Health Economics Review

Beyond seed funding: why Nigerian digital health startups struggle to grow
Elechi US, Onah CO, Tarawallie MA and Ifeanyi I
Nigeria's growing digital health startup ecosystem has a lot of potential to fill in gaps in healthcare delivery, but many of these businesses fail to get off the ground after getting initial funding. This narrative review examines funding patterns from 2019 to 2025 and investigates why seed-stage investment often fails to translate into scaled impact. Investment reports, case studies of prominent Nigerian health-tech startups, and comparative insights from peer markets were synthesized. The analysis finds that despite a surge of seed funding and a record venture capital peak in 2021, few Nigerian digital health startups convert initial success into sustainable growth. Constraining factors include regulatory hurdles, infrastructural deficiencies, market trust barriers, talent gaps, and systemic health-sector limitations, challenges that mere capital infusion cannot overcome. Case narratives (e.g., Helium Health's regional expansion and 54gene's post-pandemic collapse) illustrate these dynamics. Key mechanisms to bridge the "post-seed" gap are discussed, ranging from strategic public-private partnerships to specialized follow-on funds, with lessons drawn from ecosystems like Kenya and India. Strengthening support beyond seed stages and addressing non-financial frictions will be crucial for Nigerian health-tech innovators to realize their full scale-up potential.
Overview of the Japanese Rapid Introduction Premium as a drug pricing framework to enhance patient access to innovative drugs
Takamura K, Jinnai G, Niwa Y and Kondoh M
The pricing of new drugs plays a critical role in patient access by influencing where and when pharmaceutical companies choose to launch their products. The United States (US) operates a predominantly market-based pricing system, in which pharmaceutical companies set and manage drug prices under private health insurance. In contrast, Japan has a government-regulated drug pricing system under its National Health Insurance (NHI). On average, drug prices in the US are 3.2 times higher than those in Japan. The US system facilitates faster patient access to new drugs through rapid market entry, whereas market entry in Japan has often been delayed. To address this issue, the Japanese government introduced the Rapid Introduction Premium in April 2024, aiming to promote earlier launches of new drugs by narrowing the price gap with higher-priced markets such as the US. In this review, we provide an overview of the new drug pricing framework associated with the Rapid Introduction Premium.
An econometric examination of vaccine hesitancy among residents and their dependents in urban Ghana
Asiama RK
Vaccine hesitancy among the population raises concern for health policymakers because it threatens the attainment of herd immunity, which is necessary to keep the society healthy and manage public health spending. However, a problem arises when there is hesitancy by economic agents and their dependents, even when the resource is freely available. This policy problem is analyzed in the context of Ghana's major urban area, Accra, where a cross-section of urban parents are surveyed regarding vaccine hesitancy and whether it extends to their children, with special reference to the COVID-19 vaccine.
The impacts of the diagnosis-related group payment reform on hospitalization-related medical expenses: evidence from China
Li L, Yang W, Tang X, Zeng S, Liu X and Dong S
Diagnosis-related group (DRG) payment methods are increasingly being used to decrease the costs of healthcare worldwide. However, the effectiveness of cost controls varies from region to region. This study aimed to analyze the impacts of DRG payments on medical costs in China and provide theoretical support for the promotion of DRG payments in other countries.
Modeling in R: a practical application using a cost-effectiveness analysis
Kouame JM, Siani C, Kouakou C, Gnanou S, LaRue S and Guertin JR
Economic Evaluation (EE) is increasingly used to inform the decision-making of various health care systems about which health care interventions to fund with the available resources. Until now, majority of cost-effectiveness analyses have been performed with Microsoft Excel (ME). Today, the trend is to use software that can improve the decision-making model and that can resolve complex problems, as well as ensure reproducibility and transparency. The intention of this tutorial paper is not to show the "best" way of developing decision models in R, but to provide two different codes described in a step-by-step guide on how to implement a Markov model, with an explanation to help beginners in modeling (e.g., health economists new to R) and MS Excel users and to switch to R without having any great knowledge of programming with R. This paper is offered to facilitate the wider use of R to implement decision-making models.
Subnational life expectancy disparities in low and middle-income countries: measurement and determinants
Kyriacou A, Miranda-Lescano R, Muinelo-Gallo L and Roca-Sagales O
Relatively little is known about subnational life expectancy disparities in low and middle-income countries (LMICs). We construct indicators of subnational disparities in life expectancy, offering critical insights into health inequalities within countries. Moreover, we investigate the factors that account for cross-country and over-time variations in subnational life expectancy in less developed countries.
Economic and demographic influences on health expenditures: robust approaches for income and aging effects
Boz C and Kurnaz FS
Health expenditure is influenced by complex interactions between economic, demographic, social factors, with significant variations across countries. This study aims to investigate the determinants of health expenditures employing robust regression methods offering a more flexible and reliable approach to dealing with outliers and high data variation.
