nep-hea New Economics Papers
on Health Economics
Issue of 2005‒10‒08
eight papers chosen by
Yong Yin
SUNY at Buffalo, USA

  2. Entry and Competition in Local Hospital Markets By Jean M. Abraham; Martin S. Gaynor; William B. Vogt
  3. How Unobservable Productivity Biases the Value of a Statistical Life By Thomas J. Kniesner; W. Kip Viscusi; Christopher Woock; James P. Ziliak
  4. Hospital Ownership and Financial Performance: A Quantitative Research Review By Yu-Chu Shen; Karen Eggleston; Joseph Lau; Christopher Schmid
  5. Estimation and Identification of Merger Effects: An Application to Hospital Mergers By Leemore S. Dafny
  6. Health Risk, Income, and the Purchase of Private Health Insurance By M. Kate Bundorf; Bradley Herring; Mark Pauly
  7. Child Malnutrition, Social Development and Health Services in the Andean Region By LARREA CARLOS; MONTALVO PEDRO; RICAURTE ANA
  8. Health Expenditures Under the HIPC Debt Initiative By Ralf Hepp

  1. By: Juan M Cabasés (Departamento de Economía-UPNA); Eduardo Sánchez (Departamento de Economía-UPNA); Francisco J Vázquez-Polo; Miguel A Negrín; Emilio J Domínguez (Departamento de Economía-UPNA)
    Abstract: Objectives. This paper explores the use of regression models for estimating health status of schizophrenic patients, from a Bayesian perspective. Our aims are: 1- To obtain a set of values of health states of the EQ-5D based on self-assessed health from a sample of schizophrenic patients. 2- To analyse the differences in the health status and in patients’ perceptions of their health status between four mental-health districts in Spain. Methods. We develop two linear models with dummy variables. The first model seeks to obtain an index of the health status of the patients using a VAS as a dependent variable and the different dimensions of EQ-5D as regressors. The second model allows to analyse the differences between the self-assessed health status in the different geographic areas and also the differences between the patients’ self-assessed health states, irrespective of their actual health state, in the different geographic areas. The analysis is done using Bayesian approach with Gibbs sampling (computer program WinBUGS 1.4). Data concerning self-assessed EQ-5D with VAS from four geographic areas of schizophrenic patients were obtained for the purposes of this analysis. Results. We obtained the health status index for this sample and analysed the differences for this index between the four geographic areas. Our study reveals variables that explain the differences in patients’ health status and differences in their health states assessment. We consider four possible scenarios.
    Keywords: Schizophrenia, Bayesian analysis, effectiveness, quality of life, EQ-5D.
    Date: 2005
  2. By: Jean M. Abraham; Martin S. Gaynor; William B. Vogt
    Abstract: There has been considerable consolidation in the hospital industry in recent years. Over 900 deals occurred from 1994-2000, and many local markets, even in large urban areas, have been reduced to monopolies, duopolies, or triopolies. This surge in consolidation has led to concern about competition in local markets for hospital services. We examine the effect of market structure on competition in local hospital markets -- specifically, does the hardness of competition increase with the number of firms? We extend the entry model developed by Bresnahan and Reiss to make use of quantity information, and apply it to data on the U.S. hospital industry. In the hospital markets we examine, entry leads to a quick convergence to competitive conduct. Entry reduces variable profits and increases quantity. Most of the effects of entry come from having a second and a third firm enter the market. The fourth entrant has little estimated effect. The use of quantity information allows us to infer that entry is consumer-surplus-increasing.
    JEL: I1 L1 L8
    Date: 2005–10
  3. By: Thomas J. Kniesner; W. Kip Viscusi; Christopher Woock; James P. Ziliak
    Abstract: A prominent theoretical controversy in the compensating differentials literature concerns unobservable individual productivity. Competing models yield opposite predictions depending on whether the unobservable productivity is safety-related skill or productivity generally. Using five panel waves and several new measures of worker fatality risks, first-difference estimates imply that omitting individual heterogeneity leads to overestimates of the value of statistical life, consistent with the latent safety-related skill interpretation. Risk measures with less measurement error raise the value of statistical life, the net effect being that estimates from the static model range from $5.3 million to $6.7 million, with dynamic model estimates somewhat higher.
    JEL: I10 J17 J28 K00
    Date: 2005–10
  4. By: Yu-Chu Shen; Karen Eggleston; Joseph Lau; Christopher Schmid
    Abstract: We apply meta-analytic methods to conduct a quantitative review of the empirical literature since 1990 comparing financial performance of US for-profit, not-for-profit, and government-owned general acute hospitals. We find that the diverse results in the hospital ownership literature can be explained largely by differences in authors' underlying theoretical frameworks, assumptions about the functional form of the dependent variables, and model specifications. Weaker methods and functional forms tend to predict larger differences in financial performance between not-for-profits and for-profits. The combined estimates across studies suggest little difference in cost among all three types of hospital ownership, and that for-profit hospitals generate more revenue and greater profits than not-for-profit hospitals, although the difference is only of modest economic significance. There is little difference in revenue or profits between government and not-for-profit hospitals.
