nep-hea New Economics Papers
on Health Economics
Issue of 2012‒01‒03
forty-one papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. In Absolute or Relative Terms?: How Framing Prices Affects the Consumer Price Sensitivity of Health Plan Choice By Hendrik Schmitz; Nicolas R. Ziebarth
  2. Smoking and Returns to Education: Empirical Evidence for Germany By Julia Reilich
  3. Treatment and referral decisions under different physician payment mechanisms By Marie Allard; Izabela Jelovac; Pierre-Thomas Léger
  4. Innovative procedures: the key factor for hospital performance By Laurent Gobillon; Carine Milcent
  5. Valuing life: experimental evidence using sensitivity to rare events By Olivier Chanel; Graciela Chichilnisky
  6. Assessing the impact of antibiotic policies in Europe By Massimo Filippini; Laura G. González Ortiz; Giuliano Masiero
  7. Health Selection and the Effect of Smoking on Mortality By Adda, Jérôme; Lechene, Valerie
  8. Profit or Patients' Health Benefit? Exploring the Heterogeneity in Physician Altruism By Godager, Geir; Wiesen, Daniel
  9. Socioeconomic Heterogeneity in the Effect of Health Shocks on Earnings. Evidence from Population-Wide Data on Swedish Workers By Lundborg, Petter; Nilsson, Martin; Vikström, Johan
  10. Parental Health and Child Schooling By Massimiliano Bratti; Mariapia Mendola
  11. Stock Prices and the Doctor Supply: Effect of Medicare Residency Policy on Healthcare Industry Firms By Jonathan Hartley
  12. Earnings Growth and Movements in Self-Reported Health By Timothy Halliday
  13. R&D Costs and Productivity in Biopharmaceuticals By Scherer, F. M.
  14. Inter-firm R&D networks in the global pharmaceutical biotechnology industry during 1985 - 1998: A conceptual and empirical analysis By Krogmann, Yin; Schwalbe, Ulrich
  15. Comparative analysis of delivery of primary eye care in three European countries By Thomas, Dominik; Weegen, Lennart; Walendzik, Anke; Wasem, Jürgen; Jahn, Rebecca
  16. Diagnoses-based risk adjustment in the German remuneration system for outpatient medical care By Walendzik, Anke
  17. Health Effects of Temporary Jobs in Europe By Christoph Ehlert; Sandra Schaffner
  18. An Evaluation of the 1997 Fiscal Decentralization Reform in Mexico: The Case of the Health Sector By André Martínez; Carolina Rodríguez-Zamora
  19. The Causal Effect of Education on Health By Brunello, Giorgio; Fort, Margherita; Schneeweis, Nicole; Winter-Ebmer, Rudolf
  20. Using Respondents’ Uncertainty Scores to Mitigate Hypothetical Bias in Community-Based Health Insurance Studies By Eric Malin CREM, UMR CNRS 6211, University of Rennes I, France; Hermann Pythagore Pierre Donfouet, CREM, UMR 6211, University of Rennes I, France; Pierre-Alexandre Mahieu, LEMNA, University of Nantes, France
  21. Does prospective payment increase hospital (in)efficiency? Evidence from the Swiss hospital sector By Philippe K. Widmer
  22. Accounting for heterogeneity in the measurement of hospital performance By Philippe K. Widmer; Peter Zweifel; Mehdi Farsi
  23. Applying Beta-type Size Distributions to Healthcare Cost Regressions By Jones, A.;; Lomas, J.;; Rice, N.;
  24. Do Cash Transfers Improve Birth Outcomes? Evidence from Matched Vital Statistics, Social Security and Program Data By Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito
  25. Valuing qalys at the end of life By Jose Luis Pinto Prades; Fernando Sanchez Martínez; Belen Corbacho
  26. A social perception of smoking cessation medication: A willingness-to-pay survey By Jose Luis Pinto Prades; José M. Abellán-Perpiñán; Ildefonso Méndez-Martínez; Silvia Díaz-Cerezo; Verónica Sanz de Burgoa
  28. NICE's Social Value Judgements about Equity in Health and Health Care By Koonal K Shah; Richard Cookson; Anthony J Culyer; Peter Littlejohns
  29. Estimating the Costs of Specialised Care: Updated Analysis Using Data for 2009/10 By Silvio Daidone; Andrew Street
  30. Keep it Simple? Predicting Primary Health Care Costs with Measures of Morbidity and Multimorbidity By Samuel L Brilleman; Hugh Gravelle; Sandra Hollinghurst; Sarah Purdy; Chris Salisbury; Frank Windmeijer
  31. Education, risk perceptions, and health behaviors By You, Kai
  32. Avoiding disclosure of individually identifiable health information: a literature review By Prada, Sergio I; Gonzalez, Claudia; Borton, Joshua; Fernandes-Huessy, Johannes; Holden, Craig; Hair, Elizabeth; Mulcahy, Tim
  33. Profiling student smokers:a behavioral approach By Theofanides, Faidon; Makri, Vasiliki; Mavroeidis, Vasileios; Iliopoulos, Dimitrios
  34. Medicaid and the Elderly By Mariacristina De Nardi; Eric French; John Bailey Jones; Angshuman Gooptu
  35. From Infant to Mother: Early Disease Environment and Future Maternal Health By Douglas Almond; Janet Currie; Mariesa Herrmann
  36. The Unsustainable Rise of the Disability Rolls in the United States: Causes, Consequences, and Policy Options By David H. Autor
  37. Utilization of Infertility Treatments: The Effects of Insurance Mandates By Marianne P. Bitler; Lucie Schmidt
  38. Airports, Air Pollution, and Contemporaneous Health By Wolfram Schlenker; W. Reed Walker
  39. Take-Up of Public Insurance and Crowd-out of Private Insurance Under Recent CHIP Expansions to Higher Income Children By Carole Roan Gresenz; Sarah E. Edgington; Miriam J. Laugesen; José J. Escarce
  40. Health and Education: Understanding the Gradient By Strulik, Holger
  41. Policy Response to Pandemic Influenza: The Value of Collective Action By Bobashev, Georgiy; Cropper, Maureen; Epstein, Joshua; Goedecke, Michael; Hutton, Stephen; Over, Mead

  1. By: Hendrik Schmitz; Nicolas R. Ziebarth
    Abstract: This paper provides field evidence on (a) how price framing affects consumers¿ decision to switch health insurance plans and (b) how the price elasticity of demand for health insurance can be influenced by policymakers through simple regulatory efforts. In 2009, in order to foster competition among health insurance companies, German federal regulation required health insurance companies to express price differences between health plans in absolute Euro values rather than percentage point payroll tax differences. Using individuallevel panel data, as well as aggregated health plan-level panel data, we find that the reform led to a sixfold increase in an individual¿s switching probability and a threefold demand elasticity increase.
