nep-hea New Economics Papers
on Health Economics
Issue of 2011‒04‒30
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Regional disparities in mortality by heart attack: evidence from France By Laurent Gobillon; Carine Milcent
  2. Health Insurance Reform and Efficiency of Township Hospitals in rural China: an Analysis from Survey Data By Aurore Pelissier; Martine Audibert; Jacky Mathonnat; Xiao Xian Huang
  3. The consequences of early childhood growth failure over the life course: By Hoddinott, John; Maluccio, John; Behrman, Jere R.; Martorell, Reynaldo; Melgar, Paul; Quisumbing, Agnes R.; Ramirez-Zea, Manuel; Stein, Aryeh D.; Yount, Kathryn M.
  4. Does Health Insurance Decrease Health Expenditure Risk in Developing Countries? The Case of China By Juergen Jung; Jialu Liu
  5. The Sick Pay Trap By Fevang, Elisabeth; Markussen, Simen; Røed, Knut
  6. A Country for Old Men? An Analysis of the Determinants of Long-Term Home Care in Europe By Silvia Balia; Rinaldo Brau
  7. On the effect of prospective payment system on hospital efficiency and competition for patients in Germany By Herwartz, Helmut; Strumann, Christoph
  8. Impact of Education on Lifestyles: What Do Longitudinal Data Show? By Shah Danyal; Bichaka Fayissa; Jung-Sung Lee
  9. Disease Environment and Civil Conflicts By Matteo Cervellati; Sunde, Uwe; Simona Valmori
  10. The Demand for Health Insurance Among Uninsured Americans: Results of a Survey Experiment and Implications for Policy By Alan B. Krueger; Ilyana Kuziemko
  11. Valuing Mortality Risk Reductions: Progress and Challenges By Maureen L. Cropper; James K. Hammitt; Lisa A. Robinson
  12. Selection on Moral Hazard in Health Insurance By Liran Einav; Amy Finkelstein; Stephen P. Ryan; Paul Schrimpf; Mark R. Cullen

  1. By: Laurent Gobillon (INED - INED); Carine Milcent (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris)
    Abstract: This paper studies the determinants of the regional disparities in the mortality of patients treated in a hospital for a heart attack in France. These determinants can be some differences in patient characteristics, treatments, hospital charateristics, and local healthcare market structure. We assess their importance with an exhaustive administrative dataset over the 1998-2003 period using a stratified duration model. The raw disparities in the propensity to die within 15 days between the extreme regions reaches 80%. It decreases to 47% after controlling for the patient characteristics and their treatments. In fact, a variance analysis shows that innovative treatments play an important role. Remaining regional disparities are significantly related to the local healthcare market structure. The more patients are locally concentrated in a few large hospitals rather than many small ones, the lower the mortality.
    Keywords: spatial health disparities ; stratified duration model
    Date: 2011–04–18
  2. By: Aurore Pelissier (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Martine Audibert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Jacky Mathonnat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Xiao Xian Huang (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: In the rural health-care organization of China, township hospitals ensure the delivery of basic medical services. Particularly damaged by the economic reforms implemented from 1975 to the end of the 1990s, township hospitals efficiency is questioned, mainly with the implementation since 2003 of the reform of health insurance in rural areas. From a database of 24 randomly selected township hospitals observed over the period 2000-2008 in Weifang prefecture (Shandong), the study examines the efficiency of township hospitals through a two-stage approach and the calculation of the Malmquist index. As curative and preventive medical services delivered at township hospital level use different production processes, two data envelopment analysis models are estimated with different orientation chosen to compute scores. Following Simar and Wilson (2007), as the traditional two-stage methodology is not relevant, we used a double bootstrap strategy. Results show that technical efficiency declines over time. Moreover, township hospitals are less efficient in the production of preventive services than in the production of curative ones. Several variables explained efficiency (township hospitals' and environment's characteristics) but our results suggest that in the context of China, the efficiency of township hospitals is also influenced by unobservable factors.
    Keywords: data envelopment analysis;Technical efficiency;Double bootstrapping;China;New Rural Cooperative Medical Scheme;Township Hospitals
    Date: 2011–04–21
  3. By: Hoddinott, John; Maluccio, John; Behrman, Jere R.; Martorell, Reynaldo; Melgar, Paul; Quisumbing, Agnes R.; Ramirez-Zea, Manuel; Stein, Aryeh D.; Yount, Kathryn M.
