nep-hea New Economics Papers
on Health Economics
Issue of 2013‒07‒05
twelve papers chosen by
Yong Yin
SUNY at Buffalo

  1. Free to choose? The impact of healthcare reform By Martin Gaynor; Carol Propper; Stephan Seiler
  2. Labour's Record on Health (1997-2010) By Polina Obolenskaya; Polly Vizard
  3. The fungibility of health aid reconsidered By Nicolas Van de Sijpe
  4. The Effect of Medicaid Expansions in the Late 1980s and Early 1990s on the Labor Supply of Pregnant Women By Dhaval M. Dave; Sandra L. Decker; Robert Kaestner; Kosali Ilayperuma Simon
  5. Trends in Health, Education and Income in the United States, 1820-2000 By Hoyt Bleakley; Dora Costa; Adriana Lleras-Muney
  6. Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance By Jason Abaluck; Jonathan Gruber
  7. Effects of Mental Health on Couple Relationship Status By Nancy E. Reichman; Hope Corman; Kelly Noonan
  8. How Does Provider Supply and Regulation Influence Health Care Market? Evidence from Nurse Practitioners and Physician Assistants By Kevin M. Stange
  9. The Impact of Private Hospital Insurance on the Utilization of Hospital Care In Australia By Damien S.Eldridge
  10. The Welfare Value of FDA’s Mercury-in-Fish Advisory: A Dynamic Reanalysis By Hammitt, James; Rheinberger, Christoph
  11. Physical Activity and Policy Recommendations: a Social Multiplier Approach By Goulão, Catarina; Thibault, Emmanuel
  12. Optimal aging with uncertain death By Strulik, Holger

