nep-hea New Economics Papers
on Health Economics
Issue of 2008‒11‒11
seventeen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Breast screening in NSW, Australia: predictors of non-attendance and irregular attendance By Minh Vu; Kees van Gool; Elizabeth Savage; Marion Haas; Stephen Birch
  2. Do Optional Deductibles Reduce the Number of Doctor Visits? : Empirical Evidence with German Data By Hendrik Schmitz
  3. How do epidemics induce behavioral changes ? By Raouf, BOUCEKKINE; Rodolphe, DESBORDES; HŽlne, LATZER
  4. Adult longevity and economic take-off: from Malthus to Ben-Porath By de la CROIX, David
  5. Taxing sin goods and subsidizing health care By CREMER, Helmuth; DE DONDER, Philippe; MALDONADO, Dario; PESTIEAU, Pierre
  6. Decomposing Cross-Country Gaps in Obesity and Overweight: Does the Social Environment Matter? By Joan Costa-Font; Daniele Fabbri; Joan Gil
  7. The Effect of Managed and Traditional Care Insurance Plans on Horizontal Inequity in Access to Health Care in the United States By Frank Puffer; Elizabeth Pitney Seidler
  8. Sick Leave and the Composition of Work Teams By Matthias Weiss
  9. Social Welfare and Demand for Health Care in the Urban Areas of Côte d'Ivoire By Arsène Kouadio; Vincent Monsan; Mamadou Gbongue
  10. Distribution Impact of Public Spending in Cameroon: The Case of Health Care By Bernadette Dia Kamgnia
  11. Government Spending on Health Care and Education in Croatia: Efficiency and Reform Options By Etibar Jafarov; Victoria Gunnarsson
  12. Bargaining and the Provision of Health Services By Luigi Siciliani; Anderson Stanciol
  13. Measuring NHS Output Growth By Adriana Castelli; Mauro Laudicella; Andrew Street
  14. Mental Health Parity Legislation, Cost-Sharing and Substance Abuse Treatment Admissions By Dhaval M. Dave; Swati Mukerjee
  15. Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance By Randall D. Cebul; James B. Rebitzer; Lowell J. Taylor; Mark E. Votruba
  16. When Does Improving Health Raise GDP? By Quamrul H. Ashraf; Ashley Lester; David N. Weil
  17. Visiting and Office Home Care Workers’ Occupational Health: An Analysis of Workplace Flexibility and Worker Insecurity Measures Associated with Emotional and Physical Health By Isik U. Zeytinoglu; Margaret Denton; Sharon Davies; M. Bianca Seaton; Jennifer Millen

  1. By: Minh Vu (CHERE, University of Technology, Sydney); Kees van Gool (CHERE, University of Technology, Sydney); Elizabeth Savage (CHERE, University of Technology, Sydney); Marion Haas (CHERE, University of Technology, Sydney); Stephen Birch
    Abstract: BreastScreen Australia provides free mammography services to women in the target age group of 50 to 69 years. The program uses a variety of measures to recruit women to the service and, subsequently, encourage them to screen at two year intervals. One of the stated aims of the program is to provide equitable access to all women in the target age group. This paper analyses the extent to which systematic variation can be observed amongst women in terms of their screening behaviour, focusing on those who have never screened or are irregular screeners. Data on self reported utilisation of breast screening services was obtained from the 2002/04 NSW Health Surveys. A multinomial logit (MNL) model was used to examine the role of socioeconomic status, cultural background, education and region of residence on breast screening behaviour. The results show that lower income is associated with a woman never screening or screening irregularly. Region of residence is an important predictor of screening behaviour, although the degree of remoteness was not influential in determining participation. A higher number of hours worked was associated with women being more likely to screen irregularly. These results provide evidence of persistent and systematic variation in screening uptake and regular participation. The results also point towards targeted recruitment and retainment strategies that may provide the greatest potential benefits.