    Abstract: This paper examines the impact over the life course of early childhood growth failure as measured by achieved height at 36 months. It uses data collected on individuals who participated in a nutritional supplementation trial between 1969 and 1977 in rural Guatemala and who were subsequently reinterviewed between 2002 and 2004. It finds that individuals who did not suffer growth failure in the first three years of life complete more schooling, score higher on tests of cognitive skill in adulthood, have better outcomes in the marriage market, earn higher wages and are more likely to be employed in higher-paying skilled labor and white-collar jobs, are less likely to live in poor households, and, for women, fewer pregnancies and smaller risk of miscarriages and stillbirths. Growth failure has adverse impacts on body size and several dimensions of physical fitness in adulthood but does not have marked effects on risk indicators of cardiovascular and related chronic diseases. These results provide a powerful rationale for investments that reduce early-life growth failure.
    Keywords: Chronic disease, early life growth failure, fertility, Human capital, Poverty, Undernutrition, Wages,
    Date: 2011
  4. By: Juergen Jung (Department of Economics, Towson University); Jialu Liu (Department of Economics, Allegheny College)
    Abstract: We make use of panel data from the China Health and Nutrition Survey between 1991 and 2006 to investigate whether health insurance increases out-of-pocket (OOP) health expenditure risk. We find that health insurance increases the probability of catastrophic OOP health expenditures using a series of Probit models. We then use two-part as well as sample selection models to account for selection on unobservable variables and find that although the probability of positive OOP health expenditures increases with the availability of health insurance, the actual level of OOP health expenditures decreases. More specifically, we find that for a per- son with positive OOP health expenditures, having health insurance reduces the level of OOP expenses by 12.56 percent while controlling for selection effects.
    Keywords: health insurance, exposure to health risk, health care in China, out-of-pocket health expenditure in China, two-part model, bivariate sample selection model, Heckman two- step estimator, China Health and Nutrition Survey (CHNS).
    JEL: I11 C33 C34
    Date: 2011–04
  5. By: Fevang, Elisabeth (Ragnar Frisch Centre for Economic Research); Markussen, Simen (Ragnar Frisch Centre for Economic Research); Røed, Knut (Ragnar Frisch Centre for Economic Research)
    Abstract: In most countries, employers are financially responsible for sick pay during an initial period of a worker's absence spell, after which the public insurance system covers the bill. Based on a quasi-natural experiment in Norway, where pay liability was removed for pregnancy-related absences, we show that firms' absence costs significantly affect employees' absence behavior. However, by restricting pay liability to the initial period of the absence spell, firms are discouraged from letting long-term sick workers back into work, since they then face the financial risk associated with subsequent relapses. We show that this disincentive effect is statistically and economically significant.
    Keywords: absenteeism, social insurance, experience rating, multivariate hazard rate models
    JEL: C14 C41 H55 I18 J23
    Date: 2011–04
  6. By: Silvia Balia; Rinaldo Brau
    Abstract: This paper investigates long-term home care utilisation in Europe. We use data from SHARE on formal (nursing care or paid domestic help) and informal care (support provided by relatives) to study the probability and the number of hours of both types of care received. We address endogeneity and unobservable heterogeneity in a common latent factors framework. We find that age, disability and proximity-to- death are important joint predictors of home care utilisation. Unlike some previous studies, we find that increasing the number of hours of informal support does not lead to a reduction in formal care utilisation.
    Keywords: long-term care; proximity to death; ageing; latent factors
    JEL: C10 C30 I1
    Date: 2011
  7. By: Herwartz, Helmut; Strumann, Christoph
    Abstract: The introduction of hospital reimbursement based on diagnosis related groups (DRG) in 2004 has been a conspicuous attempt to increase hospital efficiency in the German health sector. In this paper changes of hospital efficiency, quantified as a Malmquist index decomposition in pure technical efficiency change, are analyzed for periods before and after the reform. We implement a two-stage semi-parametric efficiency model that allows for spatial interdependence among hospitals. The results reveal an enhancement in overall efficiency after the DRG introduction. Moreover, an increase in the magnitude of negative spatial spillovers among German hospital performance can be diagnosed. This result is in line with a rise of competition for (low cost) patients. --
    Keywords: hospital effciency,data envelopment analysis,spatial analysis,diagnosis related groups
    JEL: C21 D61 I11 I18
    Date: 2011
  8. By: Shah Danyal; Bichaka Fayissa; Jung-Sung Lee
    Abstract: This essay investigates the effect of education on different lifestyle variables using NLSY79 panels for 1992, 1994, and 1998. The lifestyle variables are smoking, drinking, marijuana use, and cocaine use. The analysis addresses the joint determination of lifestyle variables within the framework of the Seemingly Unrelated Regression (SUR) model. Unobserved heterogeneity is controlled by the robust fixed-effects model extended to SUR model. It is found that educational attainment has no significant effect on the lifestyle choices of individuals.
