nep-hea New Economics Papers
on Health Economics
Issue of 2010‒05‒22
nineteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. How Are Government Hospitals Performing? A Study of Resource Management in DOH-retained Hospitals By Lavado, Rouselle F.; Sanglay-Dunleavy, Abigail Barbara; Jimenez, Jeanette; Matsuda, Yasuhiko
  2. Forecasting age-related changes in breast cancer mortality among white and black US women: A functional approach By Farah Yasmeen; Rob J Hyndman; Bircan Erbas
  3. The Impact of Cigarette Tax Reduction on Consumption Behavior: Short-and Long-Term Empirical Evidence From Canada By Jean-François Ouellet; Mariachiara Restuccia; Alexandre Tellier; Caroline Lacroix
  4. Infant Mortality and the Health of Survivors: Britain 1910-1950 By Hatton, Timothy J.
  5. How do Roads Spread AIDS in Africa? A Critique of the Received Policy Wisdom By Djemaï, Elodie
  6. Perception of Health Risk and Averting Behavior: An Analysis of Household Water Consumption in Southwest Sri Lanka By Nauges, Céline; Van Den Berg, Caroline
  7. Mortality Decline and Aggregate Wealth Accumulation By Bommier, Antoine
  8. Are Patients in the Transition World Paying Unofficially to Stay Longer in Hospital? Some Evidence from Kazakhstan By Robin Thompson; Ana Xavier
  9. Water, sanitation and children's health : evidence from 172 DHS surveys By Gunther, Isabel; Fink, Gunther
  10. Health, demographic transition and economic growth By Jorgensen, Ole Hagen
  11. Non-linear models of disability and age applied to census data By Irene Albarrán; Pablo J. Alonso; Juan Miguel Marín
  12. The Economic Case for Expanding Vaccination Coverage of Children By Till Bärnighausen; David Bloom; David Canning; Abigail Friedman; Orin Levine; Jennifer O'Brien; Lois Privor-Dumm; Damian Walker
  13. Disease and Development Revisited By David E. Bloom; David Canning; Gunther Fink
  14. Changing Research Perspectives on the Global Health Workforce By Till Bärnighausen; David Bloom
  15. Does Staying Healthy Reduce Your Lifetime Health Care Costs? By Wei Sun; Anthony Webb; Natalia Zhivan
  16. Accurately Measuring Health Over the Life Course By Fabian Lange; Doug McKee
  17. A Life Insurance Deterrent to Risky Behavior in Africa By de Araujo, Pedro; Murray, James
  18. Sickness Absence: a Pan-European Study By Livanos, Ilias; Zangelidis, Alexandros
  19. The Economic Crisis and Medical Care Usage By Annamaria Lusardi; Daniel Schneider; Peter Tufano

  1. By: Lavado, Rouselle F.; Sanglay-Dunleavy, Abigail Barbara; Jimenez, Jeanette; Matsuda, Yasuhiko
    Abstract: The paper attempts to provide an overview of the hospital sector in the Philippines with particular emphasis on hospitals being managed by the DOH. The paper begins with an overview of the hospital sector in the Philippines, describing the size, location, and utilization of hospital services. To assess the efficiency and effectiveness of service delivery in DOH-retained hospitals, an analysis of resource management is undertaken by examining the sources of funds, planning and budgeting cycle, uses of funds, and monitoring set-up. The paper provides a critique of recent policies concerning hospitals as outlined in the Health Sector Reform Strategy. The last section concludes and provides some policy recommendations.
