nep-hea New Economics Papers
on Health Economics
Issue of 2008‒07‒05
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. What Determines Local Expenditures on Mental Health Care in Sweden Really? By Andersson, Linda; Henriksen, Anna
  2. State and Federal Approaches to Health Reform: What Works for the Working Poor? By Ellen Meara; Meredith Rosenthal; Anna Sinaiko; Katherine Baicker
  3. Pricing and Welfare in Health Plan Choice By M. Kate Bundorf; Jonathan D. Levin; Neale Mahoney
  4. The passive drinking effect: Evidence from Italy By Martina Menon; Federico Perali; Luca Piccoli
  5. The Health Care Crisis in the United States: The Issues and Proposed Solutions by the 2008 Presidential Candidates By Pareto, Marcos Pompeu
  6. Social wealth and optimal care By Darri-Mattiacci, Giuseppe; Langlais, Eric
  7. The Rise in Obesity Across the Atlantic: An Economic Perspective By Giorgio Brunello; Pierre-Carl Michaud; Anna Sanz-de-Galdeano

  1. By: Andersson, Linda (Department of Business, Economics, Statistics and Informatics); Henriksen, Anna (Department of Business, Economics, Statistics and Informatics)
    Abstract: The objective of this paper is to analyze the determinants of local expenditures on mental health care in Sweden. We use a unique dataset that identifies the localities’ expenditures explicitly directed towards mental health care. Based on these data we find that there is increasing returns to scale in the provision of local mental health services in terms of population. However, it appears as if local policy variables, local earnings potential (economic opportunities), geographical area or other indicators that have been put forward in the debate, cannot explain the large variation in local expenditures on mental health care in
    Keywords: local expenditures; mental health care
    JEL: H72 I18 I38
    Date: 2008–06–25
  2. By: Ellen Meara; Meredith Rosenthal; Anna Sinaiko; Katherine Baicker
    Abstract: We compare and contrast the labor market and distributional impact of three common approaches to state and federal health insurance expansion: public insurance expansions, refundable tax credits for low income people, and employer and individual mandates. We draw on existing estimates from the literature and individual-level data on the non-institutionalized population aged 64 and younger from the 2005 Current Population Survey to estimate how each approach affects (1) the number of people insured; (2) private and public health spending; (3) employment and wages; and (4) the distribution of subsidies across families based on income in relation to the federal poverty level and work status of adult family members. Employer mandates expand coverage to the largest number of previously insured relative to public insurance expansions and individual tax credits, but with potentially negative labor market consequences. Medicaid expansions could achieve moderate reductions in the share of the uninsured with neutral labor market consequences, and by definition, they expand coverage to the poorest groups regardless of work status. Tax credits extend coverage to relatively few uninsured, but with neutral effects on the labor market. Both Medicaid expansions and tax credits offer moderate redistribution to previously insured individuals who are poor or near-poor. None of the three policies significantly expand insurance coverage among poor working families. Our findings suggest that no single approach helps the working poor in exactly the ways policy makers might hope. To the extent that states are motivated to help the uninsured in poor working families, health reforms must find ways to include those unlikely to take up optional policies, and states must address the challenge of the many uninsured likely to be excluded from policies based on part-time work status, firm size, or immigration status.
    JEL: I1 I11 J3
    Date: 2008–06
  3. By: M. Kate Bundorf; Jonathan D. Levin; Neale Mahoney
    Abstract: Prices in government and employer-sponsored health insurance markets only partially reflect insurers' expected costs of coverage for different enrollees. This can create inefficient distortions when consumers self-select into plans. We develop a simple model to study this problem and estimate it using new data on small employers. In the markets we observe, the welfare loss compared to the feasible efficient benchmark is around 2-11% of coverage costs. Three-quarters of this is due to restrictions on risk-rating employee contributions; the rest is due to inefficient contribution choices. Despite the inefficiency, we find substantial benefits from plan choice relative to single-insurer options.
    JEL: D40 D61 D82 I11 L11
    Date: 2008–06
  4. By: Martina Menon; Federico Perali; Luca Piccoli
    Abstract: This paper investigates whether consumption of alcoholic beverages affects distribution of resources among household members. We refer to this effect, highlighting the negative impact that alcohol addicted individuals can have on other household members wellbeing. To investigate this issue we rely on the collective framework and estimate a structural collective demand system. Our results show that for Italian households a high level of alcohol consumption influences the allocation of resources in favour of the husband, with a larger effect in poor households. This evidence implies that alcohol consumption is not only an individual problem. Public costs that are transferred to the other household members should be taken into account when designing social policies.
    Date: 2008
  5. By: Pareto, Marcos Pompeu
    Abstract: The United States has state of the art technology and world renowned expertise in medical treatment, yet in terms of healthcare it shows a dramatically poor performance in relation to the other industrialized countries. This situation is surprising, since one would expect that a free market system run almost entirely by the private sector should show a much better performance. This issue has reached the point of being one of the most important national concerns and the subject of serious political and economic arguments - not only regarding how the system should be improved, but also whether it should remain being run by the private sector under a free market approach or whether it should be run by the government and made accessible to the entire population. The first option is supported by the arguments that public initiatives often perform poorly and that free-market competition should prevail. Contrarily, the other side claims that the system is only nominally a free market, that empirical evidence shows it's not working as it should, and that other successful healthcare systems are mostly government operated. As is stands, the health care issue acquired national importance and is presented as a major component of both presidential candidates programs, yet each favoring a different approach to improve accessibility and lower healthcare costs. Republican Senator McCain relies on improving the system by maintaining its current private enterprise, free market characteristics, while Democratic Senator Barrack Obama favours providing universal coverage and lower costs through a higher government intervention in the system. This paper examines the approaches proposed by both candidates and analyses the potential impact their plans may have on the health care system. While the lack of more detailed implementation details makes difficult accessing the effective result of each policy, the comparative review of the alternative approaches presented in this paper will help the reader to to judge for him or herself which could be the more appropriate to upgrade the system and attain a higher performance level.
    Keywords: Elections; General Elections; 2008; President; United States; Health Care; Healthcare; Crisis; McCain; Obama; Barack; Democrat; Republican; Private Market; Universal Healthcare; Competition
    JEL: I11 H51 H11 I18 D43 I10
    Date: 2008–06–18
  6. By: Darri-Mattiacci, Giuseppe; Langlais, Eric
    Abstract: Many accidents result in losses that cannot be perfectly compensated by a monetary payment. Moreover, often injurers control the magnitude rather than the probability of accidents. We study the characteristics of optimal levels of care and distribution of risk under these circumstances and show that care depends on the aggregate wealth of society but does not depend on wealth distribution. We then examine whether ordinary liability rules, regulation, insurance, taxes and subsidies can be used to implement the first-best outcome. Finally, our results are discussed in the light of fairness considerations (second best).
    Keywords: accidents; risk; wealth; care; bodily injury.
    JEL: K13
    Date: 2008–06–27
  7. By: Giorgio Brunello; Pierre-Carl Michaud; Anna Sanz-de-Galdeano
    Abstract: The authors provide comparable evidence on the patterns and trends in obesity across the Atlantic and analyze whether there are economic rationales for public intervention to control obesity. They take into account equity issues as well as efficiency considerations, which are organized around three categories of market failures: productive inefficiencies, lack of information or rationality and health insurance externalities. They also calculate the long term financial consequences of current U.S. and European obesity trends, and conclude with a brief review of current policies to reduce and prevent excessive body weight both in Europe and the U.S.
    Keywords: obesity, health care costs, efficiency, equity
    JEL: I1 D6
    Date: 2008–06

This nep-hea issue is ©2008 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.