nep-hea New Economics Papers
on Health Economics
Issue of 2012‒07‒29
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Catastrophic Medical Expenditure Risk By Gabriela Flores; Owen O'Donnell
  2. Childhood Intelligence and Adult Mortality, and the Role of Socio-Economic Status By Jan S. Cramer
  3. The impacts of public hospital autonomization : evidence from a quasi-natural experiment By Wagstaff, Adam; Bales, Sarah
  4. Health Status Determinants in the OECD Countries. A Panel Data Approach with Endogenous Regressors. By Ana Pocas; Elias Soukiazis
  5. Risk attitudes and Medicare Part D enrollment decisions By Vetter, Stefan; Heiss, Florian; McFadden, Daniel; Winter, Joachim
  6. Plan Selection in Medicare Part D: Evidence from administrative Data By Heiss, Florian; Leive, Adam; McFadden, Daniel; Winter, Joachim
  7. Financial incentives, the timing of births, birth complications, and newborns' health: Evidence from the abolition of Austria's baby bonus By Beatrice Brunner; Andreas Kuhn
  8. English Hospitals Can Improve Their Use of Resources: An Analysis of Costs and Length of Stay for Ten Treatments By James Gaughan; Anne Mason; Andrew Street; Padraic Ward
  9. Neglected infectious diseases: are push and pull incentive mechanisms suitable for promoting research? By Mueller-Langer, Frank
  10. Economic policy, does It help life expectancy? an african evidence of the role of economic policy on longevity. By Ojeaga, Paul
  11. Are Recessions Good for Your Health Behaviors? Impacts of the Economic Crisis in Iceland By Tinna Laufey Ásgeirsdóttir; Hope Corman; Kelly Noonan; Þórhildur Ólafsdóttir; Nancy E. Reichman
  12. Pharmaceutical Innovation and Longevity Growth in 30 Developing and High-income Countries, 2000-2009 By Frank R. Lichtenberg

  1. By: Gabriela Flores (Institute of Health Economics and Management, University of Lausanne, and Institute of Health Policy and Management, Erasmus University Rotterdam); Owen O'Donnell (Erasmus School of Economics, Erasmus University Rotterdam, and University of Macedonia, Greece)
    Abstract: Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness.
    Keywords: medical expenditures; catastrophic payments; downside risk; reference-dependent utility; Asia
    JEL: D12 D31 D80 I15
    Date: 2012–07–24
  2. By: Jan S. Cramer (University of Amsterdam)
    Abstract: The initial purpose of this study was to establish the effect of childhood conditions on longevity from the Brabant data set. This data set combines information at ages 12, 43, 53 and mortality between 53 and 71 for a sample of some 3000 individuals born around 1940 in the Dutch province of North Brabant. Proportional hazard analysis confirms the known association of early intelligence or cognitive ability with longevity, with a standardized hazard ratio of .80; this is the only significant childhood influence. Among men, the effect of some elements of adult socio-economic status can also be ascertained: education, income and wealth are each found to contribute about as much to a longer life as intelligence. The joint effect of all four variables is dominated by childhood intelligence and adult wealth at the expense of education and income.
    Keywords: Cognitive ability; mortality; socio-economic status; proportional hazards
    JEL: C21 I14
    Date: 2012–07–17
  3. By: Wagstaff, Adam; Bales, Sarah
    Abstract: This paper exploits the staggered rollout of Vietnam’s hospital autonomization policy to estimate its impacts on several key health sector outcomes including hospital efficiency, use of hospital care, and out-of-pocket spending. The authors use six years of panel data covering all Vietnam’s public hospitals, and three stacked cross-sections of household data. Autonomization probably led to more hospital admissions and outpatient department visits, although the effects are not large. It did not, however, affect bed stocks or bed-occupancy rates. Nor did it increase hospital efficiency. Oddly, despite the volume effects and the unchanged cost structure, the analysis does not find any evidence of autonomization leading to higher total costs. It does, however, find some evidence that autonomization led to higher out-of-pocket spending on hospital care, and higher spending per treatment episode; the effects vary in size depending on the data source and hospital type, but some are quite large -- around 20 percent. Autonomy did not apparently affect in-hospital death rates or complications, but in lower-level hospitals it did lead to more intensive style of care, with more lab tests and imaging per case.
    Keywords: Health Systems Development&Reform,Population Policies,Health Law,Health Monitoring&Evaluation,Disease Control&Prevention
    Date: 2012–07–01
  4. By: Ana Pocas; Elias Soukiazis
    Abstract: The purpose of this study is to analyse the determinants of life expectancy as proxy for health status of the OECD countries’ population. A production function of health is used to explain expectancy life at birth for total and ageing population and according to gender. Socio-economic factors, health resources and lifestyles are defined as the main determinants of heath status. The estimation approach assumes that income and education are endogenous and a panel data approach is used to control for this problem. Our evidence shows that income, education and efficiency of health resources of the health system are important factors affecting positively life expectancy and risky lifestyles (tobacco and alcohol consumption) are harmful to health. However there are differences between males and females. Income and lifestyles are the major determinants affecting man’s health while for women education and better use of health services (through consultations) explain mostly life expectancy both at birth and late age.