    JEL: I11 L30
    Date: 2005–10
  5. By: Leemore S. Dafny
    Abstract: Advances in structural demand estimation have substantially improved economists' ability to forecast the impact of mergers. However, these models rely on extensive assumptions about consumer choice and firm objectives, and ultimately observational methods are needed to test their validity. Observational studies, in turn, suffer from selection problems arising from the fact that merging entities differ from non-merging entities in unobserved ways. To obtain an accurate estimate of the ex-post effect of consummated mergers, I propose a combination of rival analysis and instrumental variables. By focusing on the effect of merger on the behavior of rival firms, and instrumenting for these mergers, unbiased estimates of the effect of merger on market outcomes can be obtained. Using this methodology, I evaluate the impact of all independent hospital mergers between 1989 and 1996 on rivals' prices. I find sharp increases in rival prices following merger, with the greatest effect on the closest rivals. The results for this industry are more consistent with predictions from structural models than with prior observational estimates.
    JEL: I1 D4 L0
    Date: 2005–10
  6. By: M. Kate Bundorf; Bradley Herring; Mark Pauly
    Abstract: While many believe that an individual's health plays an important role in both their willingness and ability to obtain health insurance, relatively little agreement exists on how and why health status is likely to affect coverage rates, particularly for individuals purchasing coverage in the individual market. In this paper, we examine the relationship between health risk and the purchase of private health insurance and whether that relationship differs between people purchasing coverage in the individual and large group markets and between low and high income individuals. The data source for our analysis is the panel component of the 1996-2002 Medical Expenditure Panel Survey (MEPS). We find that health risk is positively associated with obtaining private health insurance coverage. The positive relationship between health risk and coverage is stronger for individuals obtaining coverage in the large group market than for individuals obtaining coverage in the individual market. In the large group market, rates of coverage increase more quickly with health risk for low than high income individuals. We conclude that high premiums for high risks are not a significant contributor to the large uninsured population in the U.S. Among low income individuals, high premiums may represent a barrier to low risks in the large group market.
    JEL: I1
    Date: 2005–10
    Abstract: This study analyzes social, ethnic and regional determinants of child malnutrition, as well as the effects of access to health services in the Andean Region, through a comparison between Ecuador, Peru and Bolivia. These three countries share a profile with high stunting prevalence and strong socio-economic, regional and ethnic disparities. The analysis is conducted using DHS (Peru 1992, 1996 and 2000, Bolivia 1997) and LSMS (Ecuador 1998) surveys and it focuses on an international comparative perspective. In the case of Ecuador a detailed analysis is provided. The main task was to identify the determinants of the z-score indicators for height and weight for age. For that matter, multiple equation models were estimated, applying instrumental variables and combining different multivariate procedures, to identify the relative importance of education, housing, ethnicity and contextual regional factors as determinants of stunting in each national case. In all cases we have found strong negative ethnic effects of indigenous ethnicity as well as contextual regional negative factors for highland regions. The results remain significant even after controlling for all relevant socio- economic determinants, such as education, housing and economic status, with few exceptions.
    Keywords: nutrition,health,child,cronic,waste,stunting,Child anthropometric measures Principal component analysis
    JEL: I
    Date: 2005–09–30
  8. By: Ralf Hepp (University of California, Davis)
    Abstract: One of the goals of the Heavily Indebted Poor Countries (HIPC) debt initiative is to provide additional resources for basic health care to the population of eligible developing countries. In this paper I investigate the effect of debt relief on per capita health expenditure in a sample of developing countries while controlling for other factors used in the literature. I find that debt relief has – at the margin – little or no effect on health expenditure in countries that are classified as HIPC. The level of health expenditures in HIPC countries, however, is significantly higher than in other developing countries. On the other hand, countries not classified as HIPC increase their per capita health expenditures more than proportionally if they receive debt relief. This result is surprising considering that per capita amounts of debt relief provided to HIPC countries are on average significantly higher than those to Non-HIPC countries.
    Keywords: HIPC debt initiative, debt relief, foreign aid, public health expenditure
    JEL: F42 O11 I18
    Date: 2005–10–04

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