    Keywords: Education, Smoking, Drinking, Marijuana and Cocaine Use, Fixed-Effects Model, SUR Model
    JEL: I1 I2 I10 I12 C30
    Date: 2011–04
  9. By: Matteo Cervellati; Sunde, Uwe; Simona Valmori
    Abstract: This paper tests the hypothesis that a high and persistent exposure to infectious diseases increases the likelihood of civil conflicts. Diseases that are difficult to prevent and treat may reduce the opportunity costs of violent activities, both directly and indirectly. The analysis exploits new data on the number of multi-host vector-transmitted infectious diseases that are endemic in each country. As consequence of their specific features, the presence of these pathogens in a country is closely related to geo-climatological conditions and exogenous to civil conflict. The findings document that a larger disease richness is a statistically robust and quantitatively relevant determinant of civil conflicts for the period 1960-2004. Exploiting within country variation, the findings also document that interactions between climatological shocks in terms of droughts and the disease environment have a significant effect on the risk of civil wars. The results are robust to different specifications, data sets and estimation methods, and suggest that the persistent exposure to a more unfavorable environment in terms of disease richness is an important determinant of the incidence of civil conflict. The results also suggest the potential relevance of a channel linking geography to economic development that has not been investigated in the literature.
    Keywords: Disease Environment, Civil Conict, Multi-Host Vector-Transmitted Pathogens, Civil War
    JEL: D74 J1
    Date: 2011–04
  10. By: Alan B. Krueger; Ilyana Kuziemko
    Abstract: Most existing work on the price elasticity of demand for health insurance focuses on employees’ decisions to enroll in employer-provided plans. Yet any attempt to achieve universal coverage must focus on the uninsured, the vast majority of whom are not offered employer-sponsored insurance. In the summer of 2008, we conducted a survey experiment to assess the willingness to pay for a health plan among a large sample of uninsured Americans. The experiment yields price elasticities substantially greater than those found in most previous studies. We use these results to estimate coverage expansion under the Affordable Care Act, with and without an individual mandate. We estimate that 39 million uninsured individuals would gain coverage and find limited evidence of adverse selection.
    JEL: H51 I11 I18
    Date: 2011–04
  11. By: Maureen L. Cropper; James K. Hammitt; Lisa A. Robinson
    Abstract: The value of mortality risk reduction is an important component of the benefits of environmental policies. In recent years, the number, scope, and quality of valuation studies have increased dramatically. Revealed-preference studies of wage compensation for occupational risks, on which analysts have primarily relied, have benefited from improved data and statistical methods. Stated-preference research has improved methodologically and expanded dramatically. Studies are now available for several health conditions associated with environmental causes and researchers have explored many issues concerning the validity of the estimates. With the growing numbers of both types of studies, several meta-analyses have become available that provide insight into the results of both methods. Challenges remain, including better understanding of the persistently smaller estimates from stated-preference than from wage-differential studies and of how valuation depends on the individual’s age, health status, and characteristics of the illnesses most frequently associated with environmental causes.
    JEL: Q50 Q51 Q58
    Date: 2011–04
  12. By: Liran Einav; Amy Finkelstein; Stephen P. Ryan; Paul Schrimpf; Mark R. Cullen
    Abstract: In this paper we explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral response to the insurance contract. Such "selection on moral hazard" can have important implications for attempts to combat either selection or moral hazard. We explore these issues using individual-level panel data from a single firm, which contain information about health insurance options, choices, and subsequent claims. To identify the behavioral response to health insurance coverage and the heterogeneity in it, we take advantage of a change in the health insurance options offered to some, but not all of the firm's employees. We begin with descriptive evidence that is suggestive of both heterogeneous moral hazard as well as selection on it, with individuals who select more coverage also appearing to exhibit greater behavioral response to that coverage. To formalize this analysis and explore its implications, we develop and estimate a model of plan choice and medical utilization. The results from the modeling exercise echo the descriptive evidence, and allow for further explorations of the interaction between selection and moral hazard. For example, one implication of our estimates is that abstracting from selection on moral hazard could lead one to substantially over-estimate the spending reduction associated with introducing a high deductible health insurance option.
    JEL: D12 D82 G22
    Date: 2011–04

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