nep-hea New Economics Papers
on Health Economics
Issue of 2006‒04‒08
eleven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Public versus Private Health Care in a National Health Service By Kurt R. Brekke; Lars Sørgard
  2. Disability Testing and Retirement By Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre
  3. A Public Private Partnership Model for Managing Urban Health: A Study of Ahmedabad City By Ramani K V; Mavalankar Dileep; Patel Amit; Mahandiratta Sweta; Bhardwaj Rohini; Joshi Diptesh
  4. Effects of Title IX and Sports Participation on Girls%u2019 Physical Activity and Weight By Robert Kaestner; Xin Xu
  5. The Impact of New Laboratory Procedures and Other Medical Innovations on the Health of Americans, 1990-2003: Evidence from Longitudinal, Disease-Level Data By Frank R. Lichtenberg
  6. The Effects of Retirement on Physical and Mental Health Outcomes By Dhaval Dave; Inas Rashad; Jasmina Spasojevic
  7. Why Do Europeans Smoke More than Americans? By David M. Cutler; Edward L. Glaeser
  8. Short, Medium, and Long Term Consequences of Poor Infant Health: An Analysis using Siblings and Twins By Phil Oreopoulos; Mark Stabile; Randy Walld; Leslie Roos
  9. Lifetime earnings and life expectancy By Hans-Martin von Gaudecker; Rembrandt D. Scholz
  10. Objective sleep duration and health in elderly Russians By Maria Shkolnikova; Blake Aber; Maxine Weinstein; Luobov´ Kravtsova; Svetlana Shalnova; Vladimir M. Shkolnikov; James W. Vaupel
  11. Measuring Hospital Efficiency through Data Envelopment Analysis when Policy-makers’ Preferences Matter. An Application to a sample of Italian NHS hospitals By Dino Rizzi; Vincenzo Rebba

  1. By: Kurt R. Brekke; Lars Sørgard
    Abstract: This paper studies the interaction between public and private health care provision in a National Health Service (NHS), with free public care and costly private care. The health authority decides whether or not to allow private provision and sets the public sector remuneration. The physicians allocate their time (effort) in the public and (if allowed) in the private sector based on the public wage income and the private sector profits. We show that allowing physician dual practice "crowds out" public provision, and results in lower overall health care provision. While the health authority can mitigate this effect by offering a higher wage, we find that a ban on dual practice is more efficient if private sector competition is weak and public and private care are sufficiently close substitutes. On the other hand, if private sector competition is sufficiently hard, a mixed system, with physician dual practice, is always preferable to a pure NHS system.
    Keywords: health care, mixed oligopoly, physician dual practice
    JEL: I11 I18 J42 L33
    Date: 2006
  2. By: Cremer, Helmuth; Lozachmeur, Jean-Marie; Pestieau, Pierre
    Abstract: This paper studies the design of retirement and disability policies. It illustrates the often observed exit from the labour force of healthy workers through disability insurance schemes. Two types of individuals, disabled and leisure-prone ones, have the same disutility for labour and cannot be distinguished. However, they are not counted in the same way in social welfare. Benefits depend on retirement age and on the (reported) health status. We determine first- and second-best optimal benefit levels and retirement ages and focus on the distortions which may be induced in the individuals’ retirement decision. Then we introduce the possibility of testing which sorts out disabled workers from healthy but retirement-prone workers. We show that such testing can increase both social welfare and the rate of participation of elderly workers; in addition disabled workers are better taken care of. It is not optimal to test all applicants. Surprisingly, the (second-best) solution may imply later retirement for the disabled than for the leisure prone. In that case, the disabled are compensated by higher benefits.
    Keywords: disability; retirement; social security
    JEL: H55 I12 J26
    Date: 2006–03
  3. By: Ramani K V; Mavalankar Dileep; Patel Amit; Mahandiratta Sweta; Bhardwaj Rohini; Joshi Diptesh
    Abstract: Urbanization is an important demographic shift worldwide. India’s urban population of 300 million represents 30 % of its total population; with the slum population in urban cities registering a 5 % growth in the last few years. Responding to the healthcare needs of urban poor is therefore very essential. Government of India focus has been mainly on rural health till the late 90s. Recognizing the urgency to manage urban health for the vulnerable sections of our population, the 9th and 10th Five Year Plans of the Government of India have laid special emphasis on developing a well structured network of urban primary care institutions. Ahmedabad city (also known as Ahmedabad Municipal Corporation, AMC) is the sixth largest city in India with a population of 3.5 million spread over 192 square kilometers, across 43 wards. AMC has nearly 2500 slums and chawls housing approximately 1.5 million people. Out of 43 wards in AMC, 9 wards which house more than 20 % of AMC population, have no government health facility at all. With more than 3500 private health facilities in AMC, it is therefore worthwhile to explore Public Private Participation (PPP) to improve the delivery of healthcare services. In this working paper, we outline our approach to developing a PPP model for a decentralized and integrated primary healthcare center for each ward of AMC. Our model is built on a clear understanding of the socio-economic profile, status of public health, and the healthcare seeking habits of Ahmedabad population. Our GIS (Geographic Information System) methodology guides the AMC authorities to identify good locations for urban health center (UHC) so as to ensure availability, affordability, accessibility, and equity to primary healthcare facilities to the slum populations. We illustrate our methodology for Vasna and Naroda wards in AMC.