    Keywords: health sector, health expenditures, health care, health facilities, hospitals, health care reform, health care financing, health management, health service delivery, health, health funds
    Date: 2010
  2. By: Farah Yasmeen; Rob J Hyndman; Bircan Erbas
    Abstract: The disparity in breast cancer mortality rates among white and black US women is widening with higher mortality rates among black women. We apply functional time series models on age-specific breast cancer mortality rates for each group of women, and forecast their mortality curves using exponential smoothing state-space models with damping. The data were obtained from the Surveillance, Epidemiology and End Results (SEER) program of the US (SEER, 2007). Mortality data were obtained from the National Centre for Health Statistics (NCHS) available on the SEER*Stat database. We use annual unadjusted breast cancer mortality rates from 1969 to 2004 in 5-year age groups (45-49, 50-54, 55-59, 60-64, 65-69, 70-74, 75-79, 80-84). Age-specific mortality curves were obtained using nonparametric smoothing methods. The curves are then decomposed using functional principal components and we fit functional time series models with four basis functions for each population separately. The curves from each population are forecast and prediction intervals are calculated. Twenty-year forecasts indicate an over-all decline in future breast cancer mortality rates for both groups of women. This decline is steeper among white women aged 55-73 and black women aged 60-84. For black women under 55 years of age, the forecast rates are relatively stable indicating no significant change in future breast cancer mortality rates among young black women in the next 20 years.
    Keywords: Breast cancer mortality, racial and ethnic disparities, screening, trends, forecasting, functional data analysis
    JEL: C14 C23 J11
    Date: 2010–04–22
  3. By: Jean-François Ouellet; Mariachiara Restuccia; Alexandre Tellier; Caroline Lacroix
    Abstract: Several academic studies have been conducted to explore the link between taxes on tobacco products and consumption behavior, especially smoking cessation. While most research has been conducted by comparing static levels of taxation across states or countries, almost none have looked at the dynamic effects of taxes, let alone the context of a tax decrease that is non-homogeneous within a given country, alongside parallel phenomena such as resort to smuggling. Moreover, most research has failed to adopt a contingency framework taking into account potentially influent variables such as age and consumption levels. Using a unique dataset compiled by Statistics Canada, we estimate several models that explore consumers’ behavior towards cigarettes as taxes are rolled back, their resort to consuming smuggled products, as well as a range of individual factors that influence said behaviors. We show effects in the very short term—that is, right after taxes are decreased—and in the long term—that is, a little over one year after taxes have been rolled back. Our results suggest that consumption of smuggled cigarettes is directly and strongly linked to the level of taxes and that this behavior can be efficiently curbed by tax reduction. Tax cuts explain in the range of 17% a smoker’s decision to stop regularly consuming smuggled cigarettes. In addition, our results suggest that taxes themselves play a very limited role in explaining individuals’ propensity to quit or to start smoking, especially in comparison with age and current smoking levels. Our analyses show that, despite statistically significant effects attributable to the large sample size, the part of a smoker or non-smoker behavior that is explained by taxes is very small. In other words, while cigarette tax cuts do reduce propensity to quit or to remain a non-smoker, especially in the long run, they are responsible for about ½ of 1% of this decision. In comparison, models that take into account respondent age or, for smokers, the average number of cigarettes smoked daily, can explain in the order of 5% to 10% the variation in behavior—that is, 10 to 20 times as much as taxes only. These results suggest that, despite their statistically significant influence on smokers and non-smokers behavioral changes, tax cuts from an original level as high as $21 on a carton of 200 cigarettes are not key short-term and long-term behavioral change agents—that is, when taxes are that high, and in a context where about 20% of the population does smoke, tax cuts neither strongly induce non-smokers to start smoking nor strongly induce smokers not to quit smoking. However, they do, where smuggled products are readily available, strongly decrease smokers’ consumption of smuggled cigarettes. This should warrant further investigation of more effective means to curb smoking in this context, such as societal marketing efforts raising awareness of the short- and long-term health hazards associated with smoking. <P>De nombreuses études scientifiques ont été menées afin d’explorer le lien entre les taxes et la consommation des produits dérivés du tabac, plus en détail sur le fait d’arrêter de fumer. Bien que la plupart de la recherche ait été menée en comparant des niveaux statiques de taxation entre états ou