    Keywords: breast screening, mammography, NSW, Australia
    JEL: I10
    Date: 2008–10
  2. By: Hendrik Schmitz
    Abstract: Deductibles in health insurance are often regarded as a means to contain health care costs when individuals exhibit moral hazard. However, in the absence of moral hazard, voluntarily chosen deductibles may instead lead to self-selection into different insurance contracts. We use a set of new variables in the German Socioeconomic Panel for the years 2002, 2004, and 2006 that measure individual health more accurately and include risk-attitudes towards health in order to determine the price elasticity of demand for health care. A latent class approach that takes into account the panel structure of the data reveals that the effect of deductibles on the number of doctor visits is negligible. Private add-on insurance increases the number of doctor visits. However, altogether the effects of the insurance state on the demand for doctor visits are small in magnitude.
    Keywords: Health insurance, deductibles, add-on insurance, count data, latent class panel model
    JEL: I11 I18 G22
    Date: 2008
  3. By: Raouf, BOUCEKKINE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Rodolphe, DESBORDES; HŽlne, LATZER
    Abstract: This paper develops a theory of optimal fertility behavior under mortality schocks. In a 3-periods OLG model, young adults determine their optimal fertility, labor supply and life-cycle consumption with both exogenous child and adult mortality risks. For fixed prices (real wages and interest rate), it is shown that both child and adult one-period mortality shocks raise fertility due to insurance and life-cycle mechanisms respectively. In general equilibrium, adult mortality shocks give risse to price effects (notably through rising wages) lowering fertility, in contrast to child mortality shocks. We complement our theory with an empirical analysis on a sample of 39 Sub-Saharan African countries over the 1980-2004 period, checking for the overall effects of the adult and child mortality channels on optimal fertility behavior. We find child mortality to exert a robust, positive impact on fertility, whereas the reverse is ture for adult mortality. We further find this negative effect fertility of a rise in adult mortality to dominate in the long-term the positive effect on demand for children resulting from an increase in child mortality.
    Keywords: fertility, mortality, epidemics, HIV
    JEL: J13 J22 O41
    Date: 2008–08–25
  4. By: de la CROIX, David (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Abstract: We propose four arguments favoring the idea that medical effectiveness, adult longevity and height started to increase in Europe before the industrial revolution. This may have prompted households to increase their investment in human skills as a response to longer lives and initiated the transition from stagnation to growth.
    Keywords: life expectancy, height, industrial revolution, human capital, adult mortality.
    JEL: J11 I12 N30 I20 J24
    Date: 2008–08
  5. By: CREMER, Helmuth; DE DONDER, Philippe; MALDONADO, Dario; PESTIEAU, Pierre (Université catholique de Louvain (UCL). Center for Operations Research and Econometrics (CORE))
    Abstract: We consider a two-period model. In the first period, individuals consume two goods: one is sinful and the other is not. The sin good brings pleasure but has a detrimental effect on second period health and individuals tend to underestimate this effect. In the second period, individuals can devote part of their saving to improve their health status and thus compensate for the damage caused by their sinful consumption. We consider two alternative specifications concerning this second period health care decision: either individuals acknowledge that they have made a mistake in the first period out of myopia or ignorance, or they persist in ignoring the detrimental effect of their sinful consumption. We study the optimal linear taxes on sin good consumption, saving and health care expenditures for a paternalistic social planner. We compare those taxes in the two specifications. We show under which circumstances the first best outcome can be decentralized and we study the second best taxes when saving is unobservable.
    Keywords: paternalism, behavioral, economics, dual self v single self.
