nep-hea New Economics Papers
on Health Economics
Issue of 2014‒01‒24
eighteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Subjective Health Status of the Older Population: Is It Related to Country-Specific Economic Development Measures? By Teresa García-Muñoz; Shoshana Neuman; Tzahi Neuman
  2. Productivity of the English National Health Service from 2004/5: updated to 2011/12 By Chris Bojke; Adriana Castelli; Katja Grasic; Andrew Street
  3. Physical Stature Decline and the Health Status of the Elderly Population in England By Alan Fernihough; Mark E. McGovern
  4. What drives child health improvements in Indonesian households? A micro-level perspective on complementarities in MDG achievements By Maria Carmela Lo Bue
  5. Unemployment and Mortality By Timothy Halliday
  6. Environmental taxation, health and the life-cycle By Nathalie Mathieu-Bolh; Xavier Pautrel
  7. Supplemental Health Insurance and Healthcare Consumption: A Dynamic Approach to Moral Hazard By Carine Franc; Marc Perronnin; Aurelie Pierre
  8. Expanding Women's Healthcare Access in the United States: The Patchwork “Universalism†of the Affordable Care Act By Randy Albelda; Arjun Diana Salas Coronado
  9. Access to work and disability: the case of Italy By Tindara Addabbo; Elena Sarti
  10. State and Demographic Variation in Use of Depot Antipsychotics by Medicaid Beneficiaries With Schizophrenia. By Jonathan D. Brown; Allison Barrett; Emily Caffery; Kerianne Hourihan; Henry T. Ireys
  11. The Industrial Organization of Health Care Markets By Martin Gaynor; Kate Ho; Robert Town
  12. Household Decision-Making and Valuation of Environmental Health Risks to Parents and their Children By Wiktor Adamowicz; Mark Dickie; Shelby Gerking; Marcella Veronesi; David Zinner
  13. Preventive health and active ageing: the elderly are not a burden By Aisa, Rosa; Larramona, Gemma; Pueyo, Fernando
  14. The implication of contracting out health care services: The case of service level agreements in Malawi By Mpakati Gama, Elvis; McPake, Barbara; Newlands, David
  15. Disentangling the link between health and social capital: A comparison of immigrant and native-born populations in Spain By Stoyanova, Alexandrina Petrova; Díaz Serrano, Lluís
  16. Are we living longer but less healthy? Trends in mortality and morbidity in Catalonia (Spain), 1994-2011 By Aida Solé-Auró; Manuela Alcañiz
  17. Money talks: Paying physicians for performance By Keser, Claudia; Schnitzler, Cornelius
  18. Pharmaceutical regulation and health policy objectives By Birg, Laura

  1. By: Teresa García-Muñoz; Shoshana Neuman (Bar-Ilan University); Tzahi Neuman
    Abstract: It is now common to use the individual's self-assessed-health-status (SAHS), which expresses her/his holistic 'internal' view, as a measure of health. The use of SAHS is supported by numerous studies that show that SAHS is a better predictor of mortality and morbidity than medical records. The 2011 wave of the rich Survey of Health Aging and Retirement Europe (SHARE) is used for the exploration of the full spectrum of factors behind the health-status in 16 European countries, using about 33 thousand observations. Special emphasis is given to the examination of development country measures and their correlation with aggregate country-levels of subjective-health. The empirical analysis includes 2 layers: (i) estimation of SAHS equations, using a large set of personal socio-economic characteristics as explanatory variables (controlling for country fixed-effects); and (ii) study of the correlations between average country SAHSs – controlled for differences in populations’ socio-economic characteristics – and objective country-specific aggregate macroeconomic development variables (logarithm of per-capita GDP; the Human Development Index; life expectancy at birth; per-capita expenditures on health; percentage of GDP spent on education; income inequality). The second part of the empirical examination (that borrows the technique used by Oswald and Wu, 2010) is novel and will lead to an answer to our core question: Is subjective-health affected by the country's economic development level? The main findings are: (i) the estimation of self-assessed-health-status regressions provides clear evidence of the effects of a large set of socio-economic variables on the individual’s subjective rating of her/his health status, beyond and above the obvious effects of health conditions; (ii) the second, more innovative, finding is related to the effects of country-specific economic development variables on the subjective-health of the residents, beyond and above those of the personal characteristics. Country dummy variables are added to the SAHS regression, to derive the country-specific aggregate SAHSs. These country dummies are then examined for correlations with a set of objective country economic development measures. It appears that the first five development measures (logarithm of per-capita GDP; the Human Development Index; life expectancy at birth; per-capita expenditures on health; percentage of GDP spent on education) are positively and significantly correlates with aggregate SAHSs, while Income Inequality does not correlate significantly with SAHS. It is therefore not only ‘who you are’ that affects the subjective rating of health, but also ‘in which country you live’. Those who live in more developed countries report higher levels of subjective-health (everything else being equal). Overall, our findings indicate that what is true for the individual is also true for the country as a whole: both individual and country-level development factors affect subjective-health and the two levels accumulate and reinforce the subjective-health assessment. This seems to be at odds with the ‘Easterlin Paradox’ that emphasizes within country individual effects and denies cross-country effects.
