nep-hea New Economics Papers
on Health Economics
Issue of 2013‒10‒11
eleven papers chosen by
Yong Yin
SUNY at Buffalo

  1. The Intergenerational Inequality of Health in China By Tor Eriksson; Jay Pan; Xuezheng Qin
  2. Transportation Choices and the Value of Statistical Life By Gianmarco León; Edward Miguel
  3. Delegating home care for the elderly to external caregivers? An empirical study on Italian data By M. Lippi Bruni; C. Ugolini
  4. Absent With Leave: The Implications of Demographic Change for Worker Absenteeism By Finn Poschmann; Omar Chatur
  5. Long-Term Effects of Diabetes Prevention: Evaluation of the M.O.B.I.L.I.S. Program for Obese Persons By Jan Häußler; Friedrich Breyer
  6. The Regulation of Prescription Drug Competition and Market Responses: Patterns in Prices and Sales Following Loss of Exclusivity By Murray L. Aitken; Ernst R. Berndt; Barry Bosworth; Iain M. Cockburn; Richard Frank; Michael Kleinrock; Bradley T. Shapiro
  7. Identifying the Health Production Function: The Case of Hospitals By John A. Romley; Neeraj Sood
  8. Who Is in Control? The Determinants of Patient Adherence with Medication Therapy By Sergei Koulayev; Niels Skipper; Emilia Simeonova
  9. Bargaining in the Shadow of a Giant: Medicare's Influence on Private Payment Systems By Jeffrey Clemens; Joshua D. Gottlieb
  10. Childhood Health and Sibling Outcomes: The Shared Burden and Benefit of the 1918 Influenza Pandemic By John Parman
  11. Recent research on Health Care Management By Fleßa, Steffen

  1. By: Tor Eriksson (Department of Economics and Business, Aarhus University); Jay Pan (West China School of Public Health, Sichuan University); Xuezheng Qin (School of Economics, Peking University)
    Abstract: This paper estimates the intergenerational health transmission in China using the 1991-2009 China Health and Nutrition Survey (CHNS) data. Three decades of persistent economic growth in China has been accompanied by high income inequality, which may in turn be caused by the inequality of opportunity in education and health. In this paper, we find that there is a strong correlation of health status between parent and their offspring in both the urban and rural sectors, suggesting the existence of intergenerational health inequality in China. The correlation is persistent with different health measures and various model specifications, and is robust when unobserved household heterogeneity is removed. We also find that the parents’ (especially the mothers’) socio-economic characteristics and environmental / health care choices are strongly correlated with their own and their children’s health, supporting the “nature-nurture interaction” hypothesis. The Blinder-Oaxaca decomposition further indicates that 15% to 27% of the rural-urban inequality of child health is attributable to the endowed inequality from their parents’ health. An important policy implication of our study is that the increasing inequality of income and opportunity in China can be ameliorated through the improvement of the current generation’s health status and living standards.
    Keywords: Intergenerational transmission, Health, Inequality, China
    JEL: I14 I12
    Date: 2013–09–30
  2. By: Gianmarco León; Edward Miguel
    Abstract: This paper exploits an unusual transportation setting to estimate the value of a statistical life (VSL). We estimate the trade-offs individuals are willing to make between mortality risk and cost as they travel to and from the international airport in Sierra Leone (which is separated from the capital Freetown by a body of water). Travelers choose from among multiple transport options – namely, ferry, helicopter, hovercraft, and water taxi. The setting and original dataset allow us to address some typical omitted variable concerns in order to generate some of the first revealed preference VSL estimates from Africa. The data also allows us to compare VSL estimates for travelers from 56 countries, including 20 African and 36 non -African countries, all facing the same choice situation. The average VSL estimate for African travelers in the sample is US$577,000 compared to US$924,000 for non-Africans. Individual characteristics, particularly job earnings, can largely account for the difference between Africans and non-Africans ; Africans in the sample typically earn somewhat less. There is little evidence that individual VSL estimates are driven by a lack of information, predicted life expectancy, or cultural norms around risk-taking or fatalism. The data implies an income elasticity of the VSL of 1.77. These revealed preference VSL estimates from a developing country fill an important gap in the existing literature, and can be used for a variety of public policy purposes, including in current debates within Sierra Leone regarding the desirability of constructing new transportation infrastructure.
