The Effect of Risk Beliefs on Property Values: A Case Study of a Hazardous Waste Site1

Health risk beliefs of homeowners near a landfill site were assessed in a survey and compared to expert judgments of the health risks of living near the site. A bimodal distribution of health risk beliefs suggested sharp disagreement between the experts and at least some of the residents. Correlates of high risk beliefs included perception of odor from the site, exposure to media coverage of the problem, having children living at home, age (younger respondents more concerned), and gender (females more concerned). An aggregated neighborhood health risk belief predicted reductions in home prices even after controlling for home physical characteristics, such as size and other disamenities such as proximity to a freeway. In the 4100 homes near the site, the estimated depression in property values was estimated to total about $40.2 million before the site was closed and to be about $19.7 million after closure. Implications of these results for community conflict and for benefit-cost analysis of hazard site remediation are discussed.     

Setup Time Reduction for Electronics Assembly: Combining Simple (SMED) and IT‐Based Methods

As much as 50% of effective capacity can be lost to setups in printed circuit board assembly. Shigeo Shingo showed that radical reductions in setup times are possible in metal fabrication using an approach he called “Single Minute Exchange of Dies” (SMED). We applied SMED to setups of high speed circuit board assembly tools. Its key concepts were valid in this very different industry, but while SMED typically emphasizes process simplification, we had to add modern information technology tools including wireless terminals, barcodes, and a relational database. These tools shield operators from the inherent complexity of managing thousands of unique parts and feeders. The economic value of setup reduction is rarely calculated. We estimate a reduction of key setup times by more than 80%, and direct benefits of $1.8 million per year. Total cost of the changes was approximately $350,000.     

The inverse 1-maxian problem with edge length modification

We consider the problem of modifying the lengths of the edges of a graph at minimum cost such that a prespecified vertex becomes a 1-maxian with respect to the new edge lengths. The inverse 1-maxian problem with edge length modification is shown to be strongly -hard and remains weakly -hard even on series-parallel graphs. Moreover, a transformation of the inverse 1-maxian problem with edge length modification on a tree to a minimum cost circulation problem is given which solves the original problem in . This research has been supported by the Austrian Science Fund (FWF) Project P18918-N18.     

成本推动、需求拉动——什么推动了中国房价上涨?

本文以我国房价上涨的成因为切入点,通过构建房地产生产者利润最大化和消费者效用最大化的局部均衡模型,并利用我国2002-2011年的分省面板数据分解出成本、需求和非市场因素在不同时间段和不同地区对我国房地产价格的拉动程度,揭示出我国房地产价格上涨的原因。研究发现,在我国"房价较快增长地区",具有明显的需求拉动型特征,且市场预期因素明显;在我国部分"房价较慢增长地区",房价上涨的成本推动特征明显;金融危机前,我国房价属于典型的成本推动型价格上涨;而后金融危机时期,则呈现出需求推动型特征。因此,在"房价较快增长地区",需要从抑制过剩需求、降低投机欲望、稳定市场预期等入手来实现房价调控的效果;而在"房价较慢增长地区",则应从加大土地供给、降低土地成本入手,抑制房价上涨的潜在可能。     

Improve clinical processes in three meetings

Many health care organizations have developed methodologies to improve their processes of care. Most have outputs, such as clinical paths and/or algorithms, that require dozens of meetings over many months to design. Morton Plant Health System has taken a "SWAT team" approach and created a multi-hospital, multi-disciplinary team that develops recommendations and process changes after only three meetings of the entire team over two to three months. The organization has been highly successful, with process changes resulting in improve outcomes and savings in charges (1995 compared to 1994) of more than $22 million. What was the evolution of this process, what is the "SWAT" team approach and how does it work, and why has Morton Plant Health System been so successful in its efforts?     

