nep-hea New Economics Papers
on Health Economics
Issue of 2007‒01‒13
twenty-two papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Willingness to Pay For the Quality and Intensity of Medical Care: Evidence from Low Income Households in Ghana By Victor Lavy; John Quigley
  2. Industrialization and Infant Mortality By Maya Federman; David Levine
  3. Biases in Estimates of the Smoking Wage Penalty By Silke Anger; Michael Kvasnicka
  4. The Connection Between Maternal Employment and Childhood Obesity: Inspecting the Mechanisms By Angela Fertig; Gerhard Glomm; Rusty Tchernis
  5. Involving Private Healthcare Providers to Reduce Maternal Mortality in India: A Simulation Study to Understand Implications on Provider Incentives By Bhat Ramesh; Chandra Pankaj; Mukherjee Shantanu
  6. A Study of Factors Affecting the Renewal of Health Insurance Policy By Bhat Ramesh; Jain Nishant
  7. Cardinal Scales for Public Health Evaluation By Charles M. Harvey; Lars Peter Østerdal
  8. Black Box Warnings and Drug Safety: Examining the Determinants and Timing of FDA Warning Labels By Allan Begosh; John Goldsmith; Ed Hass; Randall W. Lutter; Clark Nardinelli; John A. Vernon
  9. Therapeutic non adherence: a rational behaviour revealing patient preferences? By Karine Lamiraud; Pierre-Yves Geoffard
  10. To drink or not to drink (tap water) ? The impact of environmental quality on consumer's choices By Bontemps, C.; Nauges, C.
  11. International Medical Technology Diffsion By Chris Papageorgiou; Andreas Savvides; Marios Zachariadis
  12. Medical Expenditure Puzzle By Xiaoshu Han
  13. Health Insurance and Tax Policy By Karsten Jeske; Sagiri Kitao
  14. Death and Development By Peter Lorentzen; John McMillan; Romain Wacziarg
  15. Health, Development, and the Demographic Transition By Matteo Cervellati; Uwe Sunde
  16. Altruism, Fertility, and the Value of Children: Health Policy Evaluation and Intergenerational Welfare* By Javier Birchenall; Rodrigo Reis Soares
  17. Mission Statement Perception: Are We All on the Same Wavelength? A Case Study in a Flemish Hospital. By S. DESMIDT; A. HEENE
  18. Harnessing the Private Sector for Rural Development, Poverty Alleviation and HIV/Aids Prevention By Steven Lim; Michael P. Cameron; Krailert Taweekui; John Askwith
  19. Adult mortality and consumption growth in the age of HIV/AIDS By Beegle, Kathleen; De Weerdt, Joachim; Dercon, Stefan
  20. Patient satisfaction, doctor effort, and interview location : evidence from Paraguay By Das, Jishnu; Sohnesen, Thomas Pave
  21. What makes cities healthy ? By Yusuf, Shahid; Nabeshima, Kaoru; Wei Ha
  22. Social health insurance reexamined By Wagstaff, Adam

  1. By: Victor Lavy (The World Bank and Hebrew University of Jerusalem); John Quigley (University of California, Berkeley)
    Abstract: This paper presents estimates of willingness to pay for medical care, including the quality and intensity of medical treatment sought in response to illness or injury. The empirical analysis is based on some 5000 observations on the behavior of low income households in Ghana in 1986. The results indicate that the decision to seek medical treatment is responsive to household income. Prices have significant but inelastic influences on the choice among types of treatment and the intensity of treatment sought. Availability of treatment has a substantial effect upon the types of treatment and the utilization of facilities. These results are robust to changes in the structure of the estimating model.
    Date: 2006–07–13
  2. By: Maya Federman (Pitzer College); David Levine (Haas School of Business, University of California, Berkeley)
    Abstract: On average, infant mortality rates are lower in more industrialized nations, yet health and mortality worsened during early industrialization in some nations. This study examines the effects of growing manufacturing employment on infant mortality across 274 Indonesian districts from 1985 to 1995, a time of rapid industrialization. Compared with cross-national studies we have a larger sample size of regions, more consistent data definitions, and better checks for causality and specification. We can also explore the causal mechanisms underlying our correlations. Overall the results suggest manufacturing employment raised living standards, housing quality, and reduced cooking with wood and coal, which helped reduce infant mortality. At the same time, pollution from factories appears quite harmful to infants. The overall effect was slightly higher infant mortality in regions that experienced greater industrialization.
