nep-hea New Economics Papers
on Health Economics
Issue of 2013‒08‒23
seven papers chosen by
Yong Yin
SUNY at Buffalo

  1. Health-Related Life Cycle Risks and Public Insurance By Daniel Kemptner
  2. Stability of Preference against Aging and Health Shocks: A comparison between Japan and the United States By HASHIMOTO Hideki; ICHIMURA Hidehiko; SHIMIZUTANI Satoshi
  3. The Economic Impact of Non-communicable Disease in China and India: Estimates, Projections, and Comparisons By David E. Bloom; Elizabeth T. Cafiero; Mark E. McGovern; Klaus Prettner; Anderson Stanciole; Jonathan Weiss; Samuel Bakkila; Larry Rosenberg
  4. Health Workforce Planning in OECD Countries: A Review of 26 Projection Models from 18 Countries By Tomoko Ono; Gaetan Lafortune; Michael Schoenstein
  5. Value in Pharmaceutical Pricing By Valérie Paris; Annalisa Belloni
  6. Dynamic Wage and Employment Effects of Elder Parent Care By Meghan Skira
  7. Explaining the Decline of the U.S. Saving Rate: the Joint Role of Health Expenditure and Employer Contributions By Bela Szemely

  1. By: Daniel Kemptner
    Abstract: This paper proposes a dynamic life cycle model of health risks, employment, early retirement, and wealth accumulation in order to analyze the health-related risks of consumption and old age poverty. In particular, the model includes a health process, the interaction between health and employment risks, and an explicit modeling of the German public insurance schemes. I rely on a dynamic programming discrete choice framework and estimate the model using data from the German Socio-Economic Panel. I quantify the health-related life cycle risks by simulating scenarios where health shocks do or do not occur at different points in the life cycle for individuals with differing endowments. Moreover, a policy simulation investigates minimum pension benefits as an insurance against old age poverty. While such a reform raises a concern about an increase in abuse of the early retirement option, the simulations indicate that a means test mitigates the moral hazard problem substantially.
    Keywords: Dynamic programming, discrete choice, health, employment, early retirement, consumption, tax and transfer system
    JEL: C61 I14 J22 J26
    Date: 2013
  2. By: HASHIMOTO Hideki; ICHIMURA Hidehiko; SHIMIZUTANI Satoshi
    Abstract: This study explores stability of preference against aging and health shocks. Contrary to a vast amount of literature assuming that risk attitude is unchanged over time, we utilize JSTAR (Japanese Study of Aging and Retirement), which provides longitudinal data on the middle aged and elderly comparable with the Health and Retirement Study (HRS)/English Longitudinal Study of Ageing (ELSA)/Survey of Health, Ageing and Retirement in Europe (SHARE), to examine how aging and past health experiences systematically affect risk attitude. We find that while there is empirical evidence that aging gradually causes individuals to be more risk averse, health shocks do not seem to affect risk preference systematically.
    Date: 2013–08
  3. By: David E. Bloom (Harvard School of Public Health); Elizabeth T. Cafiero (Harvard School of Public Health); Mark E. McGovern (Harvard Center for Population and Development Studies); Klaus Prettner (University of Göttingen); Anderson Stanciole (The Bill and Melinda Gates Foundation); Jonathan Weiss (London School of Hygiene and Tropical Medicine and UNICEF Supply Division, Copenhagen, Denmark); Samuel Bakkila (Harvard School of Public Health); Larry Rosenberg (Harvard School of Public Health)
    Abstract: This paper provides estimates of the economic impact of non-communicable diseases (NCDs) in China and India for the period 2012-2030. Our estimates are derived using WHO’s EPIC model of economic growth, which focuses on the negative effects of NCDs on labor supply and capital accumulation. We present results for the five main NCDs (cardiovascular disease, cancer, chronic respiratory disease, diabetes, and mental health). Our undiscounted estimates indicate that the cost of the five main NCDs will total USD 27.8 trillion for China and USD 6.2 trillion for India (in 2010 USD). For both countries, the most costly domains are cardiovascular disease and mental health, followed by respiratory disease. Our analyses also reveal that the costs are much larger in China than in India mainly because of China’s higher income and older population. Rough calculations also indicate that WHO’s Best Buys for addressing the challenge of NCDs are highly cost-beneficial.
    Keywords: Health and Economic Development, Non-Communicable Disease, Growth Models, Cost-Effectiveness
    Date: 2013–08
  4. By: Tomoko Ono; Gaetan Lafortune; Michael Schoenstein
