nep-hea New Economics Papers
on Health Economics
Issue of 2013‒03‒23
thirteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Determinants of Generic vs. Brand Drug Choice: Evidence from Population-wide Danish Data By Niels Skipper; Rune Vejlin
  2. Smoking in top-grossing US movies, 2012 By Polansky, Jonathan R.; Titus, Kori; Lanning, Natalie; Glantz, Stanton A.
  3. SSI for Disabled Immigrants: Why Do Ethnic Networks Matter? By Delia Furtado; Nikolaos Theodoropoulos
  4. Can Long-Term Care Insurance Partnership Programs Increase Coverage and Reduce Medicaid Costs? By Wei Sun; Anthony Webb
  5. The impact of managed care on the gender earnings gap among physicians By Alicia Sasser Modestino
  6. Weather and Welfare: Health and Agricultural Impacts of Climate Extremes, Evidence from Mexico By Roberto Guerrero Compean
  7. Hospital specialisation within a DRG-Framework: The Austrian Case By Conrad Kobel; Engelbert Theurl
  8. Regulation of Pharmaceutical Prices: Evidence from a Reference Price Reform in Denmark By Kaiser, Ulrich; Méndez, Susan J.; Rønde, Thomas; Ullrich, Hannes
  9. A Simple Approach to Treatment Effects on Durations When the Treatment Timing is Chosen By Lee, Myoung-jae; Johansson, Per
  10. The Effects of Expanding the Generosity of the Statutory Sickness Insurance System By Ziebarth, Nicolas R.; Karlsson, Martin
  11. Social Learning and Health Insurance Enrollment: Evidence from China's New Cooperative Medical Scheme By Liu, Hong; Sun, Qi; Zhao, Zhong
  12. The Earned Income Tax Credit, Health, and Happiness By Boyd-Swan, Casey; Herbst, Chris M.; Ifcher, John; Zarghamee, Homa
  13. The role of sports physicians in doping: a note on incentives By Evelyn Korn; Volker Robeck

  1. By: Niels Skipper (Department of Economics and Business, Aarhus University); Rune Vejlin (Department of Economics and Business, Aarhus University)
    Abstract: When prescription medications go off patent, vastly cheaper generic drugs usually enters the market. However, the original brand medication often maintains non-negligible market shares. This paper investigates whether demand for branded medications in post-patent markets is patient- or doctor driven. We use population-wide Danish register data including all prescriptions for seven blockbuster drugs from 1998-2008. At the outset, descriptive statistics suggest large variation in drug choice over doctors. Nonetheless, using a two-way fixed effects model we find that the primary determinants of brand drug use are unobserved patient characteristics and price effects, while observed and unobserved doctor characteristics in general explain only 0.7 % of the variation in drug choice. This is suggestive evidence that the doctors in the Danish setting with no incentives to push expensive brand drugs do indeed not do so. Our results also suggest that one should be careful when applying fixed effects in small samples.
    Keywords: Prescription drug demand, fixed effects, brand preferences
    JEL: I11 L65
    Date: 2013–03–14
  2. By: Polansky, Jonathan R.; Titus, Kori; Lanning, Natalie; Glantz, Stanton A.
    Abstract: New data on the level of smoking in movies in the US in 2012, obtained by counting tobacco incidents in all 140 movies whose box office ranked in the top 10 for at least one week, show total tobacco incidents per movie rose 45% between 2011 and 2012, the second year of increase after five years of decline. Tobacco incidents rose 54% per G, PG or PG-13 rated movie and 13% per R rated movie. The continued growth in onscreen smoking in youth-rated movies underscores the need to R rate movies with tobacco imagery, establishing an industry-wide market incentive to keep youth-accessible movies tobacco-free.
    Keywords: Film/Video and Photographic Arts, Public Health
    Date: 2013–04–01
  3. By: Delia Furtado; Nikolaos Theodoropoulos
    Abstract: Immigrants residing among many people who share their ethnic background are especially likely to receive Supplemental Security Income (SSI) for a disability when they belong to high SSI take-up immigrant groups. After showing that this relationship cannot be fully explained by differences in health, we consider the likely sources of these network effects by separately examining their role in the decision to apply for SSI and, conditional on applying, their role in determining who ultimately receives benefits. Our results suggest that networks may increase the probability of applying for SSI despite minor disabilities, but it is unlikely that network effects are driven by egregious lies on applications.
    Date: 2013–02
  4. By: Wei Sun; Anthony Webb
    Abstract: Although long-term care is a substantial financial risk for retired households, only about 10 percent purchase insurance, with many of the remainder relying on Medicaid. Faced with rising Medicaid expenditures on long-term care, states have attempted to encourage the purchase of private long-term care insurance through partnership programs that exempt purchasers of qualifying policies from the Medicaid asset test. Using numerical optimization techniques, and assuming plausible preference parameters, we show that the programs will only increase insurance coverage among single males by 5 percent and single females by 4 percent. Most of the program benefits will go to those who would have purchased non-partnership long-term care insurance anyway. Thus, the cost of the subsidy will exceed the savings in Medicaid costs.