    Keywords: industrialization, infant mortality, Indonesia, pollution, indoor air pollution,
    Date: 2006–06–27
  3. By: Silke Anger; Michael Kvasnicka
    Abstract: Empirical studies on the earnings effects of tobacco use have found significant wage penalties attached to smoking. We produce evidence that suggests that these estimates are significantly upward biased. The bias arises from a general failure in the literature to control for the past smoking behavior of individuals. 2SLS earnings estimates show that the smoking wage penalty is reduced by as much as a third, if past smoking of individuals is controlled for. Our results also point to significant wage gains for individuals that quit smoking, a finding that is of substantial interest, given the lack of evidence on the earnings effects of smoking cessation.
    Keywords: Smoking, wages, earnings regressions
    JEL: J31 I19 C51
    Date: 2006
  4. By: Angela Fertig (University of Georgia); Gerhard Glomm (Indiana University); Rusty Tchernis (Indiana University)
    Abstract: This paper investigates the channels through which maternal employment affects childhood obesity. We use time diaries and interview responses from the Child Development Supplement of the Panel Study of Income Dynamics which combine information on children’s time allocation and mother’s labor force participation. Our empirical strategy involves estimating the effect of children’s activities and meal routines on BMI, estimating the effect of maternal employment on these activities and routines and then combining these two estimates. We find that maternal employment affects child weight through two main mechanisms – supervision and nutrition, however, the particular channels vary by mother’s education.
    Keywords: Childhood Obesity, Labor Supply, Time Allocations
    JEL: H75 I12 J13 J22
    Date: 2006–12
  5. By: Bhat Ramesh; Chandra Pankaj; Mukherjee Shantanu
    Abstract: Gujarat State has implemented the “Chiranjeevi Yojana” to improve access to institutional delivery with an objective to reduce maternal mortality and at the same time providing financial protection to poor families. The scheme involves private providers in provision of maternity services through contracting-out and use of voucher type of mechanism. Five districts covered by this scheme have population of about 10.5 million of which 43 per cent are below poverty line having about 110,000 deliveries per annum. The scheme during first year of its implementation has covered 31,641 deliveries. Of the total 217 providers in these districts 133 (61 per cent) have been empanelled in this scheme. This paper mainly examines two things, one, the revenue distribution a private provider would have experienced if the provider was not part of the Chiranjeevi Scheme and second, does the financial package provided in the scheme provides adequate incentives to the private provider to join the scheme. Further, given the number of providers empanelled in each district, does number of providers contracted-out in the scheme make any difference in revenue distribution of private provider? We use Monte Carlo simulation method to examine these issues. The simulation results suggest that the average revenue is Rs. 1416 per delivery. This is less than what the provider is being reimbursed by the government on capitation fee basis, which is Rs. 1445 (Rs. 1795 less Rs. 350 towards reimbursement for food, transport and Dai). By joining this scheme, the provider’s additional margin on an average is 2 per cent. This is over and above the profits included in the average revenue earned if the provider was not part of the scheme. The results further suggest that revenue distribution is scattered asymmetrically indicating significant risk in revenues to the provider. By joining in the Chiranjeevi Scheme, the provider is able to reduce the overall risk in revenue. In addition to this, the increased volume of services will spread the fixed cost of the provider and increase overall profitability further. Since the provider is paid up-front advance for delivering services under the scheme, there is no transaction cost of bureaucratic delays in payments. The provider in the absence of this scheme can maximise the revenue by doing more cesarean cases. The scheme has embedded incentive to minimise the cesarian cases to maximise the revenue and this produces larger indirect benefits from health systems point of view. The study identifies other issues that need further investigation.
    Keywords: Contracting out, Provider Incentive, Chiranjeevi Scheme, Monte Carlo Simulation, Capitation Fee
    Date: 2007–01–02
  6. By: Bhat Ramesh; Jain Nishant
    Abstract: Health insurance policies are generally one-year policies and to remain part of the insurance poll, policyholders are required to renew their policies each year. Understanding the factors that affect the demand and renewal decisions to continue in health insurance programme is imperative for future growth and development of the insurance sector. We extend our previous work on factors affecting the decision to purchase health insurance to understand the factors affecting the renewal of insurance policy. We find the factors affecting health insurance renewal are not the same as factors affecting health insurance purchase decision. This has implications for insurance providers. The study also suggests customer satisfaction as an important factor influencing the renewal decision of policyholder.
