nep-hea New Economics Papers
on Health Economics
Issue of 2008‒03‒15
ten papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Chances of Employment in a Population of Women and Men after Surgery of Congenital Heart Disease : Gender-specific Comparisons between Patients and the General Population By Siegfried Geyer; Kambiz Norozi; Reiner Buchhorn; Armin Wessel
  2. The Impact of Income Shocks on Health: Evidence from Cohort Data By Adda, Jérôme; Banks, James; von Gaudecker, Hans-Martin
  3. Age-specific Income Inequality and Life Expectancy: New Evidence By Steven G. Prus; Robert L. Brown
  4. The Price Elasticity of Demand for Pharmaceuticals amongst High Income Older People in Australia: A Natural Experiment By Siminski, Peter
  5. Youth risk-taking behavior in Brazil : drug use and teenage pregnancy By Verner, Dorte; Cardoso, Ana Rute
  6. Pharmaceutical research in Wilhelmine Germany: The case of E. Merck By Carsten Burhop
  7. India's Health Initiative: Financing Issues and Options By Deolalikar, Anil B.; Jamison, Dean T.; Laxminarayan, Ramanan
  8. Cost-effectiveness of Disease Interventions in India By Chow, Jeffrey; Darley, Sarah R.; Laxminarayan, Ramanan
  9. Education and Labor Market Consequences of Teenage Childbearing: Evidence Using the Timing of Pregnancy Outcomes and Community Fixed Effects By Jason M. Fletcher; Barbara L. Wolfe
  10. Does a mandatory telemedicine call prior to visiting a physician reduce costs or simply attract good risks? By Chantal Grandchamp; Lucien Gardiol

  1. By: Siegfried Geyer; Kambiz Norozi; Reiner Buchhorn; Armin Wessel
    Abstract: It was examined whether women and men (17-45 years) with operated congenital heart disease (CHD) differ with respect to chances of employment. Patients were compared with the general population. Patients (N=314) were classified by type of surgery (curative, reparative, palliative) as indicator of initial severity of disease. The second classification was performed according to a system proposed by the New York Heart Association in order to take subjectively reported impairments into account. Controls (N=1165) consisted of a 10% random sample drawn from the German Socio-Economic Panel. Chances of full- time employment decreased as disease severity increased. Chances of part- time and minor employment were higher in patients than among controls. These general effects were due to male patients, while the employment patterns of women did not differ from the control group. Independently of patient status women were more likely to have lower rates of full- time employment, and the rates of part- time and minor employment were higher. Long- term adaptation to impairments due to congenital heart disease differs between women and men with respect to employment status. While female patients do not differ from the general population, males may lower their engagement in paid work.
    Keywords: Congenital heart disease, employment, unemployment, gender
    Date: 2008
  2. By: Adda, Jérôme (University College London); Banks, James (Institute for Fiscal Studies, London); von Gaudecker, Hans-Martin (Free University of Amsterdam)
    Abstract: We study the effect of permanent income innovations on health for a prime-aged population. Using information on more than half a million individuals sampled over a twenty-five year period in three different cross-sectional surveys we aggregate data by date-of-birth cohort to construct a ‘synthetic cohort’ dataset with details of income, expenditure, socio-demographic factors, health outcomes and selected risk factors. We then exploit structural and arguably exogenous changes in cohort incomes over the eighties and nineties to uncover causal effects of permanent income shocks on health. We find that such income innovations have little effects on a wide range of health measures, but do lead to increases in mortality and risky health behaviour.
