nep-hea New Economics Papers
on Health Economics
Issue of 2007‒08‒27
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Does disability explain state-level differences in the quality of Medicare beneficiary hospital inpatient care? By Brian S. Armour; M. Melinda Pitts
  2. Benevolence and the value of road safety By Andersson, Henrik; Lindberg, Gunnar
  3. Gender, risk perceptions, and smoking behavior By Lundborg, Petter; Andersson, Henrik
  4. Relatively Inaccessible Abundance: Reflections on U.S. Health Care By Ivy Lynn Bourgeault
  5. Professional Work in Health Care Organizations: The Structural Influences of Patients in French, Canadian and American Hospitals By Ivy Lynn Bourgeault; Ivan Sainsaulieu; Patricia Khokher; Kristine Hirschkorn
  6. Who Minds the Gate? Comparing the role of non physician providers in the primary care division of labour in Canada & the U.S. By Ivy Lynn Bourgeault
  7. Immigration, Ethnicity and Cancer in U.S. Women By James Ted McDonald; Jeremiah Neily
  8. Explaining the Health Gap Between Canadian- and Foreign-Born Older Adults: Findings from the 2000/2001 Canadian Community Health Survey By Karen M. Kobayashi; Steven Prus
  9. Income, Aging, Health and Wellbeing Around the World: Evidence from the Gallup World Poll By Angus Deaton
  10. The height of US-born non-Hispanic children and adolescents ages 2-19, born 1942-2002 in the NHANES Samples By John Komlos; Ariane Breitfelder
  11. The Value of Life Near its End and Terminal Care By Gary Becker; Kevin Murphy; Tomas Philipson
  12. Cost-Effective Prevention of Diarrheal Diseases: A Critical Review By Michael Kremer and Alix Peterson Zwane; Alix Peterson Zwane
  13. Performance-based Incentives for Health: Demand- and Supply-Side Incentives in the Nicaraguan Red de Protección Social By Ferdinando Regalía and Leslie Castro; Leslie Castro
  14. Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean By Amanda Glassman, Jessica Todd and Marie Gaarder; Jessica Todd
  15. Performance-Based Incentives for Health: Six Years of Results from Supply-Side Programs in Haiti By Rena Eichler, Paul Auxila, Uder Antoine, Bernateau Desmangles; Paul Auxila
  16. Performance-Based Incentives for Health: A Way to Improve Tuberculosis Detection and Treatment Completion? By Alexandra Beith, Rena Eichler and Diana Weil; Rena Eichler
  17. The Impact of Patenting on New Product Introductions in the Pharmaceutical Industry By Stuart, Graham; Matthew, Higgins
  18. Securing Medical Personnel: Case Studies of Two Source Countries and Two Destination Countries By Yamagata, Tatsufumi
  19. Fiscal Decentralization, Chinese Style: Good for Health Outcomes? By Uchimura, Hiroko; Jütting, Johannes
  20. Medical Expenditure Risk and Household Portfolio Choice By Dana P. Goldman; Nicole Maestas
  21. The rise and fall of the patient forum By Warwick, Philip

  1. By: Brian S. Armour; M. Melinda Pitts
    Abstract: Almost 20 percent of the total U.S. population and 42 percent of the population over the age of sixty-six are disabled. Research has shown that the presence of a disability can crowd out treatment for medical conditions not necessarily related to the disability and that states that are disproportionately African-American have a lower quality of hospital care. This paper uses quality of care data from the Centers for Medicare and Medicaid Services (CMS) to determine whether disability also explains state-level differences in quality of hospital care. The quality of Medicare beneficiary hospital care was measured using process measures for several medical conditions, including acute myocardial infarction, heart failure, stroke, and pneumonia, that are the leading causes of mortality. We use nonlinear least squares to assess the association between Medicare beneficiary quality of care and state- and medical system–level characteristics. The result for the key variable of interest—disability—reveals that a 1 percent increase in a state's disability rate leads to a 1 percentage point reduction in the score of the state's quality of hospital care. Without explicitly incorporating strategies to eliminate disparities in care incurred by people with disabilities, CMS may not adequately promote the goal of delivering the highest quality of care to all Medicare beneficiaries.
