nep-hea New Economics Papers
on Health Economics
Issue of 2013‒07‒28
eighteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Smoking Outside: The Effect of the Irish Workplace Smoking Ban on Smoking Prevalence Among the Employed By Savage, Michael
  2. The Future of Long-term Care in Japan By Matthew A. COLE; Robert J R ELLIOTT; OKUBO Toshihiro; Eric STROBL
  3. Do Fertility Transitions Influence Infant Mortality Declines? Evidence from Early Modern Germany By Alan Fernihough; Mark E. McGovern
  4. Integrated Healthcare in Andalusia - Analysis of primary care, specialised care, emergency care, social care and citizen support platforms By Elena Villalba Mora; Jose A. Valverde Albacete
  5. First do no harm. Then do not cheat: DRG upcoding in German neonatology By Jürges, Hendrik; Köberlein, Juliane
  6. Potential Impact of the Affordable Care Act on the Ryan White HIV/AIDS Program. By Margaret Hargreaves; Vanessa Oddo; Ann Bagchi; Boyd Gilman
  7. Heterogeneity of the effects of health insurance on household savings: Evidence from rural China. By Diana Cheung; Ysaline Padieu
  8. Research into biomarkers: how does drug procurement affect the design of clinical trials?. By Seabright, Paul
  9. Discrimination in a universal health system: Explaining socioeconomic waiting time gaps By Michael Keane; Meliyanni Johar; Glenn Jones; Elizabeth Savage; Olena Stavrunova
  10. On the measurement of the (multidimensional) inequality of health distributions By Jens L. Hougaard; Juan D. Moreno-Ternero; Lars P. Osterdal
  11. Demand Uncertainty and Hospital Costs: an Application to Portuguese NHS Hospitals By Alvaro Almeida; Joana Cima
  12. Rising Mortality Rate in Andhra Pradesh: Towards a demystification By Motkuri, Venkatanarayana; Mishra, Uday Shankar
  13. Mobility of Capital and Health Sector:A Trade Theoretic Analysis By Chatterjee, Tonmoy; Gupta, Kausik
  14. International Fragmentation in the Presence of Alternative Health Sector Scenario : A Theoretical Analysis By Chatterjee, Tonmoy; Gupta, Kausik
  15. Education and Mortality in India By Motkuri, Venkatanarayana; Mishra, Uday Shankar
  16. Does Physician Dispensing Increase Drug Expenditures? By Boris Kaiser; Christian Schmid
  17. Do economic crises lead to health and nutrition behavior responses ? analysis using longitudinal data from Russia By Nikoloski, Zlatko; Ajwad, Mohamed Ihsan
  18. Lessons from low-cost healthcare innovations for the Base-of the Pyramid markets: How incumbents can systematically create disruptive innovations By Ramdorai, Aditi; Herstatt, Cornelius

  1. By: Savage, Michael
    Abstract: In March 2004, Ireland became the first country to introduce a nationwide workplace smoking ban. The smoking ban increased the non-monetary cost of smoking by prohibiting smoking in the majority of indoor workplaces. The aim of this paper is to examine whether the extra non-monetary cost of smoking was concentrated on the employed. Using two waves of the nationally representative Slán survey, a difference-in-differences approach is used to measure changes in smoking behaviour among the employed relative to the non-working population following the introduction of the workplace smoking ban. By isolating those workers most affected by the ban, the research finds that the workplace smoking ban did not induce a greater reduction in smoking prevalence among the employed population compared to the non-working population. In fact, the evidence suggests a significantly larger decrease in smoking prevalence among the non-workers relative to the employed. This pattern is particularly strong for occasional smokers. Changes in the real price of cigarettes and changes in attitudes to risk are discussed as possible causes for the pattern observed.
    Keywords: Ireland/cost/population/risk
    Date: 2013–07
  2. By: Matthew A. COLE; Robert J R ELLIOTT; OKUBO Toshihiro; Eric STROBL
    Abstract: This paper reviews a decade of implementation of the public long-term care insurance (LTCI) program in Japan, which is now experiencing unprecedented pressure from its rapidly aging population. This overview of the program's features focuses on the incentive mechanisms and diversity, and examines official future projections of LTCI costs and their accompanying assumptions. It also includes the discussion of possible reforms for the LTCI program, with an emphasis on the micro aspects of LTCI, as evidenced by the Japanese Study on Aging and Retirement (JSTAR).
