nep-hea New Economics Papers
on Health Economics
Issue of 2007‒03‒31
ten papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Health insurance as a strategy for access: By Jairo Restrepo; Andrés Zambrano; Mauricio Velez; Manuel Ramirez
  2. Mother’s Education and Birth Weight By Arnaud Chevalier; Vincent O’Sullivan
  3. Informal and Formal Care in Europe By Tarja K. Viitanen
  4. The Effect of Pensions on Longevity: Evidence from Union Army Veterans By Martin Salm
  5. What Works in Fighting Diarrheal Diseases in Developing Countries? A Critical Review By Alix Peterson Zwane; Michael Kremer
  6. The Role of Southern Actors in Global Governance: The Fight against HIV/AIDS By Sonja Bartsch; Lars Kohlmorgen
  7. The Savings from an Efficient Medicare Drug Plan By Dean Baker
  8. Analysis of NY 'Fair Share for Health Care' Bill By John Schmitt
  9. Stagnation in the Drug Development Process: Are Patents the Problem? By Dean Baker
  10. Celebrating Pork: The Dubious Success of the Medicare Drug Benefit Health Insurance for the Elderly By Dean Baker

  1. By: Jairo Restrepo; Andrés Zambrano; Mauricio Velez; Manuel Ramirez
    Abstract: The Colombian reform to the health system (Law 100 of 1993) established, as strategy to facilitate the access, the universality of a health insurance that is acquired by means of the quotation in the contributive regime or by means of the gratuitous affiliation to the subsidized regime, in order to cover all the population with a unique plan of benefits that includes services in all levels of complexity. In this paper we intend to cover the main streamlined facts of the reform as far as coverage and access of the insurance, by means of logit models, the determinants of the enrollment and the access are considered, using data from the Living Standards Surveys of 1997 and 2003. It stands out that the coverage rose from 20% of the population in 1993 to 60% in 2003, although it seems very difficult to reach the universality; the structure and evolution of the coverage show that both regimes complement each other, while the contributive one has greater presence in the cities and among the population with formal employment, the subsidized one has greater weight among the rural population and in those with low levels of income; on the other hand, the insurance has advantages for the subsidized population, with a greater probability for use of the services, although the plan offers less benefits than the contributive one there are some barriers for the access.
    Date: 2007–03–01
  2. By: Arnaud Chevalier (Royal Holloway University of London, University College Dublin, London School of Economics and IZA); Vincent O’Sullivan (Warwick University and University College Dublin)
    Abstract: Low birth weight has considerable short and long-term consequences and leads to high costs to the individual and society even in a developed economy. Low birth weight is partially a consequence of choices made by the mother pre- and during pregnancy. Thus policies affecting these choices could have large returns. Using British data, maternal education is found to be positively correlated with birth weight. We identify a causal effect of education using the 1947 reform of the minimum school leaving age. Change in compulsory school leaving age has been previously used as an instrument, but has been criticised for mostly picking up time trends. Here, we demonstrate that the policy effects differ by social background and hence provide identification across cohorts but also within cohort. We find modest but heterogenous positive effects of maternal education on birth weight with an increase from the baseline weight ranging from 2% to 6%.
    Keywords: returns to education, health
    JEL: I12 I29
    Date: 2007–02
  3. By: Tarja K. Viitanen (University of Sheffield and IZA)
    Abstract: Government expenditure on formal residential care and home-help services for the elderly significantly reduces 45-59 year old women’s informal care-giving affecting both the extensive and the intensive margin. Allowing for country fixed-effects and country-specific trends and correcting for attrition, the estimates - based on the European Community Household Panel - imply that a 1000 Euro increase in the government expenditure on formal residential care and home-help services for the elderly decreases the probability of informal care-giving outside of the caregiver’s household by 6 percentage points. Formal care substitutes for informal care that is undertaken outside of the carer’s own household, but does not substitute for intergenerational household formation. A simulation exercise shows that an increase in government formal care expenditure is a cost-effective way of increasing the labour force participation rates.
    Keywords: informal care, formal care, ECHP, attrition bias
    JEL: J14 J2
    Date: 2007–02
  4. By: Martin Salm (MEA, University of Mannheim and IZA)
    Abstract: This study uses changes in pension laws for Union Army veterans as a natural experiment to estimate the causal effect of pensions on longevity, and to examine potential pathways underlying such a relationship. We examine the effects of the pension laws of 1907 and 1912, which granted old-age pensions to Union Army veterans. Life expectancy for veterans, who received such a pension, increased by 0.5 years and 2.7 years, respectively. The effect of veteran pensions on longevity was large across wealth groups and size of city. Pensions reduced mortality for both acute and non-acute causes of death.