pays, presque aucune étude n’a regardé les effets dynamiques des taxes, encore moins dans le contexte d’une réduction de taxes non homogène au sein d’un pays donné, en parallèle à certains phénomènes concomitants tels que le recours à la contrebande. De plus, la majorité des recherches n’ont pas adopté un cadre théorique contingent, tenant compte de certaines variables potentiellement influentes telles que l’âge des consommateurs et le niveau de consommation préalable. En utilisant une base de données unique compilée par Statistique Canada, cette recherche estime plusieurs modèles qui explorent le comportement des consommateurs envers les cigarettes en lien avec une réduction des taxes de même qu’une série de facteurs individuels pouvant influencer ces comportements. Nous distinguons les effets dans le court terme – i.e. tout de suite après que les taxes aient été réduites – et dans le long terme – i.e. environ un an après que les taxes aient été réduites. Nos résultats montrent que la consommation des cigarettes de contrebande est directement et fortement liée au niveau des taxes, et que ce comportement peut être diminué de façon efficace par une réduction des taxes. Une telle réduction explique quelque 17 % de la décision d’un fumeur d’arrêter de consommer régulièrement des cigarettes de contrebande. De plus, nos résultats montrent que les taxes ont un rôle très limité dans l’explication de la propension des individus à arrêter ou à commencer à fumer, surtout en comparaison avec l’âge et le niveau actuel de consommation. Nos analyses montrent que, malgré les effets statistiquement significatifs dus à la grande taille de l’échantillon, la portion du comportement du fumeur ou du non-fumeur qui est expliquée par les taxes est très petite. En d’autres termes, bien que les réductions de taxes sur les cigarettes abaissent la propension à arrêter de fumer ou à rester un fumeur, surtout à long terme, ces réductions expliquent environ un demi de 1 % de cette décision. En comparaison, les modèles qui tiennent compte de l’âge du répondant ou, dans le cas des fumeurs, de la moyenne des cigarettes fumées par jour arrivent à expliquer de l’ordre de 5 % à 10 % du changement du comportement, soit 10 à 20 fois davantage que les taxes seules. Ces résultats suggèrent que, malgré leur influence statistiquement significative sur les changements dans les comportements des fumeurs et des non-fumeurs, les réductions de taxes à partir d’un niveau initial aussi haut que 21 $ par cartouche de 200 cigarettes ne sont pas des facteurs véritablement décisifs pour les modifications au comportement, autant dans le court que dans le long terme. En effet, quand les taxes sont si élevées, et dans un contexte où environ 20 % de la population fume, les réductions des taxes n’incitent pas fortement les non-fumeurs à commencer à fumer ni n’incitent fortement les fumeurs à ne pas arrêter de fumer. Par contre, quand il est relativement facile de trouver sur le marché des produits de contrebande, ces réductions diminuent fortement la consommation de cigarettes de contrebande par les fumeurs. Ce résultat justifierait des recherches futures sur des moyens plus efficaces de mettre un frein au tabagisme, tels que les campagnes de marketing social cherchant à sensibiliser les consommateurs sur les dangers pour la santé (autant dans le court que dans le long terme) associés à la consommation de tabac.
    Keywords: Taxation, Smoking cessation, Tobacco, Behavioral Economics, Taxation, arrêter de fumer, tabac, économie comportementale
    Date: 2010–05–01
  4. By: Hatton, Timothy J. (Australian National University)
    Abstract: The first half of the twentieth century saw rapid improvements in the health and height of British children. Average height and health can be related to infant mortality through a positive selection effect and a negative scarring effect. Examining town-level panel data on the heights of school children I find no evidence for the selection effect but some support for the scarring effect. The results suggest that the improvement in the disease environment, as reflected by the decline in infant mortality, increased average height by about half a centimeter per decade in the first half of the twentieth century.
    Keywords: heights of children, infant mortality, health in Britain
    JEL: I12 J13 N34
    Date: 2010–05
  5. By: Djemaï, Elodie
    Abstract: This paper empirically analyzes the influence of road proximity on HIV-infection using geographical data on road infrastructure and the Demographic and Health Surveys collected in six African countries. Firstly we show that living in proximity to a major road increases the individual risk of infection. This observed relationship is found to be sensitive to the use of the road and to be robust after correcting for potential selection bias related to the non random placement of people. Secondly, our findings reveal that road infrastructure improves the level of HIV/AIDS-knowledge and facilitates access to condoms, providing no support to the hypothesis that HIV-infection is purely due to ignorance and misfortune. Thirdly, we find that the increased risk of infection is driven by a higher likelihood of engaging in casual sexual partnerships that more than osets the eect of the increased use of condoms.
