nep-hea New Economics Papers
on Health Economics
Issue of 2012‒05‒02
twenty papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Inferred vs Stated Attribute Non-Attendance in Choice Experiments: A Study of Doctors' Prescription Behaviour By Arne Risa Hole; Julie Riise Kolstad; Dorte Gyrd-Hansen
  2. Intergenerational transmission of non-communicable chronic diseases By Catarina Goulao; Agustin Pérez-Barahona
  3. Infectious disease detection with private information: By Saak, Alexander E.
  4. Down with diarrhea - Using fuzzy Regression Discontinuity Design to link communal water supply with health By Zacharias Ziegelhöfer
  5. Health, Height, Height Shrinkage and SES at Older Ages: Evidence from China By Huang, Wei; Lei, Xiaoyan; Ridder, Geert; Strauss, John; Zhao, Yaohui
  6. Evaluating the Impact of a Reduction in the Generosity of Disability Benefits: The 2008 Spanish Reform By Silva, José I.; Vall Castello, Judit
  7. The Social Capital and Health Hypothesis: A Theory and New Empirics Featuring the Norwegian HUNT Data By Folland, Sherman; Islam, Muhammad Quamrul; Kaarbøe, Oddvar Martin
  8. Effects of NCMS Coverage on Access to Care and Financial Protection in China By Zhiyuan Hou; Ellen Van de Poel; Eddy Van Doorslaer; Baorong Yua; Qingyue Menge
  9. Pharmaceutical prices under regulation: Tiered co-payments and reference pricing in Germany By Herr, Annika; Suppliet, Moritz
  10. Disability costs and equivalence scales in the older population By Morciano, Marcello; Hancock, Ruth; Pudney, Stephen
  11. Pharmaceutical clinical research and regulation: an impact evaluation of public policy By Ippoliti, Roberto; Falavigna, Greta
  12. Societal preferences for standard health insurance coverage in the Netherlands: A cross-sectional study. By Wulp, I. van der; Hout, W.B. van den; Vries, M. de; Stiggelbout, AM.; Akker-van Marle, E.M. van den
  13. Some notes on how to catch a red herring Ageing, time-to-death & care costs for older people in Sweden By Karlsson, Martin; Klohn, Florian
  14. The Response of Ontario Primary Care Physicians to Pay-for-Performance Incentives By Jeremiah Hurley; Phil DeCicca; Jinhu Li; Gioia Buckley
  15. Existence and Magnitude of Health-related Externalities: Evidence from a Choice Experiment By Jeremiah Hurley; Emmanouil Mentzakis
  16. Economic Analysis of Physician Assistants in Ontario: Literature Review and Feasibility Study By Amiram Gafni; Stephen Birch; Gioia Buckley
  17. Cost-containment policies and hospital efficiency: evidence from a panel of Italian hospitals By Vincenzo Atella; Federico Belotti; Giuseppe Ilardi; Silvio Daidone; Giorgia Marini
  18. Does cigarette smoking affect body weight? causal estimates from the clean indoor air law discontinuity By Pieroni, Luca; Salmasi, Luca
  19. Demand for Smokeless Tobacco: Role of Magazine Advertising By Dhaval M. Dave; Henry Saffer
  20. Fuel Economy and Safety: The Influences of Vehicle Class and Driver Behavior By Mark R. Jacobsen

  1. By: Arne Risa Hole (Department of Economics, The University of Sheffield); Julie Riise Kolstad (UNI Rokkan Centre, University of Bergen); Dorte Gyrd-Hansen (Health Economics Research Unit, University of Southern Denmark)
    Abstract: It is increasingly recognised that respondents to choice experiments employ heuristics such as attribute non-attendance (ANA) to simplify the choice tasks. This paper develops an econometric model which incorporates preference heterogeneity among respondents with different attribute processing strategies and allows the ANA probabilities to depend on the respondents' stated non-attendance. We find evidence that stated ANA is a useful indicator of the prevalence of nonattendance in the data. Contrary to previous papers in the literature we find that willingness to pay estimates derived from models which account for ANA are similar to the standard logit estimates.
    Keywords: choice experiment; attribute non-attendance
    JEL: C25 I10
    Date: 2012
  2. By: Catarina Goulao (TSE - Toulouse School of Economics - Toulouse School of Economics); Agustin Pérez-Barahona (INRA-UMR 210 Economie Publique - {-}, Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: We introduce a theoretical framework that contributes to the understanding of non-communicable chronic diseases' (NCDs) epidemics: even if NCDs are non-infectious diseases, they may spread due to the social transmission of unhealthy activities such as unhealthy diet, physical inactivity, and smoking. In particular, we study the intergener- ational dimension of this mechanism. We find that, due to the social transmission of NCDs, agents choose lower health conditions and higher unhealthy activities than what is socially optimal. Taxes on unhealthy activities, that may subsidize health investments, can be used to restore the social optimum. Finally, our model is consistent with the existence of regional asymmetries regarding the prevalence of obesity and NCDs.
