nep-hea New Economics Papers
on Health Economics
Issue of 2009‒01‒31
nineteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. TQuantity versus Quality in Medical Care: Evidence from State Variation in Telemedicine Regulation By Anca Cotet
  2. Tort Reform and the Demand for Medical Care: Evidence from State-by-State Variation in Non-Economic Damages Caps By Anca Cotet
  3. Death And Taxes: The Impact Of Progressive Taxation On Health By Anca Cotet
  4. Flat-of-the-Curve Medicine – A New Perspective By Johannes Schoder; Peter Zweifel
  5. Self-Employment and the Role of Health Insurance By Gumus, Gulcin; Regan, Tracy L.
  6. Nurses Wanted: Is the Job Too Hars or is the Wage Too Low By Di Tommaso, M. L.; Strøm, Steinar; Sæther, Erik Magnus
  7. Dynamic Programming Model of Health and Retirement By Iskhakov, Fedor
  8. Caring for Mom and Neglecting Yourself? The Health Effects of Caring for an Elderly Parent By Coe, N.B.; Houtven, C.H. van
  9. Does Retirement Kill You? Evidence from Early Retirement Windows By Coe, N.B.; Lindeboom, M.
  10. Does Organic Agriculture Lead to Better Health among Organic and Conventional Farmers in Thailand? An Investigation of Health Expenditure among Organic and Conventional Farmers in Thailand By Sunantar Setboonsarng
  11. New prospects for payment card application in health care By Ann Kjos
  12. The demand for intensity versus frequency of alcohol consumption: Evidence from rural Australia By Dennis Petrie; Christopher Doran; Anthony Shakeshaft; Rob Sanson-Fisher
  13. Surviving Slavery. Mortality at Mesopotamia, a Jamaican sugar estate, 1762 - 1832 By Martin Forster; Simon D. Smith
  14. A Moving Target: Universal Access to Healthcare Services in Latin America and the Caribbean By William Savedoff
  15. Rising Mortality and Life Expectancy Differentials by Lifetime Earnings in the United States By Julian Cristia
  16. Take-Up of Medicare Part D: Results from the Health and Retirement Study By Helen Levy; David Weir
  17. Public Policies and Women's Employment after Childbearing By Wen-Jui Han; Christopher Ruhm; Jane Waldfogel; Elizabeth Washbrook
  18. The Impact of Children's Public Health Insurance Expansions on Educational Outcomes By Phillip B. Levine; Diane Whitmore Schanzenbach
  19. Which Households Are Most Distant from Health Centers in Rural China? Evidence from a GIS Network Analysis By John Gibson; Xiangzheng Deng; Geua Boe-Gibson; Scott Rozelle; Jikun Huang

  1. By: Anca Cotet (Department of Economics, Ball State University)
    Abstract: This paper uses variation in state by state regulation affecting telemedicine to investigate whether the quality standards imposed by current medical regulations are too high. The Physical Examination Requirement (PER) regulation prohibits certain physician-patient telemedicine practices, expected to be of lower quality than face-to-face consultations, in order to prevent the erosion of current quality standards. At the same time however, PER makes it more difficult for some individuals to obtain professional medical advice. The empirical results suggest that states that adopted such regulation experience an increase in mortality in some sub-populations. Specifically, such improved outcomes appear in more sparsely populated areas, in areas with low physician density in total population, for individuals earning relatively low or relatively high wages, and are more likely for infants and adults ages 24 through 65. In aggregate PER leads to an increase in infant mortality and no significant effect on other age groups, an indication that easier access to professional medical advice through telemedicine even at the cost of lower quality improves outcomes.
