nep-hea New Economics Papers
on Health Economics
Issue of 2009‒07‒28
thirty papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. "Do I Really Need to Go to Rehab? I'd Say No, No, No." : Estimating Price Elasticities of Convalescent Care Programs By Nicolas R. Ziebarth
  2. Extrapolative Projections of Mortality: Towards a More Consistent Method By Dalkhat M. Ediev
  3. Why Is The World Getting Older? The Influence of Happiness on Mortality By Cahit Guven; Rudolph Saloumidis
  4. On the Distributional Consequences of Epidemics By Raouf,BOUCEKKINE; Jean-Pierre, LAFFARGUE
  5. The Effectiveness of Education and Health Spending among Brazilian Municipalities By Luiz de Mello; Mauro Pisu
  6. Design of an indicator for health and safety governance By Roberto F. Minguillón; Enrique Yacuzzi
  7. On the Constrained Contribution of Advances in Medical Knowledge to the Economic Growth of Developing Countries By Alan Martina
  8. Religious Participation and Risky Health Behaviors among Adolescents By Jennifer M. Mellor; Beth A. Freeborn
  9. Incentives and Selection Effects of Drug Coverage on Total Drug Expenditure: a Finite Mixture Approach. By Munkin, M; Trivedi, P. K
  10. Gradients of the Intergenerational Transmission of Health in Developing Countries By Bhalotra, S; Rawlings, S
  11. Critical Periods During Childhood and Adolescence: A Study of Adult Height Among Immigrant Siblings By van den Berg, G. J; Lundborg, P; Nystedt, P; Rooth, D
  12. Measuring income-related inequalities in health using a parametric dependence function By Quinn, C
  13. Management Practices in Hospitals By Bloom, N; Propper, C; Seiler, S; Van Reenen, J
  14. Quantile Regression Analysis of the Rational Addiction Model: Making unobservable heterogeneity observable By Laporte, A; Karimova, A; Ferguson, B
  15. The geography of hospital admission in a National Health Service with patient choice: Evidence from Italy By Fabbri, D; Robone, S
  16. The Effect of Child Weight on Academic Performance: Evidence using Genetic Markers By von Hinke Kessler, Scholder, S
  17. The effect of private health insurance on medical care utilization and self-assessed health in Germany By Hullegie, P; Klein, T. J
  18. Double coverage and demand for health care: Evidence from quantile regression By Moreira, S; Pita Barros, P
  19. Insurance Search and Switching Behaviour at the time of the Dutch Health Insurance Reform By Bolhaar, J; Lindeboom, M; van der Klaauw, B
  20. Dynamic Cost-offsets of Prescription Drug Expenditures: Panel Data Analysis Using a Copula-based Hurdle Model By Deb, P; Trivedi, P. K; Zimmer, D. M
  21. Estimating Lifetime or Episode-of-illness Costs By Basu, A; Manning, W. G
  22. Lose Weight for Money Only if Over-Weight: Marginal Integration for Semi-Linear Panel Models By Kan, K; Lee, M
  23. Modeling Internal Decision Making Process: An Explanation of Conflicting Empirical Results on Behavior of Nonprofit and For-Profit Hospitals By Carroll, Kathleen; Ruseski, Jane
  24. Copayments for doctor visits in Germany and the probability of visiting a physician - Evidence from a natural experiment By Farbmacher, Helmut
  25. Does AIDS-Related Mortality Reduce Per-Capita Household Income? Evidence from Rural Zambia By Toman Omar Mahmoud; Rainer Thiele
  26. What explains variation in the costs of treating patients in English obstetrics specialties? By Mauro Laudicella; Kim Rosen Olsen; Andrew Street
  27. Adverse health effects, risk perception and pesticide use behavior By Khan, Muhammad
  28. The Global Health Workforce: A Review By Till Bärnighausen; David E. Bloom
  29. A Quality-Adjusted Price Index for Colorectal Cancer Drugs By Claudio Lucarelli; Sean Nicholson
  30. Does Health Insurance Make You Fat? By Jay Bhattacharya; Kate Bundorf; Noemi Pace; Neeraj Sood

  1. By: Nicolas R. Ziebarth
    Abstract: This study is the first to estimate the price elasticities of demand for both medical rehabilitation programs and treatment at health spas. In Germany, the Statutory Health Insurance (SHI) covers both forms of therapy if administered in authorized medical facilities on referral from a physician. While health resort stays are prescribed to recover from general symptoms of poor health and are preventive in character, medical rehabilitation implies recovering from a specific illness or accident. From 1997 onwards, the German government more than doubled the copayments for both types of health care services from DM 12 (e6.14) to DM 25 (e12.78) per day for those insured under the SHI. Using longitudinal microdata from the German Socio-Economic Panel Study (SOEP), this exogenous price variation allows us to study the causal effects on demand, since we have a sound control group available. The data suggest that pull-forward effects in 1996 accounted for up to one-fifth of the subsequent decrease in demand. Taking this anticipation effect into account, we show that the reform induced a decrease in total demand of about 20 percent. We estimate the price elasticity for rehabilitation programs that aim at preventing work incapacity to be about -0.15, whereas the elasticity for rehabilitation programs for recovery from work accidents lies around -0.30. In contrast, the price elasticity for treatment at health spas is elastic and lies between -1 and -2.5.
