nep-hea New Economics Papers
on Health Economics
Issue of 2013‒04‒06
seventeen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Health, Work Intensity, and Technological Innovations By Raouf Boucekkine; Natali Hritonenko; Yuri Yatsenko
  2. Pharmaceutical policy in Australia. CHERE Working Paper 2013/01 By Bonny Parkinson
  3. Can we get there from here? Implementing health reform in Australia. CHERE Working Paper 2013/02 By Jane Hall; Patricia Kenny; Prue Power
  4. Intimate Partner Violence and HIV in Sub-Saharan Africa By Durevall, Dick; Lindskog, Annika
  5. Class-Size Effects on Adolescents’ Mental Health and Well-Being in Swedish School By Niklas, Jakobsson; Persson, Mattias; Svensson, Mikael
  6. Valuation of Health Inputs and Convenience in New Products By Nordström, Jonas
  7. Using Volume Measurement for Measuring Health Care in the SNA By Mieko Fujisawa
  8. Family Socio-Economic Status, Childhood Life-Events and the Dynamics of Depression from Adolescence to Early Adulthood By Paul Contoyannis; Jinhu Li
  9. Identifying sibling influence on teenage substance use By Joseph Altonji; Sarah Cattan; Iain Ware
  10. Beyond Expected Utility in the Economics of Health and Longevity By Cordoba, Juan Carlos; Ripoll, Marla
  11. Life Expectancy, Schooling, and Lifetime Labor Supply: Theory and Evidence Revisited By Cervellati, Matteo; Sunde, Uwe
  12. Estimating Obesity Rates in the Presence of Measurement Error By O'Neill, Donal; Sweetman, Olive
  13. The Effect of Non-Cognitive Traits on Health Behaviours in Adolescence By Mendolia, Silvia; Walker, Ian
  14. Antibiotic consumption and the role of dispensing physicians By Massimo Filippini; Fabian Heimsch; Giuliano Masiero
  15. Evidence on Individual Preferences for Longevity Risk By G. Delprat; M.-L. Leroux; P.-C. Michaud
  16. Cost-effectiveness analysis of the surgical treatment of female urinary incontinence using slings By Manuel F. Montesino-Semper; Jesús M. Jiménez-Calvo; Juan M. Cabasés; Eduardo Sánchez-Iriso; Antonio Hualde-Alfaro; Diego García-García
  17. How Do Hospitals Respond to Market Entry? Evidence from A Deregulated Market for Cardiac Revascularization By Suhui Li; Avi Dor

  1. By: Raouf Boucekkine (AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM), IRES-CORE - Université Catholique de Louvain); Natali Hritonenko (Prairie View - A&M University); Yuri Yatsenko (School of business, Houston Baptist University - Houston Baptist University)
    Abstract: Work significantly affects human life and health. Overworking may decrease the quality of life and cause direct economic losses. Technological innovations encourage modernization of firms' capital and improve labor productivity in the workplace. The paper investigates the optimal individual choice of work intensity under improving technology embodied in new equipment leading to shorter lifetime of capital goods (obsolescence). The balanced growth trajectories are analyzed in this context to find out, in particular, how the optimal choice of work intensity is tied to the rate of embodied technological change. The impact of embodied technological advances on the work/life balance problem is discussed and their macroeconomic consequences are highlighted.
    Keywords: work-life balance; rational individual choice; technological development; vintage capital
    Date: 2013–03
  2. By: Bonny Parkinson (CHERE, University of Technology, Sydney)
    Abstract: The Commonwealth Government of Australia has subsidised access to drugs since 1948 via the Pharmaceutical Benefits Scheme (PBS). Through the PBS, the Commonwealth Government aims to provide affordable, timely and equitable access to necessary medicines at an affordable cost to the Government. The PBS is one of the three pillars of government funding of the Australian health system. The other two pillars are free treatment in public hospitals, funded jointly by the Commonwealth Government and State and Territory governments, and the Medicare Benefits Scheme (MBS) where the Commonwealth Government subsidises consultations with clinicians occurring out of hospital. Pharmaceutical policy today in Australia is complex as a result of multiple reforms implemented over a number of years. These reforms introduced or changed pre-existing mechanisms with the aim to control prices and manage demand, and thus control expenditure, while maintaining equitable access. However some policies conflict and some result in unintentional, and sometimes detrimental, incentives. Section 1 provides some historical background to the PBS and explains the avenues through which patients can access PBS-subsidised drugs. Section 2 discusses PBS expenditure in the context of total expenditure on drugs in Australia, the high rate of growth in PBS expenditure over time, and the key drivers of the high rate of growth. Section 3 describes the role of the Pharmaceutical Benefits Advisory Committee, focussing on the process used to evaluate the drug, the drivers of PBAC decisions, and issues faced when reviewing currently listed drugs. Section 4 lists several mechanisms that can be used to minimise uncertainty and reduce the risk of making an incorrect decision. Finally Section 5 describes the methods used by the Australian Department of Health and Ageing (DoHA) to manage the costs and demand for, and thus affect uptake of, drugs once listed on the PBS.