    Keywords: HIV/AIDS epidemic, spatial inequalities, risk taking
    JEL: I10 O12 O18
    Date: 2009–11
  6. By: Nauges, Céline; Van Den Berg, Caroline
    Abstract: Using household data from surveys made in Sri Lanka, we provide original results regarding i) factors driving the perception of risk related to water consumption and ii) the role of perceived risk on household’s decision to treat water before drinking it. First, we find evidence that water aesthetic attributes (taste, smell, and color), household’s education and information about hygiene practices drive household’s assessment of safety risk. Second, we show that a higher perceived risk increases the probability that households boil or filter water before drinking it.
    Keywords: water consumption, risk perception, averting behavior
    Date: 2009–12
  7. By: Bommier, Antoine
    Abstract: The paper discusses the impact of longevity extension on aggregate wealth accumulation, accounting for changes in individual behaviors as well as changes in population age structure. It departs from the standard literature by adopting a formulation of individual preferences that accounts for temporal risk aversion. Human impatience is then closely related to mortality rates and aggregate wealth accumulation appears to be much more sensitive to demographic factors than with the traditional approach. Illustrations are provided using historical mortality data from different countries.
    Keywords: longevity, life cycle savings, wealth accumulation
    JEL: D91 E21 J1
    Date: 2009–06–16
  8. By: Robin Thompson; Ana Xavier
    Abstract: To empirically test whether, as surveys and anedoctal reports suggest, patients are paying to stay longer in hospital, perceived as resulting in better care (e.g. more professional attention), a unique dataset is constructed on hospital length of stay, severity, unofficial payments and socio-economic characteristics (age, gender, occupation and income) from a survey on 1508 trauma and surgical patients discharged from Almaty City (the former capital of Kazakhstan) three main hospitals between 1999 and 2000.
    Keywords: gender, age, occupation, patients, hospitals, care, kazakhstan, socio-economic,
    Date: 2010
  9. By: Gunther, Isabel; Fink, Gunther
    Abstract: This paper combines 172 Demography and Health Survey data sets from 70 countries to estimate the effect of water and sanitation on child mortality and morbidity. The results show a robust association between access to water and sanitation technologies and both child morbidity and child mortality. The point estimates imply, depending on the technology level and the sub-region chosen, that water and sanitation infrastructure lowers the odds of children to suffering from diarrhea by 7-17 percent, and reduces the mortality risk for children under the age of five by about 5-20 percent. The effects seem largest for modern sanitation technologies and least significant for basic water supply. The authorsalso find evidence for the Mills-Reincke Multiplier for both water and sanitation access as well as positive health externalities for sanitation investments. The overall magnitude of the estimated effects appears smaller than coefficients reported in meta-studies based on randomized field trials, suggesting limits to the scalability and sustainability of the health benefits associated with water and sanitation interventions.
    Keywords: Health Monitoring&Evaluation,Hygiene Promotion and Social Marketing,Town Water Supply and Sanitation,Population Policies,Urban Water Supply and Sanitation
    Date: 2010–04–01
  10. By: Jorgensen, Ole Hagen
    Abstract: This paper develops a link between four central components of the demographic transition: survival rates; fertility decisions; altruistic intergenerational transfers from workers toward their parents; and economic growth. An increase in child survival is found to reduce the fertility rate and altruistic transfers, and thereby increase the savings rate and the productivity growth rate. The analysis illustrates the key role of child health in the demographic transition.