Horizon scanning and drug expenditure for rare diseases: three-year predictive model in Italy 2025-2027
Marcellusi A, Cazzato D, Guarnotta G, Aiello A, Bonfanti M, Bitonti R, Guardigni M, Lucchetti C, Luccini F, Canonico PL and Jommi C
In recent years, spending on orphan drugs in Italy has seen a significant rise. The analysis aims to estimate future spending for medicines for rare diseases (RDs) in Italy.
The bill of aging: fiscal projections of demographic changes on South Korea's national health insurance, 2023-2042
Kim Y and Woo KS
Demographic shifts driven by declining birth rates and rising life expectancies pose significant challenges to healthcare systems globally, particularly in terms of financial sustainability. We projected fiscal trajectories for Korean National Health Insurance (NHI) by jointly forecasting revenues and expenditures for 2023–2042 and by quantifying the incremental fiscal effects of demographic change.
Physician agency in China: evidence from physicians' responses to financial pressure during the COVID-19 pandemic
Zhang Q
This paper examines how rural primary care physicians in China adjusted their practice patterns to pandemic-related financial pressures under a capitated global-budget model. Using township-hospital data, we find increased prescribing of Traditional Chinese Medicine (TCM) decoction pieces, with effects concentrated among habitual prescribers rather than converting occasional users into regular prescribers. Physicians also reduced both the number of drugs prescribed and the volume of services provided to cost-sharing outpatients, producing a 5% decline in average insurance payments per outpatient visit and potentially generating a greater surplus within the global-budget pool. By contrast, we observe no significant changes for self-paying outpatients, suggesting limited scope for physician-induced demand. These results underscore the role of physician agency in healthcare provision and highlight the importance of aligning financial incentives with policy goals. While drug reforms and managed-care models have contained expenditures, challenges remain in achieving adequate coverage for rural residents.
Estimating the direct medical cost of illness of COVID-19 hospitalisations in Kuwait: efficiency trade-offs from real-world data analysis
Almari M, Vassall A, O'Neill S and Sadique Z
COVID - 19 has had a profound impact on the economy, health systems within countries, and individuals around the world. To provide insight that may enhance the preparedness for future pandemics, a comprehensive cost assessment is vital. This study aims to estimate the direct cost of illness (CoI), as well as the national burden of treating hospitalised COVID-19 patients.
Efficiency of health systems in developing countries: the case of West African countries
Akoetey K and Viallefont A
Developing countries are faced with numerous health challenges such as lack of funding, increasing frequency and magnitude of epidemic risks, organizational and socio-cultural difficulties. In this context, we developed this study to assess for the first time the efficiency of health systems in the countries of the West African sub-region, firstly, to identify the systems that best adapt to these challenges and secondly, to highlight the factors that influence the health production process. To achieve this, we used the World Bank's, Worldwide Development Indicators and Worldwide Governance Indicators databases, from 2000 to 2022. We applied the stochastic fixed-effect frontier method of Kumbhakar et al. (2014) to account for unobservable heterogeneity in the estimates. We used a novel multiple imputation approach to deal with missing data, while determining the fractions of missing information in the estimates. The results show that the average relative efficiency for all countries in the sub-region is 89.7%. Countries in the West African sub-region could theoretically increase life expectancy at birth by an average of 10.3%, which represents 6.5 years, with the same level of resources used. The results also show that health systems in these countries have higher permanent inefficiency than temporal inefficiency, suggesting that they mainly face structural challenges. Per capita health expenditure, gross domestic product per capita, out-of-pocket expenditure per capita, literacy rate, poverty gap and voice and accountability were positively associated with the efficiency of their health systems.
Does price disclosure promote competition in private MRI markets? A difference-in-differences analysis
Hiltunen R
In Finland's private health care markets, a lack of price transparency has made price shopping difficult for consumers in the past. To address this issue, two distinct online price comparison tools were introduced. Economic theory and empirical research suggest that increasing price transparency can lower prices, but the impact depends on market conditions and the design of price disclosure. This paper examines the effect of these two distinct price disclosures on the prices of private magnetic resonance imaging (MRI) in Finland.
Efficiency in COVID-19 inpatient care: findings from public hospitals in Iran
Daroudi R, Raei B, Goudarzi R, Damiri S, Ranjbaran H and Shahali Z
Improving efficiency is one of the high-potential options for expanding fiscal space for health. During the pandemic, as health systems' financial challenges intensify, the importance of utilizing resources efficiently also increases. Therefore, this study was conducted to estimate the efficiency of Iran's public hospitals in treating COVID-19 inpatient cases.
Increasing patient access to faecal microbiota transplantation with remote delivery: a cost analysis of outpatient versus home-based treatment
Olesen RH, Larsen EB, Rubak T, Baunwall SMD, Paaske SE, Gregersen M, Erikstrup C, Olsen K, Dahlerup JF, Kjaer TK, Krogh CB, Ehlers LH and Hvas CL
Faecal microbiota transplantation (FMT) for recurrent Clostridioides difficile infection (CDI) is used in less than 10% of the patients in Europe who meet the indication. Encapsulated FMT allows increased use for CDI because capsules can be safely shipped to local healthcare facilities and administered orally to patients without use of e.g. colonoscopy. The aim of this study was to calculate and compare the costs of alternative ways of delivering encapsulated FMT to patients with CDI in Denmark, including outpatient treatment at a specialised FMT centre, outpatient treatment at local hospitals including remote delivery to the Faroe Islands, and home-based care.