    Date: 2014–01
  2. By: Chris Bojke (Centre for Health Economics, University of York, UK); Adriana Castelli (Centre for Health Economics, University of York, UK); Katja Grasic (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics and Department of Economics and Related Studies, University of York, UK)
    Abstract: We measure the productivity of the health care sector over time by comparing the total amount of health care ‘output’ produced to the total amount of ‘input’ used to produce this output in accordance with Eurostat conventions (Eurostat, 2001). To construct a time series, we need to account for changes in routine data collection procedures, such as data coverage and changing activity definitions. To do this we construct a series of chained indices for both output and input growth in consecutive years. This allows us to calculate a like-with-like productivity growth series for the English National Health Service for the time period from 2004/5 to 2011/12.
    Date: 2014–01
  3. By: Alan Fernihough (Institute for International Integration Studies, Trinity College Dublin); Mark E. McGovern (Harvard School of Public Health)
    Abstract: Few research papers in economics have examined the extent, causes or consequences of physical stature decline in aging populations. Using repeated observations on objectively measured data from the English Longitudinal Study of Ageing (ELSA), we document that reduction in height is an important phenomenon among respondents aged 50 and over. On average, physical stature decline occurs at an annual rate of between 0.08% and 0.10% for males, and 0.12% and 0.14% for females — which approximately translates into a 2cm to 4cm reduction in height over the life course. Since height is commonly used as a measure of long-run health, our results demonstrate that failing to take age-related height loss into account substantially overstates the health advantage of older birth cohorts relative to their younger counterparts. We also show that there is an absence of consistent predictors of physical stature decline at the individual level. However, we demonstrate how deteriorating health and reductions in height occur simultaneously. We document that declines in muscle mass and bone density are likely to be the mechanism through which these effects are operating. If this physical stature decline is determined by deteriorating health in adulthood, the coefficient on a measured height when used as an input in a typical empirical health production function will be affected by reverse causality. While our analysis details the inherent difficulties associated with measuring height in older populations, we do not find that significant bias arises in typical empirical health productionfunctions from the use of height which has not been adjusted for physical stature decline. Therefore, our results validate the use of height among the population aged over 50.
    Keywords: Height, Physical Stature Decline, Early Life Conditions, Health, Aging
  4. By: Maria Carmela Lo Bue (Georg-August-University Göttingen)
    Abstract: Using panel data from Indonesia, this paper analyzes the linkages between child nutrition, health care, household wealth and parental education in order to detect transmission channels between health, education, nutrition, water and sanitation access, five critical MDG targets. This paper therefore also aims at providing an empirical analysis of the drivers of complementarities between these goals at the micro level micro-level perspective. We find that maternal education has a positive and long term effect on child health and that this effect is partly reflected in reproductive behavior and partly conveyed to child health outcomes through child caring practices such as breastfeeding. Although we cannot rule out the existence of strong complementarities existing between household wealth or income and child health, the effect of positive changes in this variable appears to be present only in the short term. On the other hand, there are supply-side factors such as lack of sanitation and access to health facilities which also strongly affect children in terms of anthropometric outcomes.
