nep-hea New Economics Papers
on Health Economics
Issue of 2012‒11‒17
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo, USA

  2. A rank-dependent utility model of uncertain lifetime, time consistency and life insurance By Nicolas Drouhin
  3. Regional hot spots of exceptional longevity in Germany By Rembrandt D. Scholz; Sebastian Klüsener
  4. The Role of Network Governance Models in the Design of Local eHealth Policies. By Valentina Albano
  5. Paying Wisely: Reforming Incentives to Promote Evidence-Based Decisions at the Point of Care. Washington, DC: Mathematica Policy Research By Eugene C. Rich; Tim Lake; Christal Stone Valenzano
  6. Synthesis of Findings from System Change Grant Programs. Cambridge, MA: Mathematica Policy Research By Carol V. Irvin; Rebecca Sweetland Lester
  7. New Denial and Disenrollment Coding Strategies to Drive State Enrollment Performance. Princeton, NJ: Robert Wood Johnson Foundation By Mary Harrington; Christopher Trenholm; Andrew Snyder
  8. Best Bets for Reducing Medicare Costs for Dual Eligible Beneficiaries: Assessing the Evidence Menlo Park, CA: The Henry J. Kaiser Family Foundation By Randall Brown; David R. Mann
  9. Socioeconomic variation in the relationship between obesity and life expectancy By Jonas Minet Kinge and Stephen Morris
  10. Incentives That Saved Lives: Government Regulation of Accident Insurance Associations in Germany, 1884-1914 By Guinnane, Timothy; Streb, Jochen
  11. Electronic word of mouth about medical services By Hinz, Vera; Drevs, Florian; Wehner, Jürgen
  12. Public-Private Mix of Health Expenditure: A Political Economy Approach and A Quantitative Exercise By Shuyun May Li, Solmaz Moslehi, Siew Ling Yew
  13. When to Quit Under Uncertainty? A real options approach to smoking cessation By Yu-Fu Chen; Dennis Petrie
  14. My body is fat and my wallet is thin: The link between weight perceptions, weight control and income By Johnston, D.W.;; Lordan, G.;
  15. Childhood Health and the Business Cycle: Evidence from Western Europe By Angelini, V.;; Mierau, J.O.;
  16. The Enduring Impact of Childhood Experience on Mental Health: Evidence Using Instrumented Co-Twin Data By Rachel Berner Shalem; Francesca Cornaglia; Jan-Emmanuel De Neve
  17. Relative Quality of Foreign Nurses in the United States By Patricia Cortés; Jessica Pan
  18. Hospital Quality Competition Under Fixed Prices By Hugh Gravelle; Rita Santos; Luigi Siciliani; Rosalind Goudie
  19. The role of anti-smoking legislation on cigarette and alcohol consumption habits in Italy By Pieroni, Luca; Chiavarini, Manuela; Minelli, Liliana; Salmasi, Luca
  20. Health Insurance Reform: The Impact of a Medicare Buy-In By Gary D. Hansen; Minchung Hsu; Junsang Lee
  21. Gone Fishing! Reported Sickness Absenteeism and the Weather By Jingye Shi; Mikal Skuterud

  1. By: Sophie Randon (EA3713 - Centre de Recherche Magellan - Université de Lyon - Université Jean Moulin - Lyon III)
    Abstract: Nursing shortage is a worldwide problem throughout countries and job satisfaction is recognized to be related with staff retention. In France, the lasts hospital reforms are changing the healthcare managers' role which have an important role on nurses' job satisfaction. The aim of this study is to investigate the consequences of the evolution of healthcare managers' role. This study shows that the evolution of healthcare managers' role can be dangerous toward their relation with the staff and suggests some feature research on the influence of nurse managers' backgrounds on the style of leadership and on nurses' job satisfaction.