    Keywords: income shocks, health
    JEL: I1 J3
    Date: 2008–01
  3. By: Steven G. Prus; Robert L. Brown
    Abstract: Objectives -- The study has two primary goals. First, to test the hypothesis that higher levels of income inequality are related to lower levels of population health with updated data from around year 2000. Second, to examine the inequality-health relationship across the life course with particular focus on old age when income distributions often shift dramatically. Design -- Correlation techniques were used to assess the relationship between income inequality (Gini ratio) at ages 0+, 25+, 65+, 75+, and 85+ and life expectancy at corresponding ages (0, 25, 65, 75, 85) by sex, before and after adjusting for average population income. Analyses were conducted on two sets of data: 18 wealthy countries and 28 wealthy and non-wealthy countries.<br> Data sources -- International cross-sectional data on income and life expectancy from about year 2000 were derived from the Luxembourg Income Study and the United Nations Demographic Yearbook respectively.<br> Results -- Among wealthy countries the negative effect of income inequality on life expectancy at birth becomes insignificant after controlling for average absolute income: the correlation coefficient changes from -0.603 to -0.207 for men and -0.605 to 0.024 for women. A similar pattern is observed at age 25. By contrast, the effect becomes increasingly positive and significant across old age, notably for males, regardless of adjustments for average population income or countries of observation.<br> Conclusions -- These updated results do not support the inequality-health hypothesis. The relationship between income inequality and life expectancy at earlier ages in wealthy countries can be explained by the confounding effect of average absolute income. In old age the data are entirely contrary to the hypothesis. More research is needed to understand the mechanisms that facilitate the increasing positive effect of income inequality on life expectancy in late life.
    Keywords: Cross-national; Income Inequality; Population Health; Life Expectancy; Age
    JEL: I10 D63
    Date: 2008–02
  4. By: Siminski, Peter (University of Wollongong)
    Abstract: This paper estimates the price elasticity of demand for pharmaceuticals amongst high-income older people in Australia. It exploits a natural experiment by which some people gained entitlement to a price reduction through the Commonwealth Seniors Health Card (CSHC). To the author’s knowledge, this is the first study of the price elasticity of demand for pharmaceuticals amongst older people that draws on a natural experiment with a control group. The preferred model is a nonlinear Instrumental Variable (IV) difference-in-difference regression, estimated on nationally representative repeated cross sectional survey data using the Generalised Method of Moments. No significant evidence is found for endogenous card take-up, and so cross-sectional estimates are also considered. Taking all of the results and possible sources of bias into account, the ‘headline’ estimate is -0.1, implying that quantity demanded is not highly responsive to price
    Keywords: price elasticity; pharmaceuticals; Australia
    JEL: D12 H42 I11
    Date: 2008
  5. By: Verner, Dorte; Cardoso, Ana Rute
    Abstract: Using an extensive survey that addresses risk factors faced by the population in the shantytowns (favelas) of Fortaleza, Brazil, the aim of this paper is to study risk-taking behavior by youth, focusing on drug use and teenage pregnancy. The paper analyzes the impact of factors such as exposure to mass media, the existence of support networks, self-esteem, and the occurrence of violence at home and in the neighborhood, on the probability of risk-taking behavior. A bivariat e probit model is estimated. The findings indicate that reliance on support networks and exposure to mass media are associated with a lower probability of either type of risk behavior. Living in a violent home increases drug consumption. Race does not have a significant impact on either type of behavior.
    Keywords: Adolescent Health,Population Policies,Health Monitoring & Evaluation,Youth and Governance,Gender and Health
    Date: 2008–03–01
  6. By: Carsten Burhop (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: In this paper, we describe the emergence and evolution of pharmaceutical research at the German company E. Merck during the late 19th and early 20th century. Revolutionary changes in the scientific knowledge base, especially the rise of bacteriological research, and the market entry of dyestuff producers into pharmaceuticals made the re-organisation of pharmaceutical research during the 1890s a necessary corporate strategy. Consequently, Merck restructured its in-house research between 1895 and 1898. Moreover, the firm deepened its co-operation with universities and other outside inventors. Jointly and severally, the firm depended on outside inventors for the generation of new products, whereas in-house scientists improved the productive efficiency. Moreover, we show that a significant number of new products were launched between the late 1890s and 1905. During the following years, however, resource constraints restricted Merck’s innovative capacity.
