nep-hea New Economics Papers
on Health Economics
Issue of 2013‒10‒18
twenty papers chosen by
Yong Yin
SUNY at Buffalo

  1. Does income deprivation affect people’s mental well-being? By Maite Blázquez Cuesta; Santiago Budría
  2. 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
  3. Higher Quality and Lower Cost from Improving Hospital Discharge Decision Making By James C. Cox; Vjollca Sadiraj; Kurt E. Schnier; John F. Sweeney
  4. Why Do Some Bikers Wear a Helmet and Others Don't? Evidence from Delhi, India By Michael Grimm; Carole Treibich
  5. Austerity Measures and Infant Health. Lessons from an Unexpected Wage Cut Policy By Bejenariu, Simona; Mitrut, Andreea
  6. Do Financial Incentives Increase the Use of Electronic Health Records? Findings from an Experiment. By Lorenzo Moreno; Suzanne Felt-Lisk; Stacy Dale
  7. Data Analytics in Medicaid: Spotlight on Colorado's Accountable Care Collaborative. By Julia Paradise; Marsha Gold; Winnie Wang
  8. How Does Retiree Health Insurance Influence Public Sector Employee Saving? By Robert Clark; Olivia S. Mitchell
  9. Pharmaceutical Followers By Peter Arcidiacono; Paul B. Ellickson; Peter Landry; David B. Ridley
  10. Retiree Health Insurance for Public School Employees: Does it Affect Retirement? By Maria D. Fitzpatrick
  11. Conforming and Non-conforming Peer Effects in Vaccination Decisions By Elizabeth Bodine-Baron; Sarah Nowak; Raffaello Varadavas; Neeraj Sood
  12. Quality and health care performance in the Italian regions By De Nicola, Arianna; Mancuso, Paolo; Valdmanis , Vivian
  13. Health Cycles and Health Transitions By Chakraborty, Shankha; Papageorgiou, Chris; Perez Sebastian, Fidel
  14. Economic effects of treatment of chronic kidney disease with low-protein diet By Francesco Saverio Mennini; Simone Russo; Andrea Marcellusi; Giuseppe Quintaliani; Denis Fouque
  15. Modeling the Cost-effectiveness of HIV/AIDS Interventions in Different Socio-economic Contexts in South Africa (2007-2020) By Josue Mbonigaba
  16. Health Care Facility Choice and User Fee Abolition: Regression Discontinuity in a Multinomial Choice Setting By Steven F. Koch and Jeffrey S. Racine
  17. Does full insurance increase the demand for health care? By Stefan Boes; Michael Gerfin
  18. Transportation choices and the value of statistical life By Gianmarco León; Edward Miguel
  19. Staffing Subsidies and the Quality of Care in Nursing Homes By Yong Suk Lee; Andrew D. Foster
  20. Health and education: Understanding the gradient By Strulik, Holger

  1. By: Maite Blázquez Cuesta (Universidad Autónoma de Madrid); Santiago Budría (CEEAPLA, IZA and Banco de ESpaña)
    Abstract: This paper uses panel data from the 2002-2010 waves of the German Socio-Economic Panel dataset (SOEP) to assess the impact of income deprivation upon individual mental well-being. Unobserved heterogeneity is controlled for by means of a random effects model extended to include a Mundlak term and explicit controls for the respondents’ personality traits. The paper shows that, for a given household income, a less favourable relative position in the income distribution is associated with lower mental well-being. This effect is not statistically significant among women, though. Among men, a one standard deviation increase in income deprivation is found to be as harmful as a reduction in permanent household income of almost 30%. Interestingly, this impact is found to differ among individuals endowed with different sets of non-cognitive skills. We suggest that policies, practices and initiatives aimed at improving well-being among European citizens require a better understanding of individuals’ sensitiveness to others’ income.
    Keywords: mental health, random effects model, deprivation, personality traits
    JEL: C23 D63 I10 I14
    Date: 2013–10
  2. 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
  3. By: James C. Cox; Vjollca Sadiraj; Kurt E. Schnier; John F. Sweeney
    Abstract: The added costs from excess, wasted resources in healthcare are estimated to exceed the size of the entire defense budget. Effectively addressing this problem requires decreasing the cost of healthcare while increasing its quality by improving healthcare decision making. This paper reports research on improving decisions about hospital discharges -- decisions that are now made by physicians based on mainly subjective evaluations of patients' discharge status. The research has three components: (a) econometric identification of patient medical status and demographic characteristics that discriminate between the likelihood of successful discharge and unsuccessful discharge (resulting in unplanned readmission within 30 days); (b) development of decision support software that incorporates evidence-based discharge criteria; and (c) empirical evaluation of efficacy of the decision support software. Experimental data reported herein indicate that utilization of the decision support software with evidence-based selection of the default option reduces both patients' average length of stay in the hospital and the likelihood of higher risk patients being readmitted.