    Keywords: Convalescent care, health spa, medical rehabilitation, price elasticities, SOEP
    JEL: H51 I1 I18 J22
    Date: 2009
  2. By: Dalkhat M. Ediev
    Abstract: After a comparative study of the Lee-Carter forecasting method and looking into the direct extrapolation of mortality by age and sex, this paper advocates the use of the latter method. The method is, however, supplemented by additional procedures in order to improve its efficiency in the short run and preclude implausible mortality patterns in the long run. The short-run efficiency is improved by building the forecast on data from the most recent periods of age/sex-specific duration, when the mortality dynamics exhibit a steady trend. In the long run, the rates of the decline in mortality are assumed to converge to a plausible function of age and sex, which is derived from the data based on the assumption that it is a monotonic function of age. The framework proposed also provides a natural basis for developing multi-regional projection methods and also for introducing uncertainty into the projection.
    Keywords: Mortality forecasting, direct extrapolation, age-specific death rates, Lee-Carter method
    Date: 2009–05
  3. By: Cahit Guven; Rudolph Saloumidis
    Abstract: World life expectancy has risen by around 20 years in the last 50 years. This period has also witnessed rising happiness levels around the world suggesting that happiness might be one of the causes behind the decline in mortality. We investigate the relationship between happiness and mortality using the German Socio-Economic Panel. We consider doctor visits, self-reported health, and presence of chronic illness as health measures. After controlling for initial health conditions, we find that happiness extends life expectancy. 10 percent increase in happiness decreases probability of death by four percent, and this effect is more pronounced for men and younger people. Happiness plays a more important role for chronically ill people in decreasing mortality than for those who are not chronically ill. The positive influence of happiness on mortality can offset the negative impact of chronic illness. Marriage decreases mortality and this effect appears to work through increased happiness.
    Keywords: happiness; mortality; health; chronic illness.
    JEL: I10 I12
    Date: 2009–03–13
  4. By: Raouf,BOUCEKKINE (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Jean-Pierre, LAFFARGUE (University Paris I, CES and CEPREMAP)
    Abstract: We develop a tractable general theory for the study of the economic and demographic impact of epidemics, and notably its distributional consequences. To this end, we develop a three-period overlapping generations model where altruistic parents choose optimal health expenditures for their children and themselves. The survival probability of (junior) adults and children depends on such investments. Agents can be skilled or unskilled. The model emphasizes the role of orphans. Orphans are not only penalized in the face of death, they are also penalized in the access to education. Epidemics are modeled as one period exogenous shocks to the survival rates. We specifically study the consequence of a negative shock on adult survival rates in the first period. We prove that while the epidemic has no permanent effect on income distribution, it can perfectly alter it in the short and medium run. In particular, the epidemic may imply a worsening in the short and medium run of both economic performance and income distribution. Two opposite mechanisms are isolated: first, the survival rate of children at the end of the first period decreases relatively more in poor than in wealthy families. This decreases the proportion of junior adults with a low endowment of human capital in period 2. Secondly, the number of orphans in period 1 increases in both families. This decreases the proportion of junior adults with a low endowment of human capital in period 2. Therefore, the proportion of the unskilled will necessarily increase in the medium run if orphans are too penalized in the access to a high level of education.
