nep-hea New Economics Papers
on Health Economics
Issue of 2008‒01‒19
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Did 'Targets and Terror' Reduce Waiting times in England for Hospital Care? By Carol Propper; Matt Sutton; Carolyn Whitnall; Frank Windmeijer
  2. Screening Tests, Information, and the Health-Education Gradient By Ciro Avitabile; Tullio Jappelli; Mario Padula
  3. On SARS type economic effects during infectious disease outbreaks By Dutta, Arindam; Brahmbhatt, Milan
  4. Economic Analysis of Cost-Effectiveness of Community Engagement to Improve Health By Andrew Street; Roy Carr-Hill
  5. A Structural Misclassifcation Model to Estimate the Impact of Physician Incentives on Healthcare Utilization By Arrieta, Alejandro
  6. What is the impact of duplicate coverage on the demand for health care in Germany? By Vargas, MH; Elhewaihi, M
  7. Productivity in the National Health Service By Peter Hart

  1. By: Carol Propper; Matt Sutton; Carolyn Whitnall; Frank Windmeijer
    Abstract: Waiting times have been a central concern in the English NHS, where care is provided free at the point of delivery and is rationed by waiting time. Pro-market reforms introduced in the NHS in the 1990s were not accompanied by large drops in waiting times. As a result, the English government in 2000 adopted the use of an aggressive policy of targets coupled with publication of waiting times data at hospital level and strong sanctions for poor performing hospital managers. This regime has been dubbed ‘targets and terror’. We estimate the effect of the English target regime for waiting times for hospital care after 2001 by a comparative analysis with Scotland, a neighbouring country with the same healthcare system that did not adopt the target regime. We estimate difference-in-differences models of the proportion of people on the waiting list who waited over 6, 9 and 12 months. Comparisons between England and Scotland are sensitive to whether published or unpublished data are used but, regardless of the data source, the ‘targets and terror’ regime in England lowered the proportion of people waiting for elective treatment relative to Scotland.
    Keywords: health care, waiting times, targets
    JEL: I18 L32
    Date: 2007–11
  2. By: Ciro Avitabile (University College London, IFS, University of Salerno and CSEF); Tullio Jappelli (Università di Napoli, CSEF and CEPR); Mario Padula (Università di Venezia, and CSEF)
    Abstract: The association between health outcomes and education – the health-education gradient - is widely documented but little is known about its source. Using microeconomic data on a sample of individuals aged 50+ in eight European countries, we find that education and cognitive skills (such as numeracy, fluency, and memory) are associated with a greater propensity for standard screening tests (mammography and colonoscopy). However, the association is much weaker for people who have access to good health quality information, as proxied by a direct measure of the quality of general practitioners. We interpret this result as evidence in favor of the hypothesis that the positive health-education gradient is driven, at least in part, by information barriers rather than such other factors, as individual resources or preferences.
    Keywords: Health, education, information
    JEL: I0 I1 I2
    Date: 2008–01–02
  3. By: Dutta, Arindam; Brahmbhatt, Milan
    Abstract: Infectious disease outbreaks can exact a high human and economic cost through illness and death. But, as with severe acute respiratory syndrome (SARS) in East Asia in 2003, or the plague outbreak in Surat, India, in 1994, they can also create severe economic disruptions even when there is, ultimately, relatively little illness or death. Such disruptions are commonly the result of uncoordinated and panicky efforts by individuals to avoid becoming infected, of preventive activity. This paper places these " SARS type " effects in the context of research on economic epidemiology, in which behavioral responses to disease risk have both economic and epidemiological consequences. The paper looks in particular at how people form subjective probability judgments about disease risk. Public opinion surveys during the SARS outbreak provide suggestive evidence that people did indeed at times hold excessively high perceptions of the risk of becoming infected, or, if infected, of dying from the disease. The paper discusses research in behavioral economics and the theory of information cascades that may shed light on the origin of such biases. The authors consider whether public information strategies can help reduce unwarranted panic. A preliminary question is why governments often seem to have strong incentives to conceal information about infectious disease outbreaks. The paper reviews recent game-theoretic analysis that clarifies government incentives. An important finding is that government incentives to conceal decline the more numerous are non-official sources of information about a possible disease outbreak. The findings suggest that honesty may indeed be the best public policy under modern conditions of easy mass global communications.