    Date: 2011–09
  5. By: Vetter, Stefan; Heiss, Florian; McFadden, Daniel; Winter, Joachim
    Abstract: The new Medicare Part D program provides prescription drug coverage for older Americans through highly subsidized and tightly regulated plans offered by private insurance firms. For most eligible individuals without coverage from other sources, obtaining Part D coverage would be rational, but it requires active enrollment and plan choice decisions. We investigate if non-enrollment in Medicare Part D can partly be explained by risk aversion. Data are taken from a national online survey conducted just after the introduction Part D. The survey included a context-free and a context-related hypothetical lottery to measure an individual’s attitude towards risk. Respondents who are risk tolerant according to these measures were significantly less likely to enroll in Part D. We also illustrate that hypothetical choice questions designed to elicit risk attitudes are subject to reference-point effects. Even minor differences in the priming of respondents can result in potentially misleading conclusions about the role of risk aversion in the insurance decisions.
    JEL: D03 D81 H51 I1
    Date: 2012–02
  6. By: Heiss, Florian; Leive, Adam; McFadden, Daniel; Winter, Joachim
    Abstract: We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets, focusing on the ability of consumers to evaluate and optimize their choices of plans. Our analysis of administrative data on medical claims in Medicare Part D suggests that less than 10 percent of individuals enroll in plans that are ex post optimal with respect to total cost (premiums and co-payments). Relative to the benchmark of a static decision rule, similar to the Plan Finder provided by the Medicare administration, that conditions next year’s plan choice only on the drugs consumed in the current year, enrollees lost on average about $300 per year. These numbers are hard to reconcile with decision costs alone; it appears that unless a sizeable fraction of consumers value plan features other than cost, they are not optimizing effectively.
    Date: 2012–07
  7. By: Beatrice Brunner; Andreas Kuhn
    Abstract: We analyze the fertility and health effects resulting from the abolition of the Austrian baby bonus in January 1997. The abolition of the benefit was publicly announced about ten months in advance, creating the opportunity for prospective parents to (re-)schedule conceptions accordingly. We find robust evidence that, within the month before the abolition, about 8% more children were born as a result of (re-)scheduling conceptions. At the same time, there is no evidence that mothers deliberately manipulated the date of birth through medical intervention. We also find a substantial and significant increase in the fraction of birth complications, but no evidence for any resulting adverse effects on newborns' health.
    Keywords: Baby bonus, scheduling of conceptions, timing of births, policy announcement, abolition effect, birth complications, medical intervention
    JEL: H31 J13
    Date: 2011–11
  8. By: James Gaughan (Centre for Health Economics, University of York, UK); Anne Mason (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics, University of York, UK); Padraic Ward (Centre for Health Economics, University of York, UK)
    Abstract: Objectives: We investigate variations in costs and length of stay (LoS) among hospitals for ten clinical treatments to assess: 1. The extent to which resource use is driven by the characteristics of patients and of the type and quality of care they receive; 2. After taking these characteristics into account, the extent to which resource use is related to the hospital in which treatment takes place; 3. If conclusions are robust to whether resource use is described by costs or by LoS. Data: We analysed patient-level data from the Hospital Episode Statistics (HES) data for 2007/8, which contains approximately 16.5 million inpatient records. This dataset was merged with costs derived from the Reference Cost database. We extracted data on three medical ‘conditions’ (acute myocardial infarction (AMI); childbirth; stroke) and seven surgical treatments (appendectomy; breast cancer (mastectomy); coronary artery bypass graft (CABG); cholecystectomy; inguinal hernia; hip replacement; and knee replacement). Methods: For each treatment, we used a two-stage approach to investigate variations in cost and LoS. In stage I, we ran fixed effects models to explore which patient-level factors explain variations. In stage II, we regressed the fixed effects from stage I against an array of hospital characteristics. Results: The number of patients analysed ranged from 18,875 (CABG) to 549,036 (childbirth), and the number of hospitals ranged from 28 (CABG) to 151 (appendectomy, hernia and hip replacement). Across the ten treatments, patient factors explained between 32% (stroke) and 72% (breast cancer and knee replacement) of the observed variation in costs. In the LoS analyses, the corresponding figures were 28% (stroke) and 63% (hip replacement). A higher number of diagnoses were consistently associated with higher cost and longer LoS. A higher number of procedures had a similar effect for 9 of the 10 treatments. The effects of age and gender were mixed, but higher levels of deprivation were associated with longer stays in 8 of the 10 treatments analysed. LoS was significantly longer for patients who were cared for by more than one hospital doctor, regardless of the treatment received. In the seven surgical interventions, wound infection was always associated with longer stays and usually with higher cost. Emergency admissions increased LoS for all conditions except stroke. After accounting for these patient-level factors, substantial variation in costs and LoS among hospitals was evident for all ten treatments. These variations could not be explained by hospital characteristics such as size, teaching status, and the amount of the treatment in question that the hospital performed. We found that average hospital costs or LoS were correlated across similar types of treatments, notably hernia, cholecystectomy and appendectomy and hip and knee replacement. A small number of hospitals had considerably lower average costs or LoS for most treatments; similarly some hospitals had considerably higher average costs or LoS. Conclusion: The findings suggest that all hospitals have scope to make efficiency savings in at least one of the clinical areas considered by this study. A small number of hospitals have higher average costs or LoS across multiple treatments than their counterparts, and this cannot be explained by the characteristics of their patients or the quality of care. These hospitals are likely to struggle financially under Payment by Results (PbR) and need to consider how to improve their use of resources.