  1. By: Martin Gaynor; Carol Propper; Stephan Seiler
    Abstract: Has the introduction of greater choice and competition in healthcare in England led to improved outcomes for patients? The authors assess changes in the quality of care that hospitals provided for cardiac surgery patients following the mid-2000s reforms.
    Keywords: Demand estimation, non-price competition, health economics, patient choice, health care reform
    JEL: D12 I11 I18 L13 L30
    Date: 2013–06
  2. By: Polina Obolenskaya; Polly Vizard
    Keywords: health, health inequalities, primary care quality, adult mortality, social policy
    Date: 2013–07
  3. By: Nicolas Van de Sijpe
    Abstract: This paper draws further attention to the importance of taking into account off-budget aid when estimating the degree of foreign aid fungibility. It does so by re-evaluating the results of a recent, influential paper which concluded that health aid is fully fungible in the long run. Allowing for the presence of off-budget aid indicates that the degree of fungibility of health aid is much more uncertain than at first blush appears. Under plausible assumptions about the role of off-budget aid, the conclusion of full fungibility is overturned and at most only a limited degree of fungibility is found.
    Keywords: foreign health aid; fungibility; public health expenditure
    JEL: E62 F35 H51 I18 O23
    Date: 2013
  4. By: Dhaval M. Dave; Sandra L. Decker; Robert Kaestner; Kosali Ilayperuma Simon
    Abstract: A substantial body of research has found that expansions in Medicaid eligibility increased enrollment in Medicaid, reduced the rate of uninsured, and reduced the rate of private health insurance coverage (i.e., crowd out). Notably, there has been little research that has examined the mechanism by which crowd-out occurs. This study examines the effects of expansions in Medicaid eligibility for pregnant women in the late 1980s and the early 1990s on labor supply, which is one of the possible mechanisms underlying crowd out. Estimates suggest that the 20 percentage point increase in Medicaid eligibility during the sample period was associated with a 6% to 7% decrease in the probability that a woman who gave birth in the past year was employed. Among unmarried women with less than a high school education, the change in Medicaid eligibility reduced employment by approximately 13% to 16%.
    JEL: D1 J01 J08 J22
    Date: 2013–06
  5. By: Hoyt Bleakley; Dora Costa; Adriana Lleras-Muney
    Abstract: We document the correlations between early childhood health (as proxied by height) and educational attainment and investigate the labor market and wealth returns to height for United States cohorts born between 1820 and 1990. The 19th century was characterized by low investments in height and education, a small correlation between height and education, and positive but small returns for both height and education. The relationship between height and education was stronger in the 20th century and stronger in the first part of the 20th century than later on (when both investments in education and height stalled), but never as strong as in developing countries. The labor market and wealth returns to height and education also were higher in the 20th compared to the 19th century. We relate our findings to the theory of human capital formation and speculate that the greater importance of physical labor in the 19th century economy, which raised the opportunity cost of schooling, may have depressed the height-education relationship relative to the 20th century. Our findings are consistent with an increasing importance of cognitive abilities acquired in early childhood.
    JEL: I0
    Date: 2013–06
  6. By: Jason Abaluck; Jonathan Gruber
    Abstract: We explore choice inconsistency over time within the Medicare Part D Prescription Drug Program. Using the full universe of Part D claims data, we revisit our earlier work on partial data to replicate our results showing large “foregone savings” among Part D enrollees. We also document that this foregone savings increases over time during the first four years of the Part D program. We then develop a rich dynamic structural framework that allows us to mathematically decompose the “foregone welfare” from inconsistent plan choices into components due to demand side factors, supply side factors, and changes in preferences over time. We find that the welfare cost of choice inconsistencies increases over time. Most importantly, we find that there is little improvement in the ability of consumers to choose plans over time; we identify and estimate little learning at either the individual or cohort level over the years of our analysis. Inertia does reduce welfare, but even in a world with no inertia we estimate that substantial welfare losses would remain. We conclude that the increased choice inconsistencies over time are driven by changes on the supply side that are not offset both because of inertia and because non-inertial consumers still make inconsistent choices.
    JEL: I11 I18
    Date: 2013–06
  7. By: Nancy E. Reichman; Hope Corman; Kelly Noonan
    Abstract: We exploit the occurrence of postpartum depression (PPD), which has a random component according to the medical community, to estimate causal effects of a salient form of mental illness on couples’ relationship status. We estimate single-equation models as well as bivariate probit models that address the endogeneity of PPD. We find that this relatively prevalent mental illness reduces the probability the couples are married (by 22–24%) as well the probability that they are living together (married or cohabiting) (by 24–26%) three years after the birth of the child. Models stratified by relationship status at the time of the birth indicate that PPD makes it more likely that unions dissolve (particularly among baseline cohabitors) and less likely that unions are formed (particularly among baseline non-cohabitors). The findings contribute to the literature on the effects of mental illness on relationships and to the broader literature on socioeconomic status and health.
    JEL: I10 J12
    Date: 2013–06
  8. By: Kevin M. Stange
    Abstract: Nurse practitioners (NPs) and physician assistants (PAs) now outnumber family practice doctors in the United States and are the principal providers of primary care to many communities. Recent growth of these professions has occurred amidst considerable cross-state variation in their regulation, with some states permitting autonomous practice and others mandating extensive physician oversight. I find that expanded NP and PA supply has had minimal impact on the office-based healthcare market overall, but utilization has been modestly more responsive to supply increases in states permitting greater autonomy. Results suggest the importance of laws impacting the division of labor, not just its quantity.
    JEL: I11 J44
    Date: 2013–06
  9. By: Damien S.Eldridge (School Economics, La Trobe University; University of South Australia; Independent Researcher; SSenior Economist, Cornerstone Research, USA)
    Abstract: We use the 2004-'05 wave of the Australian National Health Survey to estimate the impact of private hospital insurance on the propensity for hospitalization as a private patient. We employ instrumental-variable methods to account for the endogeneity of supplementary private hospital insurance purchases. We calculate moral hazard based on a dierence-of-means estimator. We decompose the moral hazard estimate into a diversion component that is due to an insurance-induced substitution away from public patient care towards private patient care, and an expansion component that measures a pure insurance-induced increase in the propensity to seek private patient care. We nd some evidence of self-selection into insurance but this nding is not robust to alternative specications. Our results suggest that on average, private hospital insurance causes a sizable and signicant increase in the likelihood of hospital admission as a private patient. However, there is little evidence of moral hazard; the treatment eect of private hospital insurance on private patient care is driven almost entirely by the substitution away from public patient care towards private patient care.
    Keywords: Health Insurance, Health Care Consumption, Moral Hazard
    JEL: I11 I18 C35
    Date: 2013
  10. By: Hammitt, James; Rheinberger, Christoph
    Abstract: Assessing the welfare impact of consumer health advisories is a thorny task. Recently, Shimshack and Ward (2010) studied how U.S. households responded to FDA’s 2001 mercury-in-fish advisory. They found that the average at-risk household reduced fish consumption by about 24%, resulting in a 21%-reduction in mercury exposure at the cost of a 28%-reduction in cardioprotective omega-3 fatty acids. A rough assessment of the health costs and benefits led Shimshack and Ward to conclude that the advisory policy resulted in an overall consumer welfare loss. In this note, we propose a more comprehensive assessment that links the long term cardiovascular health effects of the advisory policy to life cycle consumption. In addition to mortality risk, our model values the loss in health quality from non-fatal cardiovascular diseases. Using the same dose-response relationships as Shimshack and Ward, we find that the expected health and mortality loss to the average at-risk household is much larger than they suggested. The analysis highlights the importance of accounting for dynamic effects when evaluating persistent changes in exposure to environmental health risks.
    Keywords: Food safety, mercury, fatty acids, policy analysis, excess lifetime risk
    JEL: I18 I38 J17 P36
    Date: 2013–04
  11. By: Goulão, Catarina; Thibault, Emmanuel
    Abstract: We look at the effects of physical activity (PA) recommendation policies by considering a social multiplier model in which individuals differ in their concern for PA. The government can either observe this concern (and implement the First Best) or not (and implement a uniform policy). Whichever the type of policy implemented, while the welfare of individuals the most concerned with PA increases in the social multiplier, the welfare of those the least concerned may decrease in it. For a sufficiently high social multiplier, both government interventions improve the welfare of those most concerned with PA but worsen the welfare of the least concerned individuals if they are not too many. However, compared to the First Best, a uniform recommendation improves the welfare of those most concerned with PA more than it reduces the welfare of those least concerned.
    Keywords: Physical Activity, Peer Effects, Long Term Care.
    JEL: D62 H11 I18
    Date: 2013–06
  12. By: Strulik, Holger
    Abstract: This paper extends the theory of optimal aging and death (Dalgaard and Strulik, 2010, 2013) towards uncertain death. Specifically, it is assumed that at any age the probability to survive depends on the number of health deficits accumulated. At the expense of less analytical tractability the model provides a formal description of aging as conceptualized in modern biology, i.e. as an inherently stochastic process according to which the timing of death of a person is not determined by his or her age but by the number of accumulated health deficits. The stochastic model basically confirms the earlier deterministic model with respect to its predictions on the association between income and life-expectancy across countries. --
    Keywords: Aging,Longevity,Health,Savings,Preston Curve
    JEL: D91 J17 J26 I12
    Date: 2013

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