    JEL: C91 D81 I10
    Date: 2013–10
  4. By: Michael Grimm (Erasmus University Rotterdam - Erasmus University Rotterdam, Passau University - Passau University, IZA - Institute for the Study of Labor); Carole Treibich (Erasmus University Rotterdam - Erasmus University Rotterdam, Paris School of Economics - Université Paris I - Panthéon-Sorbonne, AMSE - Aix-Marseille School of Economics - Aix-Marseille Univ. - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales [EHESS] - Ecole Centrale Marseille (ECM))
    Abstract: In many domains risky health behavior is still only poorly understood. Analysis is often plagued by incomplete data and a general lack of information. In this study; we try to understand the determinants of helmet use among motorcyclists in Delhi; a context in which road safety is very low. We use a very detailed data set collected especially for the purpose of the study. To guide our empirical analysis; we rely on a simple model in which drivers decide on their speed and helmet use. The empirical findings suggest that risk averse individuals are more likely to wear a helmet. We do not find any systematic effect of risk aversion on speed. Both findings are coherent with our theoretical model. Helmet use also increases with education. Drivers who show a higher awareness of road risks; because for instance; they are better informed about Delhi's actual road traffc accident fatality and injury rates; are both more likely to wear a helmet and to speed less. In turn; those drivers who show a high level of unawareness take the highest risks. Controlling for risk awareness; we observe that drivers tend to compensate between speed and helmet use. The most obvious solution to India's road safety problem and the related high social costs that result from it is to enforce the helmet law and speed limits. An alternative strategy; and probably more feasible in the current context; is to design interventions which raise awareness of road risks. Improvements to the road infrastructure are also a possible solution but these measures bear the risk that drivers will react to the improved road safety by either increasing speed or lowering helmet use.
    Keywords: road safety; helmet use; risky health behavior; self-protection; self-insurance; India
    Date: 2013–10
  5. By: Bejenariu, Simona (Department of Economics, School of Business, Economics and Law, Göteborg University); Mitrut, Andreea (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We investigate the effects on health at birth of a shock generated by a major (25%) and unexpected wage cut austerity measure that affected all public sector employees in Romania in 2010. Our findings suggest an overall improvement in health at birth for boys exposed to the shock in early gestation and a decreased sex ratio at birth among early exposed children. These findings are consistent with the selection in utero theory hypothesizing that maternal exposure to a significant shock early in gestation preponderantly selects against frail male fetuses, with healthier survivors being carried to term.
    Keywords: austerity measures; fetal shock; health at birth; selection in utero; Romania
    JEL: I19 I38 J13 J38
    Date: 2013–10–11
  6. By: Lorenzo Moreno; Suzanne Felt-Lisk; Stacy Dale
    Keywords: Health, Financial , Electronic, Records, Experiment
    JEL: I
    Date: 2013–09–30
  7. By: Julia Paradise; Marsha Gold; Winnie Wang
    Keywords: Data Analytics, Medicaid, Colorado, Accountable Care Collaborative
    JEL: I
    Date: 2013–10–30
  8. By: Robert Clark; Olivia S. Mitchell
    Abstract: Economic theory predicts that employer-provided retiree health insurance benefits crowd-out household wealth accumulation. Nevertheless, there is little research on the impacts of retiree health insurance on wealth accruals, so this paper utilizes a unique data file on three baseline cohorts from the Health and Retirement Study to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. We find that most full-time public sector employees who anticipate receiving employer-provided health insurance coverage in retirement save less than their private sector uncovered counterparts.
    JEL: H75 I11 I18 I30
    Date: 2013–10
  9. By: Peter Arcidiacono; Paul B. Ellickson; Peter Landry; David B. Ridley
    Abstract: We estimate a model of drug demand and supply that incorporates insurance, advertising, and competition between branded and generic drugs within and across therapeutic classes. We use data on antiulcer drugs from 1991 to 2010. Our simulations show generics and ``me-too'' drugs each increased consumer welfare more than $100 million in 2010, holding insurance premiums constant. However, insurance payments in 2010 fell by nearly $1 billion due to generics and rose by over $7 billion due to me-too antiulcer drugs.
    JEL: I11 L13 L65
    Date: 2013–10
  10. By: Maria D. Fitzpatrick
    Abstract: Despite the widespread provision of retiree health insurance for public sector workers, little attention has been paid to its effects on employee retirement. This is in contrast to the large literature on health-insurance-induced “job-lock” in the private sector. I use the introduction of retiree health insurance for public school employees in combination with administrative data on their retirement to identify the effects of retiree health insurance. As expected, the availability of retiree health insurance for older workers allows employees to retire earlier. These behavioral changes have budgetary implications, likely making the programs self-financing rather than costly to taxpayers.
