nep-hea New Economics Papers
on Health Economics
Issue of 2012‒09‒09
fourteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. The Socioeconomic Determinants of Mental Stress in Ireland By David Madden
  2. Adult Longevity and Growth Takeoff By Daishin Yasui
  3. Risk Classification and Health Insurance By Georges Dionne; Casey G. Rothschild
  4. Adverse Selection in Insurance Contracting By Georges Dionne; Nathalie Fombaron; Neil Doherty
  5. Health Insurance, Treatment Plan, and Delegation to Altruistic Physician By Ting Liu; Ching-to Albert Ma
  6. Keeping Watch: Building State Capacity to Oversee Medicaid Managed Long-Term Services and Supports. Washington, DC: AARP Public Policy Institute By Debra J. Lipson; Jenna Libersky; Rachel Machta; Lynda Flowers; Wendy Fox-Grage
  7. Assessing the Usability of MAX 2008 Encounter Data for Enrollees in Comprehensive Managed Care. Washington, DC: Mathematica Policy Research By Vivian L. H. Byrd; Allison Hedley Dodd; Rosalie Malsberger; Ashley Zlatinov
  8. Nudges at the Dentist By Steffen Altmann; Christian Traxler
  9. Evidence-based implementation efficiency analysis of the HIV/AIDS national response in Colombia By Moreno, Antonio; Alvarez-Rosete. Arturo; Nunez, Ricardo Luque; del Carmen Moreno Chavez, Teresa; Rodriguez-Garcia, Rosalia; Montenegro, Fernando; Moreno, Luis Angel; Suarez Lissi, Alejandra; Concardo, Pedro Magne; Gaillard, Michel Eric
  10. The Genesis of the Golden Age - Accounting for the Rise in Health and Leisure By Carl-Johan Dalgaard; Holger Strulik
  11. Decentralization of Health and Education in Developing Countries: A Quality-Adjusted Review of the Empirical Literature By Anila Channa; Jean-Paul Faguet
  12. The effect of female and male health on economic growth: cross-country evidence within a production function framework By Gazi Hassan; Arusha Cooray
  13. Is Direct FDI in Healthcare Desirable in a Developing Economy? By Chaudhuri, Sarbajit; Mukhopadhyay, Ujjaini
  14. Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City By Eva O. Arceo-Gomez; Rema Hanna; Paulina Oliva

  1. By: David Madden (University College Dublin)
    Abstract: This paper reviews Irish evidence on the link between socioeconomic factors and various measures of mental stress and well-being. The paper reviews both cross-section and time-series studies and finds that of all socioeconomic determinants, the most consistent role is found for unemployment. In general, stronger results are found for males than for females, but the time series evidence suggests that the relationship between suicide and unemployment appears to be weakening.
    Keywords: socioeconomic determinants, mental stress, suicide, subjective well-being
    JEL: I12
    Date: 2012–08–29
  2. By: Daishin Yasui (Graduate School of Economics, Kobe University)
    Abstract: This paper develops an overlapping generations model in which agents make educational and fertility decisions under life-cycle considerations, and retirement from work is distinguished from death. This model sheds light on a novel mechanism that links life expectancy, retirement, education, fertility, and growth. Gains in adult longevity induce agents to save more for retirement, reduce fertility, invest in education, and achieve sustained growth. Even if the length of working life is shortened by early retirement, this mechanism works as long as adult longevity increases sufficiently. Our model replicates the stylized facts of the transition from stagnation to growth in terms of longevity, time in retirement, fertility, education, and income, as well as reconciles the theory that gains in life expectancy trigger a growth takeoff by increasing education with the observation that the length of working life is not substantially prolonged because of retirement. This study provides a framework for considering the joint determination of education, fertility, and retirement.