    Keywords: Health insurance, health plan switching, price competition, price elasticity, SOEP
    JEL: H51 I11 I18
    Date: 2011
  2. By: Julia Reilich
    Abstract: Looking at smoking-behavior it can be shown that there are differences concerning the time-preference-rate. Therefore this has an effect on the optimal schooling decision in the way that we assume a lower average human capital level for smokers. According to a higher time-preference-rate we suppose a higher return to education for smokers who go further on education. With our empirical fondings we can confirm the presumptions. We use interactions-terms to regress the average rate of return with the instrumentvariable approach. Therefore we obtain that smokers have a significantly higher average return to education than non-smokers.
    Keywords: Returns to education, Human Capital, Smoking Effects
    JEL: J24 J31 I21
    Date: 2011
  3. By: Marie Allard (HEC Montréal - HEC MONTRÉAL); Izabela Jelovac (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon); Pierre-Thomas Léger (HEC Montréal - HEC MONTRÉAL, CIRANO - Centre interuniversitaire de recherche en analyse des organisations - Université du Québec à Montréal, CIRPEE - Centre interuniversitaire sur le risque, les politiques économiques et l'emploi - Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi)
    Abstract: This paper analyzes and compares the incentive properties of some common payment mechanisms for GPs, namely fee for service (FFS), capitation and fundholding. It focuses on gatekeeping GPs and it speci…cally recognizes GPs heterogeneity in both ability and altruism. It also allows inappropriate care by GPs to lead to more serious illnesses. The results are as follows. Capitation is the payment mechanism that induces the most referrals to expensive specialty care. Fundholding may induce almost as much referrals as capitation when the expected costs of GPs care are high relative to those of specialty care. Although driven by …nancial incentives of different nature, the strategic behaviours associated with fundholding and FFS are very much alike. Finally, whether a regulator should use one or another payment mechanism for GPs will depend on (i) his priorities (either cost-containment or quality enhancement) which, in turn, depend on the expected cost difference between GPs care and specialty care, and (ii) the distribution of pro…les (diagnostic ability and altruism levels) among GPs.
    Keywords: physician payment mechanisms
    Date: 2011
  4. By: Laurent Gobillon (INED - Institut National d'Etudes Démographiques Paris - INED, 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 - INRA, CEPR - Center for Economic Policy Research - CEPR, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique); 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 - INRA)
    Abstract: The role of innovative procedures in the mortality differences between university, non-teaching public and for-profit hospitals is investigated using a French exhaustive administrative dataset on patients admitted for heart attack. Mortality is roughly similar in the three types of hospitals after controlling for case-mix. For-profit hospitals treat the at-risk oldest patients more often with innovative procedures. Therefore, additionnally controlling for innovative procedures makes them having the highest mortality rate. Non-teaching public hospitals end up having the lowest mortality rate.
    Keywords: Hospital performance ; Innovative procedures ; Stratified duration model
    Date: 2011–12
  5. By: Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Graciela Chichilnisky (Department of Statistics - Columbia University)
    Abstract: Global environmental phenomena like climate change, major extinction events or flutype pandemics can have catastrophic consequences. By properly assessing the outcomes involved - especially those concerning human life - economic theory of choice under uncertainty is expected to help people take the best decision. However, the widely used expected utility theory values life in terms of the low probability of death someone would be willing to accept in order to receive extra payment. Common sense and experimental evidence refute this way of valuing life, and here we provide experimental evidence of people's unwillingness to accept a low probability of death, contrary to expected utility predictions. This work uses new axioms of choice, especially an axiom that allows extreme responses to extreme events, and the choice criterion that they imply. The implied decision criteria are a combination of expected utility with extreme responses, and seem more consistent with observations.
    Keywords: Decision under risk; Value of Prevented Fatality; Expected Utility; Experiment; Catastrophic risk
    Date: 2011–12–13
  6. By: Massimo Filippini (Department of Economics, University of Lugano; ETH, Zurich, Switzerland); Laura G. González Ortiz (Department of Economics, University of Lugano, Switzerland); Giuliano Masiero (Department of Economics and Technology Management, University of Bergamo, Italy; Department of Econonomics, University of Lugano, Switzerland)
    Abstract: Because of evidence of causal association between antibiotic use and bacterial resistance, the implementation of national policies has emerged as a interesting tool for controlling and reversing bacterial resistance. The aim of this study is to assess the impact of public policies on antibiotic use in Europe using a differences-in-differences approach. Comparable data on systemic administered antibiotics in 21 European countries are available for a 11-years panel between 1997 and 2007. Data on national campaigns are drawn from the public health literature. We estimate an econometric model of antibiotic consumption with country fixed effects and control for the main socioeconomic and epidemiological factors. Lagged values and the instrumental variables approach are applied to address endogeneity aspects of the prevalence of infections and the adoption of national campaigns. We find evidence that public campaigns significantly reduce the use of antimicrobials in the community by 1.4 to 3.7 defined daily doses per 1000 inhabitants. This roughly represents an impact between 7.2% and 18.5% on the mean level of antibiotic use in Europe between 1997 and 2007. The effect is robust across different measurement methods. Further research is needed to investigate the effectiveness of policy interventions targeting different social groups such as general practitioners or patients.
