nep-hea New Economics Papers
on Health Economics
Issue of 2008‒08‒06
ten papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Policy Analysis in the health-services market: accounting for quality and quantity By Bernard Fortin; Nicolas Jacquemet; Bruce Shearer
  2. Analyzing the determinants of willingness-to-pay values for testing the validity of the contingent valuation method. Application to home care compared to hospital care By Marie-Odile Carrère; Nathalie Havet; Magali Morelle; Raphaël Remonnay
  3. External referencing and pharmaceutical price negotiation By Begoña Garcia Mariñoso; Izabela Jelovac; Pau Olivella
  4. Physicians' Multitasking and Incentives: Empirical Evidence from a Natural Experiment. By Etienne Dumont; Bernard Fortin; Nicolas Jacquemet; Bruce Shearer
  5. Weight Gain in Adolescents and Their Peers By Halliday, Timothy; Kwak, Sally
  6. Being born under adverse economic conditions leads to a higher cardiovascular mortality rate later in life – evidence based on individuals born at different stages of the business cycle By van den Berg, Gerard J.; Doblhammer-Reiter, Gabriele; Christensen, Kaare
  7. Ill-Health as a Household Norm: Evidence from Other People's Health Problems By N Powdthavee;
  8. What Happens to People After Moderate and Serious Disability? A Longitudianal Study of Satisfaction with Different Areas of Life By N Powdthavee;
  9. Mental Health of Parents and Life Satisfaction of Children: A Within-Family Analysis of Intergenerational Transmission of Well-Being By N Powdthavee; A Vignoles
  10. Information, Avoidance Behavior, and Health: The Effect of Ozone on Asthma Hospitalizations By Matthew J. Neidell

  1. By: Bernard Fortin (CIRPEE - Université Laval); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Bruce Shearer (CIRPEE - Université Laval)
    Abstract: We provide a theoretical and empirical framework for evaluating the eects of policy<br />reforms on physician labor supply. We argue that any policy evaluation must account for<br />both the quality and the quantity of services provided. The introduction of quality into<br />the analysis has implications for both the theoretical and empirical analysis of labor supply,<br />and consequently policy evaluation. In particular, endogenous quality choices introduce non-<br />linearities into the budget constraint since the marginal return to an hour of work depends<br />on the quality of services provided. We illustrate by considering a particular example: the<br />recent reform in compensation contracts for specialist physicians in the province of Quebec<br />(Canada). Prior to 1999, most Quebec specialist physicians were paid fee-for-service con-<br />tracts; they received a piece rate for each clinical service provided. In 1999, the government<br />introduced a mixed remuneration system, under which physicians received a base (half-daily<br />or daily) wage, independent of services provided, and a reduced fee-for-service. Moreover,<br />the government allowed physicians to choose their contract. We derive theoretical results for<br />the eect of the reform on the quantity and quality of services supplied by analyzing local<br />prices and virtual income. We propose discretizing the choice set as an empirical approach<br />to policy evaluation in the presence of non-linear budget constraints.
    Keywords: Health production, Quality of health services, Discretized models
    Date: 2008
  2. By: Marie-Odile Carrère (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines, GRESAC - Groupe de Recherche en Economie de la SAnté et réseaux de soins en Cancérologie - CNRS : FRE2747); Nathalie Havet (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Magali Morelle (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines, GRESAC - Groupe de Recherche en Economie de la SAnté et réseaux de soins en Cancérologie - CNRS : FRE2747); Raphaël Remonnay (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines, GRESAC - Groupe de Recherche en Economie de la SAnté et réseaux de soins en Cancérologie - CNRS : FRE2747)
    Abstract: The contingent valuation (CV) method is an attractive approach for comparing home care to hospital care in which the only difference is patients’ well-being during the treatment process and not health outcomes. We considered the empirical situation of blood transfusion (BT) in cancer patients and collected willingness to pay (WTP) values among BT users. Our main objective was to test the validity of the CV method, namely its ability to elicit true preferences. Firstly, possible determinants of WTP values and their expected influences were identified, from both economic and non economic literature and from the findings of a pilot study. Secondly, they were compared to predicted influences resulting from appropriate econometric analysis of WTP values elicited by a bidding process. From the health economics literature it appeared that the double-hurdle model is the most appropriate approach to account for zero values and protest responses. However, because the number of protest responses was too small, we used a truncated regression model. None of the 7 hypothesized influences was invalidated by econometric results. The anchoring bias hypothesis was confirmed. The WTP for home BT compared to hospital BT increased with household income, with previous experience of home care, with living far from the hospital and with low quality of life. Conversely, it was lower for advanced-stage (palliative or terminal) than for early-stage (curative) patients. We conclude that the CV approach is acceptable to severely ill patients. Moreover, WTP values demonstrate good validity given that influences predicted by our model are consistent with expected determinants.