    Keywords: Epidemics, orphans, income distribution, endogenous survival, medium-term dynamics
    JEL: O1 D9 I1 I2
    Date: 2009–05
  5. By: Luiz de Mello; Mauro Pisu
    Abstract: This paper uses a large dataset combining census, household survey and budgetary data for nearly 4.000 Brazilian municipalities to estimate the impact of government spending on education and health outcomes. We deal with the multi-dimensional nature of the population’s social status by estimating structural equation models with latent variables using a limited-information two-stage least square (2SLS) estimator. Robustness of the baseline regressions to heterogeneity in the data is assessed on the basis of quantile regressions. The main empirical findings are that government spending is a powerful determinant of education outcomes, but this is not the case for health, and that spending on non-education programmes are also at least as important. In addition, there appears to be scope for gains in economies of scale in the provision of education and health care services, at least for selected segments of the conditional distribution of social outcomes. Finally, there are cross-sectoral effects in service delivery: health (education) outcomes affect the population’s education (health) status. This Working Paper relates to the 2009 OECD Economic Survey of Brazil (<P>L’efficacité des dépenses d’éducation et de santé des administrations municipales brésiliennes<BR>Ce document utilise une grande base de données combinant des informations issues des enquêtes réalisées auprès des ménages et des recensements, ainsi que les budgets de près de 4.000 municipalités brésiliennes pour estimer l’effet des dépenses des administrations publiques en matière d’éducation et de santé. Le caractère multidimensionnel des indicateurs sociaux est pris en compte par un modèle d’équation structurelle avec des variables latentes estimé par le double moindre carré à information limité. Des régressions quantiles ont été estimées pour évaluer la robustesse des résultats de base en tenant compte de l’hétérogénéité des données. Les principaux résultats sont que les dépenses des administrations publiques sont particulièrement déterminantes pour la performance de l’éducation mais pas de la santé et que les dépenses des programmes hors éducation sont aussi importantes. En outre, les résultats en matière de santé ont un impact sur les indicateurs d’éducation, et vice versa. Finalement, il apparaît que des économies d’échelle pourraient être exploitées pour la fourniture des services d’éducation et de santé au moins pour les collectivités situées sur certains segments de la distribution conditionnelle des résultats en matière d’éducation et santé. Ce Document de travail se rapporte à l’Étude économique de l’OCDE du Brésil, 2009 (ésil).
    Keywords: santé, education, health care, éducation, Brazil, Brésil, structural equation modelling, modèle d’équation structurelle, latent variable, variable latente, quantile regression, régression quantile
    JEL: I12 I18 I21 I31
    Date: 2009–07–10
  6. By: Roberto F. Minguillón; Enrique Yacuzzi
    Abstract: Occupational Health and Safety Governance (OHSG) is a branch of Corporate Governance by which the board directs and controls labor risks created by their own enterprise. The OHSG concept is relatively new; unlike Occupational Health and Safety Management, which is mostly related to the work of managerial ranks, OHSG deals with principles, the interests of stakeholders, and the work of directors. The paper defines the new concept, OHSG, develops an original health and safety indicator, and presents possible applications for it; as far as we are aware of, the indicator is the first proactive tool in existence to measure OHS governance. Our work is part of an ongoing research project aimed at improving health and safety standards in industry. The indicator takes into account—in its structure—the evaluation style of National Quality Awards, as a pattern to measure, by assigning points, a great number of variables. OHS Governance variables included in the indicator are grouped into areas, themes, dimensions and elements, in order to make them operative and measurable. Measurement is performed by means of a questionnaire, reproduced as an appendix. Maximum scores for each question are assigned following multiple attribute decision theory. The article concludes with reflections on the measurement problem in the social sciences and final thoughts on the characteristics of the proposed indicator.
    Keywords: Corporate governance, health and safety governance, measurement, measurement of health and safety, health and safety governance indicator.
    JEL: G30 G39 L20 M11 M12 M14
    Date: 2009–07
  7. By: Alan Martina
    Abstract: The conjectures examined are that: (i) advances in the medical knowledge are likely to have comparatively little (resp. considerable) impact on the rate of the growth of gross domestic product per capita (GDPPC) in a poor developing country if economic institutions are weak (resp. adequate); (ii) apparently strong economic institutions will have comparatively little (resp. considerable) impact on this rate of economic growth in this country if previously the level of health had not been (had been) raised to a minimum threshold level. The (limited) evidence presented indicates that the contribution that advances in medical knowledge are likely to make, in raising the rate of growth of GDPPC in developing counties, appears to be constrained at least by the level of economic institutions present in the country concerned.
