nep-hea New Economics Papers
on Health Economics
Issue of 2012‒06‒13
sixteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Building China’s Regional Municipal Healthcare Performance Evaluation System: A Tuscan Perspective By Hao Li; Sara Barsanti; Anna Bonini
  3. Cost-Benefit Analyses of Sprinklers in Nursing Homes for Elderly By Jaldell, Henrik
  4. Is Recipiency of Disability Pension Hereditary? By Bratberg, Espen; Nilsen, Øivind Anti; Vaage, Kjell
  5. Should sickness insurance and health care be administrated by the same jurisdiction? An empirical analysis By Johansson, Per; Nilsson, Martin
  6. Don’t Drink and… Avoid Risky Sex of Your Peers: The Influence of Alcohol Consumption of Opposite-Gender Peers on Youth Risky Sexual Behavior By Pertold, Filip
  7. Health Investment over the Life-Cycle By Timothy Halliday; Hui He; Hao Zhang
  8. GPs and hospital expenditures. Should we keep expenditure containment programs alive? By G. Fiorentini; M. Lippi Bruni; C. Ugolini
  9. The effects of income inequality on BMI and obesity: Evidence from the BRFSS By Benjamin Volland
  10. Explaining the interrelations between health, education and standards of living in Portugal. A simultaneous equation approach By Ana Poças; Elias Soukiazis
  11. Smoking, Expectations, and Health: A Dynamic Stochastic Model of Lifetime Smoking Behavior By Michael Darden
  12. Geographic Variation in Commercial Medical Care Expenditures: A Decomposition Between Price and Utilization By Abe C. Dunn; Adam Shapiro; Eli Liebman
  13. Physician Market Power and Medical-Care Expenditures By Abe Dunn; Adam Hale Shapiro
  14. Mr Hoefner, Mr Elser, Please Welcome to Poland. Some Comments on the Polish Healthcare System Reform... By Grzejdziak, Łukasz
  15. Comparative, dynamic efficiency of national healthcare systems By Waśniewski, Krzysztof
  16. NIH Peer Review: Challenges and Avenues for Reform By Pierre Azoulay; Joshua S. Graff Zivin; Gustavo Manso

  1. By: Hao Li (Istituto di Management - Scuola Superiore Sant’Anna, Pisa); Sara Barsanti (Istituto di Management - Scuola Superiore Sant’Anna, Pisa); Anna Bonini (Istituto di Management - Scuola Superiore Sant’Anna, Pisa)
    Abstract: Regional healthcare performance evaluation system (PES) can help optimize healthcare resources on regional basis and to improve the performance of healthcare services provided. The Tuscany region in Italy is a good example in meeting these requirements. China is yet to build such a system based on international experience. In this paper, based on comparative studies between Tuscany and China we propose that the Chinese managing institutions can select and commission a third party agency to respectively evaluate the performance of their affiliated hospitals and community health service centers. Following some features of the Tuscan experience, the Chinese municipal PES can be built by focusing on the selection of an appropriate performance evaluation agency, the design of an adequate performance evaluation mechanism, and the formulation of a complete set of laws, rules and regulations. When a PES system at city level is formed, the provincial government can extend the successful experience to other cities.
    Keywords: healthcare performance; performance evaluation system; evaluation agency; evaluation mechanism; evaluation laws, rules and regulations
    JEL: I18
    Date: 2012–04–01
  2. By: Bratberg, Espen (University of Bergen,); Monstad, Karin (HEB-Uni Rokkansenteret)
    Abstract: Sickness absence has risen over the past years in Norway. One explanation put forward is that a tougher labor market represents a health hazard, while a competing hypothesis predicts that loss of job security works as a disciplinary device. In this analysis we aim to trace a causal impact of organizational turmoil or job insecurity on sickness absence, applying a difference-in-difference approach. Utilizing a negative financial shock that hit specific employers and workplaces, we find that sickness absence decreased considerably in the following year. The decrease is substantially larger among male than among female employees, and stronger for days of sickness absence than for its incidence. <p> Acknowledgements: The paper has benefited from comments at the 2011 Norwegian Social Insurance Research Meeting in Lillehammer and the 2012 HEB/HERO workshop in Geilo. We are also grateful for information from Ingvar Linde, Jan G. Myrvang, and chief executives of the eight municipalities impacted by the financial shock. Remaining errors are the authors’ sole responsibility. Financial support from the Norwegian Research Council (Grant 187912) is gratefully acknowledged.
