nep-hea New Economics Papers
on Health Economics
Issue of 2010‒10‒02
fifteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  2. Health and Access Effects of New Drugs: Combining Experimental and Non-Experimental Data By Pierre-Carl Michaud; Darius Lakdawalla; Dana Goldman; Neeraj Sood; Ze Cong
  3. Labour Supply, Work Effort and Contract Choice: Theory and Evidence on Physicians By Bernard Fortin; Nicolas Jacquemet; Bruce S. Shearer
  4. Health Care Network Formation and Policyholders' Welfare By Bardey, David; Bourgeon, Jean Marc
  5. Health Care Providers Payments Regulation when Horizontal and Vertical Differentiation Matter By Bardey, David; Canta, Chiara; Lozachmeur, Jean-Marie
  6. Mortality, family and lifestyles By Grégory Ponthière
  7. Workplace smoking ban effects in an heterogeneous smoking population By Clément de Chaisemartin; Pierre-yves Geoffard
  8. Long term care insurance puzzle By Pierre Pestieau; Grégory Ponthière
  9. Chidl height, health and human capital: evidence using genetic markers By Stephanie von Hinke Kessler Scholder; George Davey Smith; Debbie A. Lawlor; Carol Propper; Frank Windmeijer
  10. Testing Providers' Moral Hazard Caused By a Health Care Report Card Policy By Yijuan Chen; Juergen Meinecke
  11. A Map of Mental Health By Rachel Smithies
  12. Patent Medicine? By Paul Grootendorst; Aidan Hollis; David K Levine; Thomas Pogge; Aled M Edwards
  13. Parental Substance Abuse and Foster Care: Evidence from Two Methamphetamine Supply Shocks By Scott Cunningham; Keith Finlay
  14. Proximity to Industrial Releases of Toxins and Childhood Respiratory, Developmental, and Neurological Diseases: Environmental Ascription in East Baton Rouge Parish By Cristina Legot; Bruce London; John Shandra
  15. The effect of competition on process and outcome quality of hospital care; An empirical analysis for the Netherlands By Michiel Bijlsma; Pierre Koning; Victoria Shestalova; Ali Aouragh

  1. By: Laura Crespo (CEMFI, Centro de Estudios Monetarios y Financieros); Pedro Mira (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: We study the prevalence of informal caregiving to elderly parents by their mature daughters in Europe and the effect of intense (daily) caregiving and parental health on the employment status of the daughters. We group the data from the first two waves of SHARE into three country pools (North, Central and South) which strongly differ in the availability of public formal care services and female labour market attachment. We use a time allocation model to provide a link to an empirical IV-treatment effects framework and to interpret parameters of interest and differences in results across country pools and subgroups of daughters. We estimate the average effect of parental disability on employment and daily care-giving choices of daughters and the ratio of these effects which is a Local Average Treatment effect of daily care on labour supply under exclusion restrictions. We find that there is a clear and robust North-South gradient in the (positive) effect of parental ill-health on the probability of daily care-giving. The aggregate loss of employment that can be attributed to daily informal caregiving seems negligible in northern and central European countries but not in southern countries. Large and significant impacts are found for particular combinations of daughter characteristics and parental disability conditions. The effects linked to longitudinal variation in the health of parents are stronger than those linked to cross-sectional variation.
    Keywords: Informal care, employment, instrumental variables, treatment effects.
    JEL: J2 C3 D1
    Date: 2010–09
  2. By: Pierre-Carl Michaud; Darius Lakdawalla; Dana Goldman; Neeraj Sood; Ze Cong
    Abstract: We propose to combine clinical trial and estimates of behavioral responses in the population to quantify the value of new drug innovations when such values cannot be obtained by randomized experiments alone. New drugs are seen as having two distinct effects on patients. First, they can provide better outcomes for patients currently under treatment, due to better clinical efficacy. Second, they can also provide treatment access to more patients, perhaps by reducing side effects or expanding treatment. We compare these “clinical” and “access” effects using claims data, data on the arrival rate of new drugs, and the clinical trials literature on the effectiveness of these drugs. We find that the effect of new drug introductions on the number of patients treated accounts for a substantial majority of the value created by new drugs.