    Keywords: Population Policies,Economic Theory&Research,Emerging Markets,Access to Finance,Health Monitoring&Evaluation
    Date: 2010–05–01
  11. By: Irene Albarrán; Pablo J. Alonso; Juan Miguel Marín
    Abstract: It is usually considered that the proportion of handicapped people grows with age. Namely, the older the man/woman is, the more level of disability he/she suffers. However, empirical evidence shows that this assessment is not always true, or at least, it is not true in the Spanish population. This study tries to assess the impact of age on disability in Spain. It is divided into three different parts. The first one is focused in describing the way disability is measured in this work. We used a former index defined by the authors that distinguishes between men and women. The second one is focused in a literature review about the methods used in this paper. This section emphasizes on local regression, feed forward neural networks and BARS. Finally, in the last section estimations are undertaken. Several methods are used and, therefore, there are fairly differences in the results, not only among the methodologies, but also between genders.
    Keywords: Disability, Local estimation, Splines, Neural networks, BARS
    JEL: C10 C11 C45 C50
    Date: 2010–05
  12. By: Till Bärnighausen (Harvard School of Public Health); David Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Abigail Friedman (Harvard School of Public Health); Orin Levine (Johns Hopkins Bloomberg School of Public Health); Jennifer O'Brien (Harvard School of Public Health); Lois Privor-Dumm (Johns Hopkins Bloomberg School of Public Health); Damian Walker (Johns Hopkins Bloomberg School of Public Health)
    Abstract: While childhood vaccination programs, such as WHO’s Expanded Program on Immunization, have had a dramatic impact on child morbidity and mortality worldwide, lack of coverage with several existing vaccines is responsible for large numbers of child deaths each year, mostly in developing countries. According to WHO estimates, increased coverage of three vaccines alone – pneumococcal conjugate vaccine (PCV), rotavirus vaccine (Rota), and Haemophilus influenzae type b (Hib) vaccine – could have prevented one and a half million deaths in children under five years in 2002. In deciding whether to implement interventions to expand vaccination coverage policy makers often consider economic evaluations. Past evaluations, however, have usually ignored both important vaccination benefits and potentially large cost reductions in vaccination delivery. We demonstrate for the example of benefit-cost analysis (BCA) of the Hib vaccination that past studies have mostly taken narrow evaluation perspectives, focusing on health gains, health care cost savings, and reductions in the time costs that parents incur when taking care of sick children, while ignoring other benefits, in particular, outcome-related productivity gains (Hib vaccination can prevent permanent mental and physical disabilities) behavior-related productivity gains (reductions in child mortality due to Hib can trigger changes in fertility which in turn may stimulate economic growth) and community externalities (Hib vaccination can prevent the development of antibiotic resistance and reduce the risk of Hib infections in unvaccinated persons). We further show that the costs of Hib vaccine delivery can be reduced if the monovalent Hib vaccine is replaced by combination vaccines. Such cost reductions have usually been ignored in CBA of Hib. Our analysis thus suggests that past BCAs are likely to have substantially underestimated the value of Hib vaccination, even though most have found it to be cost-beneficial. Unless future BCAs of childhood vaccinations take full account of benefits and costs, policy makers may lack sufficient information to make the right decisions on vaccination interventions.
    Keywords: vaccination coverage, children, economics
    Date: 2010–05
  13. By: David E. Bloom (Harvard School of Public Health); David Canning (Harvard School of Public Health); Gunther Fink (Harvard School of Public Health)
    Abstract: In a recent paper, Acemoglu and Johnson (2007) argue that the large increases in population health witnessed in the 20th century may have lowered income levels. We argue that this result depends crucially on their assumption that initial health and income do not affect subsequent economic growth. Using their data we reject this assumption in favor of a model of conditional convergence, with income adjusting to its steady state over time. We show that, allowing for conditional convergence, exogenous improvements in health due to technical advances associated with the epidemiological transition appear to have increased income levels.
    Keywords: Disease, development, economic growth, health
    Date: 2010–05
  14. By: Till Bärnighausen (Harvard School of Public Health); David Bloom (Harvard School of Public Health)
    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.