    Date: 2007–01–04
  7. By: Charles M. Harvey (University of Houston); Lars Peter Østerdal (Department of Economics, University of Copenhagen)
    Abstract: Policy studies often evaluate health for a population by summing the individuals’ health as measured by a scale that is ordinal or that depends on risk attitudes. We develop a method using a different type of preferences, called preference intensity or cardinal preferences, to construct scales that measure changes in health. The method is based on a social welfare model that relates preferences between changes in an individual’s health to preferences between changes in health for a population.
    Keywords: public health evaluation; social welfare; preference intensity; health state
    JEL: D63 H43 I18
    Date: 2006–12
  8. By: Allan Begosh; John Goldsmith; Ed Hass; Randall W. Lutter; Clark Nardinelli; John A. Vernon
    Abstract: Comparing the safety of prescription drugs over time is difficult due to the paucity of reliable quantitative measures of drug safety. Both the academic literature and popular press have focused on drug withdrawals as a proxy for breakdowns in the drug safety system. This metric, however, is problematic because withdrawals are rare events, and they may be influenced by factors beyond a drug's safety profile. In the current paper, we propose a new measure: the incidence and timing of Black Box Warnings (BBWs). BBWs are warnings placed on prescription drug labels when a drug is determined to carry a significant risk of a serious or life-threatening adverse event. Using a unique data set, one that includes all new molecular entities (NMEs) submitted to the FDA between May 1981 and February 2006, and subsequently approved and marketed, we analyze the timing and incidence of BBWs. Our analyses also use data on several drug characteristics likely to affect the probability a new drug will receive a BBW. We draw several conclusions from our analyses. For example, drugs receiving priority FDA review are more likely to have BBWs at the time of approval than NMEs receiving standard review. We also find that early prescription volume and orphan drug status are associated with an increased likelihood of receiving a BBW. We do not, however, find a significant difference in the rate of BBWs across time cohorts. A comparison of NMEs approved before and after the 1992 Prescription Drug User Fee Act (PDUFA), which authorized the payment of user fees from drug manufacturers to the FDA in an effort to expedite new drug application (NDAs) review times, did not reveal a statistically significant difference in the rate of BBWs. Critics of PDUFA maintain that reduced FDA-approval times under PDUFA have compromised drug safety. We do not find empirical support for this contention.
    JEL: I1 I11 I18 I28 K2 K23 K32
    Date: 2006–12
  9. By: Karine Lamiraud; Pierre-Yves Geoffard
    Abstract: This paper offers an indirect measure of patient welfare based on whether patients comply with the prescription they receive. Adherence behavior is supposed to reveal patients' subjective valuations of particular therapies. We write a simple theoretical model of patient adherence behavior, that reflects the trade-off between perceived costs and observed regimen efficacy. A discrete choice framework is then used for the estimation, ie the comparison of the incremental benefit of drug intake between two regimens. Consequently, the empirical analysis is based on the identification of patient and drug characteristics associated with adherence. The econometric approach is implemented through a bivariate panel two-equation simultaneous system studying jointly the factors associated with adherence and response to treatment. The data come from a randomized clinical trial conducted in France between 1999 and 2001 and comparing the efficacy of 2 tritherapy strategies in HIV disease. Both the theoretical and empirical results suggest that, for comparable clinical efficacy and toxicity levels, a higher adherence level is associated with higher patient welfare, thus adding valuable information to conclusions drawn by a mere biostatistical analysis. Therefore, from the perspective of the patient, the adherence-enhancing drug must be favored. Our results based on panel data also stress that unobserved patient characteristics account substantially for drug valuation and that the assessment evolves during the course of the treatment. Furthermore, we provide a new framework for the analysis of adherence data. The microeconometric framework highlights that non adherence is an endogenous behavior, thus suggesting new ways for improving adherence.