    JEL: H21 I18
    Date: 2008–05
  6. By: Joan Costa-Font; Daniele Fabbri; Joan Gil (Universitat de Barcelona)
    Abstract: A key question underpinning health production, and one that remains relatively unexplored, is the influence of socio-economic and environmental factors on weight gain and obesity. Such issues acquire particular relevance when data from two Mediterranean countries (Italy and Spain) are compared. Interestingly, the obesity rate was 5 percentage points higher in Spain in 2003 while in 1990 it had been roughly the same in the two countries. This paper reports a non-linear decomposition of gaps in overweight (body mass index BMI - between 25 and 29.9 kg/m2), class 1 (BMI30 kg/m2) and class 2 obesity (BMI35 kg/m2) between Spain and Italy by both gender and age. We isolate the influence of lifestyles, socioeconomic and environmental effects in explaining cross-country gaps in the prevalence of obesity. Our findings suggest that when the social environment (peer effects) is not controlled for, eating habits and education are the main predictors of total cross-country gaps (36-52%), albeit that these two factors have a different impact depending on gender and age. Somewhat paradoxically, however, when we controlled for the social environment, these previous predictors lost their explanatory power and peer effects were found to explain between 46 and 76% of gaps and to exhibit an increasing age pattern.
    Keywords: italy, obesity gaps, obesity, education, non-linear decomposition, spain
    JEL: I19 I18 I12
    Date: 2008
  7. By: Frank Puffer (Department of Economics, Clark University); Elizabeth Pitney Seidler (Department of Economics, College of the Holy Cross)
    Abstract: This study examines income inequity in access to health care in the United States. Given the predominant and growing presence of managed care organizations as a source of medical insurance and care in both the private and public settings, replacing traditional indemnity plans as a lower cost prophylactic alternative, we speculate that the presence of Managed Care Organizations would reduce, if not eliminate, any pro wealthy bias in access to health care for the insured population in the U.S. We rely on previously developed methodology from the EcuityII project, incorporating the health inequity index (HIWV), to estimate income inequity in traditional indemnity and managed care plans. Our results are surprisingly counterintuitive to the expected result that managed care was designed to have on access to care. The calculated HIWV indicates a relatively greater pro wealthy bias in the managed care group. This result has important and direct policy implications as public insurance programs in the U.S. contract with managed care organizations as a lower cost alternative for Medicaid and Medicare beneficiaries.
    Keywords: Access, equity, managed care
    JEL: J32 J33
    Date: 2008–11
  8. By: Matthias Weiss (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: In this paper, I analyse the relation between workers’ sick leave and the composition of their work teams with respect to age, job tenure, education, and nationality. The probability of sick leave of workers in work teams is shown to be lower if their teammates are older, have shorter job tenure, are less educated, female and of same nationality. In particular, the difference between a worker’s age and the average age of her teammates explains a large part of the well-known positive correlation between age and sick days. In fact, for workers older than 44 years, individual age does not have any significant effect on sick days if the difference between individual age and average team age is held constant. This age difference can be controlled by the management. If older workers have more sick days only if they work in teams with younger workers, it might optimal to form age-homogeneous work teams.
    JEL: J14 I10 M54
    Date: 2008–11–02
  9. By: Arsène Kouadio; Vincent Monsan; Mamadou Gbongue
    Abstract: This paper analyses the relationship between the demand for health care and that for health insurance by the population of Côte d’Ivoire. A Poisson model is used to estimate the demand for health care and a multinomial logit model for estimating the demand for insurance. The data on which the research was based were taken from a sample of 2,040 households that were interviewed as part of a survey on Recours aux soins et dépenses de santé or PSA 92 (Health care use and health expenses, or PSA 92), which was carried out in 1992 in Yopougon, a working class neighbourhood of Abidjan. The results show that the length of the illness appears to be the factor that triggers the use of modern health care. They also indicate that employment and age are important factors in making decisions about which insurance to take. Extending the data collection system to the rural population, or generalizing it to the whole population, and gaining a better definition of the variables “state of health”, “consulting a health service”, “behaviour of the insured person and of the insurance company vis-à-vis health services” should be envisaged to refine the research. All this will lead to a better grasp of the problems of moral hazard and adverse selection in Côte d’Ivoire’s health system as a result of the minimizing costs of the implementation of the expected Universal Health Insurance (AMU).