    Keywords: Health capital, Chronic diseases and obesity, Social transmission.
    Date: 2012–04–23
  3. By: Saak, Alexander E.
    Abstract: In this paper we study incentives to report clinically suspect situations in a simple model of an infectious animal disease with limited diagnostic resource. We characterize a transfer scheme that sustains credible reporting and implements an efficient test allocation. In a game without monetary transfers, credible reporting and first-best targeted testing are achievable in both laissez-faire and efficient disease control regimes when the disease occurrence among few well-informed producers is unlikely. When the number of producers is small, random testing is optimal under mandatory depopulation of untested animals, but credible reporting can be necessary for testing to improve welfare under laissez-faire disease control if private information is sufficiently precise. When the number of producers is large, random testing always improves welfare, and if private information is precise, disease occurrence is unlikely, and testing capacity is small, efficient testing is achievable without transfers in the efficient disease control regime.
    Keywords: diagnostic testing, indemnity design, infectious disease, private information, reporting,
    Date: 2012
  4. By: Zacharias Ziegelhöfer (Graduate Institute of International Studies)
    Abstract: This paper contributes to the existing literature by demonstrating that the provision of communal water supply can be effective in improving child health if the targeted population shows adequate hygiene awareness and behavior. Until now, the fast growing body of literature on water development interventions could not establish a significant effect of communal water supply on health. The insignificant health effect regarding communal water supply (in contrast to other types of water interventions) found in meta-studies may be explained by recontamination of the water between the source and the point of use; and by the lack of studies which address the mode of selection into treatment of water programs which may result in biased estimates. To identify the health effect of communal water supply, a fuzzy Regression Discontinuity Design set-up is applied using an eligibility criterion as source of exogenous variation. The paper also provides practical insights in a little explored extension of the fuzzy Regression Discontinuity Design which may have great relevance for applied research. As occurs often in practice, the forcing variable determining treatment could not be directly observed. For this reason, a slightly noisy measure was reconstructed. To convince the critical reader of the validity of this approach, a variety of robustness checks are carried out and the results are cross-validated through two additional identification strategies - a village fixed effects and an instrumental variable approach.
    Date: 2012–03–26
  5. By: Huang, Wei (Harvard University); Lei, Xiaoyan (Peking University); Ridder, Geert (University of Southern California); Strauss, John (University of Southern California); Zhao, Yaohui (Peking University)
    Abstract: Adult height, as a marker of childhood health, has recently become a focus in understanding the relationship between childhood health and health outcomes at older ages. However, measured height of the older individuals is contaminated by height shrinkage from aging. Height shrinkage, in turn may be correlated with health conditions and socio-economic status from throughout the life-cycle. In this case it would be problematic to use measured height directly in regressions without considering such an effect. In this paper, we tackle this problem by using upper arm length and lower leg length to estimate a pre-shrinkage height function for a younger population that should not have started their shrinkage. We then use these estimated coefficients to predict pre-shrinkage heights for an older population, for which we also have upper arm and lower leg lengths. We then estimate height shrinkage for this older population and examine the associations between shrinkage and socio-economic status variables. We provide evidence that height shrinkage for both men and women is negatively associated with better current SES and early life conditions and, for women, positively with pre-shrinkage height. We then investigate the relationships between pre-shrinkage height, height shrinkage and a rich set of health outcomes of older respondents, finding that height shrinkage is positively associated with poor health outcomes across a variety of outcomes, with results for older age cognition being especially strong. Indeed height shrinkage is more strongly associated with later life outcomes than is pre-shrinkage height, suggesting that later life conditions are especially important correlates for these outcomes.
    Keywords: height, height shrinkage, health, China
    JEL: D1 I12 J13
    Date: 2012–04
  6. By: Silva, José I. (Universitat de Girona); Vall Castello, Judit (Universitat de Girona)
    Abstract: We evaluate the effects of a reduction in the generosity of disability benefits in Spain that occurred in 2008. The main objective of the reform was to reduce the amount of benefits for individuals that do not have a long contributory history as the reform introduced a disincentive to apply to the system if the individual does not have 35 years of effective contributions. Theoretical insights are gained with a life-cycle model with heterogeneous disabled workers. The model's simulations predict a reduction in the incentives to apply for disability benefits for partially disabled individuals who do not reach the 35 years of contributions. Diff-in-diff estimates are consistent with our model predictions.