    Keywords: Healthcare managers' role ; job satisfaction ; nurses ; international comparison
    Date: 2012–06–28
  2. By: Nicolas Drouhin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan)
    Abstract: In a continuous time life cycle model of consumption with uncertain lifetime and no ''pure time preference", we use a non-parametric specification of rank dependent utility theory to characterize the preferences of the agents. From normative point of view, the paper discusses the implication of adding an axiom of time consistency to the former model. We prove that time consistency holds for a much wider class of probability weighting functions than the identity one characterizing the expected utility model. This special class of probability weighting functions provides foundations for a constant subjective rate of discount which interact multiplicatively with the instantaneous conditional probability of dying. We show that even if agent are time consistent, life annuities no more provide perfect insurance against the risk to live.
    Keywords: intertemporal choice; life cycle theory of consumption and saving; uncertain lifetime; life insurance; time consistency; rank dependent utility.
    Date: 2012–10–31
  3. By: Rembrandt D. Scholz (Max Planck Institute for Demographic Research, Rostock, Germany); Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In their contributions to the debate on exceptional longevity, several scholars have noted the existence of spatial hot spots, or areas with a high concentration of individuals who have survived to very high ages (e.g. Sardinia in Italy or Okinawa in Japan). However, most of these studies were based on a small number of cases. This study investigates the spatial pattern of exceptional longevity in Germany by place of birth and place of death. We used a large dataset of exceptional longevity that covered all recorded individuals who reached the age of 105 in Germany in the period 1991 to 2002 (N: 1,339). Our research results show that, even in Germany, with its troubled 20th-century past, most of the semi-supercentenarians reached the age of exceptional longevity in the same region in which they were born. The discovery of this highly localised pattern supports the view that an investigation of regional variation in exceptional longevity can produce meaningful results. In our analysis of spatial variation, we were able to detect hot spots of exceptional longevity in Berlin and in north-western Germany. These findings are remarkable, as life expectancy in Germany is currently characterised by a south-north gradient, with the areas of highest life expectancy at birth being located in the south. The observed pattern of exceptional longevity instead reflects the life expectancy at birth pattern in Germany in the early 20th century and to some degree also the current life expectancy at age 80 pattern. Our findings might be interpreted as support to the argument that early and late life conditions might play an important role in explaining spatial variation of exceptional longevity in Germany.
    Keywords: Germany, longevity, spatial analysis, spatial distance
    JEL: J1 Z0
    Date: 2012–11
  4. By: Valentina Albano (Faculty of Economics “Federico Caffè”, University of Rome III)
    Abstract: This paper aims at contributing to the rich debate over the obstacles to the diffusion of eHealth technologies by investigating the role of the institutional setting on the success or failure of an IT diffusion policy. This work focuses on the policy network perspective and it is based on the expectation that the internal characteristics of the policy network influence the policy design. The main goal of this paper is to investigate how eHealth policy networks operate and to determine whether a more effective network governance configuration exists that could improve the design and deployment of successful eHealth projects. This work presents a case study of three eHealth policy networks (Region-governed network, eHealth Local Board-governed network, and a Local Health Agencies’ Consortium-governed network). The focus of this investigation is on how the three models of network governance operate and influence the design of strategies to face five main eHealth challenges identified by scholars and practitioners: financial challenges; IT challenges; change management challenges; institutional challenges and sharing best practices and evaluation tools.
    Keywords: Policy design, Policy network, Network governance, eHealth.
    Date: 2012
  5. By: Eugene C. Rich; Tim Lake; Christal Stone Valenzano
    Abstract: This white paper describes how current financial incentives in the fee-for-service (FFS) system can lead to the over- and underuse of services at the point of care by physicians and other clinicians. It explores prominent payment reform models and concludes that no single approach consistently rewards evidence-based care. The paper also suggests that more targeted use of these models—grounded in recalibrated FFS—might be the most effective way to neutralize incentives and facilitate evidence-based decision making at the point of care.