    Keywords: Urban poor, availability, affordability, access, equity, GIS, PPP
    Date: 2006–03–27
  4. By: Robert Kaestner; Xin Xu
    Abstract: In this study, we examined the association between girls’ participation in high school sports and the physical activity, weight, body mass and body composition of adolescent females during the 1970s when girls’ sports participation was dramatically increasing as a result of Title IX. We found that increases in girls’ participation in high school sports, a proxy for expanded athletic opportunities for adolescent females, were associated with an increase in physical activity and an improvement in weight and body mass among girls. In contrast, adolescent boys experienced a decline in physical activity and an increase in weight and body mass during the period when girls’ athletic opportunities were expanding. Taken together, these results strongly suggest that Title IX and the increase in athletic opportunities among adolescent females it engendered had a beneficial effect on the health of adolescent girls.
    JEL: I12 I18
    Date: 2006–03
  5. By: Frank R. Lichtenberg
    Abstract: This study examines the effect of the introduction of new laboratory procedures and other medical goods and services on the health of Americans during the period 1990-2003. We hypothesize that, the more medical innovation there is related to a medical condition, the greater the improvement in the average health of people with that condition. To test this hypothesis, we estimate models of health outcomes using longitudinal disease-level data. We measure innovation in five types of medical procedures or products: pathology & laboratory procedures, outpatient prescription drugs, inpatient prescription drugs, surgical procedures, and diagnostic radiology procedures. We examine two kinds of (inverse) indicators of health: mortality and disability. The mortality indicator we analyze is the mean age at death of people whose underlying cause of death is medical condition i. The disability measures we analyze are the fraction of people with medical condition i who (1) missed work, or (2) spent one or more days in bed, due to that condition. Our estimates indicate that conditions with higher rates of lab and outpatient drug innovation had larger increases in mean age at death, controlling for other medical innovation rates and initial mean age at death. The 1990-1998 increase in mean age at death attributable to use of new lab procedures is estimated to be about 6 months. This is 42% of the total increase in mean age at death (1.18 years) in our sample of diseases. New laboratory procedures introduced during 1990-1998 are estimated to have saved 1.13 million life-years in 1998. Expenditure per life-year gained from new lab procedures is estimated to be $6093. Treatments that cost this amount are generally considered to be quite cost-effective. In the analysis of disability, when we don’t control for the initial level of disability, we find that conditions with higher rates of lab and outpatient innovation had greater declines in the probability of missing work during 1996-2003. This suggests that the use of new laboratory procedures reduced the number of work-loss days in 2003 by 42 million. When we control for initial disability, the inverse relationship between lab innovation and disability changes disappears. This is because there is a significant inverse relationship between initial health and the extent of laboratory innovation. But due to errors in measuring initial health, controlling for this variable may cause the impact of innovation on health to be underestimated.
    JEL: I12 J1 O33
    Date: 2006–03
  6. By: Dhaval Dave; Inas Rashad; Jasmina Spasojevic
    Abstract: While numerous studies have examined how health affects retirement behavior, few have analyzed the impact of retirement on subsequent health outcomes. This study estimates the effects of retirement on health status as measured by indicators of physical and functional limitations, illness conditions, and depression. The empirics are based on six longitudinal waves of the Health and Retirement Study, spanning 1992 through 2003. To account for biases due to unobserved selection and endogeneity, panel data methodologies are used. These are augmented by counterfactual and specification checks to gauge the robustness and plausibility of the estimates. Results indicate that complete retirement leads to a 23-29 percent increase in difficulties associated with mobility and daily activities, an eight percent increase in illness conditions, and an 11 percent decline in mental health. With an aging population choosing to retire at earlier ages, both Social Security and Medicare face considerable shortfalls. Eliminating the embedded incentives in Social Security and many private pension plans, which discourage work beyond some point, and enacting policies that prolong the retirement age may be desirable, ceteris paribus. Retiring at a later age may lessen or postpone poor health outcomes for older adults, raise well-being, and reduce the utilization of health care services, particularly acute care.
    JEL: I1 J0
    Date: 2006–03
  7. By: David M. Cutler; Edward L. Glaeser
    Abstract: While Americans are less healthy than Europeans along some dimensions (like obesity), Americans are significantly less likely to smoke than their European counterparts. This difference emerged in the 1970s and it is biggest among the most educated. The puzzle becomes larger once we account for cigarette prices and anti-smoking regulations, which are both higher in Europe. There is a nonmonotonic relationship between smoking and income; among richer countries and people, higher incomes are associated with less smoking. This can account for about one-fifth of the U.S./Europe difference. Almost one-half of the smoking difference appears to be the result of differences in beliefs about the health effects of smoking; Europeans are generally less likely to think that cigarette smoking is harmful.
