners. Since Caesarean sections are generally riskier than natural deliveries, it seems logical that higher tort liability in Taiwan may actually decrease the likelihood of deliveries by Caesarean sections. In this sense, my study confirms Currie and MacLeod’s predictions and empirical results.

My work contributes to our understanding of health law and policy in several concrete ways. First, I add support to the existence of defensive medicine, even in a non-Common Law jurisdiction. Since I focus on Taiwan—an environment that lacks malpractice insurance, in which physicians are either owners or employees at providers of varying sizes—my research isolates the pure effect of malpractice liability to a greater extent than do many current studies. Second, I show that interaction between the payment and legal systems may either enhance or mitigate the hypothetical pure effects of legal policies. In a fee-for-service system, physicians subject to higher malpractice risks appear much more willing to increase laboratory tests than to reduce profitable Caesarean sections. Third, my research indicates that, by altering physicians’ exposure to risks, different organizational forms and ownership structures of health care provision may affect defensive medicine at differing rates.

In sum, the practice of “defensive medicine” appears not to be a uniquely American phenomenon. Indeed, it may also play a role in health care cost escalations in Asia, especially under heightened physician liability regimes.

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Shorenstein APARC Dispatches are regular bulletins designed exclusively for our friends and supporters. Written by center faculty and scholars, Shorenstein APARC Dispatches deliver timely, succinct analysis on current events and trends in Asia, often discussing their potential implications for business.

In December 2009, the Asia Health Policy Program celebrates the first anniversary of the launch of the AHPP working paper series on health and demographic change in the Asia-Pacific. The series showcases research by AHPP’s own affiliated faculty, postdoctoral fellows, and visiting scholars, as well as selected works by other scholars from the region.

To date AHPP has released eleven research papers in the series, by authors from China, South Korea, Thailand, Taiwan, Pakistan, and the US, with more on the way from Japan and Vietnam. Topics range from “The Effect of Informal Caregiving on Labor Market Outcomes in South Korea” and “Comparing Public and Private Hospitals in China,” to “Pandemic Influenza and the Globalization of Public Health.”  The working papers are available at the Asia Health Policy website.

AHPP considers quality research papers from leading research universities and think tanks across the Asia-Pacific region for inclusion in the working paper series. If interested, please contact Karen Eggleston.

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.”

Clear evidence suggests the importance of health service provider payment incentives for achieving efficiency, equal access, and quality, including attention to primary, secondary, and tertiary prevention. “Pay for performance” may be on the cusp of significant expansion in Asia, and reform away from fee-for-service has been underway for several years in several economies. Yet despite the policy relevance, the evidence base for evaluating payment reforms in Asia is still very limited.

China in particular has been undertaking significant reforms to its health care system in both rural and urban areas. With the expansion of insurance coverage and need to resolve incentive problems like “supporting medical care through drug sales,” there is an urgent need for evaluating alternative ways of paying health service providers. Evidence from policy reforms in specific regions of China, as well as other economies of the Asia-Pacific, can provide valuable evidence to help inform policy decisions about how to align provider incentives with policy goals of quality care at reasonable cost.

To illuminate these questions, the Asia Health Policy Program and several collaborating institutions are planning to convene a conference on health care provider payment incentives on November 7-8, 2008 in Beijing. The conference will highlight and seek to distill “best-practice” lessons from rigorous and policy-relevant evaluations of recent reforms in China and elsewhere in the Asia Pacific.

The organizing committee – including health economists from Shorenstein APARC, Peking University, Tsinghua University, and Seoul National University – reviewed submissions in June 2008 and accepted sixteen. The conference papers cover payment issues in Korea, Japan, China, Taiwan, Thailand, Tajikistan, the Philippines, and the US, and the disciplines of economics, health services research/health policy, public health, medicine, and ethics. Topics include institutionalized informal payments; the impact of global budget policies on high-cost patients; public-private partnerships; public-sector physicians owning private pharmacies; evidence-informed case payment rates; payment and hospital quality; bonuses and physician satisfaction; physician prescription choice between brand-name and generic drugs; and differences in pharmaceutical utilization across insurance plans that pay providers differently (fee-for-service versus capitation).

Policymakers from China’s National Development and Reform Commission and Ministry of Health will also speak at the conference. Selected research papers will be published through the Shorenstein Asia-Pacific Research Center either in a special volume or in a special issue of an English-language health policy journal.

On May 1, 2003, President Bush publicly declared an end to combat in Iraq. Four years later, the conflict had only intensified, fueled by a violent insurgency, sectarian strife, and a resurgent al-Qaeda in Iraq. More than 3,000 American servicemen and servicewomen had been killed and 790,000 Iraqi civilians were dead. What had gone so disastrously wrong? Charles Ferguson, an MIT-trained political scientist, determined to find out.