    Keywords: antibiotic use, public policies, national campaigns, difference-in-difference
    JEL: C21 C54 I18
    Date: 2011–12
  7. By: Adda, Jérôme (European University Institute); Lechene, Valerie (University College London)
    Abstract: We show that individuals who are in poorer health, independently from smoking, are more likely to start smoking and to smoke more cigarettes than those with better non-smoking health. We present evidence of selection, relying on extensive data on morbidity and mortality. We show that health based selection into smoking has increased over the last fifty years with knowledge of its health effects. We show that the effect of smoking on mortality is higher for high educated individuals and for individuals in good non-smoking health.
    Keywords: life expectancy, tobacco, confounding
    JEL: I12
    Date: 2011–12
  8. By: Godager, Geir (Department of Health Management and Health Economics); Wiesen, Daniel (BonnEconLab, Laboratory for Experimental Economics, University of Bonn and Chair of Quantitative)
    Abstract: This paper investigates physician altruism toward patients’ health benefit using behavioral data from the fully incentivized laboratory experiment of Hennig-Schmidt et al. (2011). This setup identifies both physicians’ profits and patients’ health benefit resulting from medical treatment decisions. <p> <p> We estimate a random utility model applying multinomial logit regression, finding that physicians attach a positive weight on patients’ health benefit. Furthermore, physicians vary substantially in their degree of altruism. Finally, we provide some implications for the design of physician payment schemes. <p> <p>
    Keywords: Payment incentives; Physician altruism; Health Care Quantity
    JEL: C91 I11
    Date: 2011–12–28
  9. By: Lundborg, Petter (Lunds University); Nilsson, Martin (Uppsala Center for Labor Studies); Vikström, Johan (Uppsala Center for Labor Studies)
    Abstract: In this paper, we estimate socioeconomic heterogeneity in the effect of unexpected health shocks on labor market outcomes, using register-based data on the entire population of Swedish workers. We effectively exploit a Difference-in-Difference-in-Differences design, in which we compare the change in labor earnings across treated and control groups with high and low education levels. If the anticipation effects are similar for individuals with high and low education, any difference in the estimates across socioeconomic groups could plausibly be given a causal interpretation. Our results suggest a large amount of heterogeneity in the effects, in which individuals with a low education level suer relatively more from a given health shock. These results hold across a wide range of different types of health shocks and become more pronounced with age. Our results suggest that socioeconomic heterogeneity in the effect of health shocks offers one explanation for how the socioeconomic gradient in health arises.
    Keywords: Health; Health Shocks; Socioeconomic Status; Life-cycle
    JEL: I10 I12 I14
    Date: 2011–11–03
  10. By: Massimiliano Bratti (University of Milan); Mariapia Mendola (University of Milan Bicocca and Centro Studi Luca d’Agliano)
    Abstract: Evidence on the role of parental health on child schooling is surprisingly thin. We explore this issue by estimating the short-run effects of parents\' illness on child school enrollment. Our analysis is based on household panel data from Bosnia-Herzegovina, a country whose health and educational systems underwent extensive destruction during the 1992-1995 war. Using child fixed effects to correct for potential endogeneity bias, we find that — contrary to the common wisdom that shocks to the primary household earner should have more negative consequences for child education — it is especially maternal health that makes a difference as far as child schooling is concerned. Children whose mothers self-reported having poor health are about 7 percentage points less likely to be enrolled in education at ages 15-24. These results are robust to considering alternative indicators of parental health status such as the presence of limitations in the activities of daily living and depres-sion symptoms. Moreover, we find that mothers\' health shocks have more negative consequences on younger children and sons.
    Keywords: Bosnia and Herzegovina, children, education, parents, school, self-reported
    JEL: I21 O15
    Date: 2011–10–17
  11. By: Jonathan Hartley (University of Chicago - Department of Economics)
    Abstract: Funding for medical residencies has been capped by US Congress since the late 1997, and has resultantly become an increasingly limiting factor of the doctor supply in the US. The resulting impact of Medicare residency policy on managed care firms, especially private insurers has been unclear. Using equity price data for healthcare firms listed in the S&P Health Index, I use the surprise introduction of the Resident Physician Shortage Reduction Act of 2009 and its proposed amendment to a major healthcare overhaul bill, to evaluate the market's assessment of expanded medical residency programs on the healthcare industry. Using tight three-day event study periods to look at when the bill was unexpectedly introduced in Congress and amended to the overhaul bill, I find Cumulative Average Abnormal Returns for Managed Care Firms of 10.9% and 4.2%, respectively, corresponding to an increase in total market value of approximately $5.5 billion and $2 billion. I also find that roughly 27% of the cost of the bill is passed on to firms while the remaining 73% is either passed on to consumers or lost to static inefficiencies.
    Keywords: Legislatures; Voting Behavior; Information and Market Efficiency; Event Studies; Analysis of Health Care Markets; Industrial Policy
    JEL: D72 G14 I11 L52
    Date: 2011–12
  12. By: Timothy Halliday (Department of Economics, University of Hawaii at Manoa)
    Abstract: We employ data from the Panel Study of Income Dynamics to investigate income to health causality. To account for unobserved heterogeneity, we focus on the relationship between earnings growth and changes in self-reported health status. Causal claims are predicated upon appropriate moment restrictions and specification tests of their validity. We find evidence of Granger-type causality running from income to health for married men but not for women or single men. These effects are more pronounced for younger men and the poor. The former may be the consequence of permanent earnings shocks.