Service and Price Competition When Customers Are Naive

We consider a system of two service providers each with a separate queue. Customers choose one queue to join upon arrival and can switch between queues in real time before entering service to maximize their spot utility, which is a function of price and queue length. We characterize the steady‐state distribution for queue lengths, and then investigate a two‐stage game in which the two service providers first simultaneously select service rates and then simultaneously charge prices. Our results indicate that neither service provider will have both a faster service and a lower price than its competitor. When price plays a less significant role in customers’ service selection relative to queue length or when the two service providers incur comparable costs for building capacities, they will not engage in price competition. When price plays a significant role and the capacity costs at the service providers sufficiently differ, they will adopt substitutable competition instruments: the lower cost service provider will build a faster service and the higher cost service provider will charge a lower price. Comparing our results to those in the existing literature, we find that the service providers invest in lower service rates, engage in less intense price competition, and earn higher profits, while customers wait in line longer when they are unable to infer service rates and are naive in service selection than when they can infer service rates to make sophisticated choices. The customers’ jockeying behavior further lowers the service providers’ capacity investment and lengthens the customers’ duration of stay.     

Management of medically fragile infants and children

Medically fragile infants and children present a host of challenges. The neonatal intensive care unit (NICU) is initially the mainstay of care for these infants, but it does not meet the critical developmental interactive needs of the child and parents to ensure positive psychosocial bonding. The care of these infants is further complicated by high daily costs (ranging from $1,000 to $2,500 per neonatal intensive care bed day) and lengthy, expensive inpatient stays (typically ranging from one week to five months or more). FHP Utah, a managed care organization, met these challenges through an innovative case management-oriented home care program called "Welcome Home." The program has produced a major impact on the quality and the cost of care for medically fragile infants. This article summarizes the first year's experience in implementing and operating the program.     

Cost sharing and strategyproof mechanisms for set cover games

We develop for set cover games several general cost-sharing methods that are approximately budget-balanced, in the core, and/or group-strategyproof. We first study the cost sharing for a single set cover game, which does not have a budget-balanced mechanism in the core. We show that there is no cost allocation method that can always recover more than $\frac{1}{\ln n}$ of the total cost and in the core. Here n is the number of all players to be served. We give a cost allocation method that always recovers $\frac{1}{\ln d_{\mathit{max}}}$ of the total cost, where d _max is the maximum size of all sets. We then study the cost allocation scheme for all induced subgames. It is known that no cost sharing scheme can always recover more than $\frac{1}{n}$ of the total cost for every subset of players. We give an efficient cost sharing scheme that always recovers at least $\frac{1}{2n}$ of the total cost for every subset of players and furthermore, our scheme is cross-monotone. When the elements to be covered are selfish agents with privately known valuations, we present a strategyproof charging mechanism, under the assumption that all sets are simple sets; further, the total cost of the set cover is no more than ln?d _max times that of an optimal solution. When the sets are selfish agents with privately known costs, we present a strategyproof payment mechanism to them. We also show how to fairly share the payments to all sets among the elements.     

Home surgical recovery program proves value

The evidence is overwhelming that sharp reductions in health care costs can be achieved by reducing or eliminating reliance on expensive hospital care. In surgery, this is not always possible. However, significant savings can be achieved through reducing the length of time that a surgery patient must spend in the hospital. In outpatient surgery, the hospital stay is reduced to a single day. In this article, the authors describe a home surgical recovery program that has had great success in reducing hospital stays for even more complicated surgical procedures, frequently matching the achievements of outpatient surgery programs.     

A computerized financial planning model for a health maintenance organization

The time and resource costs needed to plan and start a prepaid medical program or health maintenance organization (HMO) are extensive. It can take up to 3 years to bring one on line and another 3 to 4 years to reach financial stability. Depending on the type of prepaid medical plan designed, the cost can reach $6 to $8 million before breakeven occurs. Because the financial stakes are so high, a systematic and sound business approach must be taken to find that one ‘best’ design that will survive in the market place. Thousands of hours are required to study all of the possible HMO design configurations. This paper describes how a corporation constructed a computerized financial planning model to simulate the financial behavior of a prepaid medical program with different organizational formats, operational policies and pricing and compensation schemes in varying market, economic and cost environments. Model development and application was a corporate affair. The computerized model provided a special design team with the capability to evaluate the economic impact of many different designs by asking ‘what if’ questions dealing with several key design and operating variables concerning different health benefit options, service utilization rates, staffing patterns, inflation rates and price and premium schedules. Thousands of hours of design time were saved and the corporation was able to find the ‘best’ possible design in a reasonable time and at a reasonable cost.     