    Date: 2013–03
  5. By: Alicia Sasser Modestino
    Abstract: Important differences in labor market characteristics suggest that men and women physicians may be viewed as imperfect substitutes in the labor market. Concerns about efficiency and cost-cutting, which have led to the adoption of managed care practices, may have (unintentionally) favored female physicians. Using data from the Young Physicians Survey, the author compares changes in the gender earnings gap for physicians in states with high versus low managed care growth during the 1980s. She finds that the gender gap in hourly earnings among physicians in states with high managed care growth narrowed by 10 percentage points relative to states with low managed care growth. Moreover, Census data show that this finding holds only for physicians and not for other professions requiring advanced degrees. Further analysis shows that managed care appears to affect the relative earnings of male and female physicians by compressing the overall distribution of physician earnings. Together, these results suggest that the spread of managed care has been a factor in improving the relative earnings of female physicians. More broadly, these results suggest that market changes can have important consequences for the gender earnings gap when there are large pre-existing differences between men and women within a profession.
    Keywords: Wages - Women ; Medical care ; Career development - Sex differences
    Date: 2013
  6. By: Roberto Guerrero Compean
    Abstract: Using data for all 2,454 municipalities of Mexico for the period 1980-2010, this paper analyzes the relationship between exposure to extreme temperatures and precipitation and death, as well as the relationship between severe weather and agricultural income and crop production in the country. It is found that extreme heat increases mortality, while the health effect of extreme cold is generally trivial. Precipitation extremes seem to affect the agricultural system, but their impact on mortality is ambiguous. More specifically, exchanging one day with a temperature of 16-18C for one day with temperatures higher than 30C increases the crude mortality rate by 0. 15 percentage points, a result robust to several model specifications. It is also found that the extreme heat effect on death is significantly more acute in rural regions, leading to increases of up to 0. 2 percentage points vis-‡-vis a 0. 07-point increase in urban areas. The timing of climate extremes is relevant: if a weather shock takes place during the agricultural growing season, the effects on mortality and agricultural output, productivity, prices, and crop yields are large and significant, but not so if such shocks occur during the non-growing season.
    JEL: I12 Q12 Q51 Q54
    Date: 2013–03
  7. By: Conrad Kobel; Engelbert Theurl
    Abstract: Evaluation of the true relationship between costs and specialisation in hospitals is hindered by the lack of a standard measure. Specialised hospitals might produce at lower costs because their staff builds expertise and care is better organised. On the other hand specialised hospitals might be more costly because they systematically attract sicker patients within each diagnosis-related group (DRG) or have special equipment available. We compare three common measures of specialisation and introduce an alternative, which builds on the widely used Gini coefficient, and investigate the influence of the Austrian provincial health-policy making on specialisation. Although the four measures differ in definition, they show high concordance and prove to assess hospital specialisation in a robust way. With the exception of university hospitals, measured specialisation complies with the different hospital types as defined by legislation in Austria. We find no significant time trend towards more specialisation and legislation on provincial level seems to have a small impact on hospital specialisation. However, caution should be paid to skewness, so that outliers do not inappropriately influence the results when evaluating the true relationship between costs and the specialisation of hospitals. Overall, the Austrian DRG framework introduced in 1997 and regional regulation by the Provinces have not led to more specialised hospitals. This finding challenges the expected impact of activity based funding on specialisation, but it may reflect the lack of incentives set by the Austrian DRG framework and the Provinces.
    Keywords: Hospital specialisation, Hospital financing, Herfindahl-Hirschman index, Information theory index, Gini coefficient, Decomposition of Inequality, Austria
    JEL: I12 I18 L10 L23 L25 L32
    Date: 2013–03
  8. By: Kaiser, Ulrich (University of Zurich); Méndez, Susan J. (University of Zurich); Rønde, Thomas (Copenhagen Business School); Ullrich, Hannes (University of Zurich)
    Abstract: Reference prices constitute a main determinant of patient health care reimbursement in many countries. We study the effects of a change from an "external" (based on a basket of prices in other countries) to an "internal" (based on comparable domestic products) reference price system. We find that while our estimated consumer compensating variation is small, the reform led to substantial reductions in list and reference prices as well as co-payments, and to sizeable decreases in overall producer revenues, health care expenditures, and co-payments. These effects differ markedly between branded drugs, generics, and parallel imports with health care expenditures and producer revenues decreasing and co-payments increasing most for branded drugs. The reform also induced consumers to substitute from branded drugs – for which they have strong preferences – to generics and parallel imports. This substitution also explains the small increase in consumer welfare despite a substantial decrease in expenditures.