    JEL: I18 K32
    Date: 2009–02
  2. By: Anca Cotet (Department of Economics, Ball State University)
    Abstract: Non-economic damages caps are meant to improve access to medical care by decreasing the operational costs of medical practices and encouraging entry in medical field. The literature indicates they are successful in increasing the number of physicians; however, by reducing the cost of malpractice noneconomic damages caps also affect physicians’ incentives to provide high quality care. A lower expected quality of care could reduce the demand for medical services. In this case changes in the number of physicians can not pick up the entire impact of non-economic damages caps on medical care delivery. This paper uses state level panel data to obtain estimates of the impact of non-economic damages caps on medical care utilization rates. The empirical results suggest that non-economic damages caps have a negative impact on admissions and surgeries in community hospitals, and on prenatal care. Since these results may be affected by selection, this paper uses the timing of adoption of term limits for legislators as an instrumental variable to isolate the causal effect of non-economic damages caps. In this specification the estimates are larger but statistically significant only in the case of surgeries. Specifically, I find that non-economic damages caps are associated with 14 fewer surgeries per 1000 individuals.
    Date: 2009–01
  3. By: Anca Cotet (Department of Economics, Ball State University)
    Abstract: More progressive taxes, holding tax liability constant, generate disincentives for health investment by decreasing benefits for additional working time and, thus, decreasing returns to health. On the other hand, progressive taxation may induce individuals to invest more in health for the purpose of extending their working life, because lifetime maximization could imply less work per period but more working years. I identify the effect of progressivity through differences in labor income tax rates among states. I find that the former effect dominates, more progressive taxes are negatively correlated with health, and argue that neither selection effects nor reverse causality can explain this result.
    Keywords: Tax Progressivity, Labor Income Tax, Health Investment.
    JEL: H31 I12 D91
    Date: 2009–03
  4. By: Johannes Schoder (Socioeconomic Institute, University of Zurich); Peter Zweifel (Socioeconomic Institute, University of Zurich)
    Abstract: Health economists have studied the determinants of the expected value of health status as a function of medical and nonmedical inputs, often finding small marginal effects of the former. This paper argues that both types of input have an additional benefit, viz. a reduced variability of health status. Using OECD health data for 24 countries between 1960 and 2004, medical and nonmedical inputs are found to reduce the variability of life expectancy. While the evidence supports the "flat-of-the-curve medicine" hypothesis with respect to the expected value of life expectancy and its variability, healthcare expenditure is comparatively effective in reducing variability.
    Keywords: production of health, control over health status, Gini coefficient
    JEL: I10 I12 J10
    Date: 2009–01
  5. By: Gumus, Gulcin (Florida International University); Regan, Tracy L. (University of Miami)
    Abstract: We investigate the effect of health insurance on labor market transitions in and out of self-employment as well as on the likelihood of being self-employed. We consider the role of individual health insurance coverage along with that from a spouse. Next, we examine a series of tax deductions granted to the self-employed through amendments made to the 1986 Tax Reform Act. Using data from the Current Population Survey for 1996-2007, we find significant but small effects of the after-tax health insurance premium on the entry rate, with no effect on exits from self-employment or the likelihood of being self-employed.
    Keywords: health insurance, self-employment, CPS, ORG
    JEL: J32 J48 I11
    Date: 2009–01
  6. By: Di Tommaso, M. L. (University of Turin); Strøm, Steinar (University of Turin); Sæther, Erik Magnus (PriceWaterhouseCoopers)
    Abstract: When entering the job market, nurses choose among different kind of jobs. Each of these jobs is characterized by wage, sector (primary care or hospital) and shift (daytime work or shift). This paper estimates a multisector-job-type random utility model of labor supply on data for Norwegian registered nurses in 2000. The empirical model implies that labor supply is rather inelastic; 10 percent increase in the wage rates for all nurses is estimated to yield 3.3 percent increase in overall labor supply. This modest response shadows for much stronger inter job-type responses. Our approach differs from previous studies in two ways: First, to our knowledge, it is the first time that a model of labour supply for nurses is estimated taking explicitly into account the choices that RN’s have regarding work place and type of job. Second, it differs from previous studies with respect to the measurement of the compensations for different types of work. So far, it has been focused on wage differentials. But there are more attributes of a job than the wage. Based on the estimated random utility model we therefore calculate the expected value of compensation that makes a utility maximizing agent indifferent between types of jobs, here between shift work and daytime work. It turns out that Norwegian nurses working shifts may be willing to work shift relative to daytime work for lower wage than the current one.