    Keywords: Reforming Incentives, Evidence-Based Decisions, Point of Care, Health
    JEL: I
    Date: 2012–10–30
  6. By: Carol V. Irvin; Rebecca Sweetland Lester
    Keywords: Long-Term Care, Gran Programs, Health
    JEL: I
    Date: 2012–10–18
  7. By: Mary Harrington; Christopher Trenholm; Andrew Snyder
    Keywords: Coding Strategies, State Enrollment, State Policy, Health
    JEL: I
    Date: 2012–10–30
  8. By: Randall Brown; David R. Mann
    Keywords: Medicare Costs, Dual Eligibles, Beneficiaries, Health
    JEL: I
    Date: 2012–10–30
  9. By: Jonas Minet Kinge and Stephen Morris (Statistics Norway)
    Abstract: We investigate the relationship between obesity and life expectancy, and whether or not this relationship varies by socioeconomic status (SES). The underlying model is based on the “Pathways to health” framework in which SES affects health by modifying the relationship between lifestyles and health. We use data from the British Health and Lifestyle Survey (1984-1985) and the longitudinal follow-up in June 2009, and run parametric Gompertz survival models to investigate the association between obesity and life expectancy, also accounting for interactions between obesity and both age and SES. Generally we find that obesity is negatively associated with survival, and that SES is positively associated with survival, in both men and women. There is no evidence of interactions between obesity and SES in predicting survival in men, but these interactions are present in women. Obesity is associated with lower survival in women except for older women in higher SES groups, who have a longer predicted survival than women of normal weight in this group.
    Keywords: obesity; life expectancy; socioeconomic status; survival analysis
    JEL: I14 I18 I19
    Date: 2012–11
  10. By: Guinnane, Timothy (Yale University); Streb, Jochen (University of Mannheim)
    Abstract: The German government introduced compulsory accident insurance for industrial firms in 1884. This insurance scheme was one of the main pillars of Bismarck's famous social insurance system. The accident-insurance system achieved only one of its intended goals: it successfully compensated workers and their survivors for losses due to accidents. The accident-insurance system was less successful in limiting the growth of work-related accidents, although that goal had been a reason for the system's creation. We trace the failure to stem the growth of accidents to faulty incentives built into the 1884 legislation. The law created mutual insurance groups that used an experience-rating system that stressed group rather than firm experience, leaving firms with little hope of saving on insurance contributions by improving the safety of their own plants. The government regulator increasingly stressed the imposition of safety rules that would force all firms to adopt certain safety practices. Econometric analysis shows that even the flawed tools available to the insurance groups were powerful, and that more consistent use would have reduced industrial accidents earlier and more extensively.
    JEL: G22 H55 N33
    Date: 2012–08
  11. By: Hinz, Vera; Drevs, Florian; Wehner, Jürgen
    Abstract: Electronic word of mouth (eWOM) about medical services gains growing popularity from the part of health care users, accompanied with a high reluctance of health care providers towards existing platforms, fearing unqualified, negative reviews driven by motives of vengeance. Purpose of this research is to shed light on the characteristics, content, and motives of eWOM about medical services. Using primary and secondary data of 822 reviews, this study shows that reviews about medical services are positive more often than negative, and that altruistic motives override egoistic motives. Furthermore, why a review is written significantly relates to the review's valence (positive, negative), degree of affectivity, and degree of differentiation. Motives and characteristics also affect the review's content, differentiated in four aspects (medical care, relationships, comfort, and processes). Hence this study counters the arguments of many health care providers and offers new insights in an underresearched field, providing implications for both management and future research. --
    Keywords: Electronic word of mouth,online reviews,health care management,hospitals
    Date: 2012
  12. By: Shuyun May Li, Solmaz Moslehi, Siew Ling Yew
    Abstract: This paper constructs a simple overlapping generations model to examine how the choice of public and private health expenditure is affected by preferences and economic factors under majority voting. In the model,agents with heterogeneous income decide how much to consume, save, and invest in private health care, and vote for the income tax to be used to finance public health. Agents survival probabilities are endogenously determined by a CES composite of public and private health expenditure. For the two special cases that public and private health are complements or perfect substitutes, we show that the voting equilibrium is unique and locally stable. For the general case, we calibrate the model to Canadian data to conduct a quantitative analysis.Our results suggest that the public-private mix of health expenditure is quite sensitive to the degree of substitutability between private and public health and the relative e¤ectiveness of public and private health. Using a sample of advanced democratic countries, we further infer these two parameters and construct the shares of public health in total health expenditure for each country, and find that the predicted values match the data quite well.