    Keywords: Worker absenteeism; sickness absence; organizational schange; job security; difference-in-differences
    JEL: H53 I18 J22 J28 J45
    Date: 2012–04–30
  3. By: Jaldell, Henrik (Dept. of Economics)
    Abstract: The risk of dying in fires in nursing homes is six times the risk of dying in fires at home in Sweden. The risk of being injured in nursing homes is even higher. The reason is that fire alarms do not help if people have problems moving around, or have dementia and do not understand what is going on. One way to reduce this risk is to install fire sprinklers. The benefits depend on the value we put on elderly people living in nursing homes. Their life expectancy is 3.2 years. This study measures the benefits and compares them in terms of the monetary value of full lives, life years and quality adjusted life years (QALYs) for deaths and injuries. The results show that sprinklers are cost-effective in newly built nursing homes no matter what value of life is used. However, if sprinklers are installed in already existing buildings, they are cost-effective only if the value of a statistical life is used.
    Keywords: QALY; value of statistical life; nursing home; fire safety; sprinklers; elderly
    JEL: H75 I11 J14 K32
    Date: 2012–06–04
  4. By: Bratberg, Espen (University of Bergen); Nilsen, Øivind Anti (Dept. of Economics, Norwegian School of Economics and Business Administration); Vaage, Kjell (University of Bergen)
    Abstract: This paper addresses whether children’s exposure to parents receiving disability benefits induces a higher probability of receiving such benefits themselves. Most OECD countries experience an increasing proportion of the working-age population receiving permanent disability benefits. Using data from Norway, a country where around 10% of the working-age population rely on disability benefits, we find that the amount of time that children are exposed to their fathers receiving disability benefits affects their own likelihood of receiving benefits positively. This finding is robust to a range of different specifications, including family fixed effects.
    Keywords: Disability; intergenerational correlations; siblings fixed effects.
    JEL: H55 J62
    Date: 2012–04–20
  5. By: Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Nilsson, Martin (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: Sweden has obligatory sickness and disability insurance which is both financed (from payroll taxes) and administered by the government. In order to receive sickness benefits, insured individuals must have certificates issued by a medical doctor. Since health care is administered at the county level, this means that monitoring is, to some extent, decentralized at a lower jurisdictional level than the funding and governance of the insurance. This paper studies one consequence of such decentralization: the effect on individual sickness absence when such certificates are not approved by the Sickness Insurance Agency (SIA)and are instead re-remitted to the doctor for completion and, potential, reapproval by the SIA. We find that this re-remission increases the length of sickness absence spells by an average of 30 percent. A suggestive test of the reason for the observed effect indicates that it is due to a decrease in health caused by increased stress related to the uncertainty about entitlement and future sickness benefits. Given that added resources improve the quality of the patients’ medical certificates, directed intergovernmental grants from the state to the counties would be cost saving.
    Keywords: Monitoring; moral hazard; public social insurance; cost-benefit; intergovernmental grants
    JEL: H51 H55 J22
    Date: 2012–02–07
  6. By: Pertold, Filip (Department of Economics, Aarhus School of Business)
    Abstract: I estimate the effect of opposite-gender peer drinking on individual risky sexual behavior among Czech youth. The identification strategy relies on two main controls for individual and groupspecific unobservables. First, younger schoolmates’ sexual behavior is a control for school-specific attitudes toward sexual behavior. Second, pre-determined individual pre-secondary-school alcohol consumption is used to control for self-selection into schools of individuals with specific attitudes toward alcohol. As opposed to Waddell (2010), I find that female drinking affects the male propensity to have unprotected sex, while male drinking does not have such an effect on female behavior. This finding corresponds to the fact that females have usually older sexual partners than males
    Keywords: Peer effects; Sexual behavior; Drinking
    JEL: I12 J13
    Date: 2011–01–01
  7. By: Timothy Halliday (Department of Economics, University of Hawaii at Manoa); Hui He (Department of Economics, University of Hawaii at Manoa); Hao Zhang (Department of Economics, University of Hawaii at Manoa)
    Abstract: We quantify what drives the rise in medical expenditures over the life- cycle. Three motives are considered. First, health delivers a flow of utility each period (the consumption motive). Second, better health enables people to allocate more time to productive or pleasurable activities (the investment motive). Third, better health improves survival prospects (the survival mo- tive). We calibrate an overlapping generations model with endogenous health accumulation to match key economic targets and then we gauge its perfor- mance by comparing key age-pro?les from the model to their counterparts in the data. We ?nd that the investment motive is more important than the consumption motive until about age 50. After that, the rise in medical ex- penditures is primarily driven by the value of health as a consumption good. The survival motive is quantitatively less important when compared to the other two motives. Finally, with our calibrated model, we conduct a series of counter-factual experiments to investigate how modi?cations to social security, government-run health insurance, and longevity impact the life-cycle behavior of medical expenditures as well as the aggregate medical expenditures-GDP ratio.