    Date: 2008–07
  10. By: Bernadette Dia Kamgnia
    Abstract: The study assessed Cameroonians’ participation in public health care services in order to grasp the distributional effects of those services. Three specific objectives are specified: determine the extent to which public spending on health care may constitute a targeted means for poverty reduction; identify the determinants of participation in health care services in general and in public services in particular; and propose alternative health care policies compatible with the government’s concern for poverty alleviation. In a benefit incidence analysis, it is shown that the benefits acquired from using publicly funded health care services are globally progressive. Integrated health care centres are chosen because of their nearness. Households appreciate the quality of services provided at the peripheral health care centres. Private health care is chosen because of the quality of the service, and people go to traditional healers or resort to self-medication because of the low cost. The majority of the considered factors – cost, nearness, revenue, education, age, gender and illness – had the expected sign and significantly affect the choice of health care providers. But for educated individuals who are employed in the formal sector, nearness and cost are the key variables in the design of health care policies.
    Date: 2008–05
  11. By: Etibar Jafarov; Victoria Gunnarsson
    Abstract: This paper assesses the relative efficiency of government spending on health care and education in Croatia by using the so-called Data Envelopment Analysis. The analysis finds evidence of significant inefficiencies in Croatia's spending on health care and education, related to inadequate cost recovery, weaknesses in the financing mechanisms and institutional arrangements, weak competition in the provision of these services, and weaknesses in targeting public subsidies on health care and education. These inefficiencies suggest that government spending on health and education could be reduced without undue sacrifices in the quality of these services. The paper identifies ways to do that.
    Keywords: Working Paper , Croatia , Government expenditures , Health care , Education ,
    Date: 2008–05–30
  12. By: Luigi Siciliani; Anderson Stanciol
    Abstract: We model and compare the bargaining process between a purchaser of health services, such as a health authority, and a provider (the hospital) in three plausible scenarios: a) the purchaser sets the price, and activity is bargained between the purchaser and the provider: activity bargaining; b) the price is bargained between the purchaser and the provider, but activity is chosen unilaterally by the provider: price bargaining; c) price and activity are simultaneously bargained between the purchaser and the provider: efficient bargaining. We show that: 1) if the bargaining power of the purchaser is high (low), efficient bargaining leads to higher (lower) activity and purchaser's utility, and lower (higher) prices and provider's utility compared to price bargaining. 2) In activity bargaining, prices are lowest, the purchaser's utility is highest and the provider's utility is lowest; activity is generally lowest, but higher than in price bargaining for high bargaining power of the purchaser. 3) If the purchaser has higher bargaining power, this reduces prices and activity in price bargaining, it reduces prices but increases activity in activity bargaining, and it reduces prices but has no effect on activity in efficient bargaining.
    Keywords: bargaining. negotiation. purchasing.
    JEL: I11
    Date: 2008–10
  13. By: Adriana Castelli (Centre for Health Economics, University of York); Mauro Laudicella (Centre for Health Economics, University of York); Andrew Street (Centre for Health Economics, University of York)
    Abstract: We report estimates of output growth for the National Health Service in England over the period 2003/4 to 2006/7. Our output index is virtually comprehensive, capturing as far as possible all the activities undertaken for NHS patients by both NHS and non-NHS providers across all care settings. We assess the quality of output by measuring the waiting times and survival status of every single patient treated in hospital, and we allow for improved disease management in primary care. We propose and apply a method that avoids the traditional requirement for consistent definition of output categories over time in construction of output indices. Use of our approach is critical: it would be not otherwise be possible to calculate output growth for the NHS over the years we consider in any meaningful way. After correcting for significant improvements in data collection in the early period, output growth for the NHS between 2003/4 to 2006/7 averages 5.1% per year, of which 1% is due to improvements in the quality of care.
