nep-hea New Economics Papers
on Health Economics
Issue of 2007‒02‒10
eight papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. As Low Birth Weight Babies Grow, Can 'Good' Parents Buffer this Adverse Factor? A Research Note. By Ming-Jen Lin; Jin-Tan Liu; Shin-Yi Chou
  2. Crowd-Out Ten Years Later: Have Recent Public Insurance Expansions Crowded Out Private Health Insurance? By Jonathan Gruber; Kosali Simon
  3. Health Information and Subjective Survival Probability: Evidence from Taiwan By Jin-Tan Liu; Meng-Wen Tsou; James Hammitt
  4. Health insurance for the poor : initial impacts of Vietnam ' s health care fund for the poor By Wagstaff, Adam
  5. The Impact of Parental Income and Education on Child Health : Further Evidence for England By Doyle, Orla; Harmon, Colm; Walker, Ian
  6. Optimal Waits and Charges in Health Insurance By Hugh Gravelle; Luigi Siciliani
  7. Health Security for rural poor:study of community based health insurance By Sudha, venu Menon
  8. Does Medical Diagnosis Data Clarify the Relation Between Prenatal Care and Delivery Outcomes? By Sankar Mukhopadhyay; Jeanne Wendel

  1. By: Ming-Jen Lin; Jin-Tan Liu; Shin-Yi Chou
    Abstract: This research note combines two national Taiwanese datasets to investigate the relationship between low birth weight (LBW) babies, their family background and their future academic outcomes. We find that LBW is negatively correlated with the probability of such children attending university at the age of 18; however, when both parents are college or senior high school graduates, such negative effects may be partially offset. We also show that discrimination against daughters does occur, but only in those cases where the daughters were LBW babies. Moreover, high parental education (HPE) can only buffer the LBW shock among moderately-LBW children (as compared to very-LBW children) and full term-LBW children (as compared to preterm-LBW children).
    JEL: I2 J1
    Date: 2007–01
  2. By: Jonathan Gruber; Kosali Simon
    Abstract: The continued interest in public insurance expansions as a means of covering the uninsured highlights the importance of estimates of "crowd-out", or the extent to which such expansions reduce private insurance coverage. Ten years ago, Cutler and Gruber (1996) suggested that such crowd-out might be quite large, but much subsequent research has questioned this conclusion. We revisit this issue by using improved data and incorporating the research approaches that have led to varying estimates. We focus in particular on the public insurance expansions of the 1996-2002 period. Our results clearly show that crowd-out is significant; the central tendency in our results is a crowd-out rate of about 60%. This finding emerges most strongly when we consider family-level measures of public insurance eligibility. We also find that recent anti-crowd-out provisions in public expansions may have had the opposite effect, lowering take-up by the uninsured faster than they lower crowd-out of private insurance.
    JEL: H3 I1
    Date: 2007–01
  3. By: Jin-Tan Liu; Meng-Wen Tsou; James Hammitt
    Abstract: The effect of new health information on individuals' expectations about their longevity is examined using a Bayesian learning model. Using two-period panel-structured survey data from Taiwan, we find that subjective probabilities of living to age 75 and 85 are significantly smaller for respondents with more abnormal medical test outcomes and for those receiving more extensive advice on health behavior from their physicians. The subjective probability of survival declines with health shocks such as developing heart disease. Using pooled cross-sectional data, we find that males and married persons are more optimistic about their longevity expectations than females and single persons, and that income is strongly correlated with the subjective probability of living to age 75. Consistent with previous studies, the longevity of the same-sex parent is strongly associated with an individual’s own expectation of living to age 75.
    JEL: I10 J14
    Date: 2007–01
  4. By: Wagstaff, Adam
    Abstract: Vietnam ' s Health Care Fund for the Poor (HCFP) uses government revenues to finance health care for the poor, ethnic minorities living in selected mountainous provinces designated as difficult, and all households living in communes officially designated as highly disadvantaged. The program, which started in 2003, did not as of 2004 include all these groups, but those who were included (about 15 percent of the population) were disproportionately poor. Estimates of the program ' s impact-obtained using single differences and propensity score matching on a trimmed sample-suggest that HCFP has substantially increased service utilization, especially in-patient care, and has reduced the risk of catastrophic spending. It has not, however, reduced average out-of-pocket spending, and appears to have had negligible impacts on utilization among the poorest decile.
    Keywords: Health Monitoring & Evaluation,Health Economics & Finance,Housing & Human Habitats,Health Law,Health Systems Development & Reform
    Date: 2007–02–01
  5. By: Doyle, Orla (UCD Geary Institute, University College Dublin); Harmon, Colm (UCD Geary Institute University College Dublin and IZA); Walker, Ian
    Abstract: This paper investigates the robustness of recent findings on the effect of parental education and income on child health. We are particularly concerned about spurious correlation arising from the potential endogeneity of parental income and education. We adopt an instrumental variables approach and our results suggest that the parental income and education effects are generally larger than are suggested by the correlations observed in the data. Moreover, we find strong support for the causal effect of income effect being large for the poor but small at the average level of income.