    Keywords: Gradient, Health, Dynamic Panel Data Models
    JEL: I0 I12 J1
    Date: 2011–12–06
  13. By: Scherer, F. M. (Harvard University)
    Abstract: This article characterizes the activities required to launch a new pharmaceutical molecule into the market, summarizes studies that have attempted to pinpoint the research and development costs incurred per approved new molecule, and analyzes the various critiques levied against published R&D cost estimates. It finds that by any reckoning, R&D costs per approved molecule have risen sharply over time, most likely at a rate of approximately 7 percent per year after stripping out the effects of general economic inflation.
    Date: 2011–12
  14. By: Krogmann, Yin; Schwalbe, Ulrich
    Abstract: This paper analyses a large database on inter-firm R&D cooperation formed in the pharmaceutical biotechnology industry during the period 1985 - 1998. The results indicate that network size largely grows, whereas the density of the network declines during the periods. In the network analysis that emphasizes individual structural positions, the empirical results show that small biotechnological companies had a crucial bridging role for the large pharmaceutical firms in the second half of the 1980s. In the 1990s, the bridge role of biotechnology companies became less important and established pharmaceutical companies developed into dominant start players with many collaborators while holding central roles in the research network. The current analysis also shows that degree-based and betweenness-based network centralization are both low implying that the overall positional advantages are relatively equally distributed in the inter-firm R&D network of the pharmaceutical biotechnology industry. --
    Keywords: R&D networks,pharmaceutical biotechnology,network analysis,conceptual centrality,network visualization software
    JEL: C88 D85 L24 L65 O32
    Date: 2011
  15. By: Thomas, Dominik; Weegen, Lennart; Walendzik, Anke; Wasem, Jürgen; Jahn, Rebecca
    Abstract: --
    Date: 2011
  16. By: Walendzik, Anke
    Abstract: --
    Date: 2011
  17. By: Christoph Ehlert; Sandra Schaffner
    Abstract: Over the last two decades, temporary employment has gained importance in the European Union. The implications of this development for the health of the workforce are not yet established. Using a unique individual-level data set for 27 European countries, this paper evaluates whether temporary employment is interrelated with self-assessed health. We find pronounced differences in self-assessed health by employment status across European countries. Furthermore, in the EU full-time permanent employed workers report the best health, followed by temporary and part-time employed workers. These differences largely vanish, when taking into account the potential endogeneity between employment status and self-assessed health. However, repeated temporary contracts have a significant negative impact on health.
    Keywords: Temporary employment; fixed-term contracts; self-assessed health
    JEL: J62
    Date: 2011–12
  18. By: André Martínez; Carolina Rodríguez-Zamora
    Abstract: This paper studies the impact of the health decentralization of funds and responsibilities that took place in Mexico in 1997 on state level health outcomes. It renders two main results. First, the magnitude of transfers from the federal government to states failed to take into account state-specific needs; instead, transfers were mainly determined by the pre-reform health expenditures of the federal government in each state. Second, decentralization did not boost the advances in health outcomes already achieved under the centralized health sector regime. We conclude by discussing plausible reasons for the disappointing impact of decentralization on health outcomes.
    Keywords: Fiscal decentralization, federalism, health.
    JEL: H51 H75
    Date: 2011–12
  19. By: Brunello, Giorgio (Department of Economics, University of Padua, Padov, Italy); Fort, Margherita (Department of Economics, University of Bologna, Bologna, Italy); Schneeweis, Nicole (Department of Economics, Johannes Kepler University, Linz, Austria); Winter-Ebmer, Rudolf (Department of Economics, Johannes Kepler University, Linz, and Institute for Advanced Studies, Vienna, Austria)
    Abstract: We study the contribution of health-related behaviors to the health-education gradient by distinguishing between short-run and long-run mediating effects:while in the former only current or lagged behaviors are taken into account, in the latter we consider the entire history of behaviors. We use an empirical approach that addresses the endogeneity of education and behaviors in the health production function. Focusing on self-reported poor health as our health out-come, we find that education has a protective effect for European males and females aged 50+. We also find that the mediating effects of health behaviors - measured by smoking, drinking, exercising and the body mass index – account in the short run for 17% to 31% and in the long run for 23% to 45% of the entire effect of education on health, depending on gender.
    Keywords: Health, education, health behaviors, Europe
    JEL: I1 I12 I21
    Date: 2011–12
  20. By: Eric Malin CREM, UMR CNRS 6211, University of Rennes I, France; Hermann Pythagore Pierre Donfouet, CREM, UMR 6211, University of Rennes I, France; Pierre-Alexandre Mahieu, LEMNA, University of Nantes, France
    Abstract: Community-based health insurance has been implemented in several developing countries to help the poor to gain access to adequate health care services. Assessing what the poor are willing to pay is of paramount importance for policy-making. The contingent valuation method, which relies on a hypothetical market, is commonly used for this purpose. But the presence of the hypothetical bias which is most often inherent in this method tends to bias the estimates upward, and compromises policy-making. This paper uses respondents’ uncertainty scores in an attempt to mitigate hypothetical bias in community-based health insurance in one rural setting in Cameroon. Uncertainty scores are often employed in single dichotomous choice surveys. An originality of the paper is to use such an approach in a double-bounded dichotomous choice survey. The results suggest that this instrument is effective at decreasing the mean WTP.