    Abstract: Health workforce planning aims to achieve a proper balance between the supply and demand for different categories of health workers, in both the short and longer-term. Workforce planning in the health sector is particularly important, given the time and cost involved in training new doctors and other health professionals. In a context of tight budget constraints, proper health workforce planning is needed not only to guide policy decisions on entry into medical and nursing education programmes, but also to assess the impact of possible re-organisations in health service delivery to better respond to changing health care needs...<BR>La planification de la main-d'oeuvre dans le domaine de la santé vise à atteindre un juste équilibre entre l'offre et la demande pour les différentes catégories de professionnels de santé, à court et à long terme. La planification de la main-d'oeuvre dans le secteur de la santé s'avère particulièrement importante compte tenu du temps et des coûts investis dans la formation de nouveaux médecins et autres professionnels. Dans un contexte de fortes contraintes budgétaires, une planification appropriée du personnel de santé est nécessaire non seulement pour guider les décisions en matière d'admission aux études de formation médicale et infirmière, mais aussi pour évaluer l'impact d'éventuelles ré-organisations dans la prestation des services de santé afin de mieux répondre aux nouveaux besoins...
    JEL: I10 I11 I12 I18 J11
    Date: 2013–06–26
  5. By: Valérie Paris; Annalisa Belloni
    Abstract: This study analyses how 14 OECD Countries refer to “value” when making decisions on reimbursement and prices of new medicines. It details the type of outcomes considered, the perspective and methods adopted for economic evaluation when used; and the consideration of budget impact. It describes which dimensions are taken into account in the assessment of “innovativeness” and the consequences of this assessment on prices; it confirms that treatments for severe and/or rare diseases are often more valued than others and shows how countries use product-specific agreements in an attempt to better align value and price.<BR>Cette étude analyse comment 14 pays de l’OCDE prennent en compte la “valeur” dans leurs décisions concernant le remboursement et le prix des nouveaux médicaments. Elle décrit le type de « résultats » pris en compte, la perspective et les méthodes adoptées pour l’évaluation économique là où elle est utilisée, ainsi que la prise en compte de l’impact budgétaire. Elle décrit quelles dimensions sont prises en compte pour évaluer le caractère innovant et les conséquences de cette évaluation en termes de prix ; elle confirme que les pays accordent souvent une valeur plus élevée aux traitements pour les maladies sévères et/ou rares et montre comment les pays utilisent les accords « par produit » pour tenter de mieux adapter le prix à la valeur.
    JEL: I18
    Date: 2013–07–11
  6. By: Meghan Skira (University of Georgia)
    Abstract: This paper formulates and estimates a dynamic discrete choice model of elder parent care and work to analyze how caregiving affects a woman's current and future labor force participation and wages. The model incorporates parental health changes, human capital accumulation, and job offer availability. The estimates indicate that women face low probabilities of returning to work or increasing work hours after a caregiving spell. I use the estimated model to simulate the caregiving, employment, and welfare effects of a longer unpaid work leave than currently available under the Family and Medical Leave Act, a paid leave, and a caregiver allowance.
    Date: 2013
  7. By: Bela Szemely (Boston University)
    Abstract: In this paper we show that a single variable can explain the decline in the U.S. personal saving rate from 9 percent in the early eighties to below 2 percent in 2007. This variable is health expenditure net of employer contributions to pension and health insurance funds. When we divide the amount contributed by employers into its two components, we find that the decline in pension contributions paired with the steep rise in health expenses are the main reasons behind the reduction in the saving rate. A puzzling implication of this finding is that households did not respond to these changes by increasing their pension contributions or by reducing their expenditure on other goods by a sufficient amount. To understand why, we first study the evolution of contributions to pension plans and provide evidence in support of the following two results. First, employer contributions declined because of a transition from defined benefit to defined contribution plans. Second, employees responded to the transition by increasing their contributions. But the increase was insufficient to prevent the decline in the saving rate. Finally, with the objective of explaining why households did not reduce their consumption of other goods, we provide evidence on how the rise in health expenditure was financed. Our findings indicate that it was funded by a reduction in other government expenses, by an increase in government debt, and by a rise in employer contributions to health insurance funds. The budget constraint of households was, therefore, barely affected.
    Date: 2013

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