    Keywords: disability benefits reform, life-cycle model, policy evaluation
    JEL: C33 I18 H51
    Date: 2012–04
  7. By: Folland, Sherman (Department of Economics , Oakland University); Islam, Muhammad Quamrul (Rokkansenteret); Kaarbøe, Oddvar Martin (University of Bergen)
    Abstract: We develop and explore an economic model in which cigarette consumption enhances utility but reduces the probability of survival through the period. Social capital is produced by time spent developing and maintaining social relationships. By requiring time inputs, social capital has an opportunity cost, represented by the wage. Elements exogenous to the subject’s decision making, such as the introduction of city parks, new social clubs, or the influence of local social norms enhance the productivity of time spent in social activity so as to produce utility. This framework is cast deliberately in a compact model so as to reveal fundamental relationships and permit clear comparative static analysis. These are tested in a Norwegian longitudinal data set new to this field of study.
    Keywords: Social norms and social capital; HUNT data set
    JEL: I10 I12 Z13
    Date: 2012–04–19
  8. By: Zhiyuan Hou (Shandong University, Jinan, China); Ellen Van de Poel (Erasmus University Rotterdam, Netherlands); Eddy Van Doorslaer (Erasmus University Rotterdam, Netherlands); Baorong Yua (Shandong University, Jinan, China); Qingyue Menge (Peking University, China)
    Abstract: The introduction of the New Cooperative Medical Scheme in rural China is one of the largest health care reforms in the developing world since the millennium. The literature to date has mainly used the uneven rollout of NCMS across counties as a way of identifying its effects on access to care and financial protection. This study exploits the cross-county variation in NCMS generosity in 2006 and 2008 in Ningxia and Shandong province and adopts an instrumenting approach to estimate the effect of a continuous measure of coverage level. Our results confirm earlier findings of NCMS being effective in increasing access to care, but not increasing financial protection. In addition, we find that NCMS enrollees are sensitive to the incentives set in the NCMS design when choosing their provider, but also that providers seem to respond by increasing prices and/or providing more expensive care.
    Keywords: Health insurance; access; financial protection; China
    JEL: D63 I14
    Date: 2012–04–16
  9. By: Herr, Annika; Suppliet, Moritz
    Abstract: Many countries with national health care providers and health insurances regulate the market for pharmaceuticals to steer drug demand and to control expenses. For example, they introduce reference pricing or tiered co-payments to enhance drug substitution and competition. Since 2006, Germany follows an innovative approach by differentiating drug co-payments by the drug's price relative to its reference price. In this two-tier system, prescription drugs are completely exempted from co-payments if their prices undercut a certain price level relative to the reference price. We identify the effect of the policy on the prices of all affected prescription drugs and differentiate the analysis by firm types (innovative, generic, branded generic or importing firms). To identify a causal effect, we use a differences-in-differences approach and additionally exploit the fact that the exemption policy had been introduced successively in the different clusters. We use quarterly data from 2007 to 2010 and find empirical evidence for differentiated price setting strategies by firm types, ranging from price decreases of -13.1% (branded generics firms) to increases of +2.0% (innovators) following the introduction of potential reductions in co-payments. We refer to the latter result as the co-payment exemption paradox. Our competition proxy (no. of firms) suggests a significant but small negative correlation with prices. --
    Keywords: pharmaceuticals,prices,co-payments,reference pricing,regulation,firm behavior
    JEL: D22 D40 I18 I11 L11
    Date: 2012
  10. By: Morciano, Marcello; Hancock, Ruth; Pudney, Stephen
    Abstract: We estimate the implicit disability costs faced by older people, using data on over 8,000 individuals from the UK Family Resources Survey. We extend previous research by using a more flexible statistical modelling approach and by allowing for measurement error in observed disability and standard of living indicators. We find that disability costs are strongly related to the severity of disability and to income and at an average level of almost 100 per week among over-65s with significant disability they typically far exceed the value of any state disability benefits received.