    Keywords: Health Monitoring & Evaluation,Disease Control & Prevention,Population Policies,Hazard Risk Management,Gender and Health
    Date: 2008–01–01
  4. By: Andrew Street (Centre for Health Economics, University of York); Roy Carr-Hill (Centre for Health Economics, University of York)
    Abstract: Liberty of association is one of the building blocks of a democratic society, and presumes that community engagement in a democratic society is universally a good thing. This presumption is not subject to economic analysis, but the issue considered here is whether community engagement is a better vehicle for improving the community’s health than another approach. The problems of applying the standard framework of economic evaluation to consider this issue include: multiple perspectives and time frames; identifying and costing activities and specifically the costs of volunteer time; identifying and measuring benefits; identifying comparator communities; how the intervention interacts with the community and therefore identifying end gainers and losers and eventually how the former might compensate the latter; attribution of any changes in community (health) to the approaches and methods of community engagement (CE); quantification across the whole range of community engagement. We consider three possible ways to apply the tools of economic appraisal to assess community engagement, these being: developing a typology; relying just on effectiveness data from the literature and guesstimating costs; and developing a scenario based on partial information about both costs and benefits. We assess the impact of community engagement on health and health behaviour; the contribution of community engagement to supporting social networks and social capital formation; and other impacts specific to a particular situation, including collective and ideological outcomes (whether of citizenship, obedience or political literacy). We conclude with a set of questions to ask of any CE intervention.
    Date: 2008–01
  5. By: Arrieta, Alejandro
    Abstract: The issue of over-utilization of medical procedures has generated strong debate in the United States. It is well acknowledged that, in the agency relationship between physicians and patients, the informational advantage gives doctors an incentive to deviate from the appropriate treatment as defined for a patient's health status, thus incurring over- or under- utilization. However, the empirical consequence of this problem has not been adequately considered. In particular, physician agency breaks the correspondence between appropriate treatment and observed treatment, generating a problem whose characteristics and efects on estimation are analogous to a classifcation error. However, the error is non-random. Empirical literature that does not consider the misclassifcation problem understates the impact of clinical and non-clinical factors on healthcare utilization. This paper proposes a structural misclassification model in which the physician behavior is modeled to characterize the structure of the measurement error. The model captures the interaction between a physician's incentives and a patient's health status, and returns consistent estimators. It also lets us identify the degree of deviation from appropriate treatment (misclassifcation probability) due to physician incentives, and to compute risk-adjusted utilization rates based on clinical factors only. The model is applied to the cesarean section deliveries performed in the state of New Jersey during the 1999-2002 period. Our results show a moderate but growing rate of non-clinically required c-sections of around 3.2%. We conclude that the growth of the c-section rates in New Jersey over these years is explained mainly by non-clinical factors.
    Keywords: Misclassification; physician incentives; structural model
    JEL: I11 D81 C35
    Date: 2007–11
  6. By: Vargas, MH; Elhewaihi, M
    Abstract: Duplicate coverage involves those individuals who hold public health insurance, and purchase additional private coverage. Using data from the German Institute for Economic Research, we try to investigate the impact of duplicate coverage on the demand for healthcare (measured in number of visits to doctors). Given the simultaneity of the choices to take out additional private health insurance coverage, we estimate a negative binomial model to measure this impact. We also estimate a a Full Information Maximun Loglikelihood (FIML), known as Endogenous Switching Poisson Count Model and we compare these results with the standard maximum log likelihood (ML) estimators of the negative binomial model. The Results show that, there is a positive difference on the level of health services demanded when there is a duplicate coverage. We found also that there is evidence to think that in Germany there is a feedback between duplicate coverage and the demand of health services.
    Keywords: Health care services demand; health insurance
    JEL: I11 I10
    Date: 2007–11–17
  7. By: Peter Hart (Centre for Institutional Performance, Department of Economics, University of Reading Business School)
    Date: 2007

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