nep-hea New Economics Papers
on Health Economics
Issue of 2008‒01‒12
fourteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. In the core of longevity risk: hidden dependence in stochastic mortality models and cut-offs in prices of longevity swaps By Stéphane Loisel; Daniel Serant
  3. Physicians’ Multitasking and Incentives: Empirical Evidence from a Natural Experiment By Etienne Dumont; Bernard Fortin; Nicolas Jacquemet; Bruce Shearer
  4. Income Volatility and Health By Timothy J. Halliday
  5. Subjective Health Assessments and Active Labor Market Participation of Older Men: Evidence from a Semiparametric Binary Choice Model with Nonadditive Correlated Individual-Specific Effects By Jürgen Maurer; Roger Klein; Francis Vella
  6. The Role of Coping Humour in the Physical and Mental Health of Older Adults By Elsa Marziali; Lynn McDonald; Peter Donahue
  7. Using Statistics Canada LifePaths Microsimulation Model to Project the Health Status of Canadian Elderly By Jacques Légaré; Yann Décarie
  8. Complementarity and the Measurement of Individual Risk Tradeoffs: Accounting for Quantity and Quality of Life Effects By Mary F. Evans; V. Kerry Smith
  9. How Costly Is Hospital Quality? A Revealed-Preference Approach By John A. Romley; Dana Goldman
  10. Are Some Deaths Worse Than Others? The Effect of ‘Labelling’ on People’s Perceptions By Anne Spencer; Judith Covey; Angela Robinson; Graham Loomes
  11. Bypassing health providers : the quest for better price and quality of health care in Chad By Wane, Waly; Gauthier, Bernard
  12. Health Care Utilization and Self-Assessed Health Specification of Bivariate Models Using Copulas* By José M. R. Murteira; Óscar D. Lourenço
  13. HEALTH AND HEALTH ECONOMICS: A CONCEPTUAL FRAMEWORK By Himanshu Sekhar , Rout; Narayan C handra, Nayak
  14. SEX, GENDER AND HEALTH: A CONCEPTUAL NOTE By Manisha, Chawala; Himanshu Sekhar, Rout

  1. By: Stéphane Loisel (SAF - EA2429 - Laboratoire de Science Actuarielle et Financière - Université Claude Bernard - Lyon I); Daniel Serant (SAF - EA2429 - Laboratoire de Science Actuarielle et Financière - Université Claude Bernard - Lyon I)
    Abstract: In most stochastic mortality models, either one stochastic intensity process (for example a jump-diffusion process) or a collection of independent processes is used to model the stochastic evolution of survival probabilities. We propose and calibrate a new model that takes inter-age correlations into account. The so-called stochastic logit's Deltas model is based on the study of the multivariate time series of the differences of logits of yearly mortality rates. These correlations are important and we illustrate our study on a real-life portfolio. We determine their impact on the price of a longevity swap type reinsurance contract, in which most of the financial risk is taken by a third party. The hypotheses of our model are statistically tested and various measures of risk of the present value of liabilities are found to be significantly smaller in our model than in the case of one common underlying stochastic process.
    Keywords: Longevity risk; longevity swap; inter-age correlations; stochastic mortality; multivariate process; logit; Lee-Carter
    Date: 2007–12
  2. By: Fischer, Justina AV (Dept. of Economic Statistics, Stockholm School of Economics); Sousa-Poza, Alfonso (University of Stuttgart-Hohenheim)
    Abstract: This paper evaluates the relationship between job satisfaction and measures of health of workers using the German Socio-Economic Panel (GSOEP). Methodologically, it addresses two important design problems encountered frequently in the literature: (a) cross-sectional causality problems and (b) absence of objective measures of physical health that complement self-reported measures of health status. Not only does using the panel structure with individual fixed effects mitigate the bias from omitting unobservable personal psycho-social characteristics, but employing more objective health measures such as health-system contacts and disability addresses such measurement problems relating to self-report assessments of health status. <p> We find a positive link between job satisfaction (and changes over time therein) and subjective health measures (and changes therein); that is, employees with higher or improved job satisfaction levels feel healthier and are more satisfied with their health. This observation also holds true for more objective measures of health. Particularly, improvements in job satisfaction over time appear to prevent workers from (further) health deterioration.