    Date: 2007
  2. By: Andersson, Henrik (VTI); Lindberg, Gunnar (VTI)
    Abstract: This study uses the contingent valuation method to elicit individuals' preferences for their own and others' safety in road-traffic. Whereas one group is asked about a private safety device for themselves, other groups are asked about safety devices for their children, household, relatives and the public. Support is found for the hypothesis that individuals are not purely selfish when it comes the safety of others.
    Keywords: Safety; Willingness to pay; Altruism; Road-traffic
    JEL: D61 D64 H51 I10
    Date: 2007–08–22
  3. By: Lundborg, Petter (Free University Amsterdam); Andersson, Henrik (VTI)
    Abstract: Among younger cohorts, the smoking rate of females has surpassed that of males in many western countries. This is a departure from the common observation that males engage more frequently in risky behaviors. The underlying reasons for gender differences in smoking behavior, and thus for the recent trends, are not well understood. Using a sample of 8,592 Swedish adolescents aged 15-18, this paper contributes to the literature by exploring gender differences in smoking risk perceptions and in the responses to the latter. The results show significant gender differences in the perception of smoking mortality risk and in the perception of the addictiveness of smoking. Girls perceive the mortality risk of smoking as significantly greater than boys do, but they also perceive the addictiveness of cigarettes as less. These results persist after controlling for a wide range of background characteristics, including smoking risk information sources. Moreover, the findings suggest that while smoking information from sources such as teachers, pals, and own search, affect smoking mortality perceptions in a significant and positive manner among boys, no such effects are obtained among girls. Finally, no evidence is found for gender differences in the effect of perceived risks of smoking on the probability of being a smoker.
    Keywords: Gender; smoking; risk perceptions; information
    JEL: D81 I10 J13
    Date: 2007–08–22
  4. By: Ivy Lynn Bourgeault
    Abstract: Outsiders’ views of American health care – and Canadian views in particular - contains this paradox: ready access to excellent high tech services for those who can pay but unfortunately too expensive for many Americans; in essence, inaccessible abundance. In this paper, I embellish upon this paradox with an initial examination of the rather complicated organization of American health care as viewed by an outside observer. I then highlight the key benefits and drawbacks seen of U.S. health care, grounded in empirical data, and how despite its drawbacks it is being spread to other countries. I conclude with a discussion of the values inherent in the provision of health care – that is, whether it should be viewed as a commodity or as a right of the citizens of a nation.
    Keywords: U.S. health care, accessibility, external views
    JEL: I18
    Date: 2007–06
  5. By: Ivy Lynn Bourgeault; Ivan Sainsaulieu; Patricia Khokher; Kristine Hirschkorn
    Abstract: Although there are several studies of the impact of employment of health professionals in large bureaucratic organizations, there has been significantly less research focused on the structural influence of patients on this relationship. In this paper we present comparative qualitative data gathered on the work experiences of health care professionals in Canadian, U.S. and French hospitals. We elaborate specifically on a typology of structural influence of clients on health care professionals work in hospitals in terms of open and closed units.
    Keywords: health professions, health care organizations, patients, hospitals, physicians, nurses, comparative perspectives
    JEL: I18
    Date: 2007–06
  6. By: Ivy Lynn Bourgeault
    Abstract: The gate-keeping role of primary care has been the most fiercely defended of the health care jurisdictions, but more recently it has become a less attractive form of medical practice. This has created an open market for the expansion of a variety of „substitute providers?. In this paper, I present comparative documentary and interview data from Canada and the U.S. on the changes and composition of the primary health care division of labour. What is revealed from this analysis is that: 1) there is a greater reliance on substitute health labour in the U.S. as evidenced by the greater number of and different kinds of primary care providers; 2) there is also a greater propensity in the U.S. towards specialization even of substitute providers; and 3) in both countries, substitute providers resist that label focusing instead on their own model of practice or niche within the primary care division of labour.