    Date: 2013–07
  3. By: Alan Fernihough (Institute for International Integration Studies, Trinity College Dublin); Mark E. McGovern (Harvard Center for Population and Development Studies)
    Abstract: The timing and sequencing of fertility transitions and early-life mortality declines in historical Western societies indicates that reductions in sibship (number of siblings) may have contributed to improvements in infant health. Surprisingly however, this demographic relationship has received little attention in empirical research. We outline the theoretical difficulties associated with establishing the causal effect of sibship on infant mortality, and provide evidence on the inherent bias associated with conventional empirical approaches. We offer a solution that permits an empirical test of this relationship whilst accounting for reverse causality. Our approach is illustrated by evaluating the causal impact of sibship on infant mortality using genealogical data from 13 German parishes spanning the 16th, 17th, 18th and 19th centuries. Overall, our findings do not support the hypothesis that declining fertility led to increased infant survival probabilities in historical populations.
    Keywords: Demographic Transition, Family Size, Early Life Conditions, Infant Mortality
    Date: 2013–07
  4. By: Elena Villalba Mora (European Commission – JRC - IPTS); Jose A. Valverde Albacete (Emergencias Sanitarias, Consejería de Salud y Bienestar)
    Abstract: The SIMPHS research studied the deployment of Integrated Personal Health and Social Care Services (IPHS) by analysing IPHS projects across 20 regions in eight European Countries. An outcome of the research was the identification of eight facilitators (key factors) for IPHS deployment. This report extends the analysis of facilitators to the case of Andalusia, a Spanish region recognised internationally as one of the "Best eHealth regional case studies". The aim was to review cases of Integrated Care in the region, especially those where ICT and IPHS enable integration, so as to identify the role of the eight facilitators in these settings.
    Keywords: Integrated care, telehealth, telecare, ICT, governance, innovation, impact assessment, Andalusia, Spain, region
    JEL: I11 I18 O33 O38
    Date: 2013–05
  5. By: Jürges, Hendrik; Köberlein, Juliane (Munich Center for the Economics of Aging (MEA))
    Abstract: Since 2003 German hospitals are reimbursed according to diagnosis related groups (DRGs). Patient classification in neonatology is based inter alia on birth weight, with substantial discontinuities in reimbursement at eight dierent thresholds. These discontinuities create strong incentives to upcode preterm infants into classes of lower birth weight. Using data from the German birth statistics 1996 to 2010 and German hospital data from 2006 to 2011, we estimate that since the introduction of DRGs, hospitals have upcoded at least 12,000 preterm infants and gained additional reimbursement in excess of 100 million Euro. The scale of upcoding in German neonatology enables us to study the anatomy of cheating in a profession that otherwise claims to have high ethical standards. We show that upcoding is not only positively linked with the strength of financial incentives but also with expected treatment costs measured by poor newborn health conditional on weight. This suggests that doctors and midwives do not indiscriminately upcode any potential preterm infant as a rational model of crime would predict. Rather, they may find it easier to cheat when this helps aligning the lump-sum reimbursement with the expected actual treatment costs.
    JEL: I11 I18 D20
    Date: 2013–07–16
  6. By: Margaret Hargreaves; Vanessa Oddo; Ann Bagchi; Boyd Gilman
    Keywords: Affordable Care Act, ACA, Ryan White, HIV, AIDS
    JEL: I
    Date: 2012–11–29
  7. By: Diana Cheung (Centre d'Economie de la Sorbonne); Ysaline Padieu (Centre d'Economie de la Sorbonne)
    Abstract: This paper estimates the impact of the New Cooperative Medical Scheme (NCMS) on household saving across income quartiles in rural China. We use data from the China Health and Nutrition Survey for the 2006 wave and we run an ordinary least squares regression. We control for the endogeneity of NCMS participation by using an instrumental variable strategy. We find evidence that NCMS has a negative impact on savings of lower-middle-income participants, while it does not affect the poorest households. The negative effect of NCMS on savings of middle-income participants holds when we use propensity score matching estimations as a robustness check.
    Keywords: Rural China, New Cooperative Medical Scheme, health insurance, Chinese savings and consumption, propensity score matching.
    JEL: C21 D1 I18 O53
    Date: 2013–07
  8. By: Seabright, Paul
    Date: 2013–06
  9. By: Michael Keane; Meliyanni Johar; Glenn Jones; Elizabeth Savage; Olena Stavrunova
    Abstract: One of the core goals of a universal health care system is to eliminate discrimination on the basis of socioeconomic status.  We test for discrimination using patient waiting times for non-emergency treatment in public hospitals.  Waiting time should reflect patients' clinical need with priority given to more urgent cases.  Using data fro Australia, we find evidence of prioritisation of the most socioeconomically advantaged patients at all quantiles of the waiting time distribution.  These patients also benefit from variation in supply endowments.  These results challenge the universal health system's core principle of equitable treatment.