    Keywords: pharmaceuticals, Australia
    JEL: I18
    Date: 2013–03
  3. By: Jane Hall (CHERE, University of Technology, Sydney); Patricia Kenny (CHERE, University of Technology, Sydney); Prue Power (Australian Hospitals and Health Care Association)
    Abstract: The Australian Health Reform Agreement has provided the basis for major change in the delivery of health care services. While the components of reform have undergone extensive negotiation between Commonwealth and State governments, and have been subject to academic and other commentary, little is known about the views of those charged with their implementation. This paper reports the opinions of key informants working in public health care during the early implementation period. It seeks to ascertain their views on the health system and the direction of the reforms, the likely effects and barriers to successful implementation. An anonymous online survey of 138 members of the Australian Healthcare and Hospitals Association (AHHA) was conducted in late 2011. The survey covered opinions about what was happening in the health system and the need for reform, access to information about the reforms, how changes were being effected and the perceived barriers to implementing activity based funding, and public performance reporting, and their perceptions of Medicare Locals and Super Clinics. Seventy-eight percent of respondents thought that fundamental reform of the system was needed but only 5% thought the current reforms would deliver the required improvements. Only 9% expected the new arrangements to remove the ‘blame game’ between the Commonwealth and States/Territories. Potential barriers to the implementation of the reforms included agreement among the Commonwealth and States, availability of alternatives to acute hospital care, valid measures of activity and performance and establishing appropriate funding models for Medicare Locals. The survey provides evidence that, among those involved in implementing the changes, there are perceptions of barriers to be overcome in implementing the reform agenda and there is an expectation that further reform will be needed.
    Keywords: Health Systems Reform, Hospital Funding, Australia
    JEL: I11 I18
    Date: 2013–03
  4. By: Durevall, Dick (Department of Economics, School of Business, Economics and Law, Göteborg University); Lindskog, Annika (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We investigate the relationship between intimate partner violence and HIV among married women in sub-Saharan Africa. Using propensity score matching, we find a strong relationship. To investigate mechanisms, we split the sample according to spouse’s HIV status. Neither women with HIV-positive husbands nor those with HIV-negative husbands are more likely to be infected when subject to IPV. To find an effect the two samples have to be combined. Thus the relationship is explained by higher HIV risk among violent men. Neither women’s decreased ability to protect from HIV transmission within marriage, nor their risky sexual behavior explains the link.
    Keywords: Domestic violence; HIV; HIV epidemic; Intimate partner violence; Gender inequality; Sexual violence; Propensity score matching; Sub-Saharan Africa
    JEL: I14 I15 J12
    Date: 2013–03–27
  5. By: Niklas, Jakobsson (Dept. of Economics); Persson, Mattias (Örebro University); Svensson, Mikael (Dept. of Economics)
    Abstract: This paper analyzes whether class size has an effect on the prevalence of mental health problems and well-being among adolescents in Swedish schools. We use cross-sectional data collected in year 2008 covering 2,755 Swedish adolescents in 9th grade from 40 schools and 159 classes. We utilize different econometric approaches to address potential between- and within-school endogeneity including school-fixed effects and regression discontinuity approaches. Our results indicate no robust effects of class size on the prevalence of mental health problems and well-being, and we cannot reject the hypothesis that class size has no effect on mental health and well-being at all.
    Keywords: mental health; well-being; class size; adolescents; Sweden.
    JEL: H75 I12 I21
    Date: 2013–03–22
  6. By: Nordström, Jonas (Department of Economics, Lund University)
    Abstract: The prevalence of illnesses related to the modern diet and a more sedentary lifestyle has increased markedly over the last few decades. There is therefore a need for effective strategies to promote health and to reduce the prevalence of diet-related diseases. In this paper, we study the willingness to pay for a new concept, healthy canteen takeaways. In the analysis, we depart from a household production model. To control for the endogeneity of the health state, we use a control function approach. The result suggests that health inputs, such as low-fat meat and a larger amount of vegetables, increase respondents’ utility. Respondents’ valuations of the convenience attribute are very heterogenous, with both positive and negative values. From a policy perspective, the IV estimation turns out to be of importance, with a sign change in the valuation of low-fat meals for individuals with a poor health state (high MBI).