    Keywords: primary care, division of labour, U.S.-Canada comparison
    JEL: I18
    Date: 2007–06
  7. By: James Ted McDonald; Jeremiah Neily
    Abstract: This study examines differences in the prevalence of various forms of cancer among American women identified by both ethnicity and immigrant status. Our focus is on four types of cancer – breast, cervical, ovarian, and uterine – that afflict adult working-age women. We analyse the extent to which the prevalence of these cancers among immigrants changes with years in the United States, after controlling for age and socio- economic influences. The paper also examines the extent to which use of preventative health screening and/or lifestyle behaviors might help to explain any observed differences. Data are drawn from the U.S. National Health Interview Survey (NHIS) over the period 1998 to 2005. We find significant evidence of differences in cancer occurrence among immigrants by ethnicity that change with years spent in the USA, as well as pronounced differences by race. The results confirm that the healthy immigrant effect is present in terms of the prevalence of certain forms of cancer in comparison with both US born whites and with US born ethnic minority groups. The result appears not to be due to differences in health behaviors or in the utilization of general health services.
    Keywords: cancer, immigrants, ethnic minorities, women's health
    JEL: I18 I19
    Date: 2007–06
  8. By: Karen M. Kobayashi; Steven Prus
    Abstract: Previous research (Gee, Kobayashi, Prus, 2004) indicates that foreign- born older adults (65 years and older) have poorer health than their Canadian-born counterparts. Using data from the 2000/2001 Canadian Community Health Survey, the current study tests two hypotheses to explain the health gap between these two groups. Findings indicate support for the differential vulnerability hypothesis but not for the differential exposure hypothesis in explaining the health gap between Canadian- and foreign-born older adults. What this suggests is that differences in health status between these two groups, rather than being the result of different social locations and/or lifestyle behaviours, can instead be attributed to the different “reactions” of Canadian- and foreign- born older adults to various social and lifestyle determinants of health.
    Keywords: health, immigrants, aging
    JEL: I18 I19
    Date: 2007–06
  9. By: Angus Deaton
    Abstract: During 2006, the Gallup Organization conducted a World Poll that used an identical questionnaire for national samples of adults from 132 countries. I analyze the data on life satisfaction (happiness) and on health satisfaction and look at their relationships with national income, age, and life-expectancy. Average happiness is strongly related to per capita national income; each doubling of income is associated with a near one point increase in life satisfaction on a scale from 0 to 10. Unlike most previous findings, the effect holds across the range of international incomes; if anything, it is slightly stronger among rich countries. Conditional on national income, recent economic growth makes people unhappier, improvements in life-expectancy make them happier, but life-expectancy itself has little effect. Age has an internationally inconsistent relationship with happiness. National income moderates the effects of aging on self-reported health, and the decline in health satisfaction and rise in disability with age are much stronger in poor countries than in rich countries. In line with earlier findings, people in much of Eastern Europe and in the countries of the former Soviet Union are particularly unhappy and particularly dissatisfied with their health, and older people in those countries are much less satisfied with their lives and with their health than are younger people. HIV prevalence in Africa has little effect on Africans' life or health satisfaction; the fraction of Kenyans who are satisfied with their personal health is the same as the fraction of Britons and higher than the fraction of Americans. The US ranks 81st out of 115 countries in the fraction of people who have confidence in their healthcare system, and has a lower score than countries such as India, Iran, Malawi, or Sierra Leone. While the strong relationship between life-satisfaction and income gives some credence to the measures, as do the low levels of life and health satisfaction in Eastern Europe and the countries of the former Soviet Union, the lack of correlations between life and health satisfaction and health measures shows that happiness (or self-reported health) measures cannot be regarded as useful summary indicators of human welfare in international comparisons.
