nep-hea New Economics Papers
on Health Economics
Issue of 2008‒03‒01
nine papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Prison Health Care: Is Contracting Out Healthy? By Kelly Bedard; Ted Frech
  2. A note on the nature of utility in time and health and implications for cost utility analysis By Ken Buckingham; Nancy Devlin
  3. Hospital competition and quality with regulated prices By Kurt R. Brekke; Luigi Siciliani; Odd Rune Straume
  4. The effectiveness of policies to control a human influenza pandemic : a literature review By Dutta, Arin
  5. Doctor Behaviour Under a Pay for Performance Contract: Further Evidence from the Quality and Outcomes Framework By Hugh Gravelle; Matt Sutton; Ada Ma
  6. Chronic Disease and Labour Force Participation in Australia: an endogenous multivariate probit analysis of clinical prevalence data By Anthony Harris
  7. Queues, Private Health Insurance and Medicare: Is Economics or Ethics the Driving Force? By Malcolm Anderson; Jeff Richardson; John McKie; Angelo Iezzi
  8. The Macroeconomic Consequences of Financing Health Insurance By Stephen B. DeLoach; Jennifer M. Platania
  9. Susceptibility to Smoking among Non-smoking East-Asian Youth: A Multilevel Analysis By G. Emmanuel Guindon; Kathy Georgiades; Michael H. Boyle

  1. By: Kelly Bedard (University of California, Santa Barbara); Ted Frech (University of California, Santa Barbara)
    Abstract: U.S Prison health care has recently been in the news and in the courts. A particular issue is whether prisons should contract out for health care. Contracting out has been growing over the past few decades. The stated motivation for this change ranges from a desire to improve the prison health care system, sometimes in response to a court mandate, to a desire to reduce costs. This study is a first attempt to quantify the impact of this change on inmate health. As morbidity measures are not readily obtainable, we focus on mortality. More specifically, we use a panel of state prisons from 1979-1990 and a fixed effects Poisson model to estimate the change in mortality associated with increases in the percentage of medical personnel employed under contract. In contrast to the first stated aim of contracting, we find that a 20 percent increase in percentage of medical personnel employed under contract increases mortality by 2 percent.
    Keywords: prison health care, contracts, managed care, outcomes, mortality,
    Date: 2007–09–01
  2. By: Ken Buckingham (Department of Preventive and Social Medicine, University of Otago, New Zealand); Nancy Devlin (Department of Economics, City University, London)
    Abstract: Time Trade-Off valuations of health are widely used in economic evaluation of health care. Current approaches to eliciting TTO values, and their use in economic evaluation, rests on specific assumptions about the way utility relates to time and health. Both the assumptions themselves and evidence of violations of them are discussed in the literature - yet the issues appear not to be widely appreciated by those using and applying TTO. This paper adds to that literature by demonstrating both the requirements of TTO and violations of these assumptions in terms of the underlying indifference curve maps and utility functions. The advantage of this approach is that is demonstrates very clearly a number of fundamental problems for the way TTO values are currently elicited and used in Cost Utility Analysis. In essence, it is extremely unwise to assume that the current ‘tariffs’ of TTO values, such as those routinely used by NICE and other organisations, can be applied irrespective of the duration of the health states to which they are assigned. The estimates of QALYs that result will, quite often, simply be wrong. We suggest a number of solutions, including the provision of multiple value sets, for a range of durations.
    Keywords: TTO; utility, QALYs, maximal endurable time
    Date: 2008–02
  3. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics and Business Administration, and Health Economics Bergen); Luigi Siciliani (Department of Economics and Related Studies, and Centre for Health Economics, University of York); Odd Rune Straume (Universidade do Minho - NIPE)
    Abstract: We analyse the effect of competition on quality in hospital market with regulated prices, considering both the effect of free patient choice (monopoly versus competition) and increased competition through lower transportation costs (increased substitutability). With partially altruistic providers and a convex cost function that is non-separable in activity and quality, we show - in both cases - that the effect is generally ambiguous. In contrast to the received theoretical literature, this is consistent with, and potentially explains, the mixed empirical evidence.
    Keywords: Hospital, Competition, Quality.
    JEL: H42 I11 I18 L13
    Date: 2008
  4. By: Dutta, Arin
    Abstract: The studies reviewed in this paper indicate that with adequate preparedness planning and execution it is possible to contain pandemic influenza outbreaks where they occur, for viral strains of moderate infectiousness. For viral strains of higher infectiousness, containment may be difficult, but it may be possible to mitigate the effects of the spread of pandemic influenza within a country and/or internationally with a combination of policies suited to the origins and nature of the initial outbreak. These results indicate the likelihood of containment success in ' frontline risk ' countries, given specific resource availability and level of infectiousness; as well as mitigation success in ' secondary ' risk countries, given the assumption of inevitable international transmission through air travel networks. However, from the analysis of the m odeling results on interventions in the U.S. and U.K. after a global pandemic starts, there is a basis for arguing that the emphasis in the secondary risk countries could shift from mitigation towards containment. This follows since a mitigation-focused strategy in such developed countries presupposes that initial outbreak containment in these countries will necessarily fail. This is paradoxical if containment success at similar infectiousness of the virus is likely in developing countries with lower public health resources, based on results using similar modeling methodologies. Such a shift in emphasis could have major implications for global risk management for diseases of international concern such as pandemic influenza or a SARS-like disease.
