nep-hea New Economics Papers
on Health Economics
Issue of 2013‒01‒12
nine papers chosen by
Yong Yin
SUNY at Buffalo

  1. The Developmental Approach to Child and Adult Health By Gabriella Conti; James J. Heckman
  2. The Production of and Market for New Physicians' Skill By Andrew J. Epstein; Sean Nicholson; David A. Asch
  3. Smoking habit changes and body weight: causal estimates from the British Household Panel Survey By Pieroni, Luca; Salmasi, Luca
  4. Increasing Access to HIV treatment/ART through ART Scaling Up in West Java By Adiatma Y.M Siregar
  5. Optimal choice of health and retirement in a life-cycle model By Kuhn, Michael; Wrzaczek, Stefan; Prskawetz, Alexia; Feichtinger, Gustav
  6. Growth and welfare effects of health care in knowledge based economies By Kuhn, Michael; Prettner, Klaus
  7. Patient Preferences and Treatment Thresholds under Diagnostic Risk: An Economic Laboratory Experiment By Mayrhofer, Thomas; Krieger, Miriam
  8. Rethinking aid for AIDS A public good approach By Sonntag, Diana
  9. The effect of involuntary unemployment on the mental health of spouses By Marcus, Jan

  1. By: Gabriella Conti; James J. Heckman
    Abstract: Pediatricians should consider the costs and benefits of preventing rather than treating childhood diseases. We present an integrated developmental approach to child and adult health that considers the costs and benefits of interventions over the life cycle. We suggest policies to promote child health which are currently outside the boundaries of conventional pediatrics. We discuss current challenges to the field and suggest avenues for future research.
    JEL: I12 I18
    Date: 2012–12
  2. By: Andrew J. Epstein; Sean Nicholson; David A. Asch
    Abstract: Our understanding of the determinants of physician skill and the extent to which skill is valued in the marketplace is superficial. Using a large, detailed panel of new obstetricians, we find that, even though physicians’ maternal complication rates improve steadily with years of practice, initial skill (as measured by performance in a physician’s first year of practice) explains most of the variation in physician performance over time. At the same time, we find that the trajectories of new physicians’ delivery volume develop in a way partially consistent with Bayesian learning about physician quality. In particular, as physicians gain experience, their volume becomes increasingly sensitive to the information in their accumulated prior.
    JEL: D83 I11 J24 L15
    Date: 2013–01
  3. By: Pieroni, Luca; Salmasi, Luca
    Abstract: This paper evaluates the causal relationship between smoking and body weight through two waves (2004-2006) of the British Household Panel Survey. We model the effect of changes in smoking habits, such as quitting or reducing, and account for the heterogeneous responses of individuals located at different points of the body mass distribution by quantile regression. We investigate the robustness of our results by means of a large set of control groups and the application of an instrumental variable (IV) estimator. Our results reveal the positive effect of quitting smoking on weight changes, which is also found to increase in the highest quantiles, whereas the decision to reduce smoking does not affect body weight. Lastly, cost-benefit analysis reveals that quitting smoking implies savings for the National Health Service which are much larger than the costs associated with increased obesity.
    Keywords: Body Mass Index; Overweight and Obesity; QTE; Instrumental Variable; Quantile regression
    JEL: I12 I18 I10
    Date: 2012–12–10
  4. By: Adiatma Y.M Siregar (Department of Economics, Padjadjaran University)
    Abstract: The number of HIV cases in Indonesia rose rapidly, increasing the need for antiretroviral treatment (ART). However, the public health expenditure on HIV/AIDS is relatively low, and ART are undersupplied and has limited fund. Strategies are required to increase the uptake of ART within limited resource. We simulate the increase of ART uptake as the result of scaling up ART in hospital or community level and use it to forecast the costs and implications on HIV epidemic in West Java by employing HIV in Indonesia Model (HIM). We collect data from both research sites and literatures. Benefit Incidence Analysis (BIA) is used to observe distribution pattern of access to HIV care among HIV patients. If by 2020 additional 20,000 PLHIV are treated with ART, the epidemic may decrease by roughly 1% in 2020 and around 6% (±2,100) of HIV infection would be averted. If around additional 45,000 PLHIV are treated in 2020, it may decrease the epidemic by approximately 4% in 2020 and around 18% (±6,000) of HIV infection would be averted. This requires 6 to 13 additional hospitals (costing US$1.3 mln to US$2.9 mln) or around 714 to 11,400 puskesmas (costing of US$1.1 mln to US$17.2 mln) distributing ART. The BIA analysis shows that the HIV patients’ access to the hospital seemed equally distributed. First, puskesmas better acts as a support to the already established hospital-based HIV service. Second, the specific demand and need for ART in puskesmas in separate region should be acknowledged before upscale ART through puskesmas. Third, ART upscale should be led by main referral hospitals, supported by satellite hospitals and puskesmas.