    Keywords: contingent valuation ; validity ; protest responses ; censored data ; home care
    Date: 2008
  3. By: Begoña Garcia Mariñoso (CMT - Comisión del Mercado de las Telecomunicaciones - Comisión del Mercado de las Telecomunicaciones); Izabela Jelovac (GATE - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Pau Olivella (CODE - Center for the study of the Organizations and Decisions in Economics - Universitat Autónoma de Barcelona)
    Abstract: External referencing (ER) imposes a price cap for pharmaceuticals based on prices of identical products in foreign countries. Suppose a foreign country (F) negotiates prices with a pharmaceutical firm while a home country (H) can either negotiate independently or implement ER based on the foreign price. We show that country H always prefers ER if (i) it can condition ER on the drug being subsidized in the foreign country and (ii) copayments are higher in H than in F. H’s preference is<br />reinforced when the difference between country copayments is large and/or H’s population is small. External referencing by H always harms F if (ii) holds, but less so if (i) holds.
    Keywords: pharmaceuticals ; external referencing ; price negotiation
    Date: 2008
  4. By: Etienne Dumont (CIRPEE - Université Laval); Bernard Fortin (CIRPEE - Université Laval); Nicolas Jacquemet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Bruce Shearer (CIRPEE - Université Laval)
    Abstract: We analyse how physicians respond to contractual changes and incentives within a multitasking<br />environment. In 1999 the Quebec government (Canada) introduced an optional mixed compensation<br />system, combining a xed per diem with a partial (relative to the traditional fee-for-service system)<br />fee for services provided. We combine panel survey and administrative data on Quebec physicians<br />to evaluate the impact of this change in incentives on their practice choices. We highlight the<br />dierentiated impact of incentives on various dimensions of physician behaviour by considering a<br />wide range of labour supply variables: time spent on seeing patients, time devoted to teaching,<br />administrative tasks or research, as well as the volume of clinical services and average time per<br />clinical service. Our results show that, on average, the reform induced physicians who changed<br />from FFS to MC to reduce their volume of (billable) services by 6.15% and to reduce their hours of<br />work spent on seeing patients by 2.57%. Their average time spent per service increased by 3.58%,<br />suggesting a potential quality-quantity substitution. Also the reform induced these physicians to<br />increase their time spent on teaching and administrative duties (tasks not remunerated under the<br />fee-for-service system) by 7.9%.
    Keywords: physician payment mechanisms; multitasking; mixed-payment systems; incentive con-<br />tracts; labour supply; self-selection; panel estimation.
    Date: 2008
  5. By: Halliday, Timothy (University of Hawaii at Manoa); Kwak, Sally (University of Hawaii at Manoa)
    Abstract: Despite the urgent public health implications, relatively little is yet known about the effect of peers on adolescent weight gain. We describe trends and features of adolescent BMI in a nationally representative dataset and document correlations in weight gain among peers. We find strong correlations between own body mass index (BMI) and peers’ BMI’s. Though the correlations are especially strong in the upper ends of the BMI distribution, the relationship is smooth and holds over almost the entire range of adolescent BMI. Furthermore, the results are robust to the inclusion of school fixed effects and basic controls for other confounding factors such as race, sex, and age. Some recent research in this area asks whether or not adolescent weight gain is caused by peers. We discuss the econometric difficulties in plausibly estimating such effects. Our results do not rule out the existence of these types of social network effects.
