nep-hea New Economics Papers
on Health Economics
Issue of 2010‒02‒20
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Winning Big but Feeling No Better? The Effect of Lottery Prizes on Physical and Mental Health By Apouey, Bénédicte; Clark, Andrew E.
  2. An Inquiry into the Theory, Causes and Consequences of Monitoring Indicators of Health and Safety at Work By Pouliakas, Konstantinos; Theodossiou, Ioannis
  3. Migration of Health Care Professionals from India: A Case Study of Nurses By Ann Issac; Nirmalya Syam
  4. Health and Healthcare in Assam-A Status Report By Indranee Dutta; Shailly Bawari
  5. Infant Mortality Situation in Bangladesh in 2007: A District Level Analysis By Ahamad, Mazbahul Golam.; Tasnima, Kaniz.; Khaled, Nafisa.; Bairagi, Subir Kanti.; Deb, Uttam Kumar.
  6. Generic Utilization Rates, Real Pharmaceutical Prices, and Research and Development Expenditures By Joseph P. Cook; Graeme Hunter; John A. Vernon
  7. Let them Have Choice: Gains from Shifting Away from Employer-Sponsored Health Insurance and Toward an Individual Exchange By Leemore Dafny; Katherine Ho; Mauricio Varela
  8. Does Prescription Drug Adherence Reduce Hospitalizations and Costs? By William Encinosa; Didem Bernard; Avi Dor
  9. The Business Cycle and Health Behaviors By Xin Xu; Robert Kaestner
  10. Asymmetric Information and the Demand for Voluntary Health Insurance in Europe By Kristian Bolin; Daniel Hedblom; Anna Lindgren; Bjorn Lindgren
  11. The Effects of Relative Food Prices on Obesity — Evidence from China: 1991-2006 By Yang Lu; Dana Goldman
  12. Do Minimum Quality Standards Improve Quality? A Case Study of the Nursing Home Industry By Haizhen Lin

  1. By: Apouey, Bénédicte (University of South Florida); Clark, Andrew E. (Paris School of Economics)
    Abstract: We use British panel data to determine the exogenous impact of income on a number of individual health outcomes: general health status, mental health, physical health problems, and health behaviors (drinking and smoking). Lottery winnings allow us to make causal statements regarding the effect of income on health, as the amount won by winners is largely exogenous. Positive income shocks have no significant effect on general health, but a large positive effect on mental health. This result seems paradoxical on two levels. First, there is a well-known status gradient in health in cross-section data, and, second, general health should partly reflect mental health, so that we may expect both variables to move in the same direction. We propose a solution to the first apparent paradox by underlining the endogeneity of income. For the second, we show that lottery winnings are also associated with more smoking and social drinking. General health will reflect both mental health and the effect of these behaviors, and so may not improve following a positive income shock. This paper thus presents the first microeconomic analogue of previous work which has highlighted the negative health consequences of good macroeconomic conditions.
    Keywords: income, self-assessed health, mental health, smoking, drinking
    JEL: D1 I1 I3
    Date: 2010–01
  2. By: Pouliakas, Konstantinos (University of Aberdeen); Theodossiou, Ioannis (University of Aberdeen)
    Abstract: This paper engages in an interdisciplinary survey of the current state of knowledge related to the theory, determinants and consequences of occupational safety and health (OSH). First, it synthesizes the available theoretical frameworks used by economists and psychologists to understand the issues related to the optimal provision of OSH in the labour market. Second, it reviews the academic literature investigating the correlates of a comprehensive set of OSH indicators, which portray the state of OSH infrastructure (social security expenditure, prevention, regulations), inputs (chemical and physical agents, ergonomics, working time, violence) and outcomes (injuries, illnesses, absenteeism, job satisfaction) within workplaces. Third, it explores the implications of the lack of OSH in terms of the economic and social costs that are entailed. Finally, the survey identifies areas of future research interests and suggests priorities for policy initiatives that can improve the health and safety of workers.
    Keywords: health, safety, indicators, accidents, diseases, absenteeism
    JEL: J17 J28 J81 K32
    Date: 2010–01
  3. By: Ann Issac; Nirmalya Syam
    Abstract: The study attempts to examine why there is staff shortage of health care professionals especially the nurses in India and the impact of such migration on services like emergency preparedness, quality of care, patient safety and access to needed health care services especially for vulnerable populations.