    JEL: I1 I31 O1 O15 O57
    Date: 2007–08
  10. By: John Komlos; Ariane Breitfelder
    Abstract: We examine the height of non-Hispanic US-born children born 1942-2002 on the basis of all NHES and NHANES data sets available. We use the CDC 2000 reference values to convert height into Height-for-Age z-scores stratified by gender. We decompose deviations from the reference values into an age-effect and a secular trend effect and find that after an initial increase in the 1940s, heights experienced a downward cycle to reach their early 1950s peak again only c. two decades later. After the early 1970s heights increased almost continuously until the present. Girls born in 2002 are estimated to be 0.35[sigma] and boys are 0.39[sigma] above their 1971 values implying an increase of circa 2.5 cm between birth cohorts 1971 and 2002 as an average of all ages (Table 3). Age effects are also substantial - pointing to faster tempo of growth. Girls are c. 0.23[sigma] taller at age 11 and boys 0.15[sigma] taller at age 13 than reference values (Figure 3). This translates into an age effect of circa 1.7 cm and 1.3 cm respectively. Hence, the combined estimated trend and age-effects are substantially larger than those reported hitherto. The two-decade stagnation in heights and the upward trend beginning in the early 1970s confirm the upswing in adult heights born c. 1975-1983, and implies that adults are likely to continue to increase in height. We find the expected positive correlation between height and family income, but income does not affect the secular trend or the age effects markedly.
    JEL: I10
    Date: 2007–08
  11. By: Gary Becker; Kevin Murphy; Tomas Philipson
    Abstract: Medical care at the end of life, which is often is estimated to contribute up to a quarter of US health care spending, often encounters skepticism from payers and policy makers who question its high cost and often minimal health benefits. It seems generally agreed upon that medical resources are being wasted on excessive care for end-of-life treatments that often only prolong minimally an already frail life. However, though many observers have claimed that such spending is often irrational and wasteful, little explicit and systematic analysis exists on the incentives that determine end of life health care spending. There exists no positive theory that attempts to explain the high degree of end-of life spending and why differences across individuals, populations, or time occur in such spending. This paper attempts to provide the first rational and systematic analysis of the incentives behind end of life care. The main argument we make is that existing estimates of the value of a life year do not apply to the valuation of life at the end of life. We stress the low opportunity cost of medical spending near ones death, the importance of keeping hope alive in a terminal care setting, the larger social value of a life than estimated in private demand settings, as well as the insignificance in quality of life in lowering its value. We derive how an ex-ante perspective in terms of insurance and R&D alters some of these conclusions.
    JEL: I1 I11 I18 I32 I39 J0
    Date: 2007–08
  12. By: Michael Kremer and Alix Peterson Zwane; Alix Peterson Zwane
    Abstract: This paper critically reviews the existing research on the cost-effective prevention and treatment of diarrheal diseases, and identifies research priorities in this area aimed at finding ways to reduce the diarrheal disease burden. In contrast to the empirical knowledge base that exists for traditional child health programs to reduce diarrheal morbidity and mortality, evidence on the relative effectiveness and costeffectiveness of various environmental health interventions is limited and subject to significant methodological concerns. There is a limited understanding of the determinants of longterm water and sanitation technology adoption and behavior change at the individual level. Even less is known about how collective action problems in water and sanitation infrastructure maintenance can be overcome. An agenda for future research includes evaluating alternative transmission interruption mechanisms, improving understanding of the determinants of individual-level technology adoption in the water and sanitation sector, and assessing the quality of infrastructure maintenance under different management schemes.
    Keywords: Diarrheal Diseases, Global Health,
    Date: 2007–04
  13. By: Ferdinando Regalía and Leslie Castro; Leslie Castro
    Abstract: While it is difficult to disentangle the individual impact of performance-based, demand-side interventions from the impact of performance-based, supply-side incentives, a rigorous evaluation of the program shows that their combination can work to increase the utilization of health services among the poor, and to improve health outcomes significantly. An evaluation undertaken ten months after demand-side incentives were stopped in certain areas revealed that the utilization of preventive health care services remained high. It is possible, therefore, that a well-targeted strategy of supply-side, performance-based incentives on its own may be sufficient to maintain high levels of health care service utilization, at least among poor households that have benefited from a relatively long period of education on the importance of preventive health care, while receiving demand-side financial incentives. However, the RPS evaluation results cannot exclude that, even after their removal, demand side incentives continue to exert, at least in the short term, a positive impact on service utilization. In the implementation of future RPS-type approaches, research efforts should focus on and be devoted to “unbundling the bundle” and assessing the relative contribution of supply vs. demand-side incentives.