MRO inventory reduction—challenges and management: a case study of the Tennessee Valley Authority

Emphasis on maintenance, repair, and operations inventory (or MRO inventory) can lead to improved inventory control, reduced operational costs, enhanced productivity, and increased cost accounting accuracy. To review the benefits of MRO inventory reduction, as well as highlight the management challenges associated with the process, a case study of the Tennessee Valley Authority (TVA) is presented. TVA is a not-for-profit electric power generation entity. TVA standardised inventory policies and procedures. Their comprehensive five-year plan included employee training, changes in organisational structure and strategy, reduced MRO inventories and the establishment of new growth drivers. Net inventory reductions of $47 million were realised. Suggestions for future MRO inventory reductions as well as replication of the management involvement and improvement process in other organisations are included.     

Residential Building Codes,Affordability, and Health Protection: A Risk-Tradeoff Approach

Residential building codes intended to promote health and safety may produce unintended countervailing risks by adding to the cost of construction. Higher construction costs increase the price of new homes and may increase health and safety risks through income and stock effects. The income effect arises because households that purchase a new home have less income remaining for spending on other goods that contribute to health and safety. The stock effect arises because suppression of new-home construction leads to slower replacement of less safe housing units. These countervailing risks are not presently considered in code debates. We demonstrate the feasibility of estimating the approximate magnitude of countervailing risks by combining the income effect with three relatively well understood and significant home-health risks. We estimate that a code change that increases the nationwide cost of constructing and maintaining homes by $150 (0.1% of the average cost to build a single-family home) would induce offsetting risks yielding between 2 and 60 premature fatalities or, including morbidity effects, between 20 and 800 lost quality-adjusted life years (both discounted at 3%) each year the code provision remains in effect. To provide a net health benefit, the code change would need to reduce risk by at least this amount. Future research should refine these estimates, incorporate quantitative uncertainty analysis, and apply a full risk-tradeoff approach to real-world case studies of proposed code changes.     

Prices,Markups, and Trade Reform

This paper examines how prices, markups, and marginal costs respond to trade liberalization. We develop a framework to estimate markups from production data with multi‐product firms. This approach does not require assumptions on the market structure or demand curves faced by firms, nor assumptions on how firms allocate their inputs across products. We exploit quantity and price information to disentangle markups from quantity‐based productivity, and then compute marginal costs by dividing observed prices by the estimated markups. We use India's trade liberalization episode to examine how firms adjust these performance measures. Not surprisingly, we find that trade liberalization lowers factory‐gate prices and that output tariff declines have the expected pro‐competitive effects. However, the price declines are small relative to the declines in marginal costs, which fall predominantly because of the input tariff liberalization. The reason for this incomplete cost pass‐through to prices is that firms offset their reductions in marginal costs by raising markups. Our results demonstrate substantial heterogeneity and variability in markups across firms and time and suggest that producers benefited relative to consumers, at least immediately after the reforms.     

非授权分享、定价分歧与知识付费平台运营策略

在崇尚“免费思维”的互联网时代，非授权分享已成为制约知识提供者持续输出优质内容的关键因素。而在“内容为王”的现实约束下，知识提供者的利益诉求位列知识付费平台的优先考虑级。本文基于知识付费参与人特性构建知识付费市场模型，通过分析知识提供者和平台的定价策略及利益分歧，探讨了非授权分享环境下知识付费平台的运营策略。本文研究发现：①当“道德消费者”和“普通消费者”共存于市场时，知识提供者可依据其产品市场信心分别采取“低价策略”和“高价策略”，而知识付费平台也将对此做出最优反应；②无论知识提供者采取何种定价策略，平台与知识提供者之间总存在一致的定价分歧（利益冲突）；③知识付费平台可通过优化“补贴和发现成本”、“佣金和流量收益”等运营参数弥合定价分歧，谋求与知识提供者建立长期互惠合作关系。本文研究为方兴未艾的知识付费产业发展提供了微观层面的理论支撑。     