    Date: 2008–10
  14. By: Dhaval M. Dave; Swati Mukerjee
    Abstract: Treatment is highly cost-effective in reducing an individual's substance abuse (SA) and associated harms. However, data from Treatment Episodes (TEDS) indicate that per capita treatment admissions have remained flat (1992-2003) despite an increase in heavy drug use. Only 16 percent of individuals with clinical SA disorders receive any treatment, and almost half point to accessibility and cost constraints as barriers to care. This study investigates the impact of state mental health parity legislation on treatment admission flows. Fixed effects specifications indicate that mandating comprehensive parity for mental health and SA disorders raises the probability that a treatment admission is privately insured, lowering costs for the individual. While there is some crowd-out of charity care for private insurance, mandates reduce the uninsured probability by a net 1.4-2.4 percentage points (5% relative to the sample mean). States which mandate comprehensive parity also see an increase in total treatment admissions, relative to states which do not support parity. Thus, increasing cost-sharing and reducing financial barriers for the at-risk population may aid in their obtaining adequate SA treatment. However, the effect sizes are muted due to supply/capacity constraints, suggesting that demand-focused interventions need to be complemented with policies that support treatment facilities and providers.
    JEL: I11 I12 I18
    Date: 2008–11
  15. By: Randall D. Cebul; James B. Rebitzer; Lowell J. Taylor; Mark E. Votruba
    Abstract: Health insurance is a complex, multi-attribute product and this creates search frictions that can distort market outcomes. We study the effect of frictions in the market for employer based health insurance. We find that frictions are most severe in the "fully insured" part of the group health insurance market and we estimate that frictions in this market segment cause a quarter of the consumer surplus to shift from policy-holders to insurers (a transfer of 32.5 billion dollars in 1997). Our analysis also suggests that frictions in insurance markets also reduce incentives to invest in future health.
    JEL: I11 L13
    Date: 2008–10
  16. By: Quamrul H. Ashraf; Ashley Lester; David N. Weil
    Abstract: We assess quantitatively the effect of exogenous health improvements on output per capita. Our simulation model allows for a direct effect of health on worker productivity, as well as indirect effects that run through schooling, the size and age-structure of the population, capital accumulation, and crowding of fixed natural resources. The model is parameterized using a combination of microeconomic estimates, data on demographics, disease burdens, and natural resource income in developing countries, and standard components of quantitative macroeconomic theory. We consider both changes in general health, proxied by improvements in life expectancy, and changes in the prevalence of two particular diseases: malaria and tuberculosis. We find that the effects of health improvements on income per capita are substantially lower than those that are often quoted by policy-makers, and may not emerge at all for three decades or more after the initial improvement in health. The results suggest that proponents of efforts to improve health in developing countries should rely on humanitarian rather than economic arguments.
    JEL: I10 O4
    Date: 2008–10
  17. By: Isik U. Zeytinoglu; Margaret Denton; Sharon Davies; M. Bianca Seaton; Jennifer Millen
    Abstract: The home health care sector in Canada experienced major restructuring in the mid-1990s creating a variety of flexibilities for organizations and insecurities for workers. This paper examines the emotional and physical health consequences of employer flexibilities and worker insecurities on home health care workers. For emotional health the focus is on stress and for physical health the focus is on selfreported musculoskeletal disorders. Data come from our survey of home health care workers in a mid-sized city in Ontario, Canada. Data are analyzed separately for 990 visiting and 300 office workers. For visiting workers, results showed that none of the ‘objective’ flexibility/insecurity measures are associated with stress or musculoskeletal disorders controlling for other factors. However, ‘subjective’ flexibility/insecurity factors, i.e. feelings of job insecurity and labour market insecurity, are significantly and positively associated with stress. When stress is included in the analysis, for visiting workers stress mediates the effects of ‘subjective’ flexibility/insecurity with musculoskeletal disorders. For office workers, none of the objective flexibility/insecurity factors are associated with stress but subjective flexibility/insecurity factor of feelings of job insecurity is positively and significantly associated with stress. For office home care workers, work on call is negatively and significantly associated with musculoskeletal disorders. Feeling job insecurity is mediated through stress in affecting musculoskeletal disorders. Feeling labour market insecurity is significantly and positively associated with musculoskeletal disorders for office home care workers. Decision-makers in home care field are recommended to pay attention to insecurities felt by workers to reduce occupational health problems of stress and musculoskeletal disorders.
    Keywords: home health care workers, stress, worker insecurity
    JEL: I11 J28
    Date: 2008–10

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