    Keywords: obesity, peer effects, adolescent health
    JEL: I10 I12
    Date: 2008–07
  6. By: van den Berg, Gerard J. (Department of Economics, Free University Amsterdam); Doblhammer-Reiter, Gabriele (University of Rostock); Christensen, Kaare (University of Southern Denmark)
    Abstract: We connect the recent medical and economic literatures on the long-run effects of early-life conditions, by analyzing the effects of economic conditions on the individual cardiovascular (CV) mortality rate later in life, using individual data records from the Danish Twin Registry covering births since the 1870s and including the cause of death. To capture exogenous variation of conditions early in life we use the state of the business cycle around birth. We find a significant negative effect of economic conditions early in life on the individual CV mortality rate at higher ages. There is no effect on the cancer-specific mortality rate. From variation within and between monozygotic and dizygotic twin pairs born under different conditions we conclude that the fate of an individual is more strongly determined by genetic and household-environmental factors if early-life conditions are poor. Individual-specific qualities come more to fruition if the starting position in life is better.
    Keywords: Cardiovascular mortality; early-life conditions
    JEL: I10
    Date: 2008–07–07
  7. By: N Powdthavee;
    Abstract: This paper presents evidence that an individual's self-assessed health (SAH) does not only suffer from systematic reporting bias and adaptation bias but is also biased owing to confounding social norm effects. Using 13 waves of the British Household Panel Survey, I am able to show that, while there is a negative and statistically significant correlation between SAH and individuals' own health problem index, this negative effect varies significantly with the average number of health problems per (other) family member. Consistent with Akerlof's (1980) social norm theory, the gap in SAH between individuals with and without health problems reduces as the average number of health problems for other household members increases. Under the assumption that SAH is endogenous, this finding suggests that the objective health of other household members could be a good instrument for self-assessed levels of health.
    Keywords: Self-assessed health; subjective health; relative; norm; comparison effects; chronic illness; BHPS
    Date: 2008–07
  8. By: N Powdthavee;
    Abstract: The current study uses a large British panel data set to examine the impact of disability, and the speed and extent of adaptation to disability, in seven domain satisfactions. Results show that the onset of a severe disability has the most detrimental impact on health, income, and social life in that order. Adaptation in the domain satisfactions is complete for the moderately disabled. However, there is little evidence of adaptation to severe disability in any of the affected domains. Finally, this paper proposes van Praag et al's (2003) two-layer model as an alternative way to study adaptation.
    Keywords: Disability; Adaptation; Domain satisfactions; Life satisfaction; Focusing effects.
    Date: 2008–07
  9. By: N Powdthavee; A Vignoles
    Abstract: This paper addresses the extent to which there is an intergenerational transmission of mental health and subjective well-being within families. Specifically it asks whether parents' own mental distress influences their child's life satisfaction, and vice versa. Whilst the evidence on daily contagion of stress and strain between members of the same family is substantial, the evidence on the transmission between parental distress and children's well-being over a longer period of time is sparse. We tested this idea by examining the within-family transmission of mental distress from parent to child's life satisfaction, and vice versa, using rich longitudinal data on 1,175 British youths. Results show that parental distress at year t-1 is an important determinant of child's life satisfaction in the current year. This is true for boys and girls, although boys do not appear to be affected by maternal distress levels. The results also indicated that the child's own life satisfaction is related with their father's distress levels in the following year, regardless of the gender of the child. Finally, we examined whether the underlying transmission correlation is due to shared social environment, empathic reactions, or transmission via parent-child interaction.
    Keywords: Life satisfaction, mental health, intergenerational transmission, within-family, longitudinal, GHQ
    JEL: D64 I1 I31 J13
    Date: 2008–07
  10. By: Matthew J. Neidell
    Abstract: This paper assesses whether responses to information about risk impact estimates of the relationship between ozone and asthma in Southern California. Using a regression discontinuity design, I find smog alerts significantly reduces daily attendance at two major outdoor facilities. Using daily time-series regression models that include year-month and small area fixed effects, I find estimates of the effect of ozone for children and the elderly that include information are significantly larger than estimates that do not. These results are consistent with the hypothesis that individuals take substantial action to reduce exposure to risk; estimates ignoring these actions are severely biased.
    JEL: D80 I12 I18 Q53
    Date: 2008–07

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