    Keywords: Community-based health insurance, contingent valuation method, hypothetical bias
    JEL: C35 D80 I38
    Date: 2011–10
  21. By: Philippe K. Widmer
    Abstract: Several European countries have followed the United States in introducing prospective payment for hospitals with the expectation of achieving cost efficiency gains. This article examines whether theoretical expectations of cost efficiency gains can be empirically confirmed. In contrast to previous studies, the analysis of Switzerland provides a comparison of a retrospective per diem payment system with a prospective global budget and a payment per patient case system. Using a sample of approximately 90 public financed Swiss hospitals during the years 2004 to 2009 and Bayesian inference of a standard and a random parameter frontier model, cost efficiency gains are found, particularly with a payment per patient case system. Payment systems designed to put hospitals at operating risk are more effective than retrospective payment systems. However, hospitals are heterogeneous with respect to their production technologies, making a random parameter frontier model the superior specification for Switzerland.
    Keywords: Hospital inefficiency, prospective payment system, Bayesian inference, stochastic frontier analysis
    JEL: C11 C23 D24 I18
    Date: 2011–12
  22. By: Philippe K. Widmer; Peter Zweifel; Mehdi Farsi
    Abstract: With prospective payment of hospitals becoming more common, measuring their performance is gaining in importance. However, the standard cost frontier model yields biased efficiency scores because it ignores technological heterogeneity between hospitals. In this paper, efficiency scores are derived from a random intercept and an extended random parameter frontier model, designed to overcome the problem of unobserved heterogeneity in stochastic frontier analysis. Using a sample of 100 Swiss hospitals covering the years 2004 to 2007 and applying Bayesian inference, significant heterogeneity is found, suggesting rejection of the standard cost frontier model. Estimated inefficiency decreases even below the 14 percent reported by Hollingsworth (2008) for European countries. Accounting for unobserved heterogeneity would make hospitals rated below 85 percent efficiency according to the standard model gain up to 12 percentage points, serving to highlight the importance of heterogeneity correction in the estimation of hospital performance.
    Keywords: Hospital efficiency, unobserved heterogeneity, Bayesian inference, Switzerland, stochastic frontier analysis
    JEL: C11 C33
    Date: 2011–12
  23. By: Jones, A.;; Lomas, J.;; Rice, N.;
    Abstract: This paper extends the literature on modelling healthcare cost data by ap- plying the Generalised Beta of the Second Kind (GB2) distribution to UK data. A quasi-experimental design, estimating models on a subset of the data and evaluating performance on another subset, is used to compare this distribution with its nested and limiting cases. We nd that the GB2 may be a useful tool for choosing an appropriate distribution to apply, with the Beta-2 (B2) distribution and Generalised Gamma (GG) distribution per- forming the best with this dataset.
    Keywords: Health econometrics; Generalised beta of the second kind; Generalised gamma; Skewed outcomes; Healthcare cost data;
    JEL: C1 C5
    Date: 2011–10
  24. By: Verónica Amarante; Marco Manacorda; Edward Miguel; Andrea Vigorito
    Abstract: There is limited empirical evidence on whether unrestricted cash social assistance to poor pregnant women improves children's birth outcomes. Using program administrative micro-data matched to longitudinal vital statistics on the universe of births in Uruguay, we estimate that participation in a generous cash transfer program led to a sizeable 15% reduction in the incidence of low birthweight. Improvements in mother nutrition and a fall in labor supply, out-of-wedlock births and mother's smoking all appear to contribute to the effect. We conclude that, by improving child health, unrestricted unconditional cash transfers may help break the cycle of intergenerational poverty.
    Keywords: Poverty relief program, maternal health, cash transfers, social assistance, Uruguay, birth outcomes,Low birthweight, Cash transfer program, Nutrition
    JEL: J88 I38 J13
    Date: 2011–12
  25. By: Jose Luis Pinto Prades (Department of Economics, Universidad Pablo de Olavide); Fernando Sanchez Martínez (Department of Economics, Universidad de Murcia); Belen Corbacho (Andalusian Agency for Health Technology Assessment)
    Abstract: There have been changes in the way that NICE evaluates medical treatments for patients who are in the last stages of their lives. If medicines fulfil some criteria to be considered “end of life” NICE considers if QALYs gained under these circumstances should receive an extra weight. In this paper we provide evidence about the social support that this policy may have. We present the result of three surveys conducted in the Spanish general population (n=813). Survey 1 compared increases in life expectancy for patients at the end of their lives with health gains from temporary health problems. Survey 2 compared health gains for temporary health problems with health gains from end of life palliative care. Survey 3 compared increases in life expectancy with palliative care in both cases for end of life patients. Preferences were elicited with Person Trade-Off and Willingness to pay techniques. Our results suggest that QALYs for end of life treatments have a higher social value than for temporary health problems. However, we also find that people discriminate between different ways of health gains within End of Life treatment. People seem to attach a greater weight to palliative care than to life extension.
    Keywords: QALY weights, end of life, palliative care, life extension
    JEL: I18 H4
    Date: 2011–12
  26. By: Jose Luis Pinto Prades (Department of Economics, Universidad Pablo de Olavide); José M. Abellán-Perpiñán (Department of Applied Economics, Universidad de Murcia); Ildefonso Méndez-Martínez (Department of Applied Economics, Universidad de Murcia); Silvia Díaz-Cerezo (Pfizer, S.L.U.); Verónica Sanz de Burgoa (Pfizer, S.L.U.)
