nep-hea New Economics Papers
on Health Economics
Issue of 2010‒07‒31
eleven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. On Utilization and Stockpiling of Prescription Drugs when Co-payments Increase: Heterogeneity across Types of Drugs By Niels Skipper
  2. Partial Identification of Willingness-to-Pay Using Shape Restrictions with an Application to the Value of a Statistical Life By Sojourner, Aaron J.
  3. The Effect of Waiting Time and Distance on Hospital Choice for English Cataract Patients By Peter Sivey
  4. Subnational Health Spending and Soft Budget Constraints in OECD Countries By Thomas Stratmann; Ernesto Crivelli; Adam Leive
  5. Private Sector in the Revised National Tuberculosis Control Programme: A Study of the Implementation of Private-Public Partnership Strategy in Tamil Nadu and Kerala (India) By Vangal R Muraleedharan; Bhuvaneswari Rajaraman; Sonia Andrews; Stephen Jan
  6. Adverse Selection and Private Health Insurance Coverage in India A Rational Behaviour Model of Insurance Agents under Asymmetric Information By Sukumar Vellakkal
  7. Morbidity Costs of Vehicular Air Pollution: Examining Dhaka City in Bangladesh By Tanzir Chowdhury; Mohammad Imran
  8. Effort or Circumstances: Does the Correlation Matter for Inequality of Opportunity in Health? By Florence Jusot; Sandy Tubeuf; Alain Trannoy
  9. Monitoring Health Inequalities in France: A Short Tool for Routine Health SUrvey to Account for LifeLong Adverse Experiences By Emmanuelle Cambois; Florence Jusot
  10. The growth of public health expenditures in OECD countries: do government ideology and electoral motives matter? By Potrafke, Niklas
  11. Why Should 5000 Children Die in India Every Day? Major Causes and Managerial Challenges By Ramani K V; Mavalankar Dileep; Tapasvi Puwar; Joshi Sanjay; Kumar Harish; Malek Imran

  1. By: Niels Skipper (School of Economics and Management, Aarhus University, Denmark)
    Abstract: This paper investigates prescription drug utilization changes following an exogenous shift in consumer co-payment caused by a reform in the Danish subsidy scheme for the general public. Two different types of medication are considered – insulin for treatment of the chronic condition diabetes and penicillin for treatment of non-chronic conditions. Using purchasing records for a 20% random sample of the Danish population, I show that increasing co-payments lower the utilization of both drugs. I demonstrate that individuals treated with drugs for chronic conditions react to the policy change by stockpiling on their medications. This has implications for other papers in the literature that use variation in subsidy rates over time to estimate the price elasticity of demand. This is not the case for penicillin however, where price elasticities are estimated to be in the -.18 – -.35 range. Further, I find that the lower part of the income distribution is more price responsive.
    Keywords: Prescription drugs, co-payments, price elasticities, stockpiling
    JEL: I11 I18
    Date: 2010–07–23
  2. By: Sojourner, Aaron J. (University of Minnesota)
    Abstract: Economists often analyze cross-sectional data to estimate the value people implicit place on attributes of goods using hedonic methods. Usually strong enough assumptions are made on the functional form of utility to point identify individuals' willingness-to-pay (WTP) for changes in attribute levels. Instead, this paper develops a new way to partially identify WTP under a weak set of conditions on the shape of individual indifference curves. In particular, indifference curves are assumed to be increasing and convex in an attribute-cost space that is finitely bounded above. These shape restrictions provide informative partial identification without relying on functional form restrictions for utility. Identification given general, potentially discrete, as well as smooth price functions is analyzed. To illustrate this method, we contribute to the literature on the value of a statistical life (VSL) by analyzing labor market data to study people's willingness to pay (WTP) for reductions in levels of fatal risk. The paper contrasts VSL estimates from conventional analysis with the bounds obtained under this new approach using a common data set. The data are shown to be consistent with a wide range of WTP values even given equilibrium and credible shape restrictions. This suggests that conventional estimates may be driven by functional form restrictions imposed on utility rather than by the data or properties of equilibrium.
    Keywords: hedonic, partial identification, value of a statistical life, shape restrictions
    JEL: C14 I10 J28
    Date: 2010–07
  3. By: Peter Sivey (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper applies latent-class and multinomial logit models to the choice of hospital for cataract operations in the UK NHS. We concentrate on the effects of travel time and waiting time and especially on the waiting time elasticity of demand. Models including hospital fixed effects rely on changes over time in waiting time to indentify coefficients. The results show how using latent-class multinomial logit models characterises the unobserved heterogeneity in GP practices' choice behaviour and affects the estimated waiting time elasticities of demand. The models estimate waiting time elasticities of demand of approximately -0.1, comparable with previous waiting time-demand models. For the average waiting time elasticity, the simple multinomial logit models are good approximations of the latent-class logit results.