    Keywords: value of statistical life, risk taking behavior, Africa, Sierra Leone
    JEL: J17 O18
    Date: 2013–09
  3. By: M. Lippi Bruni; C. Ugolini
    Abstract: We study care arrangement decisions in Italy, where families are increasingly delegating the role of primary caregiver to external (paid) people also for the provision of home care. We consider a sample of households with a dependent elderly person cared for either at home or in a residential home, extracted from a survey representative of the population of Italy’s Emilia-Romagna region. We investigate the determinants of a household’s decision to opt for one of the following three alternatives: the institutionalisation of elderly family members, informal home care, or paid home care. We estimate two model specifications, based on a simultaneous and a sequential decision process respectively, the results of which are fairly consistent. Disability related variables, rather than family characteristics, emerge as the main determinants of institutionalisation. On the other hand, household characteristics and socio-economic variables are more influential when it comes to choosing between informal and formal home care provisions.
    JEL: C21 D13 I18
    Date: 2013–10
  4. By: Finn Poschmann (C.D. Howe Institute); Omar Chatur (C.D. Howe Institute)
    Abstract: Over the past 30 years, sick days have risen in Canada’s workforce, overall, raising important questions about why days lost owing to reported illness are climbing, and how demographic and institutional change may have affected reported rates and may do so in the future. The data show striking differences in absentee-rate trends based on age, sex, and union status. Days lost owing to illness vary across age groups: as the demographic weight of Canada’s population shifts from younger to older categories, reported days lost rise. Absence rates for female versus male workers of all ages and types have diverged over the course of the last few decades, with females taking more days off and men’s rate showing little change. Public-sector employees report more workplace absences than do private-sector employees. Workers in unionized settings take more sick leave days than those in non-union settings. Workplaces and government practices and policies must adjust to these realities, through a combination of accommodation, flexibility and planning.
    Keywords: Social Policy, Labour Markets
    JEL: J21
  5. By: Jan Häußler; Friedrich Breyer
    Abstract: In response to the growing burden of obesity, public primary prevention programs against obesity have been widely recommended. Several studies estimated the cost effects of diabetes prevention trials for different countries and found that diabetes prevention can be costeffective. Nevertheless, it is still controversial if prevention conducted in more real-world settings and among people with increased risk but not yet exhibiting Increased Glucose Tolerance can really be a cost-effective strategy to cope with the obesity epidemic. We examine this question in a simulation model based on the results of the M.O.B.I.L.I.S program, a German lifestyle intervention to reduce obesity, which is directed on the high-risk group of people who are already obese. The contribution of this paper is the use of 4-year follow-up data on the intervention group and a comparison with a control group formed by SOEP respondents as inputs in a Markov model of the long-term benefits of this intervention due to prevention of type-2 diabetes.
    Keywords: Diabetes prevention, cost-benefit analysis, Markov modeling
    JEL: I12 H51
    Date: 2013
  6. By: Murray L. Aitken; Ernst R. Berndt; Barry Bosworth; Iain M. Cockburn; Richard Frank; Michael Kleinrock; Bradley T. Shapiro
    Abstract: We examine six molecules facing initial loss of US exclusivity (LOE, from patent expiration or challenges) between June 2009 and May 2013 that were among the 50 most prescribed molecules in May 2013. We examine prices per day of therapy (from the perspective of average revenue received by retail pharmacy per day of therapy) and utilization separately for four payer types (cash, Medicare Part D, Medicaid, and other third party payer – TPP) and age under vs. 65 and older. We find that quantity substitutions away from the brand are much larger proportionately and more rapid than average price reductions during the first six months following initial LOE. Brands continue to raise prices after generics enter. Expansion of total molecule sales (brand plus generic) following LOE is an increasingly common phenomenon compared with earlier eras. The number of days of therapy in a prescription has generally increased over time. Generic penetration rates are typically highest and most rapid for TPPs, and lowest and slowest for Medicaid. Cash customers and seniors generally pay the highest prices for brands and generics, third party payers and those under 65 pay the lowest prices, with Medicaid and Medicare Part D in between. The presence of an authorized generic during the 180-day exclusivity period has a significant impact on prices and volumes of prescriptions, but this varies across molecules.