    Abstract: Smoking is one of the main preventable causes of death in the world. There are several first-line pharmacological treatments available for smoking cessation. However, they are not very popular amongst smokers. There is evidence that smokers may not value these therapies in accordance with the scientific evidence. This paper provides evidence about the impact of subjective perceptions on the decision to use pharmacological treatments for smoking cessation and on the value that people place on these treatments. We conducted telephone interviews with 2011 members of the Spanish population (785 smokers, 590 ex-smokers and 636 never-smokers). We found that a large proportion of subjects (70% smokers, 67% ex-smokers and 59% never-smokers) did not show a positive willingness to pay for these therapies. The basic reason for refusing to pay anything at all was that they did not believe the therapies were effective. Mean willingness to pay (for those with a positive willingness to pay) was very similar for the three groups (€223/month for smokers, €225/month for ex-smokers and €213/month for never-smokers). We discuss whether social policy can be based on distorted preferences. We argue that Libertarian Paternalism can be used to guide social policy in the area of tobacco addiction.
    Keywords: willingness to pay, smoking cessation therapies, biases, libertarian paternalism
    JEL: D12 D78 I18
    Date: 2011–12
  27. By: Jose Luis Pinto Prades (Department of Economics, Universidad Pablo de Olavide); Eva Rodriguez Miguez (Department of Economics, Universidad de Vigo)
    Abstract: The Lead Time Trade-Off (L-TTO) is a variant of the TTO method that tries to overcome some of the problems of the most widely used method (Torrance, 1986) for health states worse than death (SWD). Theoretically, the new method reduces the problems that have been detected when researchers have elicited preferences for SWD. However, several questions remain to be clarified. One of them is the influence of this new method for states better than death (SBD). In this paper we try to shed some light on this issue using a split sample design (n=500). One subsample (n=188) was interviewed using L-TTO and the rest using the traditional TTO (T-TTO). Our results show that the L-TTO produces utilities that are consistently higher than the T-TTO for SBD. Furthermore, the higher the severity the higher the difference between both methods. Another finding is that the L-TTO seems to produce a lower number of SWD. This effect seems to be concentrated in the most severe health states. This implies a violation of additive separability, one of the cornerstones of the QALY model. Our data show that the L-TTO may be different from the T-TTO in more respects than those that were originally intended.
    Keywords: Lead Time Trade-Off, QALYs, Discounting, Additive Independece
    JEL: I10 D01
    Date: 2011–12
  28. By: Koonal K Shah (Office of Health Economics, London, UK); Richard Cookson (Centre for Health Economics, University of York, UK); Anthony J Culyer (Centre for Health Economics, University of York, UK and Department of Health Policy, Management and Evaluation, University of Toronto, Canada); Peter Littlejohns (National Institute for Health and Clinical Excellence, UK)
    Abstract: The National Institute for Health and Clinical Excellence (NICE) routinely publishes details of the evidence and reasoning underpinning its recommendations, including its social value judgements. To date, however, NICE?s social value judgements relating to equity in the distribution of health and health care have been less specific and systematic than those relating to cost-effectiveness in the pursuit of improved sum total population health. NICE takes a pragmatic, case-based approach to developing its principles of social value judgement, drawing on the cumulative experience of its advisory bodies in making decisions that command respect among its broad range of stakeholders. This paper aims to describe the social value judgements about equity in health and health care that NICE has hitherto used to guide its decision making. To do this, we review both the general social value judgements reported in NICE guidance on methodology and the case-specific social value judgements reported in NICE guidance about particular health care technologies and public health interventions.
    Date: 2011–11
  29. By: Silvio Daidone (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics, University of York, UK)
    Abstract: We were commissioned by the Department of Health’s Payment by Results (PbR) team to use 2009/10 data update the analysis we performed using 2008/9 data to estimate the marginal costs of providing specialised care (Daidone and Street, 2011). The objectives of the original work were to investigate: 1. Whether the costs associated with specialised activity are significantly different from nonspecialised activity within the same HRG; 2. Whether any differences in costs between specialised and non-specialised activity are due to differences in productive efficiency. The objective of the update is: 1. To see whether the results obtained on the 2008-09 data are robust to 2009-10 data. 2. To investigate whether there is a case for differentiating payment on the basis of marginal cost differences arising when patients transferred between providers.
    Date: 2011–12
  30. By: Samuel L Brilleman (Academic Unit of Primary Care, University of Bristol); Hugh Gravelle (Centre for Health Economics, University of York, UK); Sandra Hollinghurst (Academic Unit of Primary Care, University of Bristol); Sarah Purdy (Academic Unit of Primary Care, University of Bristol); Chris Salisbury (Academic Unit of Primary Care, University of Bristol); Frank Windmeijer (Department of Economics, University of Bristol)
    Abstract: In this paper we investigate the relationship between patients’ primary care costs (consultations, tests, drugs) and their age, gender, deprivation and alternative measures of their morbidity and multimorbidity. Such information is required in order to set capitation fees or budgets for general practices to cover their expenditure on providing primary care services. It is also useful to examine whether practices’ expenditure decisions vary equitably with patient characteristics. Electronic practice record keeping systems mean that there is very rich information on patient diagnoses. But the diagnostic information (with over 9000 possible diagnoses) is too detailed to be practicable for setting capitation fees or practice budgets. Some method of summarizing such information into more manageable measures of morbidity is required. We therefore compared the ability of eight measures of patient morbidity and multimorbidity to predict future primary care costs using data on 86,100 individuals in 174 English practices. The measures were derived from four morbidity descriptive systems (17 chronic diseases in the Quality and Outcomes Framework (QOF), 17 chronic diseases in the Charlson scheme, 114 Expanded Diagnosis Clusters (EDCs), and 68 Adjusted Clinical Groups (ACGs)). We found that, in general, for a given disease description system, counts of diseases and sets of disease dummy variables had similar explanatory power and that measures with more categories did better than those with fewer. The EDC measures performed best, followed by the QOF and ACG measures. The Charlson measures had the worst performance but still improved markedly on models containing only age, gender, deprivation and practice effects. Allowing for individual patient morbidity greatly reduced the association of age and cost. There was a pro-deprived bias in expenditure: after allowing for morbidity, patients in areas in the highest deprivation decile had costs which were 22% higher than those in the lowest deprivation decile. The predictive ability of the best performing morbidity and multimorbidity measures was very good for this type of individual level cross section data, with R2 ranging from 0.31 to 0.46. The statistical method of estimating the relationship between patient characteristics and costs was less important than the type of morbidity measure. Rankings of the morbidity and multimorbidity measures were broadly similar for generalised linear models with log link and Poisson errors and for OLS estimation. It would be currently feasible to combine the results from our study with the data on the number of patients with each QOF disease, which is available on all practices in England, to calculate budgets for general practices to cover their primary care costs.