    Keywords: Millennium Development Goals; Child undernutrition; Panel data; Mundlak model; Indonesia
    JEL: I12 I30 O15
    Date: 2014–01–13
  5. By: Timothy Halliday (University of Hawaii Economic Research Organization)
    Abstract: We use micro-data to investigate the relationship between unemployment and mortality in the United States using Logistic regression on a sample of over 16,000 individuals. We consider baselines from 1984 to 1993 and investigate mortality up to ten years from the baseline. We show that poor local labor market conditions are associated with higher mortality risk for working-aged men and, specifically, that a one percentage point increase in the unemployment rate increases their probability of dying within one year of baseline by 6%. There is little to no such relationship for people with weaker labor force attachments such as women or the elderly. Our results contribute to a growing body of work that suggests that poor economic conditions pose health risks and illustrate an important contrast with studies based on aggregate data.
    JEL: I0 I12 J1
    Date: 2013–12
  6. By: Nathalie Mathieu-Bolh (University of Vermont - University of Vermont); Xavier Pautrel (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272)
    Abstract: We build a model that takes into consideration the evolution of health over the life cycle and its consequences on individual optimal choices. In this framework, the effect of environmental taxation are not limited to the traditional negative crowding-out and positive productivity effects. We show that environmental taxation generates new general equilibrium effects ignored by previous contributions. Indeed, as the environmental tax improves the health profile over the life-cycle, it influences saving, labor supply, retirement and investment in health. We also show that whether those general equilibrium effects are positive or negative for the economy crucially depends on the degree of substitutability between young and old labor. We complete our theoretical analysis with numerical examples. Within the range of our parameters, it appears that ignoring those general equilibrium effects results in significantly understating the negative of environmental tax- ation on output per capita and welfare.
    Keywords: Health; environmental policy; economic growth
    Date: 2014–01–14
  7. By: Carine Franc (CERMES centre de recherche medecine, sciences, sante et societe); Marc Perronnin (IRDES Institute for research and information in health economics); Aurelie Pierre (IRDES Institute for research and information in health economics)
    Abstract: We analyze the existence and persistence of moral hazard over time to test the assumption of pent-up demand. We consider the effects of supplemental health insurance provided by a private insurer when added to compulsory public insurance already supplemented by private insurance. Using panel data from a French mutuelle, we compute error component models with the Chamberlain specification to control for adverse selection. By separating outpatient care consumption into (1) the probability of healthcare use, (2) the number of uses conditional on use and (3) the per-unit cost of care, we provide evidence that supplemental insurance is significantly and positively associated with (1), (2) and (3). However, these effects decrease significantly over time. This pattern supports the existence of pent-up demand, the magnitude of which varies greatly and depends on the dimensions (1), (2) and (3) and the type of care (physician care, prescription drugs, dental care or optical care).
    Keywords: Supplemental health insurance, moral hazard, health care expenditures, longitudinal analysis
    JEL: I13
    Date: 2014–01
  8. By: Randy Albelda; Arjun Diana Salas Coronado
    Date: 2014–01
  9. By: Tindara Addabbo; Elena Sarti
    Abstract: This paper is an empirical study on the work opportunities of people with disability using the Istat survey on health conditions 2004-2005, that collects information on the health status and disability condition on the whole Italian population and allows a comparison between disabled and not disabled persons. For this purpose we investigate the probability to be employed by disability status. People with disability show a lower probability of being employed and their employment probability is even lower if with psychic disability. By disaggregating by disability status our analysis can recognize a higher positive effect of investing in education on the probability of employment for people with disabilities.
    Keywords: health condition, employment, personal characteristics and environmental factors
    JEL: J71 I10 I14
    Date: 2013–10
  10. By: Jonathan D. Brown; Allison Barrett; Emily Caffery; Kerianne Hourihan; Henry T. Ireys
    Keywords: Medicaid , schizophrenia , antipsychotic depot injections , demography
    JEL: I
    Date: 2014–01–30
  11. By: Martin Gaynor; Kate Ho; Robert Town
    Abstract: The US health care sector is large and growing – health care spending in 2011 amounted to $2.7 trillion and 18% of GDP. Approximately half of health care output is allocated via markets. In this paper, we analyze the industrial organization literature on health care markets focusing on the impact of competition on price, quality and treatment decisions for health care providers and health insurers. We conclude with a discussion of research opportunities for industrial organization economists, including opportunities created by the US Patient Protection and Affordable Care Act.