    Keywords: health gradient, pensions, mortality, Union Army veterans
    JEL: I12 J14 N41
    Date: 2007–03
  5. By: Alix Peterson Zwane; Michael Kremer
    Abstract: The Millennium Development Goals call for reducing by half the proportion of people without sustainable access to safe drinking water. This goal was adopted in large part because clean water was seen as critical to fighting diarrheal disease, which kills 2 million children annually. There is compelling evidence that provision of piped water and sanitation can substantially reduce child mortality. However, in dispersed rural settlements, providing complete piped water and sanitation infrastructure to households is expensive. Many poor countries have therefore focused instead on providing community-level water infrastructure, such as wells. Various traditional child health interventions have been shown to be effective in fighting diarrhea. Among environmental interventions, handwashing and point-of-use water treatment both reduce diarrhea, although more needs to be learned about ways to encourage households to take up these behavior changes. In contrast, there is little evidence that providing community-level rural water infrastructure substantially reduces diarrheal disease or that this infrastructure can be effectively maintained. Investments in communal water infrastructure short of piped water may serve other needs and may reduce diarrhea in particular circumstances, but the case for prioritizing communal infrastructure provision needs to be made rather than assumed.
    JEL: O22 Q52 Q56
    Date: 2007–03
  6. By: Sonja Bartsch (GIGA German Institute of Global and Area Studies); Lars Kohlmorgen (GIGA German Institute of Global and Area Studies)
    Abstract: This paper analyses the role of actors from developing countries in global processes of pol-icy making and governance. To systematically examine the channels of influence of South-ern actors and the interactions in global governance it develops the concept of interfaces. It differentiates between organisational, discoursive, legal and resource-transfer interfaces in global governance. This approach is exemplified in the analysis of a specific field of global governance, the global fight against HIV/AIDS. The paper examines the role of Southern governments and non-state actors in the central organisations of global health, their influ-ence in debates and discourses on strategies to fight HIV/AIDS, and the financing mecha-nisms that were introduced to fight HIV/AIDS in the developing world. It shows that al-beit actors from Northern countries dominate global governance in general, in particular areas the current institutional setting of global governance provides significant opportuni-ties for rather weak actors such as civil society organisations and governments from the South to influence strategies and policies.
    Keywords: North-South relations, global governance, HIV/AIDS, global health, civil society, power relations, interfaces
  7. By: Dean Baker
    Abstract: The Medicare Modernization Act (MMA) was passed in 2003 to reform the Medicare system, but the result was an inefficient set of rules and regulations. This report projects the savings from a drug benefit program that was designed with efficiency in mind.
    Date: 2006–01
  8. By: John Schmitt
    Abstract: This paper is a brief analysis of the "Fair Share for Health Care" pay-or-play legislation proposal in the state of New York. The legislation would require most large firms (defined as those with 100 or more employees) to pay a $3 per hour tax on all employees; firms could avoid the tax by paying at least as much for health insurance. The proposal follows a recent law aimed at much larger firms (those with 10,000 or more employees) in Maryland.
    Date: 2006–05
  9. By: Dean Baker
    Abstract: The rate of new drug development has stagnated, in spite of large increases in both private and public sector spending on biomedical research. The flip side of slower progress is higher drug costs. The cost of developing new drugs has been rising at an average real rate of more than 7 percent since 1987. This report considers the ways in which government patent monopolies distort incentives so that pharmaceutical companies may not opt to minimize research costs. It documents some of the perverse incentives created by patent monopolies in drugs.
    JEL: O31 O32 O34 O38 L12 I18 H21 D42
    Date: 2007–03
  10. By: Dean Baker
    Abstract: Projected costs for Medicare Part D have been revised downward, causing some analysts to claim that the program has proven itself a success. This report explores the factors behind the lower cost projections and reaches far different conclusions. It finds two main reasons: 1) a slowdown in the rate of growth in drug prices that preceded the introduction of the benefit; and 2) fewer people are expected to enroll in the program. The report recommends changes to the program that could save $30 billion a year.
    JEL: I18 L12 H51 H21
    Date: 2007–03

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