    Keywords: multimorbidity; primary care; utilisation; costs; deprivation; budgets
    JEL: I14 I18
    Date: 2011–12
  31. By: You, Kai
    Abstract: It is acknowledged that there exists an association between education and health behaviors, but channels through which educational gradients resulted are not well investigated. We propose that personal risk perceptions of developing cancers in the future account for part of the gradients. To explore it, we merge two datasets to test causal effects at both individual and MSA levels. Endogeneity is considered and eased. We find that risk perceptions significantly enhance people’s smoking decisions, and prostate cancer and colorectal cancer screening. Educational gradients are robust perceived risks. It is suggested to improve health behaviors, health service providers and public health manager should take measures to enhance personal perceived risk toward diseases.
    Keywords: Education; Risk Perceptions; and Health Behaviors
    JEL: I11 I12
    Date: 2011–12–21
  32. By: Prada, Sergio I; Gonzalez, Claudia; Borton, Joshua; Fernandes-Huessy, Johannes; Holden, Craig; Hair, Elizabeth; Mulcahy, Tim
    Abstract: Achieving data and information dissemination without arming anyone is a central task of any entity in charge of collecting data. In this article, the authors examine the literature on data and statistical confidentiality. Rather than comparing the theoretical properties of specific methods, they emphasize the main themes that emerge from the ongoing discussion among scientists regarding how best to achieve the appropriate balance between data protection, data utility, and data dissemination. They cover the literature on de-identification and reidentification methods with emphasis on health care data. The authors also discuss the benefits and limitations for the most common access methods. Although there is abundant theoretical and empirical research, their review reveals lack of consensus on fundamental questions for empirical practice: How to assess disclosure risk, how to choose among disclosure methods, how to assess reidentification risk, and how to measure utility loss.
    Keywords: public use files; disclosure avoidance; reidentification; de-identification; data utility
    JEL: I18 C46
    Date: 2011–12–14
  33. By: Theofanides, Faidon; Makri, Vasiliki; Mavroeidis, Vasileios; Iliopoulos, Dimitrios
    Abstract: The aim of the present study is to construct a coherent profile of student smokers in Greece, based on their behavioral and demographic characteristics. In this context, we collected data by administrating an anonymous self-completed questionnaire, which was answered by students of University and Technological Educational Institute (T.E.I.) of Patras. The final sample consists of 1,190 student smokers. For the purposes of the present study, principal component analysis was utilized to explore and detect the demographic and behavioral profiles of Greek student smokers. The factor solution identified 5 demographic factors and 14 behavioral factors. All factors were labeled, interpreted and discussed in the light of existing knowledge in order to understand better the consumer behavior of student smokers.
    Keywords: Student Smoking; factor analysis; consumer behavior
    JEL: M31 I18 C30
    Date: 2011–09
  34. By: Mariacristina De Nardi; Eric French; John Bailey Jones; Angshuman Gooptu
    Abstract: We describe the Medicaid eligibility rules for the elderly. Medicaid is administered jointly by the Federal and state governments, and each state has significant flexibility on the details of the implementation. We document the features common to all states, but we also highlight the most salient state-level differences. There are two main pathways to Medicaid eligibility for people over age 65: either having low assets and income, or being impoverished due to large medical expenses. The first group of recipients (the categorically needy) mostly includes life-long poor individuals, while the second group (the medically needy) includes people who might have earned substantial amounts of money during their lifetime but have become impoverished by large medical expenses. The categorically needy program thus only affects the savings decision of people who have been poor throughout most of their lives. In contrast, the medically needy program provides some insurance even to people who have higher income and assets. Thus, this second pathway is to some extent going to affect the savings of the relatively higher income and assets people.
    JEL: H1 H31
    Date: 2011–12
  35. By: Douglas Almond; Janet Currie; Mariesa Herrmann
    Abstract: This paper examines the links between the disease environment around the time of a woman's birth, and her health at the time she delivers her own infant. Our results suggest that exposure to disease in early childhood significantly increases the incidence of diabetes in the population of future mothers. The exposed mothers are less likely to be married, have fewer years of education, are more likely to gain over 60 pounds while pregnant, and are more likely to smoke while pregnant. Not surprisingly then, exposure increases the probability of low birth weight in the next generation, at least among whites. Among whites, this effect remains when we control for maternal behaviors as well as disease exposure. Among blacks, we find that maternal exposure reduces the incidence of low birth weight. The difference between whites and blacks may reflect a “scarring” vs. selection story; whites who go on to have children are negatively impacted, while blacks who go on to have children are positively selected having survived a higher early childhood mortality rate.
