nep-hea New Economics Papers
on Health Economics
Issue of 2013‒02‒08
seven papers chosen by
Yong Yin
SUNY at Buffalo

  1. Developing a Framework for Decomposing Medical-Care Expenditure Growth: Exploring Issues of Representativeness By Abe Dunn; Eli Liebman; Adam Hale Shapiro
  2. Implications of Utilization Shifts on Medical-Care Price Measurement By Abe Dunn; Eli Liebman; Adam Hale Shapiro
  3. Decomposing Medical-Care Expenditure Growth By Abe Dunn; Eli Liebman; Adam Hale Shapiro
  4. Does a hospital’s quality depend on the quality of other hospitals? A spatial econometrics approach to investigating hospital quality competition By Hugh Gravelle; Rita Santos; Luigi Siciliani
  5. Is Smoking Behavior Culturally Determined?: Evidence from British Immigrants By Rebekka Christopoulou; Dean R. Lillard
  6. Drug launch timing and international reference pricing By Nicolas Houy; Izabela Jelovac
  7. Managing Pension and Healthcare Costs in Rapidly Ageing Depopulating Countries: The Case of Japan By Takayama, Noriyuki

  1. By: Abe Dunn; Eli Liebman; Adam Hale Shapiro (Bureau of Economic Analysis)
    Abstract: Medical care expenditures have been rising rapidly over time and in 2009 health care accounted for 17.9 percent of GDP, but there are many areas where we have an incomplete understanding of spending growth in this sector. This is especially true of the commercial sector, where our primary data sources are often non-random convenience samples (i.e. available claims data from contributing insurers and employers). The goal of this paper is to better understand issues related to using convenience samples to obtain nationally representative estimates of the various components of expenditure growth. Using a multitude of weighting strategies, including weighted and unweighted estimates, we ?find similar qualitative results with higher prevalence and increases in medical care service prices being the key drivers of spending growth. Utilization per episode - which was relatively ?flat for both weighted and unweighted estimates - made no signi?cant contribution to growth in spending. However, applying population weights provide quantitative results that align better with aggregate price and expenditure measures, including BEA price measures and commercial expenditure per capita estimates from the NHEA, and may be more useful for certain policy and projection purposes.
    Date: 2012–11
  2. By: Abe Dunn; Eli Liebman; Adam Hale Shapiro (Bureau of Economic Analysis)
    Abstract: The medical-care sector often experiences changes in medical protocols and technologies that cause shifts in treatments. However, the commonly used medical- care price indexes reported by the BLS hold the mix of medical services fi?xed. In contrast, episode expenditure indexes, advocated by many health economists, track the full cost of disease treatment, even as treatments shift across service categories (e.g., inpatient to outpatient hospital). In our data, we fi?nd that these two conceptually different measures of price growth show similar aggregate rates of infl?ation. Although aggregate trends are similar, we observe differences when looking at specifi?c disease categories that have implications for the productivity of disease treatment.
    Date: 2012–11
  3. By: Abe Dunn; Eli Liebman; Adam Hale Shapiro (Bureau of Economic Analysis)
    Abstract: Medical-care expenditures have been rising rapidly, accounting for almost one- fi?fth of GDP in 2009. In this study, we assess the sources of the rising medical-care expenditures in the commercial sector. We employ a novel framework for decom- posing expenditure growth into four components at the disease level: service price growth, service utilization growth, treated disease prevalence growth, and demo- graphic shift. The decomposition shows that growth in prices and treated preva- lence are the primary drivers of medical-care expenditure growth over the 2003 to 2007 period. There was no growth in service utilization at the aggregate level over this period. Price and utilization growth were especially large for the treatment of malignant neoplasms. For many conditions, treated prevalence has shifted towards preventive treatment and away from treatment for late-stage illnesses.
    Date: 2012–11
  4. 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)
    Abstract: We examine whether a hospital’s quality is affected by the quality provided by other hospitals in the same market. We first set out a theoretical model with regulated prices which specifies conditions on demand and cost functions which determine whether a hospital will have higher quality when its rivals have higher quality. We then apply spatial econometric methods to a sample of English hospitals in 2009-10 and a set of 16 quality measures including mortality rates, readmission, revision and redo rates and three patient reported indicators to examine to examine the relationship between the quality of hospitals. We find that a hospital’s quality is positively associated with the quality of its rivals for seven out of the sixteen quality measures and that in no case is there a negative association. In those cases where there is a positive association, an increase in rivals’ quality by 10% increases a hospital’s quality by 1.7% to 2.9%.
    Keywords: Quality; regulated prices; hospitals; competition; spatial econometrics
    JEL: I1 L3
    Date: 2013–01
  5. By: Rebekka Christopoulou; Dean R. Lillard
    Abstract: We exploit migration patterns from the UK to Australia, South Africa, and the US to investigate whether a person's decision to smoke is determined by culture. For each country, we use retrospective data to describe individual smoking trajectories over the life-course. For the UK, we use these trajectories to measure culture by cohort and cohort-age, and more accurately relative to the extant literature. Our proxy predicts smoking participation of second-generation British immigrants but not that of non-British immigrants and natives. Researchers can apply our strategy to estimate culture effects on other outcomes when retrospective or longitudinal data are available.
    Keywords: Culture, Immigrant health, Smoking
    JEL: Z10 J15 I10
    Date: 2013
  6. By: Nicolas Houy (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Izabela Jelovac (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: This paper analyzes the timing decisions of pharmaceutical firms to launch a new drug in countries involved in international reference pricing. We show three important features of launch timing when all countries reference the prices in all other countries and in all previous periods of time. First, there is no withdrawal of drugs in any country and in any period of time. Second, there is no strict incentive to delay the launch of a drug in any country. Third, whenever the drug is sold in a country, it is also sold in all countries with larger willingness to pay. We then show that the three results do not hold when the countries only reference a subset of all countries. The first two results do not hold when the reference is on the last period prices only.
    Keywords: Drug launch timing; international reference pricing
    Date: 2013–01–29
  7. By: Takayama, Noriyuki
    Date: 2013–01

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