    Keywords: Business history, pharmaceutical research, case study
    JEL: N83 O32
    Date: 2008–01
  7. By: Deolalikar, Anil B.; Jamison, Dean T.; Laxminarayan, Ramanan (Resources for the Future)
    Abstract: In response to the challenge of sustaining the health gains achieved in the better-performing states and ensuring that the lagging states catch up with the rest of the country, the Indian government has launched the National Rural Health Mission. A central goal of the effort is to increase public spending on health from the current 1.1 percent of GDP to roughly 2–3 percent of GDP within the next five years. In this paper, we examine the current status of health financing in India, as well as alternatives for realizing maximal health gains for the incremental expenditures.
    Keywords: health financing, public spending, India, cost-effectiveness
    JEL: I10 I12 I18
    Date: 2007–10–31
  8. By: Chow, Jeffrey; Darley, Sarah R. (Resources for the Future); Laxminarayan, Ramanan
    Abstract: Health improvements in India, while significant, have not kept up with rapid economic growth rates. The poor in India face high out-of-pocket payments for health care, a significant burden of infectious diseases, and a rapidly increasing burden of non-communicable diseases. Against this backdrop, the central government has proposed doubling government expenditures on health over the next few years. Planned increases in public spending will involve making difficult decisions about the most effective and efficient health interventions if they are to translate into improved population health. To inform the selection of interventions that should be included in a universal health package, this study generated and reviewed cost-effectiveness information for interventions that address the major causes of disease burden in India. We find that India has great potential for improving the health of its people at relatively low cost. Devoting just one percent of GDP (approximately US$6 billion) to a well-designed health program nationwide could save as much as 480 million healthy years of life.
    Keywords: India, health expenditures, cost-effectiveness, public spending
    JEL: H51 H70 I10 I18
    Date: 2007–12–13
  9. By: Jason M. Fletcher; Barbara L. Wolfe
    Abstract: The question of whether giving birth as a teenager has negative economic consequences for the mother remains controversial despite substantial research. In this paper, we build upon existing literature, especially the literature that uses the experience of teenagers who had a miscarriage as the appropriate comparison group. We show that miscarriages are not random events, but rather are likely correlated with (unobserved) community-level factors, casting some doubt on previous findings. Including community-level fixed effects in our specifications lead to important changes in our estimates. By making use of information on the timing of miscarriages as well as birth control choices preceding the teenage pregnancies we construct more relevant control groups for teenage mothers. We find evidence that teenage childbearing likely reduces the probability of receiving a high school diploma by 5 to 10 percentage points, reduces annual income as a young adult by $1,000 to $2,400, and may increase the probability of receiving cash assistance and decrease years of schooling.
    Keywords: teen pregnancy, economic consequences, human capital
    JEL: J24 J13
    Date: 2008–02
  10. By: Chantal Grandchamp; Lucien Gardiol
    Abstract: This paper aims to estimate empirically the efficiency of a Swiss telemedicine service introduced in 2003. We used claims' data gathered by a major Swiss health insurer, over a period of six years and involving 160 000 insured adults. In Switzerland, health insurance is mandatory, but everyone has the option of choosing between a managed care plan and a fee-for-service plan. The present paper focuses on a conventional fee-for-service plan including a mandatory access to a telemedicine service; the insured are obliged to phone this medical call centre prior to visiting a physician. This type of plan generates much lower average health expenditures than a conventional insurance plan. Reasons for this may include selection, incentive effects or simply efficiency. In our sample, about 90% of the difference in health expenditure can be explained by selection and incentive effects. The remaining 10% of savings due to the efficiency of the telemedicine service amount to about SFr 150 per year per insured, of which approx. 60% is saved by the insurer and 40% by the insured. While the plan is cost-effective, the big winners are the insured who not only save monetary and non-monetary costs, but also benefit from reduced premiums.
    Keywords: health, insurance, selection, efficiency, telemedicine
    JEL: I11 D12 C21
    Date: 2008–03

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