    Keywords: hospital choice, waiting time, latent class model
    JEL: I11
    Date: 2010–07
  4. By: Thomas Stratmann; Ernesto Crivelli; Adam Leive
    Abstract: Government spending on health has grown as a percent of GDP over the last 40 years in industrialized countries. Widespread decentralization of healthcare systems has often accompanied this increase in spending. In this paper, we explore the effect of soft budget constraints on subnational health spending in a sample of OECD countries. We find countries where subnational governments rely primarily on central government financing and enjoy large borrowing autonomy have higher healthcare spending than those with more restrictions on subnational government borrowing.
    Date: 2010–06–23
  5. By: Vangal R Muraleedharan; Bhuvaneswari Rajaraman; Sonia Andrews; Stephen Jan
    Abstract: During the past one decade, the concept of Public-Private Partnership (PPP) has gained much prominence in healthcare sector in India. The foremost objective of such partnerships has been to improve the accessibility and quality of health care at relatively low costs. To control the spread of Tuberculosis (TB), the World Health Organisation (WHO) has promoted the strategy of Directly Observed Treatment, Short course (DOTS). The Revised National Tuberculosis Control Programme (RNTCP) which has adopted this strategy since early 1990s has designed several specific schemes for involving the private sector and Non Governmental Organisation (NGOs) across the country. This study aims at analysing the experience of PPP in the RNTCP, with special reference to Tamil Nadu and Kerala two southern states of India. The study suggests that there is vast scope for strengthening the PPP strategy. It argues that policy measures in future should aim to (a) encourage private practitioners accept the treatment regimes prescribed by RNTCP through better information and training (b) involve to a greater extent NGOs and PPs through better incentive mechanisms and (c) improve manpower for better monitoring and supervision of the NGOs/PPs involved in RNTCP. [HEFP Working Paper 03/05]
    Keywords: Public-Private Partnership (PPP), healthcare sector, India, Tuberculosis (TB), World Health Organisation (WHO), Directly Observed Treatment, Revised National Tuberculosis Control Programme (RNTCP), Non Governmental Organisation (NGOs), Tamil Nadu, Kerala
    Date: 2010
  6. By: Sukumar Vellakkal
    Abstract: In the backdrop of the low level of health insurance coverage in India, this study examines the determinants of the scaling-up process of health insurance by analyzing the rational behaviour of an insurance agent facing a trade-off between selling ‘health insurance’ and ‘other forms of insurance’ subject to his limited time and efforts, and the implications of such behaviour on adverse selection and equity. The paper presents various pre-conditions affecting the rational behaviour of insurance agents and also discusses two new concepts— ‘insurance habit’ and ‘asymmetric information on health insurance schemes’. Further, the study examines various strategies followed by insurance agents for maximizing their net incomes. The theoretical proposition is empirically validated by applying a binary Probit model and the primary data collected by the author is used in this context. The study concludes that given the existing incentive systems in the Indian insurance market for promoting various forms of insurance, the low level of insurance awareness among the general public, coupled with the dominant role of insurance agents in the market results in a situation of: 1. Low level of health insurance coverage, 2. No adverse selection and 3. Inequity in health insurance coverage. [Working Paper No. 233]
    Keywords: Health Insurance, Insurance Agent, Asymmetric Information, Adverse Selection and Insurance Habit
    Date: 2010
  7. By: Tanzir Chowdhury; Mohammad Imran
    Abstract: This study estimates the morbidity costs of reduction in air pollution in Dhaka, the capital of Bangladesh, using the Cost-of-Illness (COI) approach. COI is defined as the sum of lost earnings due to workdays lost or restricted activity days and the mitigation expenditure borne due to illness. The data for the research comes from seasonal household surveys using health diaries. We use a random-effects Zero Inflated Poisson regression model to estimate the equation for lost earnings and use a random-effects Tobit Regression to estimate the equation for mitigation expenditure. We find that the annual savings from reducing air pollution to meet national safety standards is Taka 131.37 (USD 1.88) per person from reductions in lost earnings and Taka 150.49 (USD 2.15) per person from reductions in medical expenditure. The annual saving to the population of Dhaka is Taka 2.39 billion or USD 34.09 million. Our estimates, which are based on primary data, provide significantly lower estimates of the benefits of reducing air pollution in Dhaka relative to previous analyses that has relied on the benefit-transfer approach. [SANDEE Working Paper No. 47-10]
    Keywords: Air Pollution, Health Benefit, Health Production Function, Cost-of-Illness, Panel Data, Random-Effects Zero Inflated Poisson Model, Random-Effects Tobit Model
    Date: 2010
  8. By: Florence Jusot (LEDa-LEGOS (Université Paris-Dauphine)); Sandy Tubeuf (Academic Unit of Health Economics (University of Leeds)); Alain Trannoy (EHESS Ecole des hautes études en sciences sociales - GREQAM-IDEP Institut d’économie publique)
    Abstract: This paper proposes a method to quantify the contribution of inequalities of opportunities and inequalities due to differences in effort to be in good health to overall health inequality. It examines three alternative specifications of legitimate and illegitimate inequalities drawing on Roemer, Barry and Swift’s considerations of circumstances and effort. The issue at stake is how to treat the correlation between circumstances and effort. Using a representative French health survey undertaken in 2006 and partly designed for this purpose, and the natural decomposition of the variance, the contribution of circumstances to inequalities in self-assessed health only differs of a few percentage points according to the approach. The same applies for the contribution of effort which represents at most 8%, while circumstances can account for up to 46%. The remaining part is due to the impact of age and sex.