    Date: 2006
  10. By: Bontemps, C.; Nauges, C.
    Abstract: Bottled water consumption has been steadily growing in the world for the past 30 years, in spite of its excessively high price compared to tap water. The Italian drink more bottled water than anybody else in the world, followed by the French who drink about 130 liters per year per inhabitant. In this country, despite an access to safe public drinking water, 42% of the population regularly drink bottled water. Using scanner data on French consumption combined with raw water quality and other environmental data, we show that raw water bad quality is the most important factor driving the dexision not to drink tap water. The estimated effect is found to be stronger for low-income households. We also confirm the significant direct impact of socioeconomic and demographic households' characteristics, as well as the role of cultural/regional factors. Overall, this study shows that pollution of raw water implies indirect costs for households who instead of drinking water from the tap spend up to 100 times more for bottled water. ...French Abstract : On propose dans cet article de mesurer, par une étude économétrique appropriée, l'impact des facteurs environnementaux, socioéconomiques et culturels sur la décision des ménages de boire (ou non) l'eau du robinet. L'originalité de notre approche réside d'une part, dans l'utilisation de données de consommation de ménages (SECODIP) associées à des informations sur la qualité de l'environnement dans la commune de résidence de ces ménages, en particulier la qualité des eaux brutes (IFEN-SCEES et DGS), et d'autre part dans l'utilisation du prix de potabilisation de l'eau comme mesure de la "mauvaise qualité" des eaux brutes. L'estimation d'un modèle probit sur un échantillon de 4 758 ménages montre que la "mauvaise qualité" des eaux brutes est le déterminant le plus important de la décision de (ne pas) boire l'eau du robinet. Le rôle significatif des caractéristiques des ménages et les effets régionaux sont également confirmés.
    JEL: Q53 D12 C25
    Date: 2006
  11. By: Chris Papageorgiou (Department of Economics Lousiana State University); Andreas Savvides; Marios Zachariadis
    Abstract: Does medical technology originating in countries close to the technology frontier have a significant impact on health outcomes in countries distant from this frontier? This paper considers a framework where lagging countries may benefit from medical technology (a result of research and development by countries close to the frontier) that is embodied in medical imports or diffuses in the form of ideas. Using a novel dataset from a cross-section of 73 technology-importing countries, we show that medical technology diffusion is an important contributor to improved health status, as measured by life expectancy and mortality rates
    Keywords: International Technology Diffusion, Health Status
    JEL: O30 O40
    Date: 2006–12–03
  12. By: Xiaoshu Han
    Abstract: What does your medical expenditure do to your health? Researchers often get significant negative sign on the relative coefficient in the reduced form health production regression. The puzzling result motivates this simple dynamic quantitative general equilibrium model to study the relationships between health status, medical expenditure and employment. The structural parameters are estimated by an indirect inference procedure. This paper finds that the simulated coefficient of medical expenditure in the health equation is negative even though in the health evolution equation of the structural model, medical expenditure only impacts the health in the positive way
    Keywords: medical expenditure, employment, dynamics, indirect inference
    JEL: I10
    Date: 2006–12–03
  13. By: Karsten Jeske; Sagiri Kitao (Economics New York University)
    Abstract: The U.S. tax policy on health insurance favors only those offered group insurance through their employers, and is highly regressive since the subsidy takes the form of deductions from the progressive income tax system. The paper investigates alternatives to the current policy. We find that a complete removal of the subsidy results in a significant reduction in the insurance coverage and serious welfare deterioration. There is, however, room for improving welfare and raising the coverage, by eliminating regressiveness in the group insurance subsidy and by extending refundable credits to the private insurance market. Our work is the first in highlighting the importance of studying health policy in a general equilibrium framework with an endogenous demand for the health insurance. We use the Medical Expenditure Panel Survey (MEPS) to calibrate the process for income, health expenditure shocks and health insurance offer status through employers and succeed in producing the pattern of insurance demand as observed in the data, which serves as a solid benchmark for the policy experiments
    Keywords: Income taxation, health insurance, heterogeneous agents
    JEL: H20 H31 E62
    Date: 2006–12–03
  14. By: Peter Lorentzen (Graduate School of Business Stanford University); John McMillan; Romain Wacziarg
    Abstract: Analyzing a variety of cross-national and sub-national data sources, we show that high adult mortality reduces economic growth by shortening time horizons. Higher adult mortality is associated with increased levels of risky behavior, higher fertility and lower investment in physical and human capital. Furthermore, the feedback effect from economic prosperity to better healthcare implies that mortality could be the source of a poverty-trap. In our regressions, adult mortality explains almost all of Africa's growth tragedy over the past forty years. Our analysis also supports grim forecasts of the long-run economic costs of the ongoing AIDS epidemic.