    JEL: I11 L1 L10
    Date: 2014–01
  12. By: Wiktor Adamowicz; Mark Dickie; Shelby Gerking; Marcella Veronesi; David Zinner
    Abstract: This paper empirically discriminates between alternative household decisionmaking models for estimating parents’ willingness to pay for health risk reductions for their children as well as for themselves. Models are tested using data pertaining to heart disease from a stated preference survey involving 432 matched pairs of parents married to one another. Analysis is based on a collective model of parental resource allocation that incorporates household production of perceived health risks and allows for differences in preferences and risk perceptions between parents. Results are consistent with Pareto efficiency within the household, which implies that (1) for a given proportionate reduction in health risk, parents are willing to pay the same amount of money at the margin to protect themselves and the child; and (2) parents’ choices about proportionate health risk reductions for their children are based on household valuations, rather than their own individual valuations. Results also suggest that the marginal willingness to pay of mothers and fathers for health risk protection is sensitive to a shift in intra-household decision-making power between parents.
    Keywords: household decision-making, collective household model, non-cooperative household model, unitary household model, Pareto efficiency, environmental health risks to parents and children, willingness to pay, matched sample of mothers and fathers
    JEL: D13 D61 I12 I38 J13 Q51
    Date: 2013–12
  13. By: Aisa, Rosa; Larramona, Gemma; Pueyo, Fernando
    Abstract: Governments concerned with public finance are introducing reforms to push their citizens to remain in the labor market beyond the normal retirement age. We build a stylized theoretical framework in which we show that the labor supply among older workers and preventive health investment go hand in hand. In particular, those workers with the highest levels of productivity are those who remain longer in the labor market and, at the same time, who invest more in preventive health. We also find that a certain level of productivity in the health sector emerges as a prerequisite for active ageing. Furthermore, an increase in such productivity leads to growth in the effective labor supply, leading to an increase in demand for health care, while liberating additional resources for the non-health sectors.
    Keywords: Active ageing, preventive health
    JEL: I1 J2
    Date: 2013–12–15
  14. By: Mpakati Gama, Elvis; McPake, Barbara; Newlands, David
    Abstract: Background: The Malawi government in 2002 embarked on an innovative health care financing mechanism called Service Level Agreement (SLA) with Christian Health Association of Malawi (CHAM) institutions that are located in areas where people with low incomes reside. The rationale of SLA was to increase access, equity and quality of health care services as well as to reduce the financial burden of health expenditure faced by poor and rural communities. This thesis evaluates the implications of SLA contracting out mechanism on access, utilization and financial risk protection, and determines factors that might have affected the performance of SLAs in relation to their objectives. Methods: The study adopted a triangulation approach using qualitative and quantitative methods and case studies to investigate the implications of contracting out in Malawi. Data sources included documentary review, in-depth, semi-structured interviews and questionnaire survey. The principal agent model guided the conceptual framework of the study. Results: We find positive impact on overall access to health care services, qualitative evidence of perverse incentives for both parties to the contracting out programme and that some intended beneficiaries are still exposed to financial risk. Conclusion: An important conclusion of this study is that contracting out has succeeded in improving access to maternal and child health care as well as provided financial risk protection associated with out of pocket expenditure. However, despite this improvement in access and reduction in financial risk, we observe little evidence of meaningful improvement in quality and efficiency, perhaps because SLA focused on demand side factors, and paid little attention to supply factors: resources, materials and infrastructure continued to be inadequate.