    Keywords: Fertility; Growth; Human capital; Life expectancy; Retirement
    JEL: J13 O11
    Date: 2012–08
  3. By: Georges Dionne; Casey G. Rothschild
    Abstract: Risk classification refers to the use of observable characteristics by insurers to group individuals with similar expected claims, compute the corresponding premiums, and thereby reduce asymmetric information. With perfect risk classification, premiums fully reflect the expected cost associated with each class of risk characteristics and yield efficient outcomes. In the health sector, risk classification is also subject to concerns about social equity and potential discrimination. We present an analytical framework that illustrates the potential trade-off between efficient insurance provision and social equity. We also review empirical studies on risk classification and residual asymmetric information that inform this trade-off.
    Keywords: Adverse selection, Classification risk, Distributional equity, Empirical test of asymmetric information, Ex-ante efficiency, Financial equity, Genetic test, Group equity, Horizontal equity, Insurance rating, Interim efficiency, Moral hazard, Risk characteristic, Risk classification, Risk pooling, Risk separation, Social equity
    JEL: D82 I14 I18 I38 G22
    Date: 2012
  4. By: Georges Dionne; Nathalie Fombaron; Neil Doherty
    Abstract: In this survey we present some of the more significant results in the literature on adverse selection in insurance markets. Sections 1 and 2 introduce the subject and Section 3 discusses the monopoly model developed by Stiglitz (1977) for the case of single-period contracts extended by many authors to the multi-period case. The introduction of multi-period contracts raises many issues that are discussed in detail; time horizon, discounting, commitment of the parties, contract renegotiation and accidents underreporting. Section 4 covers the literature on competitive contracts. The analysis is more complicated because insurance companies must take into account competitive pressures when they set incentive contracts. As pointed out by Rothschild and Stiglitz (1976), there is not necessarily a Cournot-Nash equilibrium in the presence of adverse selection. However, market equilibrium can be sustained when principals anticipate competitive reactions to their behavior or when they adopt strategies that differ from the pure Nash strategy. Multi-period contracting is discussed. We show that different predictions on the evolution of insurer profits over time can be obtained from different assumptions concerning the sharing of information between insurers about individual's choice of contracts and accident experience. The roles of commitment and renegotiation between the parties to the contract are important. Section 5 introduces models that consider moral hazard and adverse selection simultaneously and Section 6 covers adverse selection when people can choose their risk status. Section 7 discusses many extensions to the basic models such as risk categorization, multidimensional adverse selection, symmetric imperfect information, reversed or double-sided adverse selection, principals more informed than agents, uberrima fides and participating contracts.
    Keywords: Adverse selection, insurance markets, monopoly, competitive contracts, self-selection mechanisms, single-period contracts, multi-period contracts, commitment, contract renegotiation, accident underreporting, risk categorization, participating contracts.
    JEL: D80 D81 G22
    Date: 2012
  5. By: Ting Liu (Department of Economics, Stony Brook University); Ching-to Albert Ma (Department of Economics, Boston University)
    Abstract: We study delegating a consumer's treatment plan decisions to an altruistic physician. The physician?s degree of altruism is his private information. The consumer's illness severity will be learned by the physician, and also will become his private information. Treatments are discrete choices, and can be combined to form treatment plans. We distinguish between two commitment regimes. In the first, the physician can commit to treatment decisions at the time a payment contract is accepted. In the second, the physician cannot commit to treatment decisions at that time, and will wait until he learns about the patient's illness to do so. In the commitment game, the first best is implemented by a single payment contract to all types of altruistic physician. In the noncommitment game, the first best is not achieved All but the most altruistic physician earn positive profits, and treatment decisions are distorted from the first best.
    Keywords: Optimal contract, delegation, altruistic physician, commitment.