    Keywords: Child health ; intergenerational transmission
    JEL: I1
    Date: 2007
  6. By: Hugh Gravelle; Luigi Siciliani
    Abstract: Waiting times are commonly used in the health sector to ration demand. We show that when money charges (coinsurance rates) are optimally set and there are no redistributional considerations, it is never optimal to have a positive waiting time if the marginal cost of waiting is higher for patients with greater benefits from health care. Although waiting time provides an additional instrument to control demand it does not mitigate the conflict between efficient risk bearing and efficient consumption of health care.
    Keywords: Waiting times, rationing, optimal pricing, insurance
    JEL: H21 H42 I11 I18
    Date: 2007–01
  7. By: Sudha, venu Menon
    Abstract: ABSTRACT For many people living in developing nations, illness represents a permanent threat to their income earning capacity and, therefore, their livelihood .Health insurance has been progressively more recognized as a tool to finance healthcare provision in the developing world. The high demand for good quality healthcare and the extreme underutilization of existing health services have given rise to the need for community health insurance—an arrangement that may both increase access to healthcare as well as theoretically improve its quality. While alternative forms of healthcare financing have been scrutinized, the option of insurance seems to be promising as it offers the opportunity to pool risk by converting unpredictable healthcare costs into fixed annual premiums. The typical dialogue surrounding health financing cites three main types of insurance as viable options to provide care. First is social health insurance, a practice initiated in several European countries where the working population of society provides health funds for the entire population, working and non-working. Social health insurance utilizes basic socialist principles to hold all sections of society accountable for the good of the community. The next type of insurance model is private health insurance, a structure that generally prevails in capitalist societies. Private insurance favors those who can afford to pay regular premiums, i.e. the middle class and the wealthy. Private insurance, therefore, inherently excludes the poor and only provides benefits to paying members. Finally, and most notable in discussing health for the rural poor, is community-based health insurance (CBHI). Studies conducted in various developing countries, including India, show that community-based health insurance (CBHI) schemes are highly effective in reaching poor populations. According to Friends of Women's World Banking, CBHI is defined as "any not-for-profit insurance scheme that is aimed primarily at the informal sector and formed on the basis of a collective pooling of health risks, and the members participate in its management." Such schemes frequently function in conjunction with healthcare providers or community organizations, such as local religious institutions, self-help groups (SHGs), or non-governmental organizations (NGOs).CBHI requires that people make a small contribution (i.e. pay a premium), which is then pooled to provide benefits, such as medical costs, to those within the pool who may need assistance. Unlike social or private health insurance schemes, CBHI is distinct in that it is generally initiated and managed by the community it benefits. This characteristic of CBHI is particularly important as it entails that the features of any specific CBHI scheme tailor to the local needs of the people. Against this background, the present paper attempts to analyze the Public Private Partnership [PPP] model in Health Insurance. As an example of the above-examined PPP, Chaitanya and HDFC-Chubb General Insurance, located in the Pune district of Maharashtra is taken as case study. Chaitanya and HDFC have recently joined in an endeavor attempting to provide CBHI coverage to SHG -women and their families in the Chaitanya field area. Founded in 1993, Chaitanya focuses on the establishment and strengthening of SHGs and development through micro-finance programs. Chaitanya's work has motivated the formation of the Grameen Mahila Swayamsiddha Sangha, the first independent federation of SHGs in Maharashtra. Currently, Chaitanya also carries out developmental activities including water & sanitation, agriculture, livelihood, and health. HDFC Bank and Chubb Corporation, USA entered a venture together in 2002 to jointly offer general insurance services. Specifically, HDFC-Chubb GIC offers a rural initiatives program tailored to meet the needs of the rural poor and offer insurance services at reduced costs.
    JEL: H51
    Date: 2006–12–15
  8. By: Sankar Mukhopadhyay (Department of Economics, University of Nevada, Reno); Jeanne Wendel (Department of Economics, University of Nevada, Reno)
    Abstract: Studies indicating that prenatal care has minimal impact sparked additional work to assess whether this is a correct conclusion or a statistical artifact. Recent work highlights the importance of including medical diagnoses as regression variables, developing inclusive measures for health outcomes, and using providergenerated measures of prenatal care utilization. We explore these issues using administrative data provided by a tertiary care hospital and a prenatal care clinic. This data includes provider-generated utilization data, coded medical diagnoses, and variable direct costs for delivery-episode hospital care. Because all patients in this dataset obtained care from one set of providers in one urban area, the data set also minimizes heterogeneity due to variations in provider practice patterns and community services. We find that prenatal care exerts a significant beneficial impact on infant outcomes, and variable direct cost provides an inclusive outcomes measure when appropriate exogenous control variables are available. Estimated per-visit cost savings range from zero for patients with no diagnoses, to $10 for patients with one diagnosis, and $22 for patients with multiple diagnoses. The differences among these per-visit savings are significant, suggesting suboptimal allocation of clinic resources. Prenatal care utilization does not, however, increase with the number of diagnoses.
    Keywords: Infant health, prenatal care
    JEL: I11 I12 I18
    Date: 2006–12

This nep-hea issue is ©2007 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.