    Keywords: job satisfaction; well-being; health; panel data analysis
    JEL: I18 I19 J28
    Date: 2007–09–28
  3. By: Etienne Dumont (Université Laval and CIRPÉE); Bernard Fortin (Université Laval and CIRPÉE); Nicolas Jacquemet (University of Paris 1, CES and PSE); Bruce Shearer (Université Laval, CIRPÉE and IZA)
    Abstract: We analyse how physicians respond to contractual changes and incentives within a multitasking environment. In 1999 the Quebec government (Canada) introduced an optional mixed compensation system, combining a fixed per diem with a discounted (relative to the traditional fee-for-service system) fee for services provided. We combine panel survey and administrative data on Quebec physicians to evaluate the impact of this change in incentives on their practice choices. We highlight the differentiated impact of incentives on various dimensions of physician behaviour by considering a wide range of labour supply variables: time spent on seeing patients, time devoted to teaching, administrative tasks or research, as well as the volume of clinical services and average time per clinical service. Our results show that, on average, the reform induced physicians who changed from FFS to MC to reduce their volume of (billable) services by 6.15% and to reduce their hours of work spent on seeing patients by 2.57%. Their average time spent per service increased by 3.58%, suggesting a potential quality-quantity substitution. Also the reform induced these physicians to increase their time spent on teaching and administrative duties (tasks not remunerated under the feefor- service system) by 7.9%.
    Keywords: physician payment mechanisms, multitasking, mixed-payment systems, incentive contracts, labour supply, self-selection, panel estimation
    JEL: I10 J22
    Date: 2007–12
  4. By: Timothy J. Halliday (University of Hawaii at Manoa and IZA)
    Abstract: We investigate the impact of exogenous income fluctuations on health using twenty years of data from the Panel Study of Income Dynamics using techniques from the literature on the estimation of dynamic panel data models. Contrary to much of the previous literature on health and socio-economic status, we find that, on average, adverse income shocks lead to a deterioration of health. These effects are most pronounced for working-aged men and are dominated by transitions into the very bottom of the earnings distribution.
    Keywords: gradient, health, dynamic panel data models, recessions
    JEL: I0 I12 J1
    Date: 2007–12
  5. By: Jürgen Maurer (MEA, University of Mannheim); Roger Klein (Rutgers University); Francis Vella (Georgetown University and IZA)
    Abstract: We use panel data from the US Health and Retirement Study 1992-2002 to estimate the effect of self-assessed health limitations on active labor market participation of men around retirement age. Self-assessments of health and functioning typically introduce an endogeneity bias when studying the effects of health on labor market participation. This results from justification bias, reflecting an individual’s tendency to provide answers which "justify" his labor market activity, and individual-specific heterogeneity in providing subjective evaluations. We address both concerns. We propose a semiparametric binary choice procedure which incorporates potentially nonadditive correlated individual-specific effects. Our estimation strategy identifies and estimates the average partial effects of health and functioning on labor market participation. The results indicate that poor health and functioning play a major role in the labor market exit decisions of older men.
    Keywords: health, retirement, nonadditive correlated effects, semiparametric estimation
    JEL: I10 J10 J26 C14 C30
    Date: 2007–12
  6. By: Elsa Marziali; Lynn McDonald; Peter Donahue
    Abstract: Objectives - This study examined the associations among coping humor, other personal/social factors, and the health status of community-dwelling older adults. Method - Survey questionnaires were completed with 73 community dwelling older adults. Included were measures of coping humor, spirituality, self-efficacy, social support and physical and mental health status. Results - Correlations across all variables showed coping humor to be significantly associated with social support, self-efficacy, depression, and anxiety. Forward stepwise regression analyses showed that coping humor and self-efficacy contributed to outcome variance in measures of mental health status. Contrary to expectation, neither social support nor spirituality contributed to the total outcome variance on any of the dependant measures. Conclusion - The importance of spirituality, self-efficacy and social support in determining the quality of life of older adults is well supported in the literature. Coping humor as a mechanism for managing the inevitable health stresses of aging has received less attention. This study shows that coping humor and self efficacy are important factors for explaining health status in older adults. Correlations among coping humor, self efficacy, and social support suggest that a sense of humor may play an important role in reinforcing self-efficacious approaches to the management of health issues.