    Date: 2012–04–24
  11. By: Ippoliti, Roberto; Falavigna, Greta
    Abstract: Taking human experimentation into account, this work aims at estimating a policy designed to reduce transaction costs that are related to the protection system of patients' rights, with both a normative and positive approach. On the one hand, considering a sample of European countries as counterfactual, an empirical analysis is performed in order to estimate the impact of a national law aimed at harmonizing the procedure to obtain opinions on clinical trials. On the other hand, an alternative law, which might be able to favor the exchange between pharmaceutical companies and patients, is proposed. Assuming that the competitiveness of the national protection system is based on the time required to obtain an authorization for an experimental activity, pharmaceutical clinical research should be positively affected by a reform of the current law. However, there is also evidence of a wasted opportunity to optimize the governance of the national protection system.
    Keywords: Transaction costs; International Review Boards (IRB); Medical researcher; Research subject; Clinical research;
    JEL: I18 L51
    Date: 2012–01
  12. By: Wulp, I. van der; Hout, W.B. van den (Tilburg University); Vries, M. de (Tilburg University); Stiggelbout, AM.; Akker-van Marle, E.M. van den
    Date: 2012
  13. By: Karlsson, Martin; Klohn, Florian
    Abstract: In this paper we test the 'red herring' hypothesis for expenditures on long-term care. The main contribution of this paper is that we assess the 'red herring' hypothesis using an aggregated measure that allows us to control for entering the final period of life on the individual level. In addition we implement a model that allows for age specific time-to-death (TTD) effects on Long Term Care. We also account for the problem that mortality, and therefore TTD, are themselves influenced by care expenditure. For our analysis we use administrative data from the Swedish statistical office. In contrast to many previous empirical studies, we are able to use the entire population for estimation instead of a sample. Our identification strategy is based on fixed effects estimation and the instrumental variable approach to achieve exogenous variation in TTD. Our results indicate that although time-to-death is a relevant indicator for long term care, age itself seems to be much more important for the projection of long-term care expenditure.
    Keywords: Ageing, Mortality, Long Term Care Expenditures
    Date: 2011–11–11
  14. By: Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University, Department of Clinical Epidemiology and Biostatistics, McMaster University); Phil DeCicca (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University); Jinhu Li (Centre for Health Economics and Policy Analysis, McMaster University); Gioia Buckley (Centre for Health Economics and Policy Analysis, McMaster University)
    Abstract: Beginning in 1999, Ontario introduced pay-for-performance incentives for selected preventive primary care services and defined sets of other services provided by family physicians, with the goal of improving the quality of patient care. These performance incentives were considerably expanded in 2004. At the request of the Ministry and as part of the collaborative research program between the Ontario Ministry of Health and Long-Term Care (MOHLTC) and the Centre for Health Economics and Policy Analysis (CHEPA), CHEPA researchers undertook an evaluation of the effect of performance incentives on service provision in Ontario. This report presents the results of that evaluation.
    Date: 2011
  15. By: Jeremiah Hurley (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University, Department of Clinical Epidemiology and Biostatistics, McMaster University); Emmanouil Mentzakis (Department of Economics, Centre for Health Economics and Policy Analysis, McMaster University)
    Abstract: Health-related external benefits are of potentially large importance for public policy. This paper investigates health-related external benefits using a stated-preference discrete-choice experiment framed in a health care context and including choice scenarios defined by six attributes related to a recipient and the recipient's condition: communicability, severity, medical necessity, relationship to respondent, location, and contribution requested. Subjects also completed a set of own-treatment scenarios and a values-orientation instrument. We find evidence of substantial health-related external benefits that vary as expected with the scenario attributes and subjects' value orientations. The results are consistent with a number of hypotheses offered by the general theoretical analysis of health-related externalities and the analysis of externalities specific to health care
    Date: 2011
  16. By: Amiram Gafni (Department of Clinical Epidemiology and Biostatistics, Centre for Health Economics and Policy Analysis, McMaster University); Stephen Birch (Department of Clinical Epidemiology and Biostatistics, Centre for Health Economics and Policy Analysis, McMaster University); Gioia Buckley (Centre for Health Economics and Policy Analysis, McMaster University)
    Abstract: We conducted a literature review of studies on Physician Assistants working in a variety of settings and found few evaluation studies on the costs and/or effectiveness of Physician Assistants in primary care practices, Emergency Departments and in hospital settings other than Emergency Departments. The existing literature is limited because of the non-Canadian settings in which most studies have been performed and because of the non-experimental study designs, which are subject to potential bias. In addition, the research questions that have been addressed have tended to ignore what would appear to be the most important comparison: that between Physician Assistants and other non-physician providers such as Nurse Practitioners. The evidence we found on the cost-effectiveness of PAs is anecdotal and difficult to translate in the Ontario context. We conclude that it is difficult to make use of the existing literature. We recommend that MOHLTC consider options for funding a randomized control trial that might involve several trial arms in the particular sectors of relevance to the PA program, for example: physician only; physician and PA; physician and NP; and physician, NP and PA. The purpose of this would be to explore the difference in costs and effects on the different service modalities. This would also provide sufficient information to support modelling the short-run effects that could be expected from allocating the same amount of resources to the different service modalities as well as the implications for physician resources planning.