    Keywords: Public hospitals, waiting time, discrimination, decomposition analysis
    JEL: I11 J7 H51 C14 C21
    Date: 2012–10–26
  10. By: Jens L. Hougaard (Department of Food and Resource Economics, University of Copenhagen); Juan D. Moreno-Ternero (Department of Economics, Universidad Pablo de Olavide; CORE, Université catholique de Louvain); Lars P. Osterdal (Department of Business and Economics, University of Southern Denmark)
    Abstract: Health outcomes are often described according to two dimensions: quality of life and quantity of life. We analyze the measurement of inequality of health distributions referring to these two dimensions. Our analysis relies on a novel treatment of the quality-of-life dimension, which might not have a standard mathematical structure. We single out two families of (absolute and relative) multidimensional health inequality indices, inspired by the classical normative approach to income inequality measurement. We also discuss how to extend the analysis to deal with the related problem of health deprivation measurement in this setting.
    Keywords: Inequality, health, quantity of life, quality of life, QALYs, HYEs
    JEL: D63 I14
    Date: 2013–07
  11. By: Alvaro Almeida (CEF.UP and Faculdade de Economia, Universidade do Porto); Joana Cima (Faculdade de Economia, Universidade do Porto)
    Abstract: In this paper, we evaluate the effect of demand uncertainty on hospital costs. Since hospital managers want to minimize the probability of not having enough capacity to satisfy demand, hospitals have to build excess capacity since demand is uncertain, and incur on the associated costs. Using panel data that comprises information for 43 Portuguese NHS hospitals for the period 2007 to 2009, we estimate a translog cost function that relates total variable costs to the usual variables (outputs, the price of inputs, some of the hospitals’ organizational characteristics) and an additional term measuring the excess capacity related to the uncertainty of demand. Demand uncertainty is measured as the difference between actual and projected demand for emergency services. Our results indicate that the cost function term associated with the uncertainty of demand is significant, which means that cost functions that do not include this type of term may be misspecified. For most of our sample, hospitals that face higher demand uncertainty have higher excess capacity and higher costs. Furthermore, we identify economies of scale in hospital costs, at least for smaller hospitals, suggesting that a policy of merging smaller hospitals would make a significant contribution to the reduction of hospital costs.
    Keywords: hospitals, demand uncertainty, cost function
    JEL: D24 I11
    Date: 2013–07
  12. By: Motkuri, Venkatanarayana; Mishra, Uday Shankar
    Abstract: This is an effort at explaining the reasons and rationale behind the rising mortality rate (CDR) in the South Indian State – Andhra Pradesh. Although the state’s performance in socio-economic sphere seems to be not that impressive, its performance in demographic transition during the last two decades is undoubtedly distinct, especially among Indian states. In addition, Andhra Pradesh has also been witnessing mushrooming of private medical care centres ranging from tiny clinics to corporate hospitals, especially during last two decades. Most notable ones are the state initiatives of Emergency Medical Service (EMS) – popularly known in the state as ‘108’ services, witnessing evolving pre-hospital care integrated with definite health care and Rajiv Aryogyasri (RAS), a health insurance scheme to cover the catastrophic health expenditure of BPL families.
    Keywords: Demography, Health, Mortality,Disease Burden, Andhra Pradesh, India
    JEL: I1 I10 I11 I18 J10 J14
    Date: 2013–03
  13. By: Chatterjee, Tonmoy; Gupta, Kausik
    Abstract: In this paper we formulate a three-sector general equilibrium model where two sectors produce final traded goods whereas a third sector produces a non-traded final good. We refer to the third sector as a non-traded final goods producing health sector. In such a set up we have shown that a movement from a regime of international health capital immobility to a regime of international health capital mobility may lead to an expansion of the health sector. Next we have considered a variant of the basic model and we have shown that the output of the health sector must go up in case of international health capital mobility. Finally in the variant of the model we have shown that a movement from a regime of international capital immobility to a regime of international capital mobility may lead to a contraction of the health sector and one of the sectors (either Agricultural or Manufacturing) vanishes.
    Keywords: Health sector, International health capital mobility, Vanishing Sector and General Equilibrium.