    Date: 2012–07
  9. By: Mueller-Langer, Frank
    Abstract: Infectious diseases are among the main causes of death and disability in developing countries, and they are a major reason for the health disparity between rich and poor countries. One of the reasons for this public health tragedy is a lack of lifesaving essential medicines, which either do not exist or badly need improvements. In this article, we analyse which of the push and pull mechanisms proposed in the recent literature may serve to promote research into neglected infectious diseases. A combination of push programs that subsidise research inputs through direct funding and pull programs that reward research output rather than research input may be the appropriate strategy to stimulate research into neglected diseases. On the one hand, early-stage (basic) research should be supported through push mechanisms, such as research grants or publicly financed research institutions. On the other hand, pull mechanisms, such as prize funds that link reward payments to the health impacts of effective medicines, have the potential to stimulate research into neglected diseases.
    Keywords: Neglected infectious diseases; Research and Development; push incentive mechanisms; pull incentive mechanisms
    JEL: I12 I18 L3 O31
    Date: 2011–05–25
  10. By: Ojeaga, Paul
    Abstract: This paper evaluates some factors that affect longevity in Africa, with the aim of offering an insight on how government economic policy and consumption spending affect the lives of people in developing countries. Government economic policy was found to be contributing in a negative manner to life expectancy in the countries in our sample. It was also found that apathy between the civil service (the embodiment of institutions) and political office holders to be the greatest stumbling block against the success of governmental economic policy, this creates a hole in institutions since they remain the pipe through which revenue is disbursed and policies are implemented for the general good of the populace. After interacting institution with economic policy economic policy had significant effect on life expectancy it was likely that institutions were either circumvented or ignored, leading to possible short comings on the overall effect that government economic policy would have had on life expectancy.
    Keywords: Corruption; life expectancy; economic policy; institutions; government spending
    JEL: I18 H5 I38 I28
    Date: 2012–07–20
  11. By: Tinna Laufey Ásgeirsdóttir; Hope Corman; Kelly Noonan; Þórhildur Ólafsdóttir; Nancy E. Reichman
    Abstract: This study exploits the October 2008 economic crisis in Iceland to identify the effects of a macroeconomic downturn on a range of health behaviors. Using longitudinal survey data that include pre- and post- reports from the same individuals, we investigate the effects of the crisis on smoking, heavy drinking, dietary behaviors, sleep, and other health behaviors and investigate changes in work hours, real income, wealth, and mental health as potential mediators. We also consider the role of prices in shaping health behaviors and compute participation elasticities for the various behaviors. We find that the crisis led to reductions in all health-compromising behaviors examined and that it led to reductions in certain health-promoting behaviors but increases in others. The individual-level mediators explained some, but not all of the effects. We infer that price increases played a large role in the effects of the crisis on health behaviors.
    JEL: I1
    Date: 2012–07
  12. By: Frank R. Lichtenberg
    Abstract: We examine the impact of pharmaceutical innovation, as measured by the vintage of prescription drugs used, on longevity, using longitudinal, country-level data on 30 developing and high-income countries during the period 2000-2009. We control for fixed country and year effects, real per capita income, the unemployment rate, mean years of schooling, the urbanization rate, real per capita health expenditure (public and private), the DPT immunization rate, HIV prevalence and tuberculosis incidence. Life expectancy at all ages and survival rates above age 25 increased faster in countries with larger increases in drug vintage. The increase in drug vintage was the only variable that was significantly related to all of these measures of longevity growth. Controlling for all of the other potential determinants of longevity did not reduce the vintage coefficient by more than 20%. Pharmaceutical innovation is estimated to have accounted for almost three-fourths of the 1.74-year increase in life expectancy at birth in the 30 countries in our sample between 2000 and 2009, and for about one third of the 9.1-year difference in life expectancy at birth in 2009 between the top 5 countries (ranked by drug vintage in 2009) and the bottom 5 countries (ranked by the same criterion).
    JEL: I12 J11 O33 O4
    Date: 2012–07

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