    Keywords: equality of opportunity; inequality decomposition; health; effort; circumstances; variance; France.
    JEL: D63 I12
    Date: 2010–07
  9. By: Emmanuelle Cambois (INED institut national d'études démographiques); Florence Jusot (IRDES institut for research and information in health economics)
    Abstract: Conventional health surveys focus on current health and social context but rarely address past experiences of hardship or exclusion. However, recent research shows how such experiences contribute to health status and social inequalities. In order to analyse in routine statistics the impact of lifelong adverse experiences (LAE) on various health indicators, a new set of questions on financial difficulties, housing difficulties due to financial hardship and isolation was introduced in the 2004 French National health, health care and insurance survey (ESPS 2004). Logistic regressions were used to analyze associations between LAE, current socioeconomic status (SES) (education, occupation, income) and health (self-perceived health, activity limitation, chronic morbidity), on a sample of 4308 men and women aged 35 years and older. In our population, LAE were reported by 1 person out of 5. Although more frequent in low SES groups, they concerned above 10% of the highest incomes. For both sexes, LAE are significantly linked to poor self-perceived health, diseases and activity limitations, even controlling for SES (OR>2) and even in the highest income group. This pattern remains significant for LAE experienced only during childhood. The questions successfully identified in a conventional survey people exposed to health problems in relation to past experiences. LAE contribute to the social health gradient and explain variability within social groups. These questions will be useful to monitor health inequalities, for instance by further analyzing LAE related health determinants such as risk factors, exposition and care use.
    Keywords: Health inequalities; Lifelong adverse experiences; Health surveys
    JEL: I12 I32
    Date: 2010–03
  10. By: Potrafke, Niklas
    Abstract: This paper empirically evaluates whether government ideology and electoral motives influenced the growth of public health expenditures in 18 OECD countries over the 1971-2004 period. The results suggest that incumbents behaved opportunistically and increased the growth of public health expenditures in election years. Government ideology did not have an influence. These findings indicate (1) the importance of public health in policy debates before elections and (2) the political pressure towards re-organizing public health policy platforms especially in times of demographic change.
    Keywords: public health expenditures; health policies; government ideology; partisan politics; electoral cycles; panel data
    JEL: H51 I18 C23 D72
    Date: 2010–07–23
  11. By: Ramani K V; Mavalankar Dileep; Tapasvi Puwar; Joshi Sanjay; Kumar Harish; Malek Imran
    Abstract: Globally, more than 10 million children under 5 years of age, die every year (20 children per minute), most from preventable causes, and almost all in poor countries. Major causes of child death include neonatal disorders (death within 28 days of birth), diarrhea, pneumonia, and measles. Malnutrition accounts for almost 35 % of childhood diseases. India alone accounts for almost 5000 child deaths under 5 years old (U5) every day. India.s child heath indicators are poor even compared with our Asian neighbors, namely Malaysia, Sri Lanka, Thailand, Vietnam, China, Nepal and Bangladesh. Within India, the states of Bihar, Madhya Pradesh, Orissa, Rajasthan and Uttar Pradesh account for almost 60 % of all child deaths India.s neonatal mortality, which accounts for almost 50 % of U5 deaths, is one of the highest in the world. India launched the Universal Immunization Program in 1985, but the status of full immunization in India has reached only 43.5 % by 2005-06. India started the Integrated Child Development Scheme (ICDS) in 1975 to provide supplementary nutrition to children, but 50 % of our children are still malnourished; nearly double that of Sub-Saharan Africa. The WHO/UNICEF training program on Integrated Management of Neonatal and Childhood Illnesses, known as IMNCI, started in India a few years ago, but the progress is very slow. What is unfortunate is the fact that most of these deaths are preventable through proven interventions: preventive interventions and/or treatment interventions, but the management of childhood illnesses is very poor. In this working paper, we bring out the nature and magnitude of child deaths in India (Chapter 1) and then share with you in Chapters 2, 3 and 4 our observations on the management of some of national programs of the government of India such as The Universal Immunization Program (UIP) The Integrated Child Development Scheme (ICDS) The Integrated Management of Neonatal and Child Illnesses (IMNCI) In the final chapter (Chapter 5), we highlight certain managerial challenges to satisfactorily address the child mortality and morbidity in our country.
    Date: 2010–02–02

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