    Keywords: Pharmaceutical innovation, effectiveness, cost-benefit analysis, cancer
    JEL: I10 J14 J18 C23
    Date: 2010
  3. By: Bernard Fortin; Nicolas Jacquemet; Bruce S. Shearer
    Abstract: We develop and estimate a generalized labour supply model that incorporates work effort into the standard consumption-leisure trade-off. We allow workers a choice between two contracts: a piece rate contract, wherein he is paid per unit of service provided, and a mixed contract, wherein he receives an hourly wage and a reduced piece rate. This setting gives rise to a nonconvex budget set and an efficient budget constraint (the upper envelope of contract-specific budget sets). We apply our model to data collected on specialist physicians working in the Province of Quebec (Canada). Our data set contains information on each physician’s labour supply and their work effort (clinical services provided per hour worked). It also covers a period of policy reform under which physicians could choose between two compensation systems: the traditional fee-for-service, under which physicians receive a fee for each service provided, and mixed remuneration, under which physicians receive a per diem as well as a reduced fee for service. We estimate the model using a discrete choice approach. We use our estimates to simulate elasticities and the effects of ex ante reforms on physician contracts. Our results show that physician services and effort are much more sensitive to contractual changes than is their time spent at work. Our results also suggest that a mandatory reform, forcing all physicians to adopt the mixed remuneration system, would have had substantially larger effects on physician behaviour than those observed under the voluntary reform. <P>
    Keywords: Labour supply, effort, contracts, practice patterns of physicians, discrete choice econometric models, mixed logit,
    JEL: C25 J22 J33 I10 J44
    Date: 2010–09–01
  4. By: Bardey, David; Bourgeon, Jean Marc
    Abstract: We develop a model in which two insurers and two health care providers compete for a fixed mass of policyholders. Insurers compete in premium and offer coverage against financial consequences of health risk. They have the possibility to sign agreements with providers to establish a health care network. Providers, partially altruistic, are horizontally differentiated with respect to their physical address. They choose the health care quality and compete in price. First, we show that policyholders are better off under a competition between conventional insurance rather than under a competition between integrated insurers (Managed Care Organizations). Second, we reveal that the competition between a conventional insurer and a Managed Care Organization (MCO) leads to a similar equilibrium than the competition between two MCOs characterized by a different objective i.e. private versus mutual. Third, we point out that the ex ante providers' horizontal differentiation leads to an exclusionary equilibrium in which both insurers select one distinct provider. This result is in sharp contrast with frameworks that introduce the concept of option value to model the (ex post) horizontal differentiation between providers.
    Keywords: Health care network; horizontal differentiation; health care quality
    JEL: I11 L11 L14 L42
    Date: 2010–08–11
  5. By: Bardey, David; Canta, Chiara; Lozachmeur, Jean-Marie
    Abstract: This paper analyzes the regulation of payment schemes for health care providers competing in both quality and product differentiation of their services. The regulator uses two instruments: a prospective payment per patient and a cost reimbursement rate. When the regulator can only use a prospective payment, the optimal price involves a trade-off between the level of quality provision and the level of horizontal differentiation. If this pure prospective payment leads to underprovision of quality and overdifferentiation, a mixed reimbursement scheme allows the regulator to improve the allocation efficiency. This is true for a relatively low level of patients’transportation costs. We also show that if the regulator cannot commit to the level of the cost reimbursement rate, the resulting allocation can dominate the one with full commitment. In particular, some cost reimbursement might be optimal even for higher levels of transportation costs.
    JEL: I18 L51
    Date: 2010–03
  6. By: Grégory Ponthière
    Abstract: While there is a large empirical literature on the intergenerational transmission of health and survival outcomes in relation to lifestyles, little theoretical work exists on the long-run prevalence of (un)healthy lifestyles induced by mortality patterns. To examine that issue, this paper develops an overlapping generations model where a healthy lifestyle and an unhealthy lifestyle are transmitted vertically or obliquely across generations. It is shown that there must exist a locally stable heterogeneous equilibrium involving a majority of healthy agents, as a result of the larger parental gains from socialization efforts under a higher life expectancy. Wealso examine the robustness of our results to the introduction of parental altruistic concerns for children's health and of asymmetric socialization costs.