    Keywords: Health Investment Motive, Medical Expenditure, life Cycle
    JEL: E21 I12
    Date: 2012–06–01
  8. By: G. Fiorentini; M. Lippi Bruni; C. Ugolini
    Abstract: Pay-for-performance programs offering additional payments to GPs can be used not only to improve the quality of care but also for cost containment purposes. In this paper, we analyse the impact of removing financial incentives in primary care that were aimed at containing hospital expenditure in the Italian region of Emilia Romagna during the period 2002-04. Our analysis draws on regional databanks linking GPs’ characteristics to those of their patients (including all sources of public payments made to GPs), together with information on the utilisation of hospital services. We employ a difference-in-difference specification to assess changes in expenditures for avoidable and total hospital admissions. We identify the treatment group with GPs operating in districts where the program is withdrawn during the observation period (“Leavers”). Their performance is compared to that of two separate control groups, namely: GPs working in districts that grant incentives for the entire period (“Stayers”), and those working in districts that never introduced measures for the containment of hospitalisations (“Non Participants”). The comparison between treatment and control groups shows that removing incentives does not result in a worse performance by Leavers compared to both control groups. This supports the policy of removing incentives, as such entail extra payments to GPs which, however, do not seem capable of significantly influencing their behaviour in the desired ways. Our findings complement previous evidence from the same institutional context showing that only those programs that aim to improve disease management for specific conditions - rather than to simply contain expenditure - have proven successful in reducing avoidable admissions for the target population.
    JEL: I11 I18 C31
    Date: 2012–06
  9. By: Benjamin Volland
    Abstract: Despite increasing knowledge on its adverse consequences, obesity prevalence across the U.S. has been rising markedly over the past three decades. The private and economic costs of this development are substantial, and it has been estimated that its direct and indirect costs now sum to over 1% of annual GDP. While much progress has been achieved in recent years in understanding the economic changes that contribute to this development, a little researched factor that has also been argued to exacerbate the prevalence of obesity is the distribution of income. Augmenting data from 12 consecutive waves of the Behavioral Risk Factor Surveillance System (BRFSS), with a recently published data set on state-level income inequality based on tax payments, the present paper analyzes whether changes in income inequality can be considered a determinant of variations in body mass and obesity across the U.S. It finds that they have a significant positive effect on BMI and obesity. While the effect is small, it is in the range of other state-level determinants, suggesting that some form of redistributive policy may help containing the spread of unfavorable weight outcomes.
    Keywords: BMI, obesity, income inequality, BRFSS
    JEL: I14 I18
    Date: 2012–05–31
  10. By: Ana Poças (Polytechnic Institute of Guarda, Portugal and UDI); Elias Soukiazis (Faculty of Economics, University of Coimbra, Portugal and GEMF)
    Abstract: The aim of this paper is to analyze the links between health status, education and economic growth in Portugal. Focus is given to the achievements made in infant mortality rate which represents the most significant reduction among the OECD countries in the last decades. While this very positive performance is a direct consequence of the investments made in the health sector, it is also important to note that it is a result of other socioeconomic factors outside the health system (mainly in the education system) that have contributed significantly to an improvement of the living conditions. So, to a complete understanding of the Portuguese infant mortality decline we must consider in our analysis the potential cumulative causation effects between health, education and per capita income growth. Having this in mind, in this paper we use a three equation model to determine simultaneously the interactions between infant mortality rate, education and per capita income growth. Our empirical evidence shows that the proposed model is adequate to highlight the potential links between these core factors.
    Keywords: Health, Education, Standards of Living, Simultaneous Equations System.
    JEL: H51 I12 I18 C23
    Date: 2012–05
  11. By: Michael Darden (Department of Economics, Tulane University)
    Abstract: This research discusses results obtained through formulation and estimation of a dynamic stochastic model that captures individual smoking decision making, health expectations, and longevity over the life cycle. The standard rational addiction model is augmented with a Bayesian learning process about the health marker transition technology to evaluate the importance of personalized health information in the decision to smoke cigarettes. Additionally, the model is well positioned to assess how smoking, and smoking cessation, impacts morbidity and mortality outcomes while taking into consideration the potential for dynamic selection of smoking behaviors. The structural parameters are estimated using rich longitudinal health and smoking data from the Framingham Heart Study: Offspring Cohort. Results suggest that there exists heterogeneity across individuals in the pathways by which smoking effects health. Furthermore, upon smoking, the estimated parameters suggest a positive reinforcement effect and a negative withdrawal effect, both of which encourage future smoking. The paper also presents evidence of health selection in smoking behavior that, when not modeled, may cause an overstatement of the effect of smoking on morbidity and mortality. Finally, personalized health marker information is not found to significantly influence smoking behavior relative to chronic health shocks themselves.