    JEL: I10 I18 O15 O43
    Date: 2009–07
  8. By: Jennifer M. Mellor (Department of Economics, College of William and Mary); Beth A. Freeborn (Department of Economics, College of William and Mary)
    Abstract: Previous studies have shown that adolescent religious participation is negatively associated with risky health behaviors like cigarette smoking, alcohol consumption, and illicit drug use. One explanation for these findings is that religion directly reduces risky behaviors because churches provide youths with moral guidance or with strong social networks that reinforce social norms. An alternative explanation is that both religious participation and risky health behaviors are driven by some common unobserved individual trait. We use data from the National Longitudinal Study of Adolescent Health and implement an instrumental variables approach to identify the effect of religious participation on smoking, binge drinking and marijuana use. Following Gruber (2005), we use a county-level measure of religious market density as an instrument. Religious market density has a strong positive association on adolescent religious participation, but not on secular measures of social capital. Upon accounting for unobserved heterogeneity, we find that religious participation continues to have a negative effect on illicit drug use.
    Keywords: Substance Abuse, Religion, Tobacco, Youth
    JEL: I1 Z12
    Date: 2009–07–20
  9. By: Munkin, M; Trivedi, P. K
    Abstract: This paper takes a nte mixture approach to model heterogeneity in incentives and selection effects of drug coverage on the total drug expenditure among the Medicare elderly US population. Evidence is found that the positive drug expenditures of the entire elderly popultion can be decomposed into two groups of relatively healthy with lower average expenditures and relatively unhealthy with higher average expenditures, accounting for approaximately 25% and 75% of the population, respectively. The incentive effects of drug insurance, i.e. ex post moral hazard, are much stronger in magnitude for the unhealthy group. There is also evidence of adverse selection into drug insurance, and this appears to be greater for the higher-expenditure component.
    Date: 2009–07
  10. By: Bhalotra, S; Rawlings, S
    Abstract: This paper investigates the sensitivity of the intergenerational transmission of health to changes in education, income and public services. It uses individual survey data on 2.24 million children born to 600000 mothers during 1970-2000 in 38 developing countries. These data are merged with macroeconomic data by country and birth cohort to create an unprecedentedly large sample of comparable data that exhibits massive variation in maternal and child health as well as in aggregate economic conditions. Child health is indicated by infant survival. Our measure of maternal health is (relative) height, although we also investigate indicators of the health environment in the mother’s childhood as proxies for her health. This is more general and carries the advantage that these indicators are free of endowment effects. We find a substantial positive intergenerational correlation of health that is stronger at both tails of the distribution of mother’s height, and larger for negative deviations from mean height. We show that improving maternal education, raising income and improving the supply or effectiveness of public services in the child’s birth year limits the degree to which child health is tied to family circumstance. These results are robust to mother fixed effects that control for genetic and other endowments common across siblings. The interaction (gradient) effects are most marked for shorter women, consistent with their being constrained in the investments they are able to make in child health. We also find that income and the infectious disease environment in the mother’s birth year exhibit significant intergenerational spillover. There is some previous evidence that adult stature on the one hand and early childhood conditions on the other predict own life expectancy. Our finding that both mother’s height and conditions in her childhood predicts survival or life expectancy for offspring is an important extension of the evidence.
    Keywords: intergenerational, health, infant mortality, birth weight, height, SES, income, education.
    JEL: O12 I12
    Date: 2009–07
  11. By: van den Berg, G. J; Lundborg, P; Nystedt, P; Rooth, D
    Abstract: We identify the ages that constitute critical periods in children’s development towards their adult health status. For this we use data on families migrating into Sweden from countries that are mostly poorer, with less healthy conditions. Long-run health is proxied by adult height. The relation between siblings’ ages at migration and their heights after age 18 allows us to estimate the causal effect of conditions at a certain age on adult height. Moreover, we compare siblings born outside and within Sweden. We apply fixed-effect methods to a sample of about 9,000 brothers. We effectively exploit that for siblings the migration occurs simultaneously in calendar time but at different developmental stages (ages). We find important critical periods at ages 5/6 and 9. The effects are stronger in families migrating from poorer countries but weaker if the mother is well-educated.