    JEL: D5 F2 I10 I12
    Date: 2013–07–17
  14. By: Chatterjee, Tonmoy; Gupta, Kausik
    Abstract: This paper attempts to integrate among international fragmentation, trade liberalization and health sector. For this purpose we have considered two different models based on Heckscher-Ohlin-Samuelson general equilibrium structure, with special reference to the health sector. In the first model we have considered four sectors and we have assumed the production process of the health sector can be fragmented. In such a set up we have shown that a movement from a regime of no fragmentation to a regime of fragmentation may lead to an expansion of the health sector. In the second model we have considered three sectors and have assumed that production process of the health sector is fragmented. In that structure we have shown that trade liberalization leads to an increase in the output level of the health sector.
    Keywords: Health sector, Health Intermediate sector, International fragmentation and International health capital mobility
    JEL: F2 F21 I10
    Date: 2013–07–10
  15. By: Motkuri, Venkatanarayana; Mishra, Uday Shankar
    Abstract: The present paper made an attempt to understand the impact schooling/education on the mortality rate in India, in a developing country context. Present study aims at looking into differences in mortality rate by the status of completion of primary schooling.
    Keywords: Demography, India, Education, Mortality
    JEL: I10 I15 J11 J18
    Date: 2013–04
  16. By: Boris Kaiser; Christian Schmid
    Abstract: We analyze whether the possibility for physicians to dispense drugs increases health care expenditures due to the incentives created by the markup on drugs sold. Using comprehensive physician-level data from Switzerland, we exploit the fact that there is regional variation in the dispensing regime to estimate policy effects. The empirical strategy consists of doubly-robust estimation which combines inverse-probability weighting with regression. Our main finding suggests that if dispensing is permitted, physicians produce significantly higher drug costs in the order of 30% per patient.
    Keywords: Health Care Costs; Drug Expenditures; Physician Dispensing; Supply-induced Demand; Treatment Effects
    JEL: I11 I18 C21
    Date: 2013–07
  17. By: Nikoloski, Zlatko; Ajwad, Mohamed Ihsan
    Abstract: Using longitudinal data on more than 2,000 Russian families spanning the period between 2007 and 2010, this paper estimates the impact of the 2009 global financial crisis on food expenditures, health care expenditures, and doctor visits in Russia. The primary estimation strategy adopted is the semi-parametric difference-in-difference with propensity score matching technique. The analysis finds that household health and nutritional behavior indicators do not vary statistically between households that were crisis-affected and households that were not affected by the crisis. However, the analysis finds that crisis-affected poor families curtailed their out-of-pocket health expenditures during and after the crisis more than poor families that were not affected by the crisis did. In addition, crisis-affected vulnerable groups changed their health behavior. In particular, households with low educational attainment of household heads and households with more elderly people changed their health and nutrition behavior response when affected by the crisis. The results are invariant to the propensity score matching techniques and parametric fixed effects estimation models.
    Keywords: Health Monitoring&Evaluation,Health Systems Development&Reform,Regional Economic Development,Population Policies,Rural Poverty Reduction
    Date: 2013–07–01
  18. By: Ramdorai, Aditi; Herstatt, Cornelius
    Abstract: [Introduction ...] The ability to successfully drive disruptive innovations from within the organization will be analyzed through the lens of organizational ambidexterity. Ambidexterity is the ability of organizations to successfully balance exploration and exploitation. The manifestation of this act of balancing exploitation and exploration is the companies' ability to initiate multiple innovation streams, in this case sustaining innovations and disruptive innovations (Danneels, 2004; Tushman, et al., 2010). Key proponents of organizational ambidexterity, O'Reilly and Tushman, consider it a 'solution to the innovators dilemma' (O'Reilly and Tushman, 2008, pg. 202), however present their thesis only conceptually. This is a general gap in the research of organizational ambidexterity, as noted by scholars of organizational ambidexterity where consensus exists on the need for ambidexterity, but the underlying mechanisms and the 'how' remain undertheorized (Gupta, et al., 2006). This work will look at the mechanisms of ambidexterity at GE Healthcare to help explain its ability in successfully hosting sustaining and disruptive innovations from within its boundaries. The next section will focus on the theoretical background of this research, explaining in greater detail the concept of disruptive innovation and BOP research. The next section describes the research methodology and research question. Section 4 narrates the empirical data from the GE Healthcare case study after which we analyze the main findings and close with a conclusion. --
    Date: 2013

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