    Keywords: Avian Flu,Disease Control & Prevention,Health Monitoring & Evaluation,Population Policies,HIV AIDS
    Date: 2008–02–01
  5. By: Hugh Gravelle (National Primary Care Research & Development Centre, Centre for Health Economics, University of York); Matt Sutton (Health Economics Research Unit, University of Aberdeen); Ada Ma (Health Economics Research Unit, University of Aberdeen)
    Abstract: Since 2003, 25% of UK general practitioners’ income has been determined by the quality of their care. The 65 clinical quality indicators in this scheme (the Quality and Outcomes Framework) are in the form of ratios, with financial reward increasing linearly with the ratio between a lower and upper threshold. The numerator is the number of patients for whom an indicator is achieved and the denominator is the number of patients the practices declare are suitable for the indicator. The number declared suitable is the number of patients with the relevant condition less the number exception reported by the practice for a specified range of reasons. Exception reporting is designed to avoid harmful treatment resulting from the application of quality targets to patients for whom they were not intended. However, exception reporting also gives GPs the opportunity to exclude patients who should in fact be treated in order to achieve higher financial rewards. This is inappropriate use of exception reporting or ‘gaming’. Practices can also increase income if they are below the upper threshold by reducing the number of patients declared with a condition (prevalence), or by increasing reported prevalence if they were above the upper threshold. This study examines the factors affecting delivered quality (the proportion of prevalent patients for indicators were achieved) and tests for gaming of exceptions and for prevalence reporting being responsive to financial incentives.
    Keywords: Quality. Incentives. Gaming. Pay for performance.
    Date: 2008–02
  6. By: Anthony Harris (Centre for Health Economics, Monash University)
    Abstract: Reducing chronic disease has been identified as a priority for both health and labour force productivity improvement. The study estimated the influence of clinically diagnosed diabetes and cardiovascular disease on labour supply in men and women aged over 25 taking account of the observed and unobserved factors that influence both the risk of these chronic diseases and labour force participation. The results show that diabetes and cardiovascular disease together have a strong impact on labour market outcomes particularly for males, and that obesity, insufficient exercise, hypertension, lipid abnormality, smoking and parental diabetes all have a significant indirect effect on labour force participation. .
    Date: 2008–02
  7. By: Malcolm Anderson (Centre for Health Economics, Monash University); Jeff Richardson (Centre for Health Economics, Monash University); John McKie (Centre for Health Economics, Monash University); Angelo Iezzi (Centre for Health Economics, Monash University)
    Date: 2007–10
  8. By: Stephen B. DeLoach (Department of Economics, Elon University); Jennifer M. Platania (Department of Economics, Elon University)
    Abstract: Employer-financed health insurance systems, like that used in the United States, distort firms' labor demand and adversely affect the economy. Since such costs vary with employment rather than hours worked, firms have an incentive to increase output by increasing worker hours rather than employment. Given that the returns to employment exceed the returns to hours worked, this results in lower levels of employment and output. In this paper we construct a heterogeneous agent general equilibrium model where individuals differ with respect to their productivity and employment opportunities. Calibrating the model to the U.S. economy, we generate steady state results for several alternative models for financing health insurance: one in which health insurance is financed primarily through employer contributions that vary with employment; a second where insurance is funded through a non-distortionary, lump-sum tax; and a third where insurance is funded by a payroll tax. We measure the effects of each of the alternatives on output, employment, hours worked and inequality.
    JEL: E62 O41 C68
    Date: 2008–02
  9. By: G. Emmanuel Guindon (Centre for Health Economics and Policy Analysis, Department of Clinical Epidemiology and Biostatistics, McMaster University); Kathy Georgiades; Michael H. Boyle (Offord Centre for Child Studies, Department of Psychiatry and Behavioural Neurosciences, McMaster University)
    Abstract: Objective - Among non-smoking youth in east-Asia, to estimate the extent to which susceptibility to smoking is associated with between-context differences (schools and classes) and to identify factors at school, class and individual levels that influence individual susceptibility to smoking. Methods - Cross-sectional data from the Global Youth Tobacco Survey conducted in Cambodia (2002), Laos (2003) and Vietnam (2003) are used to conduct multilevel analyses that account for the nesting of students in classes and classes in schools. The outcome variable is smoking susceptibility, defined as the absence of a firm decision not to smoke and measured using a validated algorithm. Explanatory variables include school and class level influences (current tobacco use prevalence in school, exposure to anti-smoking media messages, exposure to tobacco billboard advertising and school prevention) and individual level influences (parent and friends smoking behaviour, knowledge of the harmful effects of and exposure to secondhand smoke at home, age, sex and pocket income). Results - Multilevel analyses indicate that about 10 percent of the variation in smoking susceptibility is associated with school and class differences. Teens who have parents or friends who smoke, who are exposed to secondhand smoke at home and those who have access to pocket income are found to be more susceptible while better knowledge of the harmful effects of secondhand smoke appears to diminish susceptibility to smoking. For girls only, billboard tobacco advertising increases the risk for susceptibility and school prevention decreases risk while for boys only, attendance to schools with higher prevalence of tobacco use increases risk for susceptibility and anti-smoking media messages decreases risk. Conclusions - This study highlights a number of modifiable factors associated with smoking susceptibility and identifies interactions between teen sex and several factors associated with the susceptibility to smoking. This finding provides support to the call to move beyond genderblind tobacco control policies.
    Keywords: smoking susceptibility, multilevel logistic models, developing countries, Cambodia, Laos, Vietnam
    Date: 2007

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