    Date: 2012–08
  6. By: Debra J. Lipson; Jenna Libersky; Rachel Machta; Lynda Flowers; Wendy Fox-Grage
    Keywords: Medicaid Managed Care, Long-Term Care, State Capacity, Health
    JEL: I
    Date: 2012–07–30
  7. By: Vivian L. H. Byrd; Allison Hedley Dodd; Rosalie Malsberger; Ashley Zlatinov
    Abstract: This issue brief provides an assessment of the selected other services, inpatient (IP), and prescription drug (RX) encounter data for enrollees in comprehensive managed care during 2008. It summarizes the availability, completeness, quality, and usability of the encounter data for comprehensive managed care enrollees by basis of eligibility category and gives specific information by state. It also examines the changes in the IP and RX encounter data from 2007 to 2008. The results are encouraging for researchers and policymakers. Most states that have comprehensive managed care plans are reporting IP, RX, and other services encounter data. Of those data, most are usable. The number of states submitting usable encounter data is increasing.
    Keywords: Medicaid Analytical Extract; MAX, Medicaid Statistical Information System; MSIS, fee-for-service, health insurance organization; health mainenance organization; HMO; HIO
    JEL: I
    Date: 2012–07–30
  8. By: Steffen Altmann (Institute for the Study of Labor (IZA)); Christian Traxler (Max Planck Institute for Research on Collective Goods, Bonn and University of Marburg, Department of Economics)
    Abstract: We implement a randomized field experiment to study the impact of reminders on dental health prevention. Patients who are due for a check-up receive no reminder, a neutral reminder postcard, or reminders including additional information on the benefits of prevention. Our results document a strong impact of reminders. Within one month after receiving a reminder, the fraction of patients who make a check-up appointment more than doubles. The effect declines slightly over time, but remains economically and statistically significant. Including additional information in the reminders does not increase response rates. In fact, the neutral reminder has the strongest impact for the overall population as well as for important subgroups of patients. Finally, we document that being exposed to reminders repeatedly does neither strengthen nor weaken their effectiveness.
    Keywords: Field Experiment, Reminders, Nudges, Memory Limitations, Prevention, Dental Health, Framing
    JEL: D03 I11 C93
    Date: 2012–07
  9. By: Moreno, Antonio; Alvarez-Rosete. Arturo; Nunez, Ricardo Luque; del Carmen Moreno Chavez, Teresa; Rodriguez-Garcia, Rosalia; Montenegro, Fernando; Moreno, Luis Angel; Suarez Lissi, Alejandra; Concardo, Pedro Magne; Gaillard, Michel Eric
    Abstract: This study on the implementation efficiency of the HIV/AIDS national response in Colombia seeks to examine how it has been implemented -- whether it has been done according to the available evidence about the epidemic and as the response was originally planned. The study approaches three specific dimensions of implementation efficiency: (i) programmatic; (ii) budgetary; and (iii) service delivery. The study uses a range of research techniques, including: (i) documentary analysis of key policies, official publications and reports; (ii) semi-structured interviews with representatives of the central government and territorial entities, international and community-based organizations, insurers, care providers, etc.; and (iii) case-study analysis to visualize the ways in which people are cared for in practice. The available data suggest that the HIV/AIDS response is succeeding in keeping the prevalence low and the epidemic concentrated. In recent years, the level of health coverage has increased and the quality of care services has improved. The identified problems in service delivery (mostly related to coverage and access) are linked to system fragmentation and integration, and to the nature of the coordination mechanisms, both at the national and the territorial level. The effectiveness of the response would benefit from re-energized leadership at both the national and local levels -- articulated through the existing programmatic framework and coordinating mechanisms. The complexity of the system and the lack of budgetary and expenditure information have impeded the evaluation of the budgetary efficiency of the HIV/AIDS response.
    Keywords: Health Monitoring&Evaluation,HIV AIDS,Population Policies,Health Systems Development&Reform,Disease Control&Prevention
    Date: 2012–08–01
  10. By: Carl-Johan Dalgaard (Department of Economics, University of Copenhagen); Holger Strulik (University of Goettingen, Department of Economics)
    Abstract: We develop a life cycle model featuring an optimal retirement decision in the presence of physiological aging. In modeling the aging process we draw on recent advances within the fields of biology and medicine. In the model individuals decide on optimal consumption during life, the age of retirement, and (via health investments) the timing of their death. Accordingly, "years in retirement" is fully endogenously determined. Using the model we can account for the evolution of age of retirement and longevity across cohorts born between 1850 and 1940 in the US. Our analysis indicates that 2/3 of the observed increase in longevity can be accounted for by wage growth, whereas the driver behind the observed rising age of retirement appears to have been technological change in health care. Both technology and income contribute to the rise in years in retirement, but the contribution from income is slightly greater.