    Keywords: early-life conditions, migration, parental education, adult health, height retardation, age, fetal programming, developmental origins
    JEL: I10 I12 I18 F22 I20 I30 J10 N30
    Date: 2009–07
  12. By: Quinn, C
    Abstract: Attention has been given recently to the Concentration Index; specifically, corrected versions have been generated that supersede the original with properties such as transform invariance, reversal invariance and transfer invariance. While previous studies have promoted a transformed or normalised index to overcome these problems, I propose, in this paper, two novel approaches to a direct parametric model for dependence as a measure of inequality in the distributions of health and income. These are the copula and quantile regression using jackknifed samples. As well as accommodating any form of health or income, and being robust to invariance criteria, both methods parameterise the measure of inequality directly, rather than indirectly through functions on one of the marginals. Results from an illustrating example using the Survey of Health, Retirement and Ageing in Europe suggest that such inequality in these countries is not explained well by covariates on age, gender, education and lifestyles.
    Keywords: Health Inequality, Non-Continuous data, Copulas, Quantile Regression
    JEL: C46 C51 I10
    Date: 2009–07
  13. By: Bloom, N; Propper, C; Seiler, S; Van Reenen, J
    Abstract: We develop a new methodology for measuring management practices in hospitals, and use this in 182 interviews of physicians and managers in public and private hospitals (covering 61% of English acute trusts). We find our management measure is strongly correlated with hospital performance, both clinical outcomes like survival rates from heart attacks, and general operational and financial outcomes. Management in publicly owned hospitals (the National Health Service) compares poorly with management in manufacturing. These public hospitals also appear to have significantly worse management practices than private hospitals. Among publicly owned hospitals management scores are relatively higher for Foundation Trusts (hospitals with greater autonomy from the government), for larger hospitals and where managers have more clinical expertise. We also find some evidence that competition is associated with better hospital performance.
    Keywords: management, hospitals, competition, productivity
    JEL: J45 F12 I18 J31
    Date: 2009–07
  14. By: Laporte, A; Karimova, A; Ferguson, B
    Abstract: The Rational Addiction (RA) model assumes that individual decisions about the consumption of harmful and addictive commodities are made on a rational basis (Becker and Murphy, 1988). In this context, rational means forward looking, i.e. a tendency to take account of future consequences of current consumption decisions. Different individuals may well attach different weights to the present relative to the future. The degree to which an individual is forward looking in her consumption decisions is revealed not by her current consumption level but rather by the time path of her consumption of an addictive commodity. Hence, the need to estimate a forward looking second order difference equation (SODE) as part of the process of testing the RA model. Most studies using micro level data estimate a single SODE for the whole sample. This involves estimating an average propensity to be forward looking for the entire sample, even when it is believed that different fully rational individuals in the same sample may have different propensities to be forward looking. Forward looking behaviour is an aspect of treating the consumption of an addictive commodity as part of an inter-temporal optimization problem. Inter-temporal optimization is characterized by what are known as saddle point dynamics and the information about an individual’s propensity to be forward looking is contained in what are known as the characteristic roots of the equation (Ferguson, 2003). In a sample of heterogeneous individuals we expect propensity to be forward looking to differ across individuals and the best way to identify these differences is by looking at the dynamic behaviour of the individual consumption paths. Estimating a common SODE for everyone hides this key difference. In this paper, we make the argument that the best place to look for differences in individual propensities to be forward looking is in dynamic behaviour considered at different points in the distribution of the consumption of an addictive commodity. To do this we adopt techniques of Quantile Regression, (QR) estimating RA type difference equations in consumption across quantiles of cigarette consumption. We use panel data to ensure that we are examining the behaviour of individuals across time. Our hypothesis is that we will find differences in the degree of forward looking behaviour characterizing the time paths of consumption across quantiles in the micro-level data.
    Date: 2009–07
  15. By: Fabbri, D; Robone, S
    Abstract: Every year 35% of the 10 million hospital admissions in Italy occurs outside the patients' Local Health Authority of residence. In this paper we look for explanation for this phenomenon and estimate gravity equations for "trade" in hospital care using a Poisson pseudo maximum likelihood method. Our results suggest that the gravity model is a good framework for explaining patient mobility in most of the examined diagnostic groups. We find that the ability to restrain the imports of hospital services increases with the size of the pool of enrollees. Moreover, the ability to export hospital services, as proxied by the ratio of export-to-internal demand, is U-shaped. Therefore our evidence suggests that there are scale effects played by the size of the pool of enrollees.