    Keywords: Nicaragua, cash transfer programs, CCT, Health
    Date: 2007–04
  14. By: Amanda Glassman, Jessica Todd and Marie Gaarder; Jessica Todd
    Abstract: In order to support poor families in the developing world to seek and use health care, a multi-pronged strategy is needed on both the supply and the demand side of health care. A demand-side program called Conditional Cash Transfers (CCTs) strives to reduce poverty and also increase food consumption, school attendance, and use of preventive health care. Since 1997, seven countries in Latin America have implemented and evaluated CCT programs with health and nutrition components. The core of the program is based on encouraging poor mothers to seek preventive health services and attend health education talks by providing a cash incentive for their healthy behavior (with healthy behavior representing performance). Evaluations of these programs measured outputs in the utilization of services; health knowledge, attitudes, and practice; food consumption; the supply and quality of services; as well as outcomes in vaccination rates; nutritional status; morbidity; mortality; and fertility. While CCT impact evaluations provided unambiguous evidence that financial incentives increase utilization of key services by the poor, the studies gave little attention to the impact on health-related behaviors, attitudes, and household decision-making or how these factors contribute to or limit impact on health outcomes. Recommendations include expanding the scope of future evaluations to study these effects, modeling program effects beforehand, and carefully selecting the conditions for payment so that they are not too burdensome yet not irrelevant. Continuing to focus on the extreme poor is recommended since findings show that the poorest households must reach a minimum level of food consumption before they are able to make other investments in their health and well-being.
    Keywords: Health, Latin America, Caribbean
    Date: 2007–04
  15. By: Rena Eichler, Paul Auxila, Uder Antoine, Bernateau Desmangles; Paul Auxila
    Abstract: USAID launched a project in 1995 to deliver basic health services in Haiti. The project began by reimbursing contracted NGOs for documented expenditures or inputs. In 1999, payment was changed to being based partly on attaining performance targets or outputs. The project also provided technical assistance to the NGOs, along with opportunities to participate in an NGO network and other cross-fertilization activities. Remarkable improvements in key health indicators have been achieved in the six years since payment for performance was phased in. Although it is difficult to isolate the effects of performance-based payment on these improved indicators from the efforts aimed at strengthening NGOs and other factors, panel regression results suggest that the new payment incentives were responsible for considerable improvements in both immunization coverage and attended deliveries. Results for prenatal and postnatal care were less significant, perhaps suggesting a strong patient behavioral element that is not under the influence of provider actions.
    Keywords: Health, Haiti
    Date: 2007–04
  16. By: Alexandra Beith, Rena Eichler and Diana Weil; Rena Eichler
    Abstract: Tuberculosis is a public health emergency in Africa, Eastern Europe, and Central Asia. Of the estimated 1.7 million deaths from TB, 98 percent are in the developing world, the majority being among the poor. In order to reach the MDG and the Stop TB partnership targets for 2015, TB detection rates need to double, treatment success rates must increase to more than 7075 percent, and strategies to address HIV-associated TB and multi-drug resistant TB must be aggressively expanded. DOTS, the internationally-recommended TB control strategy is the foundation of TB control efforts worldwide. A standard recording and monitoring system built on routine service-based data allows nearly all countries in the world to track progress in case detection and treatment completion through routine monitoring. This provides a good base for measuring the impact of different strategies for improving TB control outcomes. Performance-based incentives in TB control programs include financial and material incentives directed to patients, individual health workers (in the public and private sectors), and entire health care facilities. Those directed toward patients encourage individuals to seek care (a diagnosis) and are conditional on completing steps in the treatment process to ensure adherence to the lengthy treatment schedule. Incentives directed at providers seek to improve the quality of diagnosis, expand access to treatment, improve teamwork, and encourage system changes to improve outcomes. Since multiple program strengthening interventions are implemented simultaneously, it is difficult to fully attribute performance changes to the incentives. However, evidence indicates that performance-based incentives for patients and providers directly contribute to increases in case detection and treatment completion rates. Experience in a number of countries points to the importance of careful design and implementation, particularly where it concerns the distribution of money and/or food. While more evidence is needed on the direct correlation between the incentives and performance, existing evidence suggests that incentives should be an integral element of a TB control strategy.