    JEL: D01 D02 D43 I1 L65 L78
    Date: 2013–10
  7. By: John A. Romley; Neeraj Sood
    Abstract: Estimates of the returns to medical care may reflect not only the efficacy of more intensive care, but also unmeasured differences in patient severity or the productivity of health-care providers. We use a variety of instruments that are plausibly orthogonal to heterogeneity among providers as well as patients to analyze the intensity of care and 30-day survival among Medicare patients hospitalized for heart attack, congestive heart failure and pneumonia. We find that the intensity of care is endogenous for two out of three conditions. The elasticity of 30-day mortality with respect to care intensity increases in magnitude from -0.27 to -0.71 for pneumonia and from -0.16 to -0.33 for congestive heart failure, when we address the identification problem. This finding is consistent with the hypotheses that care intensity at hospitals tends to decrease with hospital productivity, or increase with unmeasured patient severity.
    JEL: D24 I1 I12
    Date: 2013–10
  8. By: Sergei Koulayev; Niels Skipper; Emilia Simeonova
    Abstract: Non-compliance with medication therapy remains an unsolved and expensive problem for health care systems around the world. Yet we know little about the factors that determine a patient’s decision to follow treatment recommendations. This study uses a unique panel dataset comprising all prescription drug users, physicians, and all prescription drug sales in Denmark over seven years to analyze the contributions of doctor-, patient-, and drug-specific factors to the adherence decision. Our findings have important implications for the design of incentive schemes targeted at improving chronic disease management.
    JEL: I1 I12
    Date: 2013–10
  9. By: Jeffrey Clemens; Joshua D. Gottlieb
    Abstract: We analyze Medicare's influence on private payments for physicians' services. Using a large administrative change in payments for surgical procedures relative to other medical services, we find that private payments follow Medicare's lead. On average, a $1 change in Medicare's relative payments results in a $1.30 change in private payments. We find that Medicare similarly moves the level of private payments when it alters fees across the board. Medicare thus strongly influences both relative valuations and aggregate expenditures on physicians' services. We show further that Medicare's price transmission is strongest in markets with large numbers of physicians and low provider consolidation. Transaction and bargaining costs may lead the development of payment systems to suffer from a classic coordination problem. By extension, improvements in Medicare's payment models may have the qualities of public goods.
    JEL: H44 H51 H57 I11 I13 L98
    Date: 2013–10
  10. By: John Parman
    Abstract: There is a growing body of evidence showing that negative childhood health shocks have long term consequences in terms of health, human capital formation and labor market outcomes. However, by altering the relative prices of child quality across siblings, these health shocks can also affect investments in and the outcomes of healthy siblings. This paper uses the 1918 influenza pandemic to test how household resources are reallocated when there is a health shock to one child. Using a new dataset linking census data on childhood households to health and education data from military enlistment records, I show that families with a child in utero during the pandemic shifted resources to older siblings of that child, leading to significantly higher educational attainments and high school graduation rates for these older siblings. There are no significant effects for younger siblings born after the pandemic. These results suggest that the reallocation of household resources in response to a negative childhood health shock tended to reinforce rather than compensate for differences in endowments across children.
    JEL: I1 J13 J24 N3 N32
    Date: 2013–10
  11. By: Fleßa, Steffen
    Abstract: [Preface] Health Care Management is a global mission, i.e., neither diseases nor health care concepts can be addressed adequately with a limited focus on one particular country. For instance, multi-resistant bacteria do not respect national borders but are a challenge in Poland as well as in Germany. Any attempt to solve this problem in one country only is doomed to failure as bacteria will re-invade from the other country. At the same time, health care concepts developed in one country will likely be an innovation seedling for other nations. For instance, individualized medicine is likely to challenge the existing paradigm of health care provision. Although this concept is strongly fostered at the University of Greifswald, it might soon be of highest importance at the University of Stettin. Health Care Management is global! For this reason, I am delighted to have the opportunity to present a series of papers on recent developments of health care management at the University of Stettin and learn from the experiences of my colleagues at this center of research. As scientists we share methodology and paradigms, and we unite in the fight for better health for the population of our nations. Health Care Management has much to offer to the health care systems, providers and programs. Based on evidence, efficient solutions can be sought to tackle life-threatening diseases and to improve the quality of life of millions of people. It is a privilege to share these insights with our Polish colleagues. And it is my sincere hope that this cooperation will bear fruit. This booklet provides an overview of the papers presented in Stettin, May 2013. The papers do not focus on methodology but on decision-making relevance. For methodological insights, the reader is asked to contact the authors. Every author is responsible for their paper, but we conjointly submit this booklet to the reader hoping that they will be inspired by one of the most challenging scientific fields: Health Care Management. --
    Date: 2013

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