    Keywords: patients mobility, hospital care, gravity model, Italian National Health Service
    Date: 2009–07
  16. By: von Hinke Kessler, Scholder, S
    Abstract: This paper examines the relationship between children’s weight and academic outcomes using genetic markers as instruments to account for the possible endogeneity of body size. We use medically assessed measures of body size which are more appropriate than the generally used BMI measures. OLS results indicate that leaner children perform better in school tests compared to their heavier counterparts, but the IV results, using genetic markers as instruments, show no evidence that fat mass affects academic outcomes. We compare these IV results to those using the instruments generally adopted in this literature. We show that the results are sensitive to the instrument set and argue that several of the commonly used instruments do not meet the exclusion restrictions required of a valid instrument.
    Keywords: Child weight; Academic Performance; Educational Outcomes; Instrumental Variables; Mendelian Randomization; Genetic Markers; DXA; Body Mass Index; ALSPAC
    JEL: I1 I2 J24
    Date: 2009–07
  17. By: Hullegie, P; Klein, T. J
    Abstract: In Germany, employees are generally obliged to participate in the public health insurance system, where coverage is universal, co-payments and deductables are moderate, and premia are based on income. However, they may buy private insurance instead if their income exceeds the compulsory insurance threshold. Here, premia are based on age and health, individuals may choose to what extent they are covered, and deductables and co-payments are common. In this paper we estimate the effect of private insurance coverage on the number of doctor visits and self-assessed health. Variation in income around the compulsory insurance threshold provides a natural experiment that we exploit to control for selection into private insurance. We document that income is measured with error and suggest an approach to take this into account. We find negative effects of private insurance coverage on the number of doctor visits and positive effects on health.
    Keywords: Private health insurance, medical care utilization, selection into insurance, natural experiment, regression discontinuity design, measurement error.
    JEL: I11 I12 C31
    Date: 2009–07
  18. By: Moreira, S; Pita Barros, P
    Keywords: Demand for health services, Moral hazard, Count data, Quantile regression.
    JEL: I11 I18 C21 C25
    Date: 2009–07
  19. By: Bolhaar, J; Lindeboom, M; van der Klaauw, B
    Abstract: The Netherlands introduced a new health insurance system in January 2006, a system based on managed competition. Such a system critically hinges on consumers that search. It is for this reason we think it is important to investigate the extend to which consumers search, how they search and why they search ´or don’t search. The price dispersion observed in the insurance market after the reform suggests the number of consumers that searches is low. We set up a search model for insurance that includes the main features of the Dutch health insurance market after the reform and test the hypotheses from this model on the data.
    Date: 2009–07
  20. By: Deb, P; Trivedi, P. K; Zimmer, D. M
    Keywords: Medical Expenditure Panel Survey; random effects; Clayton copula; dynamic dependence
    JEL: C51 C33 I11
    Date: 2009–07
  21. By: Basu, A; Manning, W. G
    Abstract: Most analysis of health care costs examine costs for fixed periods of time (e.g., annual) but are not well suited for the analysis of either lifetime costs or per episode of illness cost, such as those that occur in cost-effectiveness and some cost of illness analyses. These questions involve use of data with varying periods of observation and right censoring of cases before death or the end of the episode of illness. Although some work has been done on this issue, there are concerns about the robustness of the existing methods, especially given the extreme skewness typical of health care costs generally and these data specifically, as well as the prominence of observations with no expenditure for some short periods of observation. In this paper, we identify a major bias associated with estimators that use inverse probability weighting with the survival from censoring probabilities in estimating mean cumulative costs (Bang-Tsiatis-Lin). We propose an alternative that extends the class of two-part models to deal with random right censoring (e.g., administrative censoring), and more fully incorporates the information from the censored periods. Our model also addresses issues about the time to death in these analyses. Several simulations are conducted to highlight our proposed estimator compared to alternatives. The results support the theoretical result indicating that estimators based on inverse probability weighting yield biased estimates of accumulated costs in situations with substantial censoring. Our alternative is consistent and more efficient for these designs. We apply this approach and compare it to the alternatives from the literature using data from the Medicare-SEER files on prostate cancer using within and split sample methods. Our results indicate that the Bang-Tsiatis-Lin approach yields negative estimates of the ten year incremental costs of worse stages of prostate cancer relative to better initial grade. Our alternative indicates the opposite. The discrepancy is large in magnitude and statistically significant.