    Date: 2011
  17. By: Vincenzo Atella (Faculty of Economics, University of Rome "Tor Vergata"); Federico Belotti (Faculty of Economics, University of Rome "Tor Vergata"); Giuseppe Ilardi (Bank of Italy, Economic and Financial Statistics Department); Silvio Daidone (University of York); Giorgia Marini (Faculty of Economics, University of Rome "Tor Vergata")
    Abstract: The main objective of this article is to evaluate to which extent the set of national and regional cost control policies implemented in recent years in Italy have affected hospital activity. Our contribution is mainly empirical as we focus our attention on the impact that policies like hospital mergers and regional bailout plans had on inefficiency. We use a rich longitudinal sample of Italian hospitals over the period 1999-2007 and perform a Bayesian analysis of the random-effects stochastic frontier model proposed by Greene (2005), allowing for a one-step estimation of both production frontier parameters and inefficiency effects. Results show that hospital inefficiency has changed over time and that part of this change could be ascribed to the mentioned policies.
    Keywords: Hospital efficiency, Stochastic frontiers, Bayesian inference, Policy evaluation
    JEL: C23 I11 L23
    Date: 2012–04–13
  18. By: Pieroni, Luca; Salmasi, Luca
    Abstract: This paper examines the causal effects of smoking behavior on body weight in Italy. In 2005, the Italian government introduced a smoking ban in all indoor public places. We use a regression discontinuity design, which exploits this exogenous variation across cohorts to achieve identification in our model. Our estimates indicate that the smoking ban reduced cigarette consumption and the smoking participation rate. Most interestingly, we estimate a significative, although not very large, effect of nicotine reduction on weight increases. Heterogeneous effects are also estimated, with smaller impact on men and employees and, conditionally on BMI distribution, overweight and obese people.
    Keywords: Smoking ban; overweight and obesity; Local average treatment effect
    JEL: I12 I18 I10
    Date: 2012–04–23
  19. By: Dhaval M. Dave; Henry Saffer
    Abstract: While the prevalence of smokeless tobacco (ST) is low relative to smoking, the distribution of ST use is highly skewed with consumption concentrated among certain segments of the population (rural residents, males, whites, low-educated individuals). Furthermore, there is suggestive evidence that use has trended upwards recently for groups that have traditionally been at low risk of using ST, and thus started to diffuse across demographics. This study provides the first estimates, at the national level, of the effects of magazine advertising on ST use. The focus on magazine advertising is significant given that ST manufacturers have been banned from using other conventional media since the 1986 Comprehensive ST Act and the 1998 ST Master Settlement Agreement. This study is based on the 2003-2009 waves of the National Consumer Survey (NCS), a unique data source that contains extensive information on the reading habits of individuals, matched with magazine-specific advertising information over the sample period. This allows detailed and salient measures of advertising exposure at the individual level and addresses potential bias due to endogeneity and selective targeting. We find consistent and robust evidence that exposure to ST ads in magazines raises ST use, especially among males, with an estimated elasticity of 0.11. Estimates further indicate that both ST taxes and cigarette taxes reduce ST use, suggesting complementarity between these tobacco products. Sub-analyses point to some differences in the advertising and tax response across segments of the population. The advertising effects from this study inform the debate in the literature with respect to whether, and the extent to which, tobacco advertising affects primary demand at the market level versus brand-shifting.
    JEL: D12 I1 M3
    Date: 2012–04
  20. By: Mark R. Jacobsen
    Abstract: Fuel economy standards change the composition of the vehicle fleet, potentially influencing accident safety. I introduce a model of the fleet that captures risks across interactions between vehicle types while simultaneously recovering estimates of unobserved driving safety behavior. The model importantly includes the ability to consider the selection of driver types across vehicles. I apply the model to the present structure of U.S. fuel economy standards and find an adverse effect on safety: Each MPG increment to the standard results in an additional 149 fatalities per year in expectation. I next show how two alternative regulatory provisions, including one slated to enter effect next year, can fully offset the negative safety consequences; minor changes in the regulation produce a robust, near-zero change in accident fatalities while conserving the same quantity of gasoline.
    JEL: L9 Q4 Q5
    Date: 2012–04

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