    Keywords: Public-private mix, Health expenditure, Majority voting, Overlapping generations model
    JEL: D7 H51 I1
    Date: 2012
  13. By: Yu-Fu Chen; Dennis Petrie
    Abstract: This paper models the decision to quit smoking like an investment decision where the quitter incurs a sunk withdrawal cost today and forgoes their consumer surplus from cigarettes (invests) and hopes to reap an uncertain reward of better health and therefore higher utility in the future (return). We show that a risk-averse mature smoker who expects to benefit from quitting may still rationally choose to delay quitting until they are more confident that quitting is the right decision for them. Such a decision by the smoker is due to the value associated with keeping their option of whether or not to quit open as they learn more about the damage that smoking will have on their future utility. Policies which reduce a smoker’s uncertainty about the damage that smoking with have on their future utility is likely to make them quit earlier.
    Keywords: smoking, quitting, optimal stopping problem, real options analysis, addiction
    JEL: I1 D1 D8 D9
    Date: 2012–11
  14. By: Johnston, D.W.;; Lordan, G.;
    Abstract: This paper explores why the poor are more likely to be overweight and obese than the rich. The main aim is to better understand the mechanisms underlying the income-obesity relationship so that effective policy interventions can be developed. Our approach involves analysing data on approximately 9,000 overweight British adults from between 1997 and 2002. We estimate the effect of income on the probability that an overweight individual correctly recognises their overweight status and the effect of income on the probability that an overweight individual attempts to lose weight. Our work finds that low-income individuals are more likely to both misperceive that they are a healthy weight and fail to address their unhealthy weight. Both of these effects are higher for males than females. For example, it is estimated that overweight low-income males are 15%-points less likely to recognize their overweight status than overweight high-income males, and that after controlling for weight perceptions, overweight low-income males are 10%-points less likely to be trying to lose weight. An implication of these results is that more public education on what constitutes overweight and the dangers associated with being overweight is needed, especially in low income neighbourhoods.
    Keywords: Obesity, Overweight, Weight Control, Weight Misperceptions
    Date: 2012–09
  15. By: Angelini, V.;; Mierau, J.O.;
    Abstract: We analyze the relationship between the business cycle and childhood health. We use a retrospective survey on self-reported childhood health for 10 Western European countries and combine it with historically and internationally comparable data on the Gross Domestic Product. We validate the self-reported data by comparing them to realized illness spells. We find a positive relationship between being born in and growing up during a recession and childhood health. This relationship is not driven by selection effects due to heightened infant mortality during recessions. As the business cycle is exogenous from the individual perspective, our results can be considered causal.
    Keywords: Childhood Health, Business Cycle, Western Europe
    JEL: I12 E32 O52
    Date: 2012–10
  16. By: Rachel Berner Shalem; Francesca Cornaglia; Jan-Emmanuel De Neve
    Abstract: The question of whether there is a lasting effect of childhood experience on mental health has eluded causal measurement. We draw upon identical twin data and econometric instrumentation to provide an unbiased answer. We find that 55% of a one standard deviation change in mental health due to idiosyncratic experience at age 9 will still be present three years later. Extending the analysis, we find such persistence to vary with age at impact, gender, and mental health sub-categories. This investigation allows us to get a grasp on the degree to which childhood events influence health and socio-economic outcomes by way of their lagged effect on subsequent mental health. A better understanding of the evolution of mental health also helps identifying when mental health issues can be most effectively treated.
