nep-hea New Economics Papers
on Health Economics
Issue of 2013‒05‒05
eight papers chosen by
Yong Yin
SUNY at Buffalo

  1. Efficient Self-Protection and Progress in Curing-Technology By Gilad Sorek
  2. Regression-Based Decompositions of Rank-Dependent Indicators of Socioeconomic Inequality of Health By Erreygers G.; Kessels R.
  3. Smoking Bans, Cigarette Prices and Life Satisfaction By Reto Odermatt; Alois Stutzer
  4. State Savings with an Efficient Medicare Prescription Drug Benefit By Nicole Woo; Dean Baker
  5. Gender differences in sickness absence and the gender division of family responsibilities By Angelov, Nikolay; Johansson, Per; Lindahl, Erica
  6. Education, Cognition and Health: Evidence from a Social Experiment By Meghir, Costas; Palme, Mårten; Simeonova, Emilia
  7. Diagnosis and Unnecessary Procedure Use: Evidence from C-Section By Janet Currie; W. Bentley MacLeod
  8. Social Impact Bonds in Nonprofit Health Care: New Product or New Package? By Mark Pauly; Ashley Swanson

  1. By: Gilad Sorek
    Abstract: The direct medical costs associated with obesity, smoking, and other non-healthy habits are estimated to account for more than 20% of U.S. health spending. Hence, poor health choices induce significant aggregate shift in spending away from treating competing?non preventable?medical risks and from nonmedical consumption. Such a shift in spending distorts relative incentives to innovate in different sectors, through market-size effect. As consumers fail to internalize these aggregate-level externalities, private-prevention is generally inefficient. We show that private prevention is insufficient compared with social optimum, unless technological opportunities to develop cures for preventable diseases are sufficiently superior. Furthermore, under multiple preventable-risks, prevention efforts are biased in favor of the risk with higher potential for curing advances.
    Keywords: Self-Protection; Efficient Prevention; Medical Innovation
    Date: 2013–04
  2. By: Erreygers G.; Kessels R.
    Abstract: In this paper we explore dierent ways to obtain decompositions of rank-dependent indices of socioeconomic inequality of health, such as the Concentration Index. Our focus is on the regression-based type of decomposition. Depending on whether the regression explains the health variable, or the socioeconomic variable, or both, a dierent decomposition formula is generated. We illustrate the dierences using data from the Ethiopia 2011 Demographic and Health Survey (DHS).
    Date: 2013–04
  3. By: Reto Odermatt; Alois Stutzer (University of Basel)
    Abstract: <p style="margin-bottom:0cm; margin-bottom:.0001pt; line-height: normal; text-autospace:none"><span style="font-family: "Arial","sans-serif"">The consequences of tobacco control policies for individual welfare are difficult to assess. We therefore evaluate the impact of smoking bans and cigarette prices on subjective well-being by analyzing data for 40 European countries and regions between 1990 and 2011. We exploit the staggered introduction of bans and apply an imputation strategy to study the effect of anti-smoking policies on people with different propensities to smoke. We find that higher cigarette prices reduce the life satisfaction of likely smokers. Overall, smoking bans are not related to subjective well-being, but increase the life satisfaction of smokers who recently failed to quit smoking. The latter finding is consistent with cue-triggered models of addiction and the idea of bans as self-control devices.</span>
    Keywords: Smoking bans, cigarette prices, life satisfaction, addiction, self-control, tobacco, control policies
    JEL: D03 D62 I18 K32
    Date: 2013
  4. By: Nicole Woo; Dean Baker
    Abstract: Americans pay far higher prices for prescription drugs than do people in other wealthy countries. The reason that other countries spend so much less on drugs is that their governments negotiate prices with the pharmaceutical industry. The United States government could adopt the same approach with the Medicare drug program and use its market leverage to negotiate the same, or even lower, prices as are paid by other wealthy nations. This issue brief finds the potential savings to states would be enormous, cumulatively between $31 billion and $73 billion over 10 years, and also each state individually could expect significant savings. California leads the way, with potential savings between $3.3 and $7.8 billion. The next six top-saving states are Florida, New York, Texas, Pennsylvania, Ohio and Illinois, all with projected savings of at least $1 billion per year. Even those states with the least potential savings, such as Wyoming, North Dakota and Vermont, would still save tens of millions of dollars over a decade.