Drawing on shockingly frank interviews with U.S. government officials, military personnel, diplomats, journalists and Iraqi leaders and citizens, his first film, No End in Sight: The American Occupation of Iraq, examines comprehensively how the Bush administration constructed the Iraq war and subsequent occupation. The film won the Special Jury Prize, documentary competition, at the 2007 Sundance Film Festival, as a “timely work that clearly illuminates the misguided policy decisions that have led to the catastrophic quagmire of the U.S. invasion and occupation of Iraq.”

“Overnight rendered unemployed and infuriated are 500,000 armed men,” one of many ill-advised moves that ignited resentment, desperation, and a still-raging insurgency.On May 23, the Freeman Spogli Institute hosted a special screening of the film, followed by a distinguished panel of experts. Among the film’s central themes was the failure to commit sufficient troops to maintain order, secure the borders, or protect government ministries, historic sites, or ammunition depots. The destruction of national treasures, depicted vividly, was heartbreaking.

Soon after one watershed—the toppling of Saddam Hussein and the defeat of the military—there was another watershed, characterized by widespread looting, lawlessness, and a growing feeling among Iraqis that Americans could not protect them. The film chronicles three especially fateful decisions: to halt the formation of an Iraqi interim government (as Iraqi opposition leaders felt they had been promised) and impose an American occupation instead; a wide-ranging campaign of de-Baathification—the purging of higher-level Baath Party officials who ran the civil service and even staffed many schools and hospitals; and the hasty decision to disband the Iraqi military and intelligence services.

Said Col. Paul Hughes (Ret.), “We could have used Iraqi units to clean up, build roads, and rebuild their country.” Instead, the military were told they were going to be out of work, leaving millions of Iraqis suddenly without support. The film recounts, “Overnight rendered unemployed and infuriated are 500,000 armed men,” one of many ill-advised moves that ignited resentment, desperation, and a still-raging insurgency. Ambassador Barbara Bodine recalled, “When we were first starting the reconstruction, we used to joke that there were 500 ways to do it wrong and two to three ways to do it right. What we didn’t understand is that we were going to go through all 500.”

The riveting documentary was followed by a lively panel discussion among Stanford political scientists, historians, and experts on the war in Iraq. Moderating the panel was Larry Diamond, Hoover Institution senior fellow and coordinator of the Democracy Program at FSI’s Center on Democracy, Development, and the Rule of Law, who called the war “one of the greatest policy tragedies in American history.” Diamond served as an advisor to the Coalition Provisional Authority and wrote a book about the experience, titled %publication1%.

Writer and director Charles Ferguson noted that the shooting to inclusion ratio was 100:1 and said he will release more than 100 hours of film and 3,000 pages of transcripts as a public archive for the historical record. Col. Christopher Gibson, a 2006–07 National Security Affairs fellow at the Hoover Institution, who served in both the Gulf and Iraq wars, observed in his opening remarks, “For this to work in a republic, soldiers have to be there to take the tough questions.” Drawing on his experience during two tours of duty supervising national elections, he underscored the Iraqi people’s desire for freedom and “their deep and sincere desire for democracy.”

David Kennedy, Stanford’s Donald J. McLachlan Professor of History and a 2000 Pulitzer-Prize winner, commended the film for making an important contribution to the historical record. Future historians will have to consider a number of major questions, Kennedy said, including these two: “What was the deep strategic rationale for this war and how was that rationale related to the declared reasons for going to war,” namely the now discredited claims that the regime possessed weapons of mass destruction and had verifiable links to al-Qaeda.

In a lively discussion among panelists, it was agreed that the calculus was complex and many factors converged—an Iraq believed both to be a menace and weakened by many years of sanctions under a brutal leader; a son wishing to redress the policy of the father and avenge a near assassination attempt. But the ideological factor was significant—the belief that we had the ability to effect political change in a country that would transform the character of an entire region.

The debate addressed other critical issues—could the outcome have been better had policy been better informed and more skillfully implemented? Could anything change the outcome now? Said Diamond, the only thing that could materially change the outcome now “would be to combine a military surge with a diplomatic surge,” involving the United Nations, the European Union, the United States, and a cooperative Iraqi leadership. The United States should let Iraq know we’ll leave, he stated, if Iraqi leaders fail to undertake the requisite political reconciliation and compromise. As the lively debate and discussion with more than 300 audience members ended, there was little doubt that all these questions would be debated for some time to come.