    Keywords: coping humor, aging, health status
    JEL: I19
    Date: 2007–12
  7. By: Jacques Légaré; Yann Décarie
    Abstract: Complex population projections usually use microsimulation models; in Canada, Statistics Canada has developed a global dynamic microsimulation model named LifePaths in the Modgen programming language to be used in policy research. LifePaths provides a platform to build on for our research program, conjointly with Dr Janice Keefe from Mount Saint Vincent University, on projections of the Canadian chronic homecare needs for the elderly up to 2031 and of the human resources required. Beside marital status, family networks and living arrangements, future health status of the elderly is a key variable, but an intricate one. Since health status transitions were previously conditioned only on age and sex, we will use here the current disability module of LifePaths with longitudinal data from Canada’s National Population Health Survey (NPHS). These new health status transitions are considering other significant explicative variables like marital status, education etc. We will then present projections of future Canadian elderly by health status and a comparison with nine European countries for the Future Elderly Living Conditions in Europe (FELICIE) Research Program which has used the same approach. Our previous researches have shown the importance of future disability level for the management of an elderly society. The main output of the present paper would first produce, with new health scenarios, new estimates for Canada of elderly in poor health, for those aged 75 and over. Secondly, it would produce an interesting comparative analysis, useful especially for implementing new policies for the well-being of the Canadian elderly.
    Keywords: Microsimulation, Elderly population, Aging, LifePaths, Health, Canada
    JEL: C15 I19
    Date: 2008–01
  8. By: Mary F. Evans; V. Kerry Smith
    Abstract: This paper considers the factors responsible for differences with age in estimates of the wage compensation an individual requires to accept increased occupational fatality risk. We derive a relationship between the value of a statistical life (VSL) and the degree of complementarity between consumption and labor supplied when health status serves as a potential source of variation in this relationship. Our empirical analysis finds that variations in an individual's health status or quality of life and anticipated longevity threats lead to significant differences in the estimated wage/risk tradeoffs. We describe how extensions to the specification of hedonic wage models, including measures for quality of life and anticipated longevity threats, help to explain the diversity in past studies examining how the estimated wage–risk tradeoff changes with age.
    JEL: I12 J17
    Date: 2008–01
  9. By: John A. Romley; Dana Goldman
    Abstract: One of the most important and vexing issues in health care concerns the cost to improve quality. Unfortunately, quality is difficult to measure and potentially confounded with productivity. Rather than relying on clinical or process measures, we infer quality at hospitals in greater Los Angeles from the revealed preference of pneumonia patients. We then decompose the joint contribution of quality and unobserved productivity to hospital costs, relying on heterogeneous tastes among patients for plausibly exogenous quality variation. We find that more productive hospitals provide higher quality, demonstrating that the cost of quality improvement is substantially understated by methods that do not take into account productivity differences. After accounting for these differences, we find that a quality improvement from the 25th percentile to the 75th percentile would increase costs at the average hospital by nearly fifty percent. Improvements in traditional metrics of hospital quality such as risk-adjusted mortality are more modest, indicating that other factors such as amenities are an important driver of both hospital costs and patient choices.
    JEL: D24 I11
    Date: 2008–01
  10. By: Anne Spencer (Queen Mary, University of London); Judith Covey (University of Durham); Angela Robinson (University of East Anglia); Graham Loomes (University of East Anglia)
    Abstract: This paper sets out to explore the extent to which perceptions regarding the ‘badness’ of different types of deaths differ according to how those deaths are ‘labelled’ in the elicitation procedure. In particular, we are interested in whether responses to ‘contextual’ questions – where the specific context in which the deaths occur is known – differ from ‘generic’ questions – where the context is unknown. Further, we set out to test whether sensitivity to the numbers of deaths differs across the ‘generic’ and ‘contextual’ versions of the questions. We uncover evidence to suggest that both the perceived ‘badness’ of different types of deaths and sensitivity to the numbers of deaths may differ according to whether ‘generic’ or ‘contextual’ descriptions are used.<br> Qualitative data suggested two reasons why responses to ‘generic’ and ‘contextual’ questions differed: firstly, some influential variables were omitted from the ‘generic’ descriptions and secondly, certain variables were interpreted somewhat differently once the context had been identified. The implications of our findings for ‘generic’ questions, such as those commonly used in health economics (for example, the EQ 5D), are discussed.