    Date: 2009–07
  22. By: Kan, K; Lee, M
    Abstract: Body mass index (BMI), weight(kg)/ height(m)2, is a widely used measure for obesity in medical science. In economics, there appeared studies (e.g., Cawley (2004) and Burkhauser and Cawley (2008)) showing that BMI has a negative (or no) effect on wage. But BMI is a tightly specified function of weight and height, and there is no priori reason to believe why the particular function is the best to combine weight and height. In this paper, we address the question of weight effect on wage, employing two-wave panel data for white females; the same panel data with more waves were used originally in Cawley (2004). We posit a semi-linear model consisting of a nonparametric function of height and weight and a linear function of the other regressors. The model is differenced to get rid of the unit specific effect, which results in a difference of two nonparametric functions with the same shape. We estimate each nonparametric function with a ‘marginal integration method’, and then combine the two estimated functions using the same shape restriction. We find that there is no weight effect on wage up to the average weight, beyond which a large negative effect kicks in. The effect magnitude is greater than that in Cawley (2004) who used a linear BMI model. The linear model gives the false impression that there would be a wage gain by becoming slimmer than the average and that the ‘obesity penalty’ is less that what it actually is.
    Keywords: BMI, weight effect on wage, panel data, semi-linear model, marginal integration.
    JEL: C14 C33 I10 J30
    Date: 2009–07
  23. By: Carroll, Kathleen (UMBC Department of Economics); Ruseski, Jane (University of Alberta, Department of Economics)
    Abstract: This paper develops multiobjective models of hospital decision making that incorporate the internal decision process in both a for-profit and a nonprofit hospital. Predicted output and quality for a nonprofit hospital differ from those for a for-profit hospital under some conditions but converge under others. Convergence may be the result of a complex internal decision structure with decision control primarily by physicians; similar objectives across different organizational forms; or differing constraints. The mechanisms underlying these outcomes provide explanations for conflicting result in empirical studies of nonprofit and for-profit hospitals and provide a different rationale for convergence than nonprofit response to competition from for-profit hospitals. Understanding the source of convergence is important for policies directed toward the tax treatment of nonproift hospitals.
    Keywords: hospital behavior; hospital ownership; internal decision making; physician-hospital relations
    JEL: D21 D23 I11 L21 L30
    Date: 2009–07–01
  24. By: Farbmacher, Helmut
    Abstract: The German health care reform of 2004 imposes a charge of 10 Euro for the first visit to a doctor in each quarter of the year. At first glance, there is no inhibiting effect of this fee on utilization in the German Socio-Economic Panel. However, this study reveals that the true effect is diluted by a special characteristic of the fee. Exploiting random variation in the interview date, this study finds a substantial effect of the new fee on the probability of visiting a physician. In addition, the identification strategy makes it possible to disentangle this effect from the influence of the contemporaneous increase of copayments for prescription drugs.
    Keywords: copayment; moral hazard; differences-in-differences
    JEL: I18 I11
    Date: 2009–07–11
  25. By: Toman Omar Mahmoud; Rainer Thiele
    Abstract: This paper evaluates the effect of AIDS-related mortality on per-capita incomes of surviving household members, using a large nationally representative sample of rural households from Zambia. To minimize selection bias that may arise because AIDS is likely to be the endogenous outcome of individual behavior, we employ a difference-in-difference propensity score matching estimator. We find that the death of a prime-age member has no significant impact on per-capita household income. This result continues to hold when we control for spillover effects by excluding households from the control group if members departed or joined for reasons related to AIDS. A likely explanation for this finding is that surviving household members pursue a mix of income and demographic coping strategies that prevents income losses in the short to medium run
    Keywords: HIV/AIDS, prime-age mortality, per adult equivalent income, difference-in-difference, propensity score matching, spillovers, Zambia
    JEL: I31 J19 C14 C23
    Date: 2009–07
  26. By: Mauro Laudicella (Centre for Health Economics, University of York, UK); Kim Rosen Olsen (Institute for Public Health, University of Southern Denmark and Danish Institute for Health Services Research, 27-29 Dampfaergevej, DK 2100, Copenhagen, Denmark); Andrew Street (Centre for Health Economics, University of York, UK)
    Abstract: We assess patients admitted to English obstetrics departments to identify what proportion of variation in their costs is explained by patient characteristics and what proportion is due to departmental characteristics. Hospital Episode Statistics records for every patient admitted to obstetrics departments are matched to Reference Cost data by HRG reported by all English hospitals for the year 2005/6. Our sample consists of 951,277 patients in 136 departments. We estimate fixed effects models analysing patient-level costs, explore departmental characteristics that drive variation in costs at department-level and explore the sensitivity of results to the use of the full sample and sub-samples of obstetrics patients. Patient costs depend on various diagnostic characteristics over and above the HRG classification, particularly whether the patient suffered infection. After controlling for patient characteristics a substantial amount of unexplained variation in costs remains at departmental level. Higher costs are evident in departments that are not supported by a neonatology specialty and where factor prices are higher. There is evidence of lower costs in departments with high volumes of activity. We identify departments where further scrutiny of their high costs is required.