    Keywords: Nurse labor supply: multi-sector; shift-work
    JEL: I11 J22 J33
    Date: 2008–03–27
  7. By: Iskhakov, Fedor (Dept. of Economics, University of Oslo)
    Abstract: A structural dynamic programming model is applied for modeling labour market transitions among older age workers in Norway in 1992-2003. Special attention is given to early retirement pensiion and disability pension as two major exit routes from the labour force. Health status is represented by a latent variable reflecting the eligibility for participating in disability programs. Incomplete information maximum likelihood method is used in several stages to facilitate the estimation. The model is used to investigate the degree of potential substitution of the early retirement and retirement through the disability insurance scheme. Estimates of the structural parameters of the concealed health process allow for forecasting the individual "eligibility" for the disability and thus facilitate the assessment of the potential substitution between the two exit routes from the labour force. Performed policy simulation of the complete elimination of the early retirement program indicates nearly complete return of th otherwise early pensioners back to the labour market.
    Keywords: Retirement; health; early retirement; disability; labour market transitions; structural dynamic model; dynamic programming
    JEL: C61 I10 J22 J26
    Date: 2008–02–01
  8. By: Coe, N.B.; Houtven, C.H. van (Tilburg University, Center for Economic Research)
    Abstract: We examine the physical and mental health effects of providing care to an elderly mother on the adult child caregiver. We address the endogeneity of the selection in and out of caregiving using an instrumental variable approach, and carefully control for baseline health and work status of the adult child using fixed effects and Arellano-Bond estimation techniques. Continued caregiving over time increases depressive symptoms for married women and married men. In addition, the increase in depressive symptoms is persistent for married men. Depressive symptoms for single men and women are not affected by continued caregiving. There is a small protective effect on the likelihood (10%) of having any heart conditions among married women who continue caregiving. Robustness checks confirm that the increase in depressive symptoms and decrease in likelihood of heart conditions can be directly attributable to caregiving behavior, and not due to a direct effect of the death of the mother. The initial onset of caregiving, by contrast, has no immediate effects on physical or mental health for any subgroup of caregivers.
    Keywords: CES-D;depressive symptoms;heart conditions;elderly parents;informal care
    JEL: I10 J14 D10
    Date: 2008
  9. By: Coe, N.B.; Lindeboom, M. (Tilburg University, Center for Economic Research)
    Abstract: The effect that health has on the retirement decision has long been studied. We examine the reverse relationship, whether retirement has a direct impact on later-life health. To identify the causal relationship, we use early retirement window offers to instrument for retirement. We find no negative effects of early retirement on men’s health, and if anything, a temporary increase in self-reported health and improvements in health of highly educated workers. While this is consistent with previous literature using Social Security ages as instruments, we also find that anticipation of retirement might be important, and bias the previous estimates downwards.
    Keywords: retirement;depression;self-reported health;heart attack;cancer;diabetes;instrumental variables
    JEL: J26 I10
    Date: 2008
  10. By: Sunantar Setboonsarng
    Abstract: The study attempts to empirically examine whether the adoption of organic farming practices leads to better health. As a proxy for health status, a comparison of the health expenditure patterns of organic and conventional rice-farming households in North and Northeast Thailand is done. Using data from a 2006 household survey covering 626 households in eight provinces, we calculate catastrophic health expenditures as out-of-pocket (OOP) medical expenditures exceeding a specified percentage of the household budget. [ADBI WP 129].