    JEL: I1 J1 P5
    Date: 2006–03
  8. By: Phil Oreopoulos; Mark Stabile; Randy Walld; Leslie Roos
    Abstract: We use administrative data on a sample of births between 1978 and 1985 to investigate the short, medium and long-term consequences of poor infant health. Our findings offer several advances to the existing literature on the effects of early infant health on subsequent health, education, and labor force attachment. First, we use a large sample of both siblings and twins, second we use a variety of measures of infant health, and finally we track children through their schooling years and into the labor force. Our findings suggest that poor infant health is a strong predictor of educational and labor force outcomes. In particular, infant health is found to predict both high school completion and social assistance (welfare) take-up and length.
    JEL: I1 I2
    Date: 2006–02
  9. By: Hans-Martin von Gaudecker (Max Planck Institute for Demographic Research, Rostock, Germany); Rembrandt D. Scholz (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: We estimate remaining life expectancy at age 65 using a very large sample of male German pensioners. Our analysis is entirely nonparametric. Furthermore, the data enable us to compare life expectancy in eastern and western Germany conditional on a measure of socio-economic status. Our findings show a lower bound of almost fifty percent (six years) on the difference in remaining life expectancy between the lowest and the highest socio-economic group considered. Within groups, we find similar values for East and West. Our analysis contributes to the literature in several aspects. First, Germany is clearly underrepresented in differential mortality studies. Second, we are able to use a novel measure of lifetime earnings as a proxy for socio-economic status that remains valid for retired people. Third, the comparison of eastern and western Germany may provide some interesting insights for transformation countries.
    Keywords: Germany, life expectancy, pensioners, socio-economic differentials
    JEL: J1 Z0
    Date: 2006–03
  10. By: Maria Shkolnikova (Max Planck Institute for Demographic Research, Rostock, Germany); Blake Aber; Maxine Weinstein (Max Planck Institute for Demographic Research, Rostock, Germany); Luobov´ Kravtsova (Max Planck Institute for Demographic Research, Rostock, Germany); Svetlana Shalnova (Max Planck Institute for Demographic Research, Rostock, Germany); Vladimir M. Shkolnikov (Max Planck Institute for Demographic Research, Rostock, Germany); James W. Vaupel (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Objectives - We examine the relationship between sleep duration and health in the high mortality context of Russia. Methods - Night and daytime sleep durations are based on self-reports and 24-hour heart rate trends (Holter monitoring). The sample of 201 individuals (Holter data for 185) is drawn from the Moscow Lipid Research Clinics cohort, followed up since 1975-77. Field-work occurred in 2002-03. Results - Although objective and reported mean sleep are similar, there are significant intra-individual differences. Significant associations are found between objective sleep and health: longer sleep corresponds to lower grip strength, poorer self-rated health and immediate recall, and higher mortality risk score. No significant relationships are found for subjective sleep. Conclusions - We provide the first evidence of an association between long sleep and worse health outcomes among elderly Russians. Predictive power increases if objective sleep measures are used, a consideration which is especially important in small studies.
    JEL: J1 Z0
    Date: 2006–03
  11. By: Dino Rizzi (Department of Economics, University Of Venice Cà Foscari); Vincenzo Rebba (Department of Economics - University of Padova)
    Abstract: In this paper we show how both the choice of specific constraints on input and output weights (in accordance with health care policy-makers’ preferences) and the consideration of exogenous variables outside the control of hospital management (and linked to past policy-makers’ decisions) can affect the measurement of hospital technical efficiency using the Data Envelopment Analysis (DEA). Considering these issues, the DEA method is applied to measure the efficiency of 85 (public and private) hospitals in Veneto, a Northern region of Italy. The empirical analysis allows us to verify the role of weight restrictions and of demand in measuring the efficiency of hospitals operating within a National Health Service (NHS). We find that the imposition of a lower bound on the virtual weight of acute care discharges weighted by case-mix (in order to consider policy-maker objectives) reduces average hospital efficiency. Moreover, we show that, in many cases, low efficiency scores are attributable to external factors, which are not fully controlled by the hospital management; especially for public hospitals low total efficiency scores can be mainly explained by past policy-makers’ decisions on the size of the hospitals or their role within the regional health care service. Finally, non-profit private hospitals exhibit a higher total inefficiency while both non-profit and for-profit hospitals are characterised by higher levels of scale inefficiency than public ones.
    Keywords: Hospital performance, Technical efficiency, Data envelopment analysis, NationalHealth Service
    JEL: D24 I12
    Date: 2006

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