    Keywords: Medicare, medicare drug benefit, prescription drug, Dean Baker, hospital insurance, pharmaceutical industry, private insurers
    JEL: I I1 I14 I18 I3 I38 H
    Date: 2013–03
  5. By: Angelov, Nikolay (IFAU - Institute for Evaluation of Labour Market and Education Policy); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindahl, Erica (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: This study investigates possible reasons for the gender difference in sickness absence. We estimate both short- and long-term effects of parenthood in a within-couple analysis based on the timing of parenthood. We find that after entering parenthood, women increase their sickness absence by between 0.5 days per month (during the child's third year) and 0.85 days per month (during year 17) more than their spouse. By investigating possible explanations for the observed effect, we conclude that the effect mainly stems from higher home commitment, which reduces women's labour market attachment and, in turn, increases female sickness absence.
    Keywords: Double burden; health investment; household work; labour market work; moral hazard; parenthood; sickness insurance; work absence
    JEL: C23 D13 I19 J22
    Date: 2013–04–17
  6. By: Meghir, Costas (Yale University, IFS and NBER); Palme, Mårten (Dept. of Economics, Stockholm University); Simeonova, Emilia (Tufts University, Princeton University and NBER)
    Abstract: We examine how an education policy intervention - the introduction of a comprehensive school in Sweden that increased the number of compulsory years of schooling, affected cognitive and non-cognitive skills and long-term health. We use administrative and survey data including background information, child ability and long-term adult outcomes. We show that education reform increased skills among children, but the effects on long-term health are overall negligible. We demonstrate that effects vary across socio-economic backgrounds and initial skill endowments, with significant improvements in cognition and skills for lower Socio-economic status individuals and lower ability people.
    Keywords: Mortality; cognitive skills; non-cognitive skills; education reform
    JEL: I12 I14 I18 I21
    Date: 2013–04–23
  7. By: Janet Currie; W. Bentley MacLeod
    Abstract: This paper provides a model of diagnostic skill as an element of provider quality that is separate from a doctor's skill in performing procedures. Unlike higher surgical skill, which leads to higher use of surgical procedures across the board, better diagnostic skill results in fewer procedures for the low risk, but more procedures for the high risk. That is, better diagnostic skill improves the matching between patients and procedures leading to better health outcomes. Taking the model to data on C-sections, the most common surgical procedure performed in the U.S., we show that improving diagnostic skills from the 25th to the 75th percentile of the observed distribution would reduce C-section rates by 11.7% among the low risk, and increase them by 4.6% among the high risk. Since there are many more low risk than high risk women, improving diagnosis would reduce overall C-section rates. Moreover, such an improvement in diagnostic skill would improve health outcomes for both high risk and low risk women, while improvements in surgical skill have the greatest impact on high risk women. These results are consistent with the hypothesis that eorts to improve diagnosis through methods such as checklists, computer assisted diagnosis, and collaborative decision making may improve patient outcomes.
    JEL: I11
    Date: 2013–04
  8. By: Mark Pauly; Ashley Swanson
    Abstract: This note considers a relatively new form of financing for social services, the "Social Impact Bond." Proponents of Social Impact Bonds argue that they present a solution to several problems in funding social services, including performance measurement and the distribution of risk. Using a simple model, we demonstrate that Social Impact Bonds have many features present in standard financing arrangements. They will lead to greater program success when investors’ effort can positively influence outcomes, but are unlikely to do so otherwise. We conclude that the value of this funding innovation will be strongly context-dependent.
    JEL: H0 H51 I1 I10 I18
    Date: 2013–04

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