    Date: 2009–07
  27. By: Khan, Muhammad
    Abstract: The use of pesticides on the farm is largely governed by voluntary behavior. It is important to understand what drives farmer’s behavior of pesticide use. Health belief models in public health and social psychology argue that persons who have had adverse health experiences are likely to undertake greater preventive behavior which was tested here. We drew a survey of 163 farmers in, Vehari and Lodhran District of southern Punjab. Almost all the farmers were found, using pesticides extensively and covering their body partially. Resultantly more than 77% farmers experienced at least one health symptom. The analysis appeared to confirm the hypothesis that Farmers who have experienced health problems from pesticide are having heightened concern about health effects of pesticides, than farmers who have not experienced such problems. Farmers who report experiencing such problems are also more likely to report using protective clothing than farmers who do not report having such problems. The study however, does not support the hypothesis that Farmers who have had experienced health problems from pesticides are likely to use alternative pest management practices. Finally study concludes that to improve practices of pesticide use, specific and relevant information through training programs should be provided to farmers focusing health and environmental risks of pesticide use.
    Keywords: Health experiences; risk perception; health belief; pesticide use behavior
    JEL: I12 A14
    Date: 2009–06–23
  28. By: Till Bärnighausen; David E. Bloom
    Abstract: Past research on the health workforce can be structured into three perspectives – “health workforce planning†(1960 through 1970s); “the health worker as economic actor†(1980s through 1990s); and “the health worker as necessary resource†(1990s through 2000s). During the first phase, shortages of health workers in developed countries triggered the development of four approaches to project future health worker requirements. We discuss each approach and show that modified versions are experiencing a resurgence in current studies estimating health worker requirements to meet population health goals, such as the United Nations’ health-related Millennium Development Goals. A perceived “cost explosion†in many health systems shifted the focus to the study of the effect of health workers’ behavior on health system efficiency during the second phase. We review the literature on one example topic, health worker licensure. In the last phase, regional health worker shortages in developing countries and local shortages in developed countries led to research on international health worker migration and programs to increase the supply of health workers in underserved areas. Based on our review of existing studies, we suggest areas for future research on the health workforce, including the transfer of existing approaches from developed to developing countries.
    JEL: I12 I18 J44
    Date: 2009–07
  29. By: Claudio Lucarelli; Sean Nicholson
    Abstract: The average price of treating a colorectal cancer patient with chemotherapy increased from about $100 in 1993 to $36,000 in 2005, due largely to the approval and widespread use of five new drugs between 1996 and 2004. We examine whether the substantial increase in spending has been worth it. Using discrete choice methods to estimate demand, we construct a price index for colorectal cancer drugs for each quarter between 1993 and 2005 that takes into consideration the quality (i.e., the efficacy and side effects in randomized clinical trials) of each drug on the market and the value that oncologists place on drug quality. A naive price index, which makes no adjustments for the changing attributes of drugs on the market, greatly overstates the true price increase. By contrast, a hedonic price index and two quality-adjusted price indices show that prices have actually remained fairly constant over this 13-year period, with slight increases or decreases depending on a model’s assumptions.
    JEL: I11 L0
    Date: 2009–07
  30. By: Jay Bhattacharya; Kate Bundorf; Noemi Pace; Neeraj Sood
    Abstract: The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions: 1) that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and 2) that body weight decisions are responsive to the incidence of medical care costs associated with obesity. In this paper, we test the latter proposition – that body weight is influenced by insurance coverage - using two approaches. First, we use data from the Rand Health Insurance Experiment, in which people were randomly assigned to varying levels of health insurance, to examine the effect of generosity of insurance coverage on body weight along the intensive coverage margin. Second, we use instrumental variables methods to estimate the effect of type of insurance coverage (private, public and none) on body weight along the extensive margin. We explicitly address the discrete nature of the endogenous indicator of health insurance coverage by estimating a nonlinear instrumental variables model. We find weak evidence that more generous insurance coverage increases body mass index. We find stronger evidence that being insured increases body mass index and obesity.
    JEL: H23 I1
    Date: 2009–07

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