    Keywords: endogen; discrete choice; health; household production; instrumental variable
    JEL: C25 D12 D13 I10
    Date: 2013–03–26
  7. By: Mieko Fujisawa
    Abstract: How health care systems should be organized and associated financial challenges be addressed is the subject of considerable debate in developed countries, including Japan. An important aspect in this context is the measurement of health care output, which would also be useful in the measurement of productivity. Measuring health care output accurately not only makes it possible to examine the role and significance of public health insurance and measure its qualitative effects, but would also improve the measurement of gross domestic product(GDP). An important approach in this context is the volume approach to measuring health care output. Against this background, the aim of this study is to examine if and how measures of health care output could be used in the Japanese System of National Accounts (JSNA) and to present materials for implementing the measurement of health care output. The results indicate that when estimating output employing a cost-weighted output index (CWOI) using the number of patients, there are no large changes which can be observed, because the annual changes in the number of patients are also small. On the other hand, when employing a quality-adjusted cost-weighted output index (QACWOI) using the survival rate of cancer patients, some interesting results are obtained. Specifically, it is found that the rate of increase in the QACWOI was larger than that in the CWOI. Moreover, the rate of increase in the QACWOI was smaller than that in health care expenditure. To measure health care output overall, it would be necessary to decide on a measurement criterion for each type of medical treatment or surgery. On the other hand, if it were possible to change the estimation approach used for the JSNA to employ medical treatment units, it would be possible to partly reflect the results obtained here. This study shows one potential avenue for using the volume measurement approach for measuring quality-adjusted health care output.
    Keywords: national accounts, measurement of health care output, volume measurement, CWOI, QACWOI
    Date: 2013–03
  8. By: Paul Contoyannis (Department of Economics and Centre for Health Economics and Policy Analysis, McMaster University); Jinhu Li (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: This paper employs a conditional quantile regression approach to examine the roles of family SES, early childhood life-events, unobserved heterogeneity and pure state dependence in explaining the distribution of depression among adolescents and young adults using data on the children of the US National Longitudinal Survey of Youth 79 cohort (CNLSY79). Our study also extends previous work by explicitly modelling depression dynamics during adolescence. To estimate dynamic models we integrate the ‘jittering’ approach for estimating conditional quantile models for count data with a recently-developed instrumental variable approach for the estimation of dynamic quantile regression models with fixed effects.
    Keywords: Health dynamics, dynamic quantile regression models, instrumental variable approach, depression, adolescence
    JEL: I12 C22 C23
    Date: 2013–03
  9. By: Joseph Altonji; Sarah Cattan (Institute for Fiscal Studies); Iain Ware
    Abstract: The large sibling correlations in risky behaviour between siblings raise the possibility that adolescents may directly influence the actions of their brothers or sisters. We assess the extent to which correlations in substance use and selling drugs are causal. Our identification strategy relies on panel data, the fact that the future does not cause the past, and the assumption that the direction of influence is from older siblings to younger siblings. Under this assumption along with strong restrictions on dynamics, one can identify the causal effect from a regression of the behaviour of the younger sibling on the past behaviour and future behaviour of the older sibling. We also estimate a joint dynamic model of the behaviour of older and younger siblings that allows for family specific effects, individual specific heterogeneity, and state dependence. We use the model to simulate the dynamic response of substance use to the behaviour of the older sibling. We find that smoking, drinking and marijuana use are affected by the example of older siblings, but only a small faction of the linke between siblings is causal.
    Date: 2013–03
  10. By: Cordoba, Juan Carlos; Ripoll, Marla
    Abstract: We document various limitations of the expected utility model for the study of health and longevity. The model assumes individuals are indifferent between early and late resolution of uncertainty. This assumption gives rise to predictions regarding the economic value of life that are inconsistent with relevant evidence. For example, poor individuals would price life below the present value of foregone income or even negatively. We show that a non-expected utility model disentangling intertemporal substitution from risk aversion can overcome these limitations. We illustrate the quantitative implications of our model for the economic value of life across countries and time.
    Keywords: life expectancy; value of statistical life; mortality risk aversion; Epstein-Zin-Weil pref- erences; Welfare; AIDS.