    Keywords: mental health, childhood experience, twin study, instrumental variable analysis
    JEL: I10
    Date: 2012–11
  17. By: Patricia Cortés (School of Management, Boston University); Jessica Pan (National University of Singapore)
    Abstract: In recent years, the US has become increasingly reliant on foreign registered nurses to satisfy health care demands. The Philippines has emerged as the single largest source of nurses educated abroad, representing more than half of foreign nurses entering the US in the last decade. One of the main concerns raised by the importation of nurses is the quality of care that they provide. This paper addresses this question by analyzing the relative quality of foreign educated nurses and its evolution over time using Census data from 1980 to 2010 and wages as a measure of skill. We find a positive wage premium for nurses educated in the Philippines, but not for foreign nurses educated elsewhere. This premium cannot be explained by differences in demographics, education, work experience, location, or detailed job characteristics. The assimilation profile of Filipino nurses and the types of hospitals that hire them strongly suggest that the premium reflects quality differences and not just unobserved characteristics of the job that carry a higher wage but are unrelated to skill. We provide evidence that the wage premium is likely to be driven by strong positive selection into nursing among Filipinos resulting from the high and heterogeneous returns to the occupation generated by active government support for the migration of nurses in the Philippines.
    Keywords: Nurses, Migration, Selection, Skills.
    JEL: J61 J24 J44
    Date: 2012–11
  18. By: Hugh Gravelle (Centre for Health Economics, University of York, UK); Rita Santos (Centre for Health Economics, University of York, UK); Luigi Siciliani (Centre for Health Economics and Department of Economics & Related Studies, University of York, UK); Rosalind Goudie (School of Social & Community Medicine, University of Bristol, UK)
    Abstract: The relationship between the quality of health care and the extent of competition amongst providers has been the subject of intense policy interest and debate. As part of the ESHCRU programme we are undertaking a set of related investigations into this relationship in the hospital sector, in primary care (general practices) and in social care.
    Date: 2012–11
  19. By: Pieroni, Luca; Chiavarini, Manuela; Minelli, Liliana; Salmasi, Luca
    Abstract: The short-term effects of public smoking bans on individual smoking and drinking habits were investigated in this paper. In 2005, a smoking ban was introduced in Italy, and we exploited this exogenous variation to measure the effect on both smoking participation and intensity and the indirect effect on alcohol consumption. Using data from the Everyday Life Aspects survey, for the period 2001-2007, we show that the introduction of smoke-free legislation in Italy significantly affected smoking behavior. We also document significant indirect effects on alcohol consumption for the main alcoholic beverage categories. A robustness analysis is also performed, to test the extent to which unobservable variables may bias our estimated parameters. Our results are then used to perform a cost-effectiveness analysis of the anti-smoking legislation in Italy.
    Keywords: Anti-smoking legislation; regression discontinuity; Difference-in-Differences; cost-effectiveness analysis
    JEL: I12 I18 I10
    Date: 2012–11–06
  20. By: Gary D. Hansen; Minchung Hsu; Junsang Lee
    Abstract: The steady state general equilibrium and welfare consequences of health insurance reform are evaluated in a calibrated life-cycle economy with incomplete markets and endogenous labor supply. Individuals face uncertainty each period about their future health status, medical expenditures, labor productivity, access to employer provided group health insurance, and the length of their life. In this environment, incomplete markets and adverse selection, which restricts the type of insurance contracts available in equilibrium, creates a potential role for health insurance reform. In particular, we consider a policy reform that would allow older workers (aged 55-64) to purchase insurance similar to Medicare coverage. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance. Hence, we compare the equilibrium properties of the current insurance system with those that obtain with an optional buy-in subsidized by the government, as well as with several types of health insurance mandates.
    JEL: E6 H51
    Date: 2012–11
  21. By: Jingye Shi (Research Institute of Economics and Management, Southwestern University of Finance and Economics); Mikal Skuterud (Department of Economics, University of Waterloo)
    Abstract: A fundamental challenge in informing employer-employee agency problems is measuring employee shirking activity. We identify the propensity of employees to misreport health in order to exploit favorable weather by linking Canadian weather data and survey data on short-term spells of sickness absenteeism among indoor workers during the non-winter months. The results point to a clear tendency for reported sickness absenteeism to rise with weather quality. Comparing across workers suggests larger marginal weather effects where shirking costs are higher, which we show is consistent with employees' marginal utility of outdoor leisure increasing in the interaction of their health and weather quality.
    JEL: D82 I10 J22
    Date: 2012–08

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