    Keywords: pharmaceutical markets, regulation, co-payments, reference pricing, welfare effects
    JEL: I18 C23
    Date: 2013–02
  9. By: Lee, Myoung-jae (Korea University); Johansson, Per (IFAU)
    Abstract: When a treatment unambiguously defines the treatment and control groups at a given time point, its effects are usually found by comparing the two groups' mean responses. But there are many cases where the treatment timing is chosen, for which the conventional approach fails. This paper sets up an ideal causal framework for such cases to propose a simple gamma-mixed proportional-hazard approach with three durations: the waiting time until treatment, the untreated duration from the baseline, and the treated duration from the treatment timing. To implement the proposal, we use semiparametric piecewise-constant hazards as well as Weibull hazards with a multiplicative gamma unobserved heterogeneity affecting all three durations. Despite the three durations interwoven in complex ways, surprisingly simple closed-form likelihoods are obtained whose maximization converges well. The estimators are applied to the same data as used by Fredriksson and Johansson (2008) for employment subsidy effects on unemployment duration to find about 11.1 month reduction.
    Keywords: treatment effect, duration, treatment timing, proportional hazard, gamma heterogeneity
    JEL: C21 C41
    Date: 2013–02
  10. By: Ziebarth, Nicolas R. (Cornell University); Karlsson, Martin (University of Duisburg-Essen)
    Abstract: This article evaluates an expansion of employer-mandated sick leave from 80 to 100 percent of forgone gross wages in Germany. We employ and compare parametric difference-in-difference (DID), matching DID, and mixed approaches. Overall workplace attendance decreased by at least 10 percent or 1 day per worker per year. We show that taking partial compliance into account increases coefficient estimates. Further, heterogeneity in response behavior was of great importance. There is no evidence that the increase in sick leave improved employee health, a finding that supports a shirking explanation. Finally, we provide evidence on potential labor market adjustments to the reform.
    Keywords: generosity of social insurance, difference-in-differences estimation, sickness absence, employer sick leave mandate, natural experiment, SOEP
    JEL: H51 I18 J22 J32
    Date: 2013–02
  11. By: Liu, Hong (Central University of Finance and Economics); Sun, Qi (Shanghai University of Finance and Economics); Zhao, Zhong (Renmin University of China)
    Abstract: This paper examines the role of social learning in household enrollment decisions for the New Cooperative Medical Scheme in rural China by estimating a static game with incomplete information. Using a rich dataset from the China Health and Nutrition Survey, we find that the social network effects in the enrollment decision are large and significant. Furthermore, we use temporal and spatial proximity among household heads and obtain the result that the primary mechanism for the social network effects is social learning. Our findings indicate that a 10-percentage-point increase in the enrollment rate in a village increases one's take-up probability by 5 percentage points. We also find that the importance of social learning decreases significantly with the development of alternative information channels. Finally, the evidence suggests that healthier, wealthier, relatively well-educated older male household heads with Han nationality tend to be opinion leaders.
    Keywords: rural China, health insurance, social learning, social effect
    JEL: I1 G22
    Date: 2013–02
  12. By: Boyd-Swan, Casey (Arizona State University); Herbst, Chris M. (Arizona State University); Ifcher, John (Santa Clara University); Zarghamee, Homa (Barnard College)
    Abstract: This paper contributes to the small but growing literature evaluating the health effects of the Earned Income Tax Credit (EITC). In particular, we use data from the National Survey of Families and Households to study the impact of the 1990 federal EITC expansion on several outcomes related to mental health and subjective well-being. The identification strategy relies on a difference-in-differences framework to estimate intent-to-treat effects for the post-reform period. Our results suggest that the 1990 EITC reform generated sizeable health benefits for low-skilled mothers. Such women experienced lower depression symptomatology, an increase in self-reported happiness, and improved self-efficacy relative to their childless counterparts. Consistent with previous work, we find that married mothers captured most of the health benefits, with unmarried mothers' health changing very little following the 1990 EITC reform.
    Keywords: Earned Income Tax Credit (EITC), happiness, health, subjective well-being
    JEL: I1 J00
    Date: 2013–03
  13. By: Evelyn Korn (University of Marburg); Volker Robeck (University of Marburg)
    Abstract: How to ban the fraudulent use of performance-enhancing drugs is an issue in all professional - and increasingly in amateur - sports. The main effort in enforcing a “clean sport” has concentrated on proving an abuse of performance-enhancing drugs and on imposing sanctions on teams and athletes. An investigation started by Freiburg university hospital against two of its employees who had been working as physicians for a professional cycling team has drawn attention to another group of actors: physicians. It reveals a multi-layered contractual relations between sports teams, physicians, hospitals, and sports associations that provided string incentives for the two doctors to support the use performance-enhancing drugs. This paper argues that these misled incentives are not singular but a structural part of modern sports caused by cross effects between the labor market for sports medicine specialists (especially if they are researchers) and for professional athletes.
    Date: 2013

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