    Date: 2010
  7. By: Clément de Chaisemartin; Pierre-yves Geoffard
    Abstract: Many public policies, and especially health policies, are aimed at modifying individual behavior. This is particularly true of anti smoking policies. However, health behavior is highly heterogeneous, and so are individual responses to public policies such as taxes or restriction on use. We investigate the effect of a workplace smoking ban which took place in France in 2007. By its national aspect, the French reform offers a good case to study the effect of workplace smoking bans. Using original data on patients who consult tobacco cessation services, we show that the ban caused an increase in the demand for such services, and in the number of successful attempts to quit smoking. However, using survey data, we show that the ban had no measurable effect on overall prevalence in the general population. Models of quasi rational smoking behavior may offer an explanation for these two apparently contradictory findings.
    Date: 2010
  8. By: Pierre Pestieau; Grégory Ponthière
    Abstract: The purpose of this paper is to examine the alternative explanatory factors of the so-called long term care insurance puzzle, namely the fact that so few people purchase a long term care insurance whereas this would seem to be a rational conduct given the high probability of dependence and the high costs of long term care. For that purpose, we survey various theoretical and empirical studies of the demand and supply of long term care insurance. We discuss the vicious circle in which the long term care insurance market is stuck: that market is thin because most people find the existing insurance products too expensive, and, at the same time, the products supplied by insurance companies are too expensive because of the thinness of the market. Moreover, we also show that, whereas some explanations of the puzzle involve a perfect rationality of agents on the LTC insurance market, others rely, on the contrary, on various behavioral imperfections.
    Date: 2010
  9. By: Stephanie von Hinke Kessler Scholder; George Davey Smith; Debbie A. Lawlor; Carol Propper; Frank Windmeijer
    Abstract: Height has long been recognised as associated with better outcomes: the question is whether this association is causal. We use children’s genetic variants as instrumental variables (IV) to deal with possible unobserved confounders and examine the effect of child and adolescent height on a wide range of outcomes: academic performance, IQ, self-esteem, symptoms related to depression and behavioural problems, including hyperactivity, emotional, conduct and peer problems. OLS findings show that taller children have higher IQ scores, perform better in school tests, and are less likely to have emotional or peer problems. The IV results differ. They show that taller children have better cognitive performance but, in contrast to the OLS, indicate that taller children are more likely to have behavioural problems. The magnitude of these IV estimates is large. For example, the effect of one standard deviation increase in height on IQ is comparable to the IQ difference for children born approximately 6 months apart within the same school year, while the increase in hyperactivity is comparable to the raw difference in hyperactivity between boys and girls.
    Keywords: Child and adolescent height; human capital; mental health; behavioural outcomes; instrumental variables; Mendelian randomization; genetic variants; ALSPAC
    JEL: I1 J24
    Date: 2010–09
  10. By: Yijuan Chen; Juergen Meinecke
    Abstract: This paper focuses on testing providers' moral hazard caused by a health care report card policy. We argue that, to indicate providers' moral hazard, empirical approaches should be based on understanding that the policy may cause different sides of participants to take actions. Neglecting this, an estimation strategy will estimate treatment effects that only capture the mixture of the providers' and patients' actions, and therefore cannot identify either side's action. We propose a simple remedy to the estimation strategy in the previous literature: Restricting to data before the report cards are published and setting the date when providers' performance start being recorded as the effective date of the policy. The U.S. state of Pennsylvania started collecting information on mortality outcomes for coronary artery bypass graft (CABG) surgery in 1990. The first report cards were published in 1992. Using U.S. Nationwide Inpatient Sample data from 1988 to 1992, we find insignificant quantity and incidence effects of the report-card policy before report cards are published. This means that the report card policy has not affected the likelihood that heart patients receive CABG surgery and it has not led hospitals to select patients strategically.