    Keywords: smoking, information, learning, structural econometrics
    JEL: I1 I12 D8 D83
    Date: 2012–05
  12. By: Abe C. Dunn; Adam Shapiro; Eli Liebman (Bureau of Economic Analysis)
    Abstract: This study examines geographic variation in commercial medical care expenditures. Medical care expenditures are decomposed between service prices and service utilization. We find that both service prices and utilization contribute to overall differences in health spending across geographic markets. Our findings suggest that potential expenditure savings may be possible from more efficient utilization. However, the large variation in underlying service prices suggests that deviations in overall spending may persist, even if utilization differences across markets are diminished.
    Date: 2011–07
  13. By: Abe Dunn; Adam Hale Shapiro (Bureau of Economic Analysis)
    Abstract: Physicians play a critical role in determining medical-care expenditures. In this study, we empirically assess the degree to which physicians exploit their bargaining leverage over insurance carriers as a means to raise service prices. We also examine the degree to which these potentially higher payments may translate into different levels of service utilization. We find that physicians are able to translate bargaining leverage into both higher fees and higher service utilization. Ceteris paribus, a cardiologist with high market power (concentration in the 90th percentile) will charge 25 percent higher prices and perform 22 percent more services than a cardiologist with low market power (concentration in the 10th percentile). The corresponding orthopedist will charge 24 percent higher prices and perform 4 percent more services. We provide evidence that the effect of bargaining leverage on service utilization may be explained by physicians responding to the negotiated service prices. As measurement of medical-care output requires an accurate decomposition of nominal expenditures into prices and quantities, this paper shows that bargaining leverage can affect both medical-care prices and utilization.
    Date: 2011–12
  14. By: Grzejdziak, Łukasz
    Abstract: The purpose of this paper is to verify the hypothesis that a debt write-off implemented recently by Polish authorities in favour of public hospitals constitutes State aid within the meaning of Article 107(1) of the Treaty of the Functioning of the European Union. The paper contains a detailed description of the nature of the measure – its historical background, regulatory context, as well as its construction. It presents an in-depth analysis of the fulfilment by the measure of the conditions stipulated in Article 107(1) TFEU. As a preliminary issue, the analysis addresses the problem whether Polish public hospitals can be considered as undertakings within the meaning of EU competition law, particularly, as to their activity financed by the sickness fund organized under the principle of social solidarity. The answer to this question seems to be affirmative and in line with the landmark Hoefner and Elser judgments where the ECJ held that the way in which an entity is financed is irrelevant for its classification as an undertaking. The paper argues in favour of the thesis that the debt write-off must be considered as affecting trade between Member States and competition. Consequently, and contrary to the official position of the Polish government, the measure in question is classified as State aid.
    Keywords: Poland; healthcare services; hospital services; state aid; notion of state aid; write-off of the debts of an ndertaking; notion of undertaking in the EU competition law; public undertakings; social solidarity; cross-subsidization; effect on trade between Member States; adverse effect on competition; notification of state aid; services of general economic interest
    JEL: K21
    Date: 2011
  15. By: Waśniewski, Krzysztof
    Abstract: The paper is an ex post, critical contribution to the research conducted by the World Health Organisation on healthcare financing. The issue of national healthcare systems’ efficiency is addressed, through building a model of change in healthcare quality, in response to changes in healthcare financing, with the core hypothesis stating that the greater is the change in healthcare expenditures, the lesser is their efficiency in terms of healthcare quality improvement. Then, empirical evidence is provided, with econometric research proving the robustness of the model; further, qualitative research provides strong presumptions to a more general thesis, namely that healthcare systems bear significant transaction costs, proportional to their demographically defined size. Thus, important, and negative effects of scale are to assume in healthcare financing.
    Keywords: healthcare; institutions; efficiency
    JEL: H41 G28 I1
    Date: 2012–05–10
  16. By: Pierre Azoulay; Joshua S. Graff Zivin; Gustavo Manso
    Abstract: The National Institute of Health (NIH), through its extramural grant program, is the primary public funder of health-related research in the United States. Peer review at NIH is organized around the twin principles of investigator initiation and rigorous peer review, and this combination has long been a model that science funding agencies throughout the world seek to emulate. However, lean budgets and the rapidly changing ecosystem within which scientific inquiry takes place have led many to ask whether the peer-review practices inherited from the immediate post-war era are still well-suited to twenty first century realities. In this essay, we examine two salient issues: (1) the aging of the scientist population supported by NIH and (2) the innovativeness of the research supported by the institutes. We identify potential avenues for reform as well as a means for implementing and evaluating them.
    JEL: O31 O32
    Date: 2012–06

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