    Keywords: income, organic farming, health, rice, farming, expenditure, Thailand, households, medical, budget, organic, conventional
    Date: 2009
  11. By: Ann Kjos
    Abstract: While consumers' use of payment cards has grown rapidly in many other areas, their use in making health-care payments has been far more limited. This paper attempts to explain several reasons for the slow adoption rates and identifies four related trends and developments that can be expected to lead to more rapid growth in the future: (1) a shift away from employer-provided health care to consumer-directed health-care plans, (2) an expansion of health-care savings accounts, (3) a move toward using debit and prepaid card applications to address limitations in paper-based environments, and (4) a recent Internal Revenue Service ruling intended to improve the efficiency of electronic payment processing. While these factors are expected to contribute to the acceleration of growth for payment card applications in health care, we know less about potential barriers stemming from consumer behavior, raising a cautionary note pending further research.
    Keywords: Payment systems
    Date: 2008
  12. By: Dennis Petrie; Christopher Doran; Anthony Shakeshaft; Rob Sanson-Fisher
    Abstract: This paper develops a theoretical model for the demand of alcohol where intensity and frequency of consumption are separate choices made by individuals in order to maximize their utility. While distinguishing between intensity and frequency of consumption may be unimportant for many goods, this is clearly not the case with alcohol where the likelihood of harm depends not only on the total amount consumed but also on the pattern of use. The results from the theoretical model are applied to data from rural Australia in order to investigate the factors that affect the patterns of alcohol use for this population group. This research can play an important role in informing policies by identifying those factors which influence preferences for patterns of risky alcohol use and those groups and communities who are most at risk of harm.
    Keywords: alcohol, demand model, patterns of consumption
    JEL: I10 D11 D12
    Date: 2009–01
  13. By: Martin Forster; Simon D. Smith
    Abstract: We use survival analysis to study the mortality experience of 1111 slaves living on the British West Indian sugar plantation of Mesopotamia for seven decades prior to the Emancipation Act of 1833. Using three different concepts of analysis time and employing non-parametric and semi-parametric models, our results suggest that female slaves first observed under Joseph Foster Barham II's period of ownership (1789-1832) faced an increased hazard of death compared with those first observed during his predecessor's tenure. We find no such relationship for males. We cite as a possible explanation the employment regime operated by Foster Barham II, which allocated increasing numbers of females to gang labour in the cane fields. A G-estimation model used to compensate for the 'healthy worker survivor effect' estimates that continuous exposure to such work reduced survival times by between 20 and 40 per cent. Our findings are compared with previous studies of Mesopotamia and related to the wider literature investigating the roles of fertility and mortality in undermining the sustainability of Caribbean slave populations.
    Date: 2009–01
  14. By: William Savedoff
    Abstract: Healthcare services are more widespread in Latin America and the Caribbean today than 50 years ago, yet this availability is not necessarily reflected in popular perceptions. This study documents the expansion of healthcare services in the Region in terms of medically-trained professionals, service utilization, and insurance eligibility. It finds that people in countries with more doctors have a more positive view of access to healthcare and greater confidence in the healthcare system. However, other factors intervene in this relationship between perceptions and objective indicators, such as the strength of local social networks and wealth. As a consequence of rising expectations, differential access and continuing discontent, public policy can be driven by factors that are least likely to improve the population's health.
    Keywords: Health Care, Health Financing, Access, Happiness, Health Policy, Latin America, Caribbean
    JEL: I18 I11 N96
    Date: 2009–01
  15. By: Julian Cristia
    Abstract: Are mortality and life expectancy differences by socioeconomic groups increasing in the United States? Using a unique data set matching high-quality administrative records with survey data, this study explores trends in these differentials by lifetime earnings for the 1983 to 2003 period. The results indicate a consistent increase in mortality differentials across sex and age groups. The study also finds a substantial increase in life expectancy differentials: the top-to-bottom quintile premium increased around 30 percent for men and almost doubled for women. These results complement recent research to point to almost five decades of increasing differential mortality in the United States.