    JEL: I12 I14
    Date: 2011–12
  36. By: David H. Autor
    Abstract: Two ailments limit the effectiveness and threaten the long-term viability of the U.S. Social Security Disability Insurance program (SSDI). First, the program is ineffective in assisting the vast majority of workers with less severe disabilities to reach their employment potential or earn their own way. Second, the program’s expenditures on cash transfers and medical benefits— exceeding $1,500 per U.S. household—are extremely high and growing unsustainably. There is no compelling evidence, however, that the incidence of disabling conditions among the U.S. working age population is rising. This paper discusses the challenges facing the SSDI program, explains how its design has led to rapid and unsustainable growth, considers why past efforts to slow program growth have met with minimal and fleeting success, and outlines three recent proposals that would modify the program to slow growth while potentially improving the employment prospects of workers with disabilities. Because these proposals depart substantially from a program design that has seen little change in half a century, their efficacy is unproven. Additionally, even well-meaning efforts to place the SSDI program on a sustainable trajectory run the risk of creating additional hurdles for claimants who are truly unable to work. Nevertheless, the imminent exhaustion of the SSDI Trust Fund provides an impetus and an opportunity to explore innovative solutions to the longstanding policy challenges posed by the SSDI program.
    JEL: H51 J18
    Date: 2011–12
  37. By: Marianne P. Bitler; Lucie Schmidt
    Abstract: Over the last several decades, both delay of childbearing and fertility problems have become increasingly common among women in developed countries. At the same time, technological changes have made many more options available to individuals experiencing fertility problems. However, these technologies are expensive, and only 25% of health insurance plans in the United States cover infertility treatment. As a result of these high costs, legislation has been passed in 15 states that mandates insurance coverage of infertility treatment in private insurance plans. In this paper, we examine whether mandated insurance coverage for infertility treatment affects utilization. We allow utilization effects to differ by age and education, since previous research suggests that older, more educated women should be more likely to be directly affected by the mandates than younger women and less educated women, both because they are at higher risk of fertility problems and because they are more likely to have private health insurance which is subject to the mandate. We find robust evidence that the mandates do have a significant effect on utilization for older, more educated women that is larger than the effects found for other groups. These effects are largest for the use of ovulation-inducing drugs and artificial insemination.
    JEL: I1
    Date: 2011–12
  38. By: Wolfram Schlenker; W. Reed Walker
    Abstract: Airports are some of the largest sources of air pollution in the United States. We demonstrate that daily airport runway congestion contributes significantly to local pollution levels and contemporaneous health of residents living nearby and downwind from airports. Our research design exploits the fact that network delays originating from large airports on the East Coast increase runway congestion in California, which in turn increases daily pollution levels around California airports. Using the component of California air pollution driven by airport congestion, we find that carbon monoxide (CO) leads to significant increases in hospitalization rates for asthma, respiratory, and heart related emergency room admissions that are an order of magnitude larger than conventional estimates: A one standard deviation increase in daily pollution levels leads to an additional $1 million in hospitalization costs for respiratory and heart related admissions for the 6 million individuals living within 10km (6.2 miles) of the 12 largest airports in California. While infants and the elderly are more sensitive to air pollution, we also find significant relationships for the adult population. The health impacts are driven by CO, not NO2 or O3, and occur at levels far below existing EPA mandates. Our results suggest there may be sizable morbidity benefits from lowering the existing CO standard.
    JEL: H0 I1 Q5
    Date: 2011–12
  39. By: Carole Roan Gresenz; Sarah E. Edgington; Miriam J. Laugesen; José J. Escarce
    Abstract: We analyze the effects of states’ expansions of CHIP eligibility to children in higher income families during 2002-2009 on take-up of public coverage, crowd-out of private coverage, and rates of uninsurance. Our results indicate these expansions were associated with limited uptake of public coverage and only a two percentage point reduction in the uninsurance rate among these children. Because not all of the take-up of public insurance among eligible children is accounted for by children who transfer from being uninsured to having public insurance, our results suggest that there may be some crowd-out of private insurance coverage; the upper bound crowd-out rate we calculate is 46 percent.
    Date: 2011–12
  40. By: Strulik, Holger
    Abstract: This study presents a novel view on education and health behavior of individuals constrained by aging bodies. The aging process, i.e. the accumulation of health deficits over time, is built on recent insights from gerontology. The loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. The proposed theory rationalizes why better educated people optimally choose a healthier lifestyle, that is why they spend more on health and indulge less in unhealthy behavior. The model is calibrated for the average male US citizen. In the benchmark case a di erence of the return to education that motivates one year more of education motivates also about 8 percent less unhealthy behavior and 5 percent more health expenditure and thus explains half a year gain of longevity. Progress in medical technology explains why the education gradient gets larger over time.
    Keywords: Schooling, Aging, Longevity, Health Expenditure, Unhealthy Behavior, Smoking
    JEL: D91 J17 J26 I12
    Date: 2011–12
  41. By: Bobashev, Georgiy; Cropper, Maureen (Resources for the Future); Epstein, Joshua; Goedecke, Michael; Hutton, Stephen; Over, Mead
    Abstract: This paper examines positive externalities and complementarities between countries in the use of antiviral pharmaceuticals to mitigate pandemic influenza. It demonstrates the presence of treatment externalities in simple SIR (susceptible-infectious-recovered) models and simulations of a Global Epidemiological Model. In these simulations, the pandemic spreads from city to city through the international airline network and from cities to rural areas through ground transport. While most treatment benefits are private, spillovers suggest that it is in the self-interest of high-income countries to pay for some antiviral treatment in low-income countries. The most cost-effective policy is to donate doses to the country where the outbreak originates; however, donating doses to low-income countries in proportion to their populations may also be cost-effective. These results depend on the transmissibility of the flu strain, its start date, the efficacy of antivirals in reducing transmissibility, and the proportion of infectious people who can be identified and treated.
    Keywords: pandemic influenza, disease control externalities
    JEL: I18 C63 D62
    Date: 2011–09–22

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