    JEL: H75 I21 I22 J26
    Date: 2013–10
  11. By: Elizabeth Bodine-Baron; Sarah Nowak; Raffaello Varadavas; Neeraj Sood
    Abstract: Traditional economic models of vaccination assume that agents free-ride on the vaccination decision of others. These models show that private vaccination rates are always below the social optimal and even large subsidies cannot achieve disease eradication. In this paper, we build a model where in addition to the desire to free-ride, agents have a desire to conform to the vaccination decisions of their peers. In this model privately optimal vaccination rates can be higher or lower than the social optimal and thus subsidies for vaccination are not always optimal. However, in certain cases, even small subsidies can achieve disease eradication.
    JEL: H2 H21 I1 I28
    Date: 2013–10
  12. By: De Nicola, Arianna; Mancuso, Paolo; Valdmanis , Vivian
    Abstract: This paper estimates the total factor productivity of the Italian health care sector using a modified bootstrapped Malmquist Index including the quality of the production process provided to the population. Decomposing the productivity process in three different components (efficiency change, technological change and quality change) we can detemine if the increasing/decreasing health care productivity of the 20 Italian regions is strictly related to any of the changes during 1999-2008. The results highlights also significant difference in the terms of North-South divide.
    Keywords: Malmquist, quality, DEA, health care, regional differences, Italy.
    JEL: D24 I1 I11 I12
    Date: 2013–10
  13. By: Chakraborty, Shankha; Papageorgiou, Chris; Perez Sebastian, Fidel
    Abstract: We study the dynamics of poverty and health in a model of endogenous growth and rational health behavior. Population health depends on the prevalence of infectious diseases that can be avoided through costly prevention. The incentive to do so comes from the negative effects of ill health on the quality and quantity of life. The model can generate a poverty trap where infectious diseases cycle between high and low prevalence. These cycles originate from the rationality of preventive behavior in contrast to the predator-prey dynamics of epidemiological models. We calibrate the model to reflect sub-Saharan Africa's recent economic recovery and analyze policy alternatives. Unconditional transfers are found to improve welfare relative to conditional health-based transfers: at low income levels, income growth (quality of life) is valued more than improvements to health (quantity of life).
    Keywords: Infectious Disease, Cycles, Economic Epidemiology, Morbidity, Mortality, Conditional Transfers, Unconditional Transfers
    JEL: I15 O11 O40 O47
    Date: 2013–10–10
  14. By: Francesco Saverio Mennini (University of Rome "Tor Vergata"); Simone Russo (ISPESL); Andrea Marcellusi (University of Rome "Tor Vergata"); Giuseppe Quintaliani (Departments of Nephrology Dialysis and Cardiology, Silvestrini Hospital, Perugia); Denis Fouque (Dept Nephrology,Centre Hospitalier Lyon Sud, Center for European Nutrition and Safety, Université de Lyon, France)
    Abstract: Background: Several clinical studies have shown that a low protein diet in patients with Chronic Kidney Disease (CKD), delays the natural progression of the end stage renal disease (ESRD) and the necessary treatment of chronic dialysis. The aim of this study is to estimate the cost-effectiveness of a low protein diet compared with no dietary treatment in patients with CKD stage 4 and 5 after 2, 3, 5 and 10 years. Methods: A Markov model was developed to estimate costs and QALYs associated with low protein diet versus no treatment for patients with CKD stage 4-5. The transition probability was estimated on data from seven studies which determined the efficacy of low protein diets in delaying the need to start maintenance dialysis. The Quality Adjusted Life Years (QALYs) scores used were estimated with the Time Trade Off technique. The annual cost of dialysis per patient was estimated to be approximately €34,072. The costs of a low-protein diet was €1,440 per patient per year in the Lazio Region (conservative assumptions). Results: Treatment with a low-protein diet was more effective in terms of QALYs: the difference was always in favour of dietary treatment from a 0.09 QALYS after the first two years, 0.16 after three years, 0.36 after five years and up to a differential of 0.93 year after the first 10 years of treatment. In terms of cost-effectiveness, the dietary treatment was always dominant in all intervals considered. The dominance is due to the fact that the treatment is more effective in terms of QALYs and at the same time is less expensive. Conclusion: The results of these simulations indicate that the treatment of CKD patients with a low protein diet is cost effective relative to no-treatment in an Italian setting. Further studies should test this model in other countries with different dialysis costs and dietary support.