    Keywords: Indonesia, HIV, policy simulation, ART, economic analysis
    JEL: I14 I18
    Date: 2013–01
  5. By: Kuhn, Michael; Wrzaczek, Stefan; Prskawetz, Alexia; Feichtinger, Gustav
    Abstract: We examine within a life-cycle set-up the simultaneous choice of health care and retirement (together with consumption), when health care contributes to both a reduction in mortality and in morbidity. Health tends to impact on retirement via morbidity, determining the disutility of work, and through longevity, determining the need to accumulate retirement wealth. In contrast, the age of retirement drives health through changes in the value of survival and the value of morbidity reductions. We apply our model to analyse the effects of moral hazard in the annuity market: While moral hazard always induces excessive health investments and an excessive duration of working life it also triggers an excessive level of consumption if the impact of health on the disutility of work is sufficiently large. We examine a transfer scheme and mandatory retirement as policies to curtail moral hazard. Numerical analysis illustrates the working of our model. --
    Keywords: annuities,demand for health,moral hazard,life-cycle-model,optimal control,retirement,value of life
    JEL: D91 I12 J26
    Date: 2012
  6. By: Kuhn, Michael; Prettner, Klaus
    Abstract: We study the effects of a labor-intensive health care sector within an R&D-driven growth model with overlapping generations. Health care increases longevity and labor participation/productivity. We examine under which conditions expanding health care enhances growth and welfare. Even if the provision of health care diverts labor from productive activities, it may still fuel R&D and economic growth if the additional wealth that comes with expanding longevity translates into a more capital/machine- intensive final goods production and, thereby, raises the return to developing new machines. We establish mild conditions under which an expansion of health care beyond the growth-maximizing level is Pareto-improving. --
    Keywords: endogenous growth,mortality,(Blanchard) overlapping generations,health care,research and development,sectoral composition
    JEL: I15 I18 O11 O41 O43
    Date: 2012
  7. By: Mayrhofer, Thomas; Krieger, Miriam
    Abstract: We study risk-aversion and prudence in medical treatment decisions. In a laboratory experiment, we investigate the frequency and intensity of second- and third-order risk preferences, as well as the effect of the medical decision context. Risk preferences are assessed through treatment thresholds (the indifference point between not treating and treating). Under diagnostic risk, medical decision theory predicts lower treatment thresholds for risk-averse than for risk-neutral decision makers. Given a comorbidity risk in the sick state, prudent individuals have an even lower threshold. Our results demonstrate risk-averse and prudent behavior in medical decisions, which reduce the (average) treatment threshold by 41% relative to risk-neutrality (from 50.0% to 29.3%). Risk aversion accounts for 3/4 of this effect, prudence for 1/4. Medical decision framing does not affect risk aversion, but is associated with more and stronger prudent behavior. These findings can have consequences for diagnostic technologies and QALYs, and thus for clinical guidelines. --
    JEL: I10 C91 D81
    Date: 2012
  8. By: Sonntag, Diana
    Abstract: This paper demonstrates why an increased quantity of funding as claimed by big health lenders is not effective to achieve the Millennium Development Goals (MDGs). An alternative funding mechanism linking the disbursement of matching grants with a minimum provision level is suggested. In order to study the impact of conditional subsidies on the efficiency of international health-promoting public goods, non-cooperative multi-stage games are analyzed. In the participation stage, a subsidy which is contingent on some minimum provision level is determined. In later stages countries choose their contributions to a health-promoting public good and receive a subsidy if their supply is no less than a predetermined threshold. The analyses indicate that efficient provision levels can be achieved. --
    JEL: H87 F35 I18
    Date: 2012
  9. By: Marcus, Jan
    Abstract: This paper is the first to estimate the effect of one partner's entry into unemployment on the mental health of both spouses in Germany. In order to give the estimates a causal interpretation, this study focuses on an exogenous entry into unemployment (plant closure) and applies a regression-adjusted semiparametric difference-in-difference matching strategy, which is robust against selection on observables and time-invariant unobservables. About one year after the plant closure, unemployment decreased mental health by 25% of a standard deviation for the unemployed individuals themselves and by 23% of a standard deviation for their spouses. The results are robust over various matching specifications and different choices of the conditioning variables. Furthermore, this paper shows that mental health does not follow a different trend for treated and matched controls before the plant closure, adding additional credibility to the identification assumption. --
    JEL: I12 J65 C21
    Date: 2012

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