    JEL: I J
    Date: 2013–03–28
  11. By: Cervellati, Matteo (University of Bologna); Sunde, Uwe (University of Munich)
    Abstract: This paper presents a theoretical and empirical analysis of the role of life expectancy for optimal schooling and lifetime labor supply. The results of a simple prototype Ben-Porath model with age-specific survival rates show that an increase in lifetime labor supply is not a necessary, nor a sufficient, condition for greater life expectancy to increase optimal schooling. The observed increase in survival rates during working ages that follows from the "rectangularization" of the survival function is crucial for schooling and labor supply. The empirical results suggest that the relative benefits of schooling have been increasing across cohorts of US men born 1840-1930. A simple quantitative analysis shows that a realistic shift in the survival function can lead to an increase in schooling and a reduction in lifetime labor hours.
    Keywords: longevity, life expectancy, schooling, lifetime labor supply, rectangularization of the survival function
    JEL: E20 J22 J24 J26 O11
    Date: 2013–03
  12. By: O'Neill, Donal (National University of Ireland, Maynooth); Sweetman, Olive (National University of Ireland, Maynooth)
    Abstract: Reliable measures of obesity are essential in order to develop effective policies to tackle the costs of obesity. In this paper we examine what, if anything, we can learn about obesity rates using self-reported BMI once we allow for possible measurement error. We combine self-reported data on BMI with estimated misclassification rates obtained from auxiliary data to derive upper and lower bounds for the population obesity rate for ten European countries. For men it is possible to obtain meaningful comparisons across countries even after accounting for measurement error. In particular the self-reported data identifies a set of low obesity countries consisting of Denmark, Ireland, Italy, Greece and Portugal and a set of high obesity countries consisting of Spain and Finland. However, it is more difficult to rank countries by female obesity rates. Meaningful rankings only emerge when the misclassification rate is bounded at a level that is much lower than that observed in auxiliary data. A similar limit on misclassification rates is also needed before we can begin to observe meaningful gender differences in obesity rates within countries.
    Keywords: obesity, measurement error, bounds
    JEL: C13 C26 I14
    Date: 2013–03
  13. By: Mendolia, Silvia (University of Wollongong); Walker, Ian (Lancaster University)
    Abstract: This paper investigates the relationship between personality traits in adolescence and health behaviours using a large and recent cohort study. In particular, we investigate the impact of locus of control, self-esteem and conscientiousness at age 15-16, on the incidence of health behaviours such as: alcohol consumption; cannabis and other drug use; unprotected and early sexual activity; and sports and physical activity. We use matching methods to control for a very rich set of adolescent and family characteristics and we find that personality traits do affect health behaviours. In particular, individuals with external locus of control, or with low self-esteem, or with low levels of conscientiousness are more likely to engage in health-risky behaviours.
    Keywords: personality, locus of control, self-esteem, health behaviours
    JEL: I18 I28
    Date: 2013–03
  14. By: Massimo Filippini (Institute of Economics, University of Lugano; ETH, Zurich, Switzerland); Fabian Heimsch (ETH, Zurich, Switzerland); Giuliano Masiero (University of Bergamo, Italy; Institute of Economics, University of Lugano, Switzerland)
    Abstract: Regulation of prescription and dispensing of antibiotics has a twin purpose: to enhance access to antibiotic treatment and to reduce inappropriate use of drugs. Nevertheless, incentives on antibiotics to dispensing physicians may lead to inefficiencies. We model the interaction between competing physicians (with and without dispensing of drugs) and patients exposed to bacterial infections when antibiotic treatment generates spatial consumption externalities. Then, we empirically investigate the impact of dispensing practices on antibiotic consumption by means of combined spatial-lag and spatial-error econometric estimators for panel data (SARAR). The investigation exploits data from small geographic areas in a country where both regimes - with and without dispensing physicians - are possible. We find evidence that dispensing practices increase antibiotic use after controlling for determinants of demand and access, and spatial effects. This suggests that health authorities have a margin to adjust economic incentives on dispensing practices in order to reduce antibiotic misuse.
    Keywords: nursing homes, prospective payment, quality of care, policy change
    Date: 2013–03
  15. By: G. Delprat; M.-L. Leroux; P.-C. Michaud
    Abstract: The standard model of intertemporal choice assumes risk neutrality toward the length of life: due to additivity, agents are not sensitive to a mean preserving spread in the length of life. Using a survey fielded in the RAND American Life Panel (ALP), this paper provides empirical evidence on possible deviation from risk neutrality with respect to longevity in the U.S. population. The questions we ask allow to find the distribution as well as to quantify the degree of risk aversion with respect to the length of life in the population. We find evidence that roughly 75% of respondents were not neutral with respect to longevity risk. Higher income households are more likely to be risk averse. We do not find evidence that the degree of risk aversion varies with age or education.