    Keywords: mortality, fertility, human capital, growth, investment
    JEL: I10
    Date: 2006–12–03
  15. By: Matteo Cervellati; Uwe Sunde (IZA)
    Abstract: This paper provides a unified theory of the economic and demographic transition. The main mechanism is based on optimal decisions about fertility and time investments in heterogeneous types of human capital. These decisions depend on different dimensions of health, which themselves are endogenously determined in the process of development. By disentangling the distinct roles that different dimensions of health, such as adult longevity, child mortality, and overall healthiness, play for education and fertility decisions, the model is able to generate dynamics that can replicate the historical development pattern in the Western world. The model generates an endogenous economic transition from a situation of sluggish growth in incomes and productivity to a modern growth regime. Closely related, a demographic transition from high mortality and high fertility to low mortality and low fertility arises, with an intermediate phase of increasing fertility despite falling mortality rates. The model can generate a positive correlation between income and fertility during early stages of development, as well as a decline net fertility in the last phase of the demographic transition, and it provides a rationale for fertility declines that precede drops in child mortality
    Keywords: endogenous life expectancy, child mortality, health, heterogeneous human capital, technological change
    JEL: E10 J10 O10
    Date: 2006–12–03
  16. By: Javier Birchenall (University of California at Santa Barbara); Rodrigo Reis Soares (Department of Economics PUC-Rio)
    Abstract: This paper accounts for the value of children and future generations in the evaluation of health policies. This is achieved through the incorporation of altruism and fertility in a “value of life” type of framework. We are able to express adults’ willingness to pay for changes in child mortality and also to incorporate the welfare of future generations in the evaluation of current policies. Our model clarifies a series of puzzles from the literature on the “value of life” and on intergenerational welfare comparisons. We show that, by incorporating altruism and fertility into the analysis, the estimated welfare gain from recent reductions in mortality in the U.S. easily doubles.
    Keywords: value of life, mortality, fertility, altruism, intergenerational welfare, willingness to pay
    Date: 2007–01
  17. By: S. DESMIDT; A. HEENE
    Abstract: Background<br> Although it is widely recognized that the effectiveness of mission statements is contingent upon the extent to which they are communicated to the organization’s members, there is virtually no literature about how individual organizational members perceive the mission statement. Previous empirical mission statement research has tended to focus primarily on (a) analyzing mission statement content and (b) the CEO’s perception of the mission statement.<br><br> Purposes<br> In order to address these shortcomings and to help health care managers to better understand and manage their mission statement, a research project was set up that sought (a) to assess how managers and non-managers perceive the mission statement, and (b) to determine if there is a perception gap between both groups. <br><br>Methodology/Approach <br> In total 102 nurses, nurse managers and senior managers of a 217-bed Belgian regional general hospital filled in a questionnaire, based on the Competing Values Framework for Managerial Communication, in order to assess their perception of the organizational mission statement.<br><br> Findings<br> There is a mission statement perception gap between managers and non-managers. The scores of the management group are in almost all cases significantly higher. These findings suggests that managers have a more outspoken and positive attitude towards the mission statement than non-management members. <br><br>Practice Implications<br> In order to optimize the impact of the mission statement, managers should measure the perception of the mission statement and try to remediate possible mission statement 3 perception gaps. The Competing Values Framework for Managerial Communication is offered as a tool to assess (a) the presence, (b) the direction, and (c) the intensity of possible mission statement perception gaps.
    Keywords: Mission statement, Perception, Competing Values Framework for Managerial Communication, Hospital, Nurses
    Date: 2006–11
  18. By: Steven Lim (University of Waikato); Michael P. Cameron (University of Waikato); Krailert Taweekui (Khon Kaen University); John Askwith
    Abstract: In resource-constrained developing countries, mobilizing resources from outside sources may assist in overcoming many development challenges. This paper examines the Thai Business Initiative in Rural Development (TBIRD), an NGO-sponsored program that brings together the comparative advantages and self-interest of rural villages, private sector firms and a facilitating NGO, to improve social and community health outcomes in rural areas. We analyze key issues in the program with data from Northeast Thailand. We find that the TBIRD program appears to improve the income earning and other prospects of the TBIRD factory workers. Further, TBIRD factory employment exhibits a pro-poor bias. A key impact is to provide jobs for people who might otherwise be at increased risk of HIV infection through poverty-induced decisions to migrate to urban centres and participate in the commercial sex industry. This program adds another important tool for development planners in the fight against HIV/AIDS.