Health care trends, Part 2. The new health care team. Panel discussion

In Part 2 of this third annual panel discussion, six experts talk about the growing diversity of health care providers and what it means for consumers and physicians. Americans are getting their wellness and health care services from a wider variety of non-physician practitioners than ever before. The number of allied health and alternative providers with direct patient access is likely to continue growing. This trend is being driven by consumer demand, by the lobbying efforts of non-physician providers, and by federal, state, and private payers who see the potential for reduced health care spending, greater consumer satisfaction, and better outcomes. In practice, this means physicians and non-physician providers, some of whom may not be sanctioned by the medical establishment, are obligated to collaborate as a team. Members of this new provider team will have to communicate effectively (with each other, with consumers, and with payers) and make evidence-based clinical decisions. Physicians may have to share decision-making with other members of this new health care team.     

Compliance with patients' end-of-life wishes by nursing homes in New York City with conscience policies

Nursing home patients have a constitutional right to refuse treatment. The Patient Self-Determination Act confirmed that right. State laws address the obligations of health care providers and facilities to honor that right. The New York State law is more specific than those of many other states. It allows exemptions for "reasons of conscience" and imposes a number of requirements on nursing homes claiming such an exemption, including the transfer of a patient to a home that will honor an end-of-life wish. This study, conducted by FRIA, investigated the refusal of some nursing homes in New York City to carry out patients' end-of-life wishes because of conscience-based objections. The study also investigated the willingness of homes which did not have such policies to accept patients transferring from a home with a policy so that the patient's end-of-life wishes would be honored. Implications for administrators, policy makers, and regulators are discussed.     

The chasm: what can be done, and what should be done

The case study of growth hormone in short-stature children offers an example of the high cost of bioengineered therapies and the attendant ethical concerns. Despite uncertainties as to its efficacy, it is estimated that the annual U.S. expenditure for growth hormone, which costs about $20,000 per year for a 30 kg child, exceeds $375 million dollars. Ultimately, at this point in its evolution, the use of GH therapy illustrates the dilemma commonly created by new medical technology--the chasm between what can be done and what should be done. Unfortunately, the knowledge of what can be done precedes the understanding of what should be done.     

From primary care physician employment to private practice: easing the transition

In most cases, the practice acquisition and employment strategy of the 1990s has backfired, with acquired physician practices losing in the range of $50,000 to $100,000 or more per physician annually. There are two alternatives for addressing the operating deficits incurred from practice ownership and physician employment: (1) restructuring through the implementation of network-wide and practice-specific initiatives to improve financial performance; or (2) wholesale (i.e., all practices) or selective practice divestiture, depending on the individual practice financial performance and "fit" with the physician network strategic priorities. Unraveling a decade's worth of physician-health system relationships that are grounded by the notion of acquisition and employment is going to be a complex process for both parties. But given the magnitude of financial losses on acquired practices and the inability of health care providers to sustain future losses, there simply are not options beyond restructuring or divesting these relationships.     

Cost-plus pricing when joint costs are present

Companies using cost-plus pricing often produce products that entail joint cost allocation. A problem they have encountered is that, while product prices are a function of the full cost, joint cost allocation methods using net realizable values depend on the product prices. This paper shows that when all costs and production quantities are known (or can be budgeted), it is possible to simultaneously determine unique product prices and cost allocations using the net realizable value method.     

Measuring the Implications of Sales and Consumer Inventory Behavior

Temporary price reductions (sales) are common for many goods and naturally result in large increases in the quantity sold. Demand estimation based on temporary price reductions may mismeasure the long‐run responsiveness to prices. In this paper we quantify the extent of the problem and assess its economic implications. We structurally estimate a dynamic model of consumer choice using two years of scanner data on the purchasing behavior of a panel of households. The results suggest that static demand estimates, which neglect dynamics, (i) overestimate own‐price elasticities by 30 percent, (ii) underestimate cross‐price elasticities by up to a factor of 5, and (iii) overestimate the substitution to the no‐purchase or outside option by over 200 percent. This suggests that policy analysis based on static elasticity estimates will underestimate price–cost margins and underpredict the effects of mergers.