    Keywords: Health, Tuberculosis Detection
    Date: 2007–04
  17. By: Stuart, Graham; Matthew, Higgins
    Abstract: Since Comanor and Scherer (1969), researchers have been using patents as a proxy for new product development. In this paper, we reevaluate this relationship by using novel new data. We demonstrate that the relationship between patenting and new FDA-approved product introductions has diminished considerably since the 1950s, and in fact no longer holds. Moreover, we also find that the relationship between R&D expenditures and new product introductions is considerably smaller than previously reported. While measures of patenting remain important in predicting the arrival of product introductions, the most important predictor is the loss of exclusivity protection on a current product. Our evidence suggests that pharmaceutical firms are acting strategically with respect to new product introductions. Finally, we find no relationship between firm size and new product introductions.
    Keywords: Patenting; Pharmaceutical industry; New product management; Research productivity
    JEL: O30
    Date: 2007–08–08
  18. By: Yamagata, Tatsufumi
    Abstract: A shortage of medical personnel has become a critical problem for developing countries attempting to expand the provision of medical services for the poor. In order to highlight the driving forces determining the international allocation of medical personnel, the cases of four countries, namely the Philippines and South Africa as source countries and Saudi Arabia and the United Kingdom as destination countries, are examined. The paper concludes that changes in demand generated in major destination countries determine the international allocation of medical personnel at least in the short run. Major destination countries often alter their policies on how many medical staff they can accept, and from where, while source countries are required to make appropriate responses to the changes in demand.
    Keywords: Medical personnel, Brain drain, Philippines, South Africa, Saudi Arabia, United Kingdom, Medical care
    JEL: F22 I19 J61 O52 O53 O55
    Date: 2007–05
  19. By: Uchimura, Hiroko; Jütting, Johannes
    Abstract: This study analyzes the effect of fiscal decentralization on health outcomes in China using a panel data set with nationwide county-level data. We find that counties in more fiscal decentralized provinces have lower infant mortality rates compared to those counties in which the provincial government retains the main spending authority, if certain conditions are met. Spending responsibilities at the local level need to be matched with county government’s own fiscal capacity. For those local governments that have only limited revenues, their ability to spend on local public goods such as health care depends crucially upon intergovernmental transfers. The findings of this study thereby support the common assertion that fiscal decentralization can indeed lead to more efficient production of local public goods, but also highlights the necessary conditions to make this happen.
    Keywords: Fiscal decentralization, Health outcomes, China, Fiscal policy, Decentralization, Local government, Public health
    JEL: H75 I18
    Date: 2007–07
  20. By: Dana P. Goldman; Nicole Maestas
    Abstract: As health care costs continue to rise, medical expenses have become an increasingly important contributor to financial risk. Economic theory suggests that when background risk rises, individuals will reduce their exposure to other risks. This paper presents a test of this theory by examining the effect of medical expenditure risk on the willingness of elderly Medicare beneficiaries to hold risky assets. The authors measure exposure to medical expenditure risk by whether an individual is covered by supplemental insurance through Medigap, an employer, or a Medicare HMO. They account for the endogeneity of insurance choice by using county variation in Medigap prices and non-Medicare HMO market penetration. They find that having Medigap or an employer policy increases risky asset holding by 6 percentage points relative to those enrolled in only Medicare Parts A and B. HMO participation increases risky asset holding by 12 percentage points. Their results point to an important link between the availability and pricing of health insurance and the financial behavior of the elderly.
    Keywords: cost of medical care, managed care plans, health insurance
    JEL: I0
    Date: 2007–02
  21. By: Warwick, Philip
    Abstract: The circular, ‘A Stronger Local Voice’ (Department of Health 2006) published in July announced that Patient Forums in England will be abolished to be replaced by local authority run Local Involvement Networks (LINks). What went wrong with Forums? What was wrong with Community Health Councils before them? Will LINks be more successful than either of them? Is there anything to be gained from another major reorganisation of public involvement arrangements?
    Date: 2006–09

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