CHERE Awarded NH&MRC Program Grant

Commonwealth Minister for Health, Senator Kay Patterson, announced in August the new Program Grant awards for 2003 - 2007. Sixteen teams of researchers share grants worth $118.175 million for research into cures and treatments for diseases such as cancer, heart disease and depression. One team stood out from the crowd because its project is directed to contributing to health policy rather than (the customary) biomedical research: the Centre for Health Economics Research and Evaluation (CHERE) at the University of Technology, Sydney (UTS) (formerly within the University of Sydney).

NH&MRC program grants are intended to enable successful teams to contribute new knowledge, develop novel ideas and approaches, and address problems for which longer term, stable funding is essential. They are also encouraged to develop training and career development opportunities within the team and facilitate collaborative use of specialised facilities or expertise.

The NH&MRC summarised the grant to CHERE as follows: "This proposed program of research will contribute to the development of economics and health economics internationally. It provides an exciting opportunity to bring together scholars across economics at the forefront of the discipline internationally, and who are researchers with extensive experience in the practical application of research results in shaping policy directions. The immediate outcomes of the research program will be information on specific health policy issues, in terms of the drivers of cost and utilisation, access and equity."

CHERE's Director and the Program leader is Jane Hall, Professor of Health Economics at UTS, President of the Health Services Research Association of Australia and New Zealand (launched in New Zealand in December last year) and the Australian representative of the Harkness Fellowships in Health Care Policy offered by the Commonwealth Fund of New York.

Other members of the CHERE research team are:

• Denzil Fiebig, Professor of Economics, University of NSW
• Jordan Louviere, Professor of Economics, UTS
• Patricia Apps, Professor of Public Economics, University of Sydney
• Rosalie Viney, Senior Lecturer in Health Economics and Deputy Director of CHERE
• Elizabeth Savage Senior Lecturer in Health Economics, CHERE

The team has achievements in the development of health economics theory and applications (Hall), health policy analysis and evaluation (Viney), econometric modelling and forecasting (Fiebig), empirical decision analysis (Louviere), development of new models of household decision making and policy evaluation (Apps) and modelling demand and social welfare (Savage). All have outstanding research records, and the team represents a level of research capacity that has not previously been assembled in Australian health economics. Together the team is committed to reshaping research inquiry within health economics by applying the best research minds and the most sophisticated and innovative techniques from across the spectrum of theoretical and empirical economics. The program draws on and transfers 'cutting edge' research techniques to health economics, health services research and health policy.

The program will employ advanced economic theory and econometric modelling to understand and predict individual and household decisions about health care. Although it is often said that countries choose how much to spend on health care, in fact health care utilisation and expenditure is the result of many individual decisions - whether a consumer decides to see a doctor or other health care professional; what investigations are undertaken; what treatment the doctor institutes; and so on. The research will focus on:

1. Choices made by consumers in their use of health services.
2. Choices made by providers in recommending health care.
3. The interaction of providers and health care consumers and how this determines utilisation.
4. How these choices and interactions are influenced and can be modified by government interventions.
5. How individuals value the product of the health care system and therefore how social welfare should be assessed.
6. The resulting models, by being based on an understanding of why and how individuals - consumers, providers and funders - make their decisions, can then be used to predict utilisation patterns and costs, and how this affects access and equity.

It also means that the impact of new policy initiatives can be analysed and evaluated, not just in terms of aggregate indicators but also in terms of their different impact on population sub-groups.

The approach can be applied to the investigation of any aspect of health care that involves decision making. Initial topics for research are the use of and access to general practitioner services, taking into account the effect of bulk-billing and the substitutability of hospital emergency departments; the demand for private health insurance and the interaction between insurance and the use of hospitals; the choice of whether or not to be tested for inherited diseases; the provision of care by family and friends to patients in the palliative care stage of their illness; and the interaction of doctor and consumer in the choice of medical technology.