    Keywords: Intertemporal choice, Risk aversion toward the Length of Life, Stated-Preference
    JEL: D12 D91 I10 J26
    Date: 2013
  16. By: Manuel F. Montesino-Semper (Urology Service. “Virgen del Camino” Hospital); Jesús M. Jiménez-Calvo (Urology Service. “Virgen del Camino” Hospital); Juan M. Cabasés (Departamento de Economía-UPNA); Eduardo Sánchez-Iriso (Departamento de Economía-UPNA); Antonio Hualde-Alfaro (Urology Service. “Virgen del Camino” Hospital); Diego García-García (Urology Service. “Virgen del Camino” Hospital)
    Abstract: Objective. To determine the cost-utility and cost-effectiveness of the surgical treatment of female urinary incontinence using suburethral slings compared with therapeutic abstention. Study Design. An economic analysis was performed on 69 women receiving surgical treatment for urinary incontinence using suburethral slings. To calculate the procedure´s cost-effectiveness, an incremental analysis up to 1 year was performed using the incremental cost-effectiveness ratio (ICER). The costs were calculated using a cost-by-process model. Answers to the health-related quality of life questionnaires EQ-5D (generic) and International Consultation Incontinence Questionnaire Short-form (specific) were collected before the operation and as well as 1 month and 1 year post-operation to calculate the utility, using qualityadjusted life years (QALY), and the effectiveness, respectively. A sensitivity analysis was performed by calculating the Incremental Cost-Effectiveness Ratio (ICER) at 5 years post-operation. To complete the economic evaluation, we derived confidence ellipses and acceptability curves. The analysis was conducted for the entire sample and also for each type of urinary incontinence. Results. In total, 45 women presented with stress incontinence, 15 with mixed incontinence and 9 with incontinence associated with prolapse. The average cost per patient at 1 year post-operation was 1,220€. The QALY achieved at 1 year was 0.046. The results reveal an ICER at 1 year of 26,288 €/QALY, which is below the cost-effectiveness threshold considered acceptable, and this value was lower for stress incontinence (21,191 €/QALY). To achieve greater temporal perspective, we examined the ICER at 5 years, which was 10,141 €/QALY, demonstrating that the programme is clearly efficient. The cost-effectiveness was 106.5 €/International Consultation Incontinence Questionnaire Short-form unit. Conclusion. Surgery for female urinary incontinence using slings is cost-effective compared with abstention in our public health environment..
    Keywords: female urinary incontinence, surgical treatment, cost-utility analysis, cost-effectiveness analysis, QALY
    Date: 2013
  17. By: Suhui Li; Avi Dor
    Abstract: Regulatory entry barriers to hospital service markets, namely Certificate of Need (CON) regulations, are enforced in many states; although no longer federally mandated, policy makers in other states are considering reinstating CON policies in tandem with service expansions mandated under the Affordable Care Act. While numerous studies have examined the impacts of CON on hospital volumes, demand responses to actual hospital entry into local hospital markets are not well understood. In this paper, we empirically examine the demand-augmenting, demand-redistribution, and risk-allocation effects of hospital entry by studying the cardiac revascularization markets in Pennsylvania, a state in which dynamic market entry occurred after repeal of CON in 1996. Our findings with respect to demand-augmentation are mixed: we find robust evidence that high entrant market share mitigated the declining incidence of coronary artery bypass graft (CABG), but it had no significant effect on the rising trend in percutaneous coronary intervention (PCI) procedures, among patients with coronary artery disease. Consequently, incumbent hospitals experienced a decrease in the likelihood of PCI due to entry, thereby indicating a shift in demand away from incumbents to entrants, namely business-stealing. Results of our analyses further indicate that entry by new cardiac surgery centers tended to sort high-severity patients into the more invasive CABG procedure and low-severity patients into the less invasive PCI procedures. Thus, from a welfare perspective our results are mixed: on the one hand, free-entry may lead to improved access rather than business stealing for CABG procedures; on the other hand, the empirical evidence is in favor of business-stealing for PCI procedures. Moreover, free-entry improves the match between underlying medical risk and treatment intensity. These findings underscore the importance of considering market-level strategic responses by hospitals when regulatory barriers to entry are rescinded.
    JEL: I1 L4 L5
    Date: 2013–03

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