Payment compliance of informal sector workers in Indonesia National Health Insurance: a study on ability and willingness to pay
Hidayat MS, Permana YH, Puspandari DA, Siregar DR, Setyaningsih H, Aristianti V, Baros WA, Atsna Z, Fadlika F and Boenjamin A
Currently, the Indonesian National Health Insurance (NHI) covers over 90% of the population. However, around 18% of the enrolees are inactive, failing to pay premiums regularly, with proportions varying across membership types. This situation could impede access to health services and influence overall enrolees' health. This study seeks to assess the ability and willingness to pay, and to identify the factors influencing them among informal workers in relation to compliance and commitment to NHI premium payments.
Determinants of medical borrowing and associated inequalities in the Kingdom of Saudi Arabia: evidence from the Global Findex survey
Al-Hanawi MK
While out-of-pocket health expenses continue to rise, households' coping strategies remain largely unexplored. When individuals and families rely on unsustainable mechanisms such as borrowing, they may face heightened financial vulnerability, which can be particularly severe among certain socio-economic groups. This study examined the determinants of medical borrowing and the associated inequalities in Saudi Arabia.
Impact of sugar-sweetened beverages tax on obesity and obesity-related health conditions: evidence from Washington State's soft drink syrup tax
Chung SH and Xu L
Sugar-sweetened beverage (SSB) taxes have been implemented in various regions as a public health strategy to reduce obesity and associated chronic diseases. While previous research has examined the effectiveness of these taxes, findings remain mixed regarding their impact on long-term health outcomes. This study assesses the effect of Washington State's 2009 soft drink syrup tax on obesity prevalence and related health conditions. This study mitigates selection bias and cross-border purchasing effects, providing a clear picture of the policy's effectiveness.
Persistent inconsistencies in patient cost variability within the French DRG classification system over the 2012-2019 period
Milcent C
This paper evaluates the effectiveness of the 2009 French Diagnosis-Related Group (DRG) classification reform, which introduced four severity levels within each DRG, ranging from low to very high, with corresponding increases in fixed-price reimbursements. Notably, the reform incorporates the Medicare Severity Diagnosis-Related Group (MS-DRG) system, first implemented in the United States in 2007, giving the French system international relevance. The French Public Health Insurance system (NHI) reimburses both public and private healthcare establishments through a DRG-based payment system. This study focuses on variations in hospital resource costs for four different health conditions. The paper begins by discussing the theoretical challenges of constructing DRG categories, particularly the trade-off between greater clinical detail (granularity) and the risk of distorting incentives for hospital efficiency. It then presents an empirical analysis of hospital resource cost variations both within and between DRGs for the same pathology or clinically meaningful group (DRG-root), using data from 2012 to 2019. Our findings suggest that a one-size-fits-all approach to severity classification is inadequate. In some cases, broader categories improve statistical validity, while in others, more granular distinctions are necessary. We conclude that a tailored, case-by-case approach is the most effective solution. Specifically, the analysis reveals significant overlap in confidence intervals for hospital resource costs across DRG severity levels, suggesting that the current classification system fails to effectively capture cost differences related to severity. Additionally, a large portion of cost variation within DRGs is driven by factors unrelated to severity, such as hospital-specific characteristics. Overall, the results underscore the need to revise the current DRG system in France in order to reduce financial discrepancies and to prevent incentives for patient selection, especially before implementing bundled payment models that include both inpatient and outpatient care.
The financial repercussions of rheumatoid arthritis and determinants of catastrophic healthcare expenditure: insights from the Karnataka chapter of the Indian rheumatology association
Shobha V, Singhai S, Haridas V, V S, R S, Mamadapur M, Kamath A, M N A, Chebbi P, Vahaneyil JM, V R SV, Patil A, Pinto B, J P, G C Y, Jeevanagi SR, Baliga S, A S H, Rao VK, Ramachandran V, Anusha MS, Selvam S, S C and Mahendranath KM
To estimate the financial burden and the determinants of catastrophic healthcare expenditure(CHE) in patients with rheumatoid arthritis(RA) residing in the state of Karnataka, India.
Key indicators for evaluating Iran's health insurance performance
Olyaeemanesh A, Takian A, Effatpanah M, Nasehi MM, Shahali Z, Kargar S, Mobinizadeh M and Mohamadi E
Performance evaluation is a critical aspect of managing organizations, especially in the healthcare sector, where financial and resource management have direct implications on public health. The Iran Health Insurance Organization (IHIO), responsible for covering over half of the Iranian population, faces challenges due to rising healthcare costs and international sanctions. This study focuses on identifying performance evaluation indicators for the IHIO, aiming to provide a systematic framework to assess the organization's efficiency and accountability, aligning with the national health policies of Iran.