    Keywords: Preferences, Context effects, Affect heuristic
    JEL: H5 I10
    Date: 2007–12
  11. By: Wane, Waly; Gauthier, Bernard
    Abstract: This paper investigates individuals ' bypassing behavior in the health sector in Chad and the determinants of individuals ' facility choice. The authors introduce a new way to measure bypassing using the patients ' own knowledge of alternative health providers available to them instead of assuming that information as previously done. The authors analyze how perceived health care quality and prices impact patients ' bypassing decisions. The analysis uses data from a Quantitative Service Delivery Survey in Chad ' s health sector carried out in 2004. The survey covers 281 primary health care centers and 1,801 patients. The matching of facility data and patient data allows the analysis to control for a wide range of important patient and facility characteristics, such as income, severity of illness, quality of health care, or price of services. The findings show that income inequalities translate into health service inequalities. There is evidence of two distinct types of bypassing activities in Chad: (1) patients from low-income households bypass high-quality facilities they cannot afford to go to low-quality facilities, and (2) rich individuals bypass low-quality facilities and aim for more expensive facilities that also offer a higher quality of care. These significant differences in patients ' facility choices are observed across income groups as well as between rural and urban areas.
    Keywords: Health Monitoring & Evaluation,Health Systems Development & Reform,Health Law,Housing & Human Habitats,Gender and Health
    Date: 2008–01–01
  12. By: José M. R. Murteira; Óscar D. Lourenço
    Abstract: The discernment of relevant factors driving health care utilization constitutes one important research topic in Health Economics. This issue is frequently addressed through specification of regression models for health care use (y – often measured by number of doctor visits) including, among other covariates, a measure of self-assessed health (sah). However, the exogeneity of sah has been questioned, due to the possible presence of unobservables influencing y and sah, and because individuals’ health assessments may depend on the quantity of medical care received. This paper circumvents the potential endogeneity of sah and its associated consequences within conventional regression models (namely the need to find valid instruments) by adopting a full information approach, with specification of bivariate regression models for the discrete variables (sah,y). The approach is implemented with copula functions, which enable separate consideration of each variable margin and their dependence structure. Estimation of these models is through maximum likelihood, with cross-section data from the Portuguese National Health Survey of 1998/99. Results indicate that estimates of regression parameters do not vary much between different copula models. The dependence parameter estimate is negative across joint models, which suggests evidence of simultaneity of (sah,y) and
    Keywords: health care utilization; self-assessed health; endogeneity; discrete data; copulas.
    JEL: I10 C16 C51
    Date: 2007–12
  13. By: Himanshu Sekhar , Rout; Narayan C handra, Nayak
    Abstract: Over the last three decades, treating health economics as an independent scientific discipline and providing specific treatment to the topics related to the economics of the health care sector have become more and more common. Currently, the field is so well established that it has appeared in the ordinary curriculum of most universities, and even if health economists are mainly to be found in the medical departments, the connections to economics proper are being strengthened, and the methodologies applied are getting refined. In this connection the paper highlights about the concept of health, why does health matter, relationship between health and Health Economics, and the justification of health economics.
    Keywords: Health and Health Economics
    JEL: A23 I1
    Date: 2007
  14. By: Manisha, Chawala; Himanshu Sekhar, Rout
    Abstract: The paper is a conceptual note on Sex, Gender and Health. It also explains the relationship among them. Gender is different from Sex. “Sex" refers to the biological and physiological characteristics that define men and women. “Gender” refers to the socially constructed roles, behaviors, activities, and attributes that a given society considers appropriate for men and women. Little systematic research has been done on the social causes of ill-health. The paper draws the attention of the health researchers to concentrate more on the gender aspects of health research. The good news is that gender norms and values are not fixed. They evolve over time, vary substantially from place to place, and are subject to change. Thus, the poor health consequences resulting from gender differences and gender inequalities are not fixed, either. They can be changed for better.
    Keywords: Sex; Gender; Health
    JEL: A3 I1
    Date: 2007

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