    Keywords: rural development; poverty; HIV/AIDS; Thailand
    JEL: O29 I38 L31
    Date: 2007–01–15
  19. By: Beegle, Kathleen; De Weerdt, Joachim; Dercon, Stefan
    Abstract: The authors use a 13-year panel of individuals in Tanzania to assess how adult mortality shocks affect both short and long-run consumption growth of surviving household members. Using unique data which tracks individuals from 1991 to 2004, they examine consumption growth, controlling for a set of initial community, household and individual characteristics. The effect is identified using the sample of households in 2004 which grew out of baseline households. The authors find robust evidence that an affected household will see consumption drop 7 percent within the first five years after the adult death. With high growth in the sample over this time period, this creates a 19 percentage point growth gap with the average household. There is some evidence of persistent effects of these shocks for up to 13 years, but these effects are imprecisely estimated and not significantly different from zero. The impact of female adult death is found to be particularly severe.
    Keywords: Population Policies,Consumption,Housing & Human Habitats,Poverty Lines,Inequality
    Date: 2006–12–01
  20. By: Das, Jishnu; Sohnesen, Thomas Pave
    Abstract: To examine the relationship between patient satisfaction and doctor performance, the authors observed 2,271 interactions between 292 doctors and their patients in 98 clinics and hospitals in Paraguay and conducted an exit-survey with the same patients as they left the clinic. For a subsample of 64 facilities they also interviewed patients who visited the facility within the last week. There are three patterns in the data: (1) Patient satisfaction is positively correlated with doctor effort, measured as a combination of time spent, questions asked, and examinations performed after controlling for observed doctor and patient characteristics; (2) However, accounting for unobserved doctor characteristics dramatically reduces the level of significance and size of correlation between effort and satisfaction, showing that much of the positive relationship is driven by these unobserved doctor-specific factors; and (3) Reported satisfaction is significantly lower for patients interviewed at home compared with those interviewed at the clinic. This leads the authors to conclude that even if patient satisfaction reflects some aspects of the doctor ' s performance, unobserved heterogeneity combined with survey biases limit the widespread applicability of patient satisfaction as an indicator of doctor performance.
    Keywords: Health Monitoring & Evaluation,Health Systems Development & Reform,Health Law,Educational Sciences,Gender and Health
    Date: 2006–12–01
  21. By: Yusuf, Shahid; Nabeshima, Kaoru; Wei Ha
    Abstract: The benefits of good health to individuals and to society are strongly positive and improving the health of the poor is a key Millennium Development Goal. A typical health strategy advocated by some is increased public spending on health targeted to favor the poor and backed by foreign assistance, as well as by an international effort to perfect drugs and vaccines to ameliorate infectious diseases bedeviling the developing nations. But if the objective is better health outcomes at the least cost and a reduction in urban health inequity, the authors ' research suggests that the four most potent policy interventions are: water and sanitation systems; urban land use and transport planning; effective primary care and health programs aimed at influencing diets and lifestyles; and education. The payoff from these four in terms of health outcomes dwarf the returns from new drugs and curative hospital-based medicine, although these certainly have their place in a modern urban health system. And the authors find that the resource requirements for successful health care policies are likely to depend on an acceleration of economic growth rates which increase household purchasing power and enlarge the pool of resources available to national and subnational governments to invest in health-related infrastructure and services. Thus, an acceleration of growth rates may be necessary to sustain a viable urban health strategy which is equitable and to ensure steady gains in health outcomes.
    Keywords: Health Monitoring & Evaluation,Population Policies,Housing & Human Habitats,Health Economics & Finance,Health Systems Development & Reform
    Date: 2007–01–01
  22. By: Wagstaff, Adam
    Abstract: Social health insurance (SHI) is enjoying something of a revival in parts of the developing world. Many countries that have in the past relied largely on tax finance (and out-of-pocket payments) have introduced SHI, or are thinking about doing so. And countries with SHI already in place are making vigorous efforts to extend coverage to the informal sector. Ironically, this revival is occurring at a time when the traditional SHI countries in Europe have either already reduced payroll financing in favor of general revenues, or are in the process of doing so. This paper examines how SHI fares in health care delivery, revenue collection, covering the formal sector, and its impacts on the labor market. It argues that SHI does not necessarily deliver good quality care at a low cost, partly because of poor regulation of SHI purchasers. It suggests that the costs of collecting revenues can be substantial, even in the formal sector where nonenrollment and evasion are commonplace, and that while SHI can cover the formal sector and the poor relatively easily, it fares badly in terms of covering the nonpoor informal sector workers until the economy has reached a high level of economic development. The paper also argues that SHI can have negative labor market effects.
    Keywords: Health Monitoring & Evaluation,Health Economics & Finance,Public Sector Economics & Finance,Labor Markets,Health Systems Development & Reform
    Date: 2007–01–01

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