    Keywords: Aging, Longevity, Retirement, Health, Health Technology
    JEL: D91 I15 J17 J26
    Date: 2012–08
  11. By: Anila Channa; Jean-Paul Faguet
    Abstract: We review empirical evidence on the ability of decentralization to enhance preference matching and technical efficiency in the provision of health and education in developing countries. Many influential surveys have found that the empirical evidence of decentralization's effects on service delivery is weak, incomplete and often contradictory. Our own unweighted reading of the literature concurs. But when we organize the evidence first by substantive theme, and then - crucially - by empirical quality and the credibility of its identification strategy, clear patterns emerge. Higher quality evidence indicates that decentralization increases technical efficiency across a variety of public services, from student test scores to infant mortality rates. Decentralization also improves preference matching in education, and can do so in health under certain conditions, although there is less evidence for both. We discuss individual studies in some detail. Weighting by quality is especially important when evidence informs policy-making. Firmer conclusions will require an increased focus on research design, and a deeper examination into the prerequisites and mechanisms of successful reforms.
    Keywords: Decentralization, School-Based Management, Education, Health, Service Delivery, Developing Countries, Preference Matching, Technical Efficiency
    Date: 2012–07
  12. By: Gazi Hassan (University of Waikato); Arusha Cooray (University of Wollongong)
    Abstract: Adopting a production function based approach we model the role of health as a regular factor of production on economic growth. Additionally we disaggregate the measures of human capital by including male and female life expectancy and school enrolments. Allowing for the dynamics of TFP to be embedded in the production function we estimate it in growth form using various estimators appropriate for our data. Our main finding is that male life expectancy has a positive effect on the growth of income while female life expectancy has a negative effect, controlling for unobserved time and country effects in a panel of 83 countries from 1960 - 2009. We use lag differences of life expectancy and school enrolments and lagged growth rates of other inputs as instruments for controlling the endogenity of health in the growth regressions. We check for the robustness of the results with use of ‘deletion diagnostics’ to identify influential observations and outliers. The results continue to show that male life expectancy has a positive effect on income growth while that of female has a negative effect.
    Keywords: veterans, Health and economic development, economic growth, endogeneity, panel data, TFP convergence, economics of gender.
    JEL: I15 J16
    Date: 2012
  13. By: Chaudhuri, Sarbajit; Mukhopadhyay, Ujjaini
    Abstract: We develop a three-sector general equilibrium model and attempt to examine the impact of FDI in healthcare sector on the welfare and human capital stock of the economy. The greater the size of the healthcare sector the higher and better would be the medical facilities available to each member of the population. Better medical facilities must produce positive effects on workers’ general health and productivity. The greater the size of the healthcare sector the higher is the efficiency of labour. There are two types of capital: capital of type K and capital of type N. While capital of type K is used in production of all the sectors of the economy, capital of type N is specific to the healthcare sector. Our analysis finds that an FDI of capital of type N although raises the human capital formation may lower social welfare. On the contrary, an inflow of foreign capital of type K is likely to be welfare-improving. Although these effects crucially hinge on different structural factors e.g. the degree of labour market imperfection, trade-related and technological factors these can at least question the desirability of allowing the entry of foreign capital in the healthcare sector directly.
    Keywords: FDI; healthcare; developing economy; social welfare; human capital; general equilibrium
    JEL: P36 I12 F19
    Date: 2012–09–03
  14. By: Eva O. Arceo-Gomez; Rema Hanna; Paulina Oliva
    Abstract: Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.
    JEL: O1 Q53
    Date: 2012–08

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