    Keywords: Research perspectives, Global Health Workforce
    Date: 2010–05
  15. By: Wei Sun; Anthony Webb; Natalia Zhivan
    Abstract: Medical and long-term care costs represent a substantial uninsured risk for most retired households. A recent brief from the Center for Retirement Research at Boston College reported new findings on average lifetime health care costs at selected ages and on the distribution of those costs. This second brief explores the relationship between health care costs and health status. That is, it considers whether current good health is a predictor of low health care costs over one’s remaining lifetime. If so, healthy households could set aside less for health care expenditures than the unhealthy, and households that stay healthy could release for general consumption money that they had previously set aside for health care costs. Our main finding is that although the current health care costs of healthy retirees are lower than those of the unhealthy, the healthy actually face higher total health care costs over their remaining lifetime. To illustrate, the expected present value of lifetime health care costs for a couple turning 65 in 2009 in which one or both spouses suffer from a chronic disease is $220,000, including insurance premiums and the cost of nursing home care, and 5 percent can expect to spend more than $465,000. The comparable numbers for couples free of chronic disease are substantially higher, at $260,000 and $570,000, respectively. This brief explains this somewhat counterintuitive finding.
    Keywords: savings and consumption, health
    Date: 2010–05
  16. By: Fabian Lange; Doug McKee
    Abstract: This paper develops a new method of estimating rich, dynamic models of health based on multiple health measures available in the HRS. We apply these methods to investigate what generates the large socioeconomic gradient in health. Preliminary results suggest a large role for initial differences in health at age 50 that persist into old age.
    Date: 2010–05
  17. By: de Araujo, Pedro; Murray, James
    Abstract: The spread of HIV and AIDS and risky sexual behavior continues to be a problem in Sub-Saharan African countries despite government measures to educate people on the risk and severity of the disease and measures to promote safe sex practices such as making condoms readily available at reduced or no cost. We examine whether people decide to engage in risky sexual behavior due to low income and low life expectancy. Sub-Saharan Africa is characterized by conditions that significantly reduce life expectancy such as unsanitary conditions prevalent in poverty stricken areas, inaccessibility to health care, and dangerous working conditions such as those in very poor mining regions. Moreover, since income per capita in these countries is very low, the opportunity cost associated with dying from AIDS and foregoing future consumption is very low. We examine how a government provided life insurance benefit may be an effective means of deterring risky sexual behavior. To evaluate this policy prescription we develop a life-cycle model with personal and family consumption and endogenous probability of survival. In the model, agents can receive life insurance benefits if their death is not the result of AIDS. We demonstrate that excessive risky behavior does result from low life expectancy and low levels of income and illustrate the conditions for which the life insurance benefit can replicate the effects of higher income and life expectancy, deterring risky sexual behavior and reducing the spread of HIV/AIDS.
    Keywords: AIDS; life-cycle; life expectancy; sub-Saharan Africa
    JEL: H51 I18 I38
    Date: 2010–05–12
  18. By: Livanos, Ilias; Zangelidis, Alexandros
    Abstract: This study, using the EU-LFS, examines the determinants of sickness absence in 26 EU countries. The analysis highlights the importance of demographic and workplace characteristics and of institutional and societal conditions. Female workers aged 26-35 exhibit higher absenteeism, possibly reflecting the level of high household labour pressure. Increased job insecurity, captured by temporary contracts, and labour market uncertainty, reflected in higher unemployment rates, have a negative effect on absenteeism. Finally, individual sickness absence is lower in countries with higher proportion of dependent/out of the labour market individuals, probably because of the increasing pressure labour active people may experience.
    Keywords: Absenteeism; sickness; EU; Labour Force Survey
    JEL: J28 J32 J22
    Date: 2010–05
  19. By: Annamaria Lusardi (Dartmouth College and NBER); Daniel Schneider (Princeton University); Peter Tufano (Harvard Business School and NBER)
    Abstract: We use a unique, nationally representative cross-national dataset to document the reduction in individuals’ usage of routine non-emergency medical care in the midst of the economic crisis. A substantially larger fraction of Americans have reduced medical care than have individuals in Great Britain, Canada, France, and Germany, all countries with universal health care systems. At the national level, reductions in medical care are related to the degree to which individuals must pay for it, and within countries are strongly associated with exogenous shocks to wealth and employment.
    Date: 2010–03

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