    Keywords: nurses, migration, professional migration, Mode 4 services, India, humanpower, manpower,Sociology, migration studies, health professionals, nursing education, medical education, health personnel, health manpower, health care, hospitals, nursing care
    Date: 2010
  4. By: Indranee Dutta; Shailly Bawari
    Abstract: Despite its rich natural resources and high concentration of business and economic activities among the Northeastern states, Assam has not been able to achieve the desired health outcomes. There is a clear need for more resources and investment in public health to attain better health objectives.
    Keywords: Assam, health, child health, natural resources, economic, AIDS, India
    Date: 2010
  5. By: Ahamad, Mazbahul Golam.; Tasnima, Kaniz.; Khaled, Nafisa.; Bairagi, Subir Kanti.; Deb, Uttam Kumar.
    Abstract: District level trend of infant mortality rate (IMR) per thousand live births in Bangladesh influenced by some assorted form of socio-demographic determinants such as individual, household and community level factors. This paper examines the trend and annual rate of reduction from 1998-2007 time periods and correlates causal factors based on different data from Statistical Yearbook of Bangladesh 2008 and Sample Vital Registration System 2007. Seven explanatory variables are considered and the log-log specified ordinary least square and simultaneous quantile regression models are employed to investigate and compare the stochastic impacts of these predictors on changing infant mortality. Infant immunization is the most effective factor that reduces infant mortality especially at lower quantile districts. Most notably, lower poverty line implies increasing trend with upper quantile, indicates that districts with low infant mortality rate has low effect for any positive rate of change of it. The least square as well as simultaneous quantile regression result disclose that population lived in electricity accessed houses, road density, percentage of no. of family planning personnel has potential and statistically significant impacts on infant mortality rate that is -0.25%, -0.22% and -0.58% respectively. Likewise, infant mortality decreased with the increased percentage of household having television by 0.08%, on average. As infant mortality is an outcome from a variety of socio-economic disparity; reducing policy should address the degree of severity of the risk factors on infant mortality, prioritizing the most effective reducing factors such as infant immunization and population growth rate as well.
    Keywords: Infant Mortality Rate, Socio-demographic Determinants, Annual Rate of Reduction, Log linear Regression, Simultaneous Quantile Regression.
    JEL: I12 C21
    Date: 2010–01–15
  6. By: Joseph P. Cook; Graeme Hunter; John A. Vernon
    Abstract: Generic utilization rates have risen substantially since the enactment of The Drug Price Competition and Patent Term Restoration Act (Hatch-Waxman) in 1984. In the year Hatch-Waxman was enacted, generic utilization rates were 19 percent; in contrast, today, the generic utilization rate is approximately 70 percent. Striking a balance between access to existing medicines and access to yet-to-be-discovered (and developed) drugs, through research incentives, was the principal objective of this landmark legislation. However, given the current rate of generic utilization, it seems plausible, if not likely, that any balance achieved by the 1984 Act has since shifted away from research incentives and towards improved access, ceteris paribus. Among other factors, recent mandatory substitution laws in most states have driven up generic utilization rates. In the current paper, we employ semi-annual data from 1992 to 2008 to examine the link between generic utilization rates and real U.S. prescription drug prices. This link is important because previous research has identified a causal relationship between real drug prices in the U.S. and industry-level R&D investment intensity. We identify a statistically significant, positive relationship between generic utilization rates in the U.S. and real U.S. prescription drug prices. Specifically, we estimate an elasticity of real drug prices to generic utilization rates of -0.15. This finding, when coupled with previous empirical work on the determinants of pharmaceutical R&D intensity, suggests an elasticity of R&D to generic utilization rates of about 0.090. While the magnitude of this elasticity is modest, as theory would predict—the effect of greater generic erosion of brand sales at patent expiration is heavily discounted due to the long time horizon to generic erosion when an R&D project is in clinical development. However, because there has been a very substantial increase in generic utilization rates since 1984, the impact on R&D is nevertheless quite large. We explore this and other issues in the current paper.
    JEL: I11 I18 K0 L0
    Date: 2010–02
  7. By: Leemore Dafny; Katherine Ho; Mauricio Varela
    Abstract: Most non-elderly Americans purchase insurance through their employers, which sponsor a limited number of plans. We estimate how much employees would be willing to pay for the right to apply their employer subsidy to the plan of their choosing. We make use of a proprietary dataset containing information on plan offerings and enrollment for 800+ large employers between 1998 and 2006; the dataset represents over 10 million Americans annually. We estimate a model of employee preferences using the set of plans they are offered. Using the estimated parameters from this model, we predict employees’ choices in a hypothetical world in which additional plans in a market are available to them on the same terms, i.e. tax-free and subsidized by their employers. Holding employer outlays constant, we estimate that the median welfare gain from expanding choice amounts to roughly 20 percent of premiums. For the vast majority of employee groups and alternative model specifications, the gains from choice are likely to outweigh potential premium increases associated with a transition from large group to individual pricing.