    JEL: I18 D82 C31
    Date: 2010–09
  11. By: Rachel Smithies
    Abstract: This paper provides a comprehensive picture of mental health services in England, includingstaffing and expenditure, and the number of people in need and the number treated.Historically, this information has been split across sub-sections of the health and socialservices; and the readily available information often appeared to give inconsistent answers.This paper brings together and interprets the available evidence to provide a single coherentmap of mental health need and services, from children to older adults and across both healthand social care services, in England.
    Keywords: mental health, NHS, mental health services, mental health staff, public health, expenditure
    JEL: H51 I19
    Date: 2010–09
  12. By: Paul Grootendorst; Aidan Hollis; David K Levine; Thomas Pogge; Aled M Edwards
    Date: 2010–09–21
  13. By: Scott Cunningham; Keith Finlay (Department of Economics, Tulane University)
    Abstract: Foster care caseloads have almost doubled over the last two decades, but the cause of the growth is poorly understood. We study the role of parental methamphetamine (meth) use, which social workers have linked to recent growth in foster care admissions. To mitigate the impact of omitted variable bias, we take advantage of two significant, exogenous supply-side interventions in meth markets in 1995 and 1997, and find robust evidence that meth use has caused growth in foster care caseloads. Further, we identify the mechanisms by which increased meth use caused an increase in foster care caseloads. First, we find that treatment for meth abuse caused foster caseloads to fall in situations where a child was removed because of parental incarceration, suggesting that substance abuse treatment is a substitute for foster care services and more generally an effective demand-side intervention. Secondly, we find that parental meth use causes an increase in both child abuse and child neglect foster care cases. These results suggest that child welfare policies should be designed specifically for the children of meth-using parents.
    Keywords: child welfare, illegal drugs, crime
    JEL: I12 J13 K42
    Date: 2010–09
  14. By: Cristina Legot; Bruce London; John Shandra
    Abstract: Recent research by Legot et al. (2010a, 2010b) has identified East Baton Rouge Parish (EBR) as a locus of particularly high volumes of emissions of developmental neurotoxins, i.e., those toxins that put children’s health and, especially, learning abilities at greatest risk. Many developmental neurotoxins are also classified as respiratory toxins, which are also linked to the sorts of childhood diseases (e.g., asthma) that impact school performance. This case study specifies the degree to which proximity to the main sources of these toxins in EBR is associated with high rates of neurodevelopmental diseases and childhood asthma. We also examine the relationship between proximity to toxins and race and class.<span>  </span>We find very strong patterns: disease rates are significantly higher in zip codes close to pollution “hot spots” than in more distant zip codes, as are percent minority and percent poverty.<span>  </span>This is evidence of “environmental ascription”, the existence of multiple, overlapping ascriptions based on race, class, and “place”.<span>  </span>Vulnerable populations are disproportionately exposed to the sorts of toxins that limit their life chances.<p></p>
    Keywords: environmental ascription; developmental neurotoxins; respiratory toxins; childhood diseases; vulnerable populations
    JEL: Q53 I19 J15
    Date: 2010
  15. By: Michiel Bijlsma; Pierre Koning; Victoria Shestalova; Ali Aouragh
    Abstract: The paper focuses on the relationship between competition and quality in the Dutch hospital sector. We analyse the period of 2004-2008, in which a healthcare reform took place in the Netherlands, introducing competition in the healthcare sector. The increased attention to hospital quality and its growing importance in a new institutional environment have resulted in a gradual increase of the voluntary disclosure of quality indicators by Dutch hospitals. We use panel data on Dutch general and academic hospitals in 2004-2008, including both process indicators (e.g., share of operation cancellations on short notice and share of diagnoses within 5 days) and outcome indicators (e.g., mortality rates) of hospital quality. We take the correlation between the disclosure decision and the level of the disclosed quality indicators explicitly into account by estimating a bivariate model. We find that competition explains differences in performance on process indicators, but not on outcome indicators.
    Keywords: competition in healthcare; quality; voluntary disclosure
    JEL: I1 L8 H4
    Date: 2010–09

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