    Keywords: Differential mortality, Life expectancy, Lifetime earnings, Trends
    JEL: I12 J11
    Date: 2009–01
  16. By: Helen Levy; David Weir
    Abstract: We analyze data from the Health and Retirement Study on senior citizens’ take-up of Medicare Part D. Take-up among those without drug coverage in 2004 was high; about fifty to sixty percent of this group have Part D coverage in 2006. Only seven percent of senior citizens lack drug coverage in 2006 compared with 24 percent in 2004. We find little circumstantial evidence that Part D crowded out private coverage in the short run, since the persistence of employer coverage was only slightly lower in 2004 – 2006 than it was in 2002 – 2004. We find that demand for prescription drugs is the most important determinant of the decision to enroll in Part D among those with no prior coverage. Many of those who remained without coverage in 2006 reported that they do not use prescribed medicines, and the majority had relatively low out-of-pocket spending. Thus, for the most part, Medicare beneficiaries seem to have been able to make economically rational decisions about Part D enrollment despite the complexity of the program. We also find that Part D erased socioeconomic gradients in drug coverage among the elderly.
    JEL: I18 I38
    Date: 2009–01
  17. By: Wen-Jui Han; Christopher Ruhm; Jane Waldfogel; Elizabeth Washbrook
    Abstract: This paper examines how the public policy environment in the United States affects work by new mothers following childbirth. We examine four types of policies that vary across states and affect the budget constraint in different ways. The policy environment has important effects, particularly for less advantaged mothers. There is a potential conflict between policies aiming to increase maternal employment and those maximizing the choices available to families with young children. However, this tradeoff is not absolute since some choice-increasing policies (generous child care subsidies and state parental leave laws) foster both choice and higher levels of employment.
    JEL: H3 J13 J18 J22
    Date: 2009–01
  18. By: Phillip B. Levine; Diane Whitmore Schanzenbach
    Abstract: This paper examines the impact of public health insurance expansions through both Medicaid and SCHIP on children's educational outcomes, measured by 4th and 8th grade reading and math test scores, available from the National Assessment of Educational Progress (NAEP). We use a triple difference estimation strategy, taking advantage of the cross-state variation over time and across ages in children’s health insurance eligibility. Using this approach, we find that test scores in reading, but not math, increased for those children affected at birth by increased health insurance eligibility. A 50 percentage point increase in eligibility is found to increase reading test scores by 0.09 standard deviations. We also examine whether the improvements in educational outcomes can be at least partially attributed to improvements in health status itself. First, we provide further evidence that increases in eligibility are linked to improvements in health status at birth. Second, we show that better health status at birth (measured by rates of low birth-weight and infant mortality), is linked to improved educational outcomes. Although the methods used to support this last finding do not completely eliminate potentially confounding factors, we believe it is strongly suggestive that improving children's health will improve their classroom performance.
    JEL: I18 I21
    Date: 2009–01
  19. By: John Gibson (University of Waikato); Xiangzheng Deng (Chinese Academy of Sciences); Geua Boe-Gibson (University of Waikato); Scott Rozelle; Jikun Huang
    Abstract: In this paper we have two objectives - one empirical; one methodological. Although China’s leaders are beginning to pay attention to health care in rural China, there are still concerns about access to health services. To examine this issue, we use measures of travel distances to health services to examine the nature of coverage in Shaanxi Province, our case study. The mean distance by road to the nearest health center is still more than 6 kilometers. When we use thresholds for access of 5 and 10 kilometers we find that more than 40 (15) percent of the rural population lives outside of these 5 (10) kilometer service areas for health centers. The nature of the access differs by geographical region and demographic composition of the household. The methodological contribution of our paper originates from a key feature of our analysis in which we use Geographic Information System (GIS) network analysis methods to measure traveling distance along the road network. We compare these measures to straight-line distance measures. Road distances (produced by network analysis) produce measures (using means) that are nearly twice as great as straight-line distances. Moreover, the errors in the measures (that is, the difference between road distances and straight-line distances) are not random. Therefore, traditional econometric methods of ameliorating the effects of measurement errors, such as instrument variables regression, will not produce consistent results when used with straight-line distances.
    Keywords: health access; measurement error; network analysis
    JEL: I12 O15
    Date: 2008–12–31

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