    Keywords: Contracting out,financial risk protection,health financing,transaction costs, incentives,revealed objective
    JEL: D7 D8 D82 H5 I3
    Date: 2013–08–06
  15. By: Stoyanova, Alexandrina Petrova; Díaz Serrano, Lluís
    Abstract: An increasing body of research has pointed to the relevance of social capital in studying a great variety of socio-economic phenomena, ranging from economics growth and development to educational attainment and public health. Conceptually, our paper is framed within the debates about the possible links between health and social capital, on one hand, and within the hypotheses regarding the importance of social and community networks in all stages of the dynamics of international migration, on the other hand. Our primary objective is to explore the ways social relations contribute to health differences between the immigrants and the native-born population of Spain. We also try to reveal differences in the nature of the social networks of foreign-born, as compared to that of the native-born persons. The empirical analysis is based on an individual-level data coming from the 2006 Spanish Health Survey, which contains a representative sample of the immigrant population. To assess the relationship between various health indicators (self-assessed health, chronic conditions and long-term illness) and social capital, controlling for other covariates, we estimate multilevel models separately for the two population groups of interest. In the estimates we distinguish between individual and community-level social capital. While the Health Survey contains information that allows us to define individual social capital measures, the collective indicators come from other official sources. In particular, for the subsample of immigrants, we proxy community-level networks and relationships by variables contained in the Spanish National Survey of Immigrants 2007. The results obtained so far point to the relevance of social capital as a covariate in the health equation, although, the significance varies according to the specific health indicator used. Additionally, and contrary to what is expected, immigrants’ social networks seem to be inferior to those of the native-born population in many aspects; and they also affect immigrant’s health to a lesser extent. Policy implications of the findings are discussed. Keywords: health status, social capital, immigration, Spain
    Keywords: Estatus social, Salut pública, Capital social, Emigració i immigració, Espanya, 338 - Situació econòmica. Política econòmica. Gestió, control i planificació de l'economia. Producció. Serveis. Turisme. Preus,
    Date: 2013
  16. By: Aida Solé-Auró (Mortality, Health and Epidiemology Unit, Institut National d’Études Démographiques INED, Paris, France & Riskcenter, University of Barcelona, Barcelona, Spain); Manuela Alcañiz (Riskcenter, University of Barcelona, Barcelona, Spain)
    Abstract: Evidence on trends in prevalence of disease and disability can clarify whether countries are experiencing a compression or expansion of morbidity. An expansion of morbidity as indicated by disease have appeared in Europe and other developed regions. It is likely that better treatment, preventive measures and increases in education levels have contributed to the declines in mortality and increments in life expectancy. This paper examines whether there has been an expansion of morbidity in Catalonia (Spain). It uses trends in mortality and morbidity from major causes of death and links of these with survival to provide estimates of life expectancy with and without diseases and functioning loss. We use a repeated cross-sectional health survey carried out in 1994 and 2011 for measures of morbidity; mortality information comes from the Spanish National Statistics Institute. Our findings show that at age 65 the percentage of life with disease increased from 52% to 70% for men, and from 56% to 72% for women; the expectation of life unable to function increased from 24% to 30% for men and 40% to 47% for women between 1994 and 2011. These changes were attributable to increases in the prevalences of diseases and moderate functional limitation. Overall, we find an expansion of morbidity along the period. Increasing survival among people with diseases can lead to a higher prevalence of diseases in the older population. Higher prevalence of health problems can lead to greater pressure on the health care system and a growing burden of disease for individuals.
    Keywords: Healthy life expectancy, diseases, physical functioning, Spain
    Date: 2014–01
  17. By: Keser, Claudia; Schnitzler, Cornelius
    Abstract: Pay-for-performance has been enjoying a growing popularity among healthcare policy makers. It attempts to tie physician payment to quality of care. In a controlled laboratory experiment, we investigate the effect of pay-for-performance on physician provision behavior and patient benefit. For that purpose, we compare two payment systems, a traditional fee-for-service payment system and a hybrid payment system that blends fee-for-service and pay-for-performance incentives. Physicians are found to respond to pay-for-performance incentives. Approximately 89 percent of the participants qualify for a pay-for-performance bonus payment in the experiment. The physicians' relative share of optimal treatment decisions is significantly larger under the hybrid payment system than under fee-for-service. A patient treated under the hybrid payment system is significantly more likely to receive optimal treatment than a fee-for-service patient of matching type and illness. Pay-for-performance in many cases alleviates over- and under-provision behavior relative to fee-for-service. We observe unethical treatment behavior (i.e., the provision of medical services with no benefit to the patient), irrespective of the payment system. --
    Keywords: experimental economics,physician remuneration,pay-for-performance (P4P)
    Date: 2013
  18. By: Birg, Laura
    Abstract: This paper analyzes a maximum price system and a reference price system in a vertical differentiation model with a brand-name drug and a generic. In particular, both instruments are compared with respect to their performance in reducing public expenditure, limiting financial exposure of patients, improving access to pharmaceuticals, and stimulating competition. For identical regulatory prices, free pricing under the reference system tends to result in a higher price for the brand-name drug. For identical price reductions of the brand-name drug, the lower reimbursement amount under the reference price system results in lower health expenditure, but higher financial exposure of patients. Total welfare is higher under the maximum price system. --
    Keywords: pharmaceutical regulation,reference price,maximum price,price cap,health,policy objectives
    JEL: I18 L50 H51
    Date: 2013

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