    Date: 2013–10–10
  15. By: Josue Mbonigaba
    Abstract: Evidence of how cost-effectiveness (CE) of an HIV/AIDS intervention compares in a rural context and an urban context is deficient yet crucial to potential efficiency in resource allocations in South Africa. To inform policy makers about such potential, the CE of major HIV/AIDS interventions is estimated in these contexts over the period 2007-2020. Two versions of Spectrum Policy Modeling System (SPMS) are constructed; one for a rural context and another for an urban context. Then each version is populated with context-specific parameters, before being used to project the annual number of patients and health outcomes of an HIV/AIDS intervention and a related USUAL CARE. The cost evidence for an HIV/AIDS intervention and related USUAL CARE is applied to projected number of patients and the incremental CE ratio (ICER) of an HIV/AIDS intervention relative to USUAL CARE in each context is estimated. The ICERs in the two contexts for the same HIV/AIDS intervention are then used to compare the CE of that HIV/AIDS intervention across contexts. The paper finds that CE estimates of an HIV/AIDS intervention across a rural context and an urban context differ and the extent of that difference varies across HIV/AIDS interventions. Therefore, policy makers can increase efficiency by allocating resources in HIV/AIDS interventions in socio-economic contexts according to CE variations in such contexts.
    Keywords: HIV/AIDS, rural, urban, socio-economic, interventions, South Africa, modeling, Spectrum, projections
    Date: 2013
  16. By: Steven F. Koch and Jeffrey S. Racine
    Abstract: We apply parametric and nonparametric regression discontinuity methodology within a multinomial choice setting to examine the impact of public health care user fee abolition on health facility choice using data from South Africa. The nonparametric model is found to outperform the parametric model both in- and out-of-sample, while also delivering more plausible estimates of the impact of user fee abolition (i.e. the `treatment effect'). In the parametric framework, treatment effects were relatively constant { around 7% { and that increase was drawn equally from both home care and private care groups. On the other hand, in the nonpara-metric framework treatment effects were largest for the least well-off (also around 7%) but fell for the most well-off. More plausibly, that increase was drawn primarily from the home care group, suggesting that the policy favoured those least well-off as more of these children received at least some minimum level of professional health care after the policy was implemented. Regarding the most well-off, despite having access to free public health care, children were still far more likely to receive health care at private facilities than at public facilities, which is also more plausible in South Africa's two-tier health sector.
    Keywords: Health care facility, User fee abolition, Regression Discontinuity
    Date: 2013
  17. By: Stefan Boes; Michael Gerfin
    Abstract: We estimate the causal effect of having full health insurance on health care expenditures. We take advantage of a unique quasi-experimental setup in which deductibles and co- payments were zero in a managed care plan, and non-zero in regular insurance, until a policy change forced all individuals with an active plan to cover a minimum amount of their expenses. Using panel data and a non-linear difference-in-differences strategy, we find a demand elasticity of about -0.14 comparing full insurance with the cost-sharing model, and a significant upward shift in the likelihood to generate costs.
    Keywords: Deductibles; health cost; quasi experiment; changes-in-changes
    JEL: I11 C14
    Date: 2013–10
  18. 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 risktaking 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
  19. By: Yong Suk Lee (Williams College); Andrew D. Foster (Brown University)
    Abstract: Concerns about the quality of state-financed nursing home care has led to the wide-scale adoption by states of pass-through subsidies, in which Medicaid reimbursement rates are directly tied to staffing expenditure. We examine the effects of Medicaid pass-through on nursing home staffing and quality of care by adapting a two-step FGLS method that addresses clustering and state-level temporal autocorrelation. We find that pass-through increases staffing by 4.4% in higher quality nursing homes and improves quality of care in lower quality nursing homes by an amount equivalent to one sixth the inter-quartile range of the quality distribution.
    Keywords: Medicaid, wage pass-through, nursing home, direct care staff, quality of care, FGLS
    JEL: H51 I18 J20 C23
    Date: 2013–06
  20. By: Strulik, Holger
    Abstract: This study presents a novel view on education and health behavior of individuals constrained by aging bodies. The aging process, i.e. the accumulation of health deficits over time, is built on recent insights from gerontology. The loss of body functionality, which eventually leads to death, can be accelerated by unhealthy behavior and delayed through health expenditure. Education is endogenous and determined, among others thing, by cognitive ability. The proposed theory rationalizes why better educated persons optimally choose a healthier lifestyle. The model is calibrated for the average male US citizen. In the benchmark case a difference in cognitive ability that motivates one more year of education leads to an increase of longevity by about half a year. Progress in medical technology explains why the education gradient gets larger over time. --
    Keywords: schooling,aging,longevity,health expenditure,unhealthy behavior,smoking
    JEL: D91 J17 J26 I12
    Date: 2013

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