    JEL: I11 L1
    Date: 2010–01
  8. By: William Encinosa; Didem Bernard; Avi Dor
    Abstract: We estimate the impact of diabetic drug adherence on hospitalizations, ER visits, and hospital costs, using insurance claims from MarketScan® employer data. However, it is often difficult to measure the impact of drug adherence on hospitalizations since both adherence and hospitalizations may be correlated with unobservable patient severity. We control for such unobservables using propensity score methods and instrumental variables for adherence such as drug coinsurance levels and direct-to- consumer-advertising. We find a significant bias due to unobservable severity in that patients with more severe health are more apt to comply with medications. Thus, the relationship between adherence and hospitalization will be underestimated if one does not control for unobservable severity. Overall, we find that increasing diabetic drug adherence from 50% to 100% reduced the hospitalization rate by 23.3% (p=0.02) from 15% to 11.5%. ER visits are reduces by 46.2% (p=.04) from 17.3% to 9.3%. While such an increase in adherence increases diabetic drug spending by $776 a year per diabetic, the annual cost savings for averted hospitalizations are $886 per diabetic, a cost offset of $110 (p=0.02), or $1.14 per $1 spent on drugs.
    JEL: H51 I11
    Date: 2010–01
  9. By: Xin Xu; Robert Kaestner
    Abstract: In this paper, we take a structural approach to investigate the effects of wages and working hours on health behaviors of low-educated persons using variation in wages and hours caused by changes in economic activity. We find that increases in hours are associated with an increase in cigarette smoking, a reduction in physical activity, and fewer visits to physicians. More importantly, we find that most of the effects associated with changes in hours can be attributed to the changes in the extensive margin of employment. Increases in wages are associated with greater consumption of cigarettes.
    JEL: I12 J22
    Date: 2010–02
  10. By: Kristian Bolin; Daniel Hedblom; Anna Lindgren; Bjorn Lindgren
    Abstract: Several past studies have found health risk to be negatively correlated with the probability of voluntary health insurance. This is contrary to what one would expect from standard textbook models of adverse selection and moral hazard. The two most common explanations to the counter-intuitive result are either (1) that risk-aversion is correlated with health — i.e. that healthier individuals are also more risk-averse — or (2) that insurers are able to discriminate among customers based on observable health-risk characteristics. We revisited these arguments, using data from the Survey of Health, Ageing and Retirement in Europe (SHARE). Self-assessed health served as an indicator of risk: better health, lower risk. We did, indeed, observe a negative correlation between risk and insurance but found no evidence of heterogeneous risk-preferences as an explanation to our finding.
    JEL: D82 I1
    Date: 2010–01
  11. By: Yang Lu; Dana Goldman
    Abstract: This paper explores the effects of relative food prices on body weight and body fat over time in China. We study a cohort of 15,000 adults from over 200 communities in China, using the longitudinal China Health and Nutrition Survey (1991-2006). We find that the price of energy-dense foods has consistent and negative effects on body fat, while such price effects do not always reflect in body weight. These findings suggest that changes in food consumption patterns induced by varying food prices can increase percentage body fat to risky levels even without substantial weight gain. In addition, food prices and subsidies could be used to encourage healthier food consumption patterns and to curb obesity.
    JEL: D01 I1 J88
    Date: 2010–02
  12. By: Haizhen Lin (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: This paper estimates the impact that minimum staffing requirements have on the United States nursing home market using a unique national panel that spans the period between 1996 to 2005. It highlights the importance of controlling for unobserved heterogeneity in examining policy impacts. I find that, given an increase of 0.5 hours of minimum staffing requirements for licensed nurses, the quality of patient care increases by 15 percent. I also find that this quality-increasing effect is mainly driven by low quality nursing homes increasing their quality of care to meet the new standards. By contrast, minimum staffing requirements for direct care nurses do not have any significant impact on quality. A detailed explanation for this lack of impact is also provided in this paper.
    Date: 2010–01

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