nep-hea New Economics Papers
on Health Economics
Issue of 2014‒06‒07
seventeen papers chosen by
Yong Yin
SUNY at Buffalo

  1. SafeTREC - UCTC Seminar: An Innovative Performance Based Approach to the Health Impacts of Transit Investments By Co, Sean
  2. Early retirement and post retirement health By Hallberg, Daniel; Johansson, Per; Josephson, Malin
  3. Means-tested long term care and family transfers By Cremer, Helmuth; Pestieau, Pierre
  4. A Directional Distance Function Approach to Identifying the Input/Output Status of Medical Residents By Gary D. Ferrier; Viviane Valdmanis; Michael Vardanyan
  5. Bouncing Back from Health Shocks: Locus of Control, Labor Supply, and Mortality By Schurer, Stefanie
  6. The Effects of the Great Recession on Teenagers' Risky Health Behaviors and Time Use By Pabilonia, Sabrina Wulff
  7. A Kink that Makes You Sick: The Incentive Effect of Sick Pay on Absence By Böckerman, Petri; Kanninen, Ohto; Suoniemi, Ilpo
  8. The Length of Maternity Leave and Family Health By Beuchert, Louise Voldby; Humlum, Maria Knoth; Vejlin, Rune Majlund
  9. Consequences of ADHD Medication Use for Children's Outcomes By Dalsgaard, Søren; Nielsen, Helena Skyt; Simonsen, Marianne
  10. The Effects of Access to Health Insurance for Informally Employed Individuals in Peru By Bernal, Noelia; Carpio, Miguel A.; Klein, Tobias J.
  11. To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda By Greg Fischer; Dean Karlan; Margaret McConnell; Pia Raffler
  12. The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions By Sarah Cohodes; Samuel Kleiner; Michael F. Lovenheim; Daniel Grossman
  13. Dominated Choices and Medicare Advantage Enrollment By Christopher Afendulis; Anna Sinaiko; Richard Frank
  14. Hospital Mergers with Regulated Prices By Kurt R. Brekke; Luigi Siciliani; Odd Rune Straume
  15. Public health prevention strategies. A mathematical model. By Giuseppe Schinaia; Valentino Parisi
  16. Supply-Side Barriers to Maternity-Care Provision in India: A Facility-Based Analysis By Santosh Kumar; Emily Dansereau
  17. Inflated Responses in Measures of Self-Assessed Health By William H. Greene; Mark N. Harris; Bruce Hollingsworth

  1. By: Co, Sean
    Abstract: The epidemic of obesity and increased health care costs is a growing issue that is no longer confined to the public health field. Transportation agencies have begun to examine the impact of projects on public health. The Metropolitan Transportation Commission conducted a first of its kind benefit cost analysis of projects to be considered in the long range Regional Transportation Plan (RTP). This performance assessment of transportation investments was conducted to assess the impacts of projects on levels of transit and walking and biking. Bay Area residents that received increases in active transportation from specific transportation investments and resulted in meeting or exceeding the U.S. Surgeon General's recommendation of approximately 30 minutes daily had a health care savings compared to inactive residents. The benefits of active transportation range from $55 million for investments in bicycle infrastructure projects to $500,000 for transit projects where the increase in bike to transit contribute to reduced health care costs and lost productivity.
    Keywords: Engineering
    Date: 2014–04–01
  2. By: Hallberg, Daniel (The Swedish Social Insurance Inspectorate (ISF)); Johansson, Per (IFAU - Institute for Evaluation of Labour Market and Education Policy); Josephson, Malin (the Swedish Social Insurance Inspectorate (ISF))
    Abstract: This paper studies empirically the consequences of retirement on health. We make use of a targeted retirement offer to army employees 55 years of age or older. Before the offer was implemented in the Swedish defense, the normal retirement age was 60 years of age. Estimating the effect of the offer on individuals’ health within the age range 56-70, we find support for a reduction in both mortality and in inpatient care as a consequence of the early retirement offer. Increasing the mandatory retirement age may thus not only have positive government income effects but also negative effects on increasing government health care expenditures.
    Keywords: Health; mortality; inpatient care; retirement; health care; pensions; occupational pensions
    JEL: I18 J22 J26
    Date: 2014–05–19
  3. By: Cremer, Helmuth; Pestieau, Pierre
    Abstract: One of the pervasive problems with means-tested public long term care (LTC) programs is their inability to prevent individuals who could a¤ord private long term services from taking advantage of public care. They often manage to elude the means-test net through strategic impoverishment. We show in a simple model how this problem comes about, how it a¤ects welfare and how it can be mitigated.
    Keywords: Long term care, means-testing, strategic impoverishment, opting out, public insurance, altruism.
    JEL: H2 H5
    Date: 2014–05
  4. By: Gary D. Ferrier (University of Arkansas; CNRS-LEM and IESEG School of Management); Viviane Valdmanis (University of the Sciences in Philadelphia and IESEG School of Management); Michael Vardanyan (IESEG School of Management (LEM-CNRS))
    Abstract: The application of the human capital theory, the production theory, and the comparison of costs between teaching and non-teaching hospitals all point to the difficulties in identifying whether medical residents should be considered as inputs or outputs. We add to the debate by using a data-driven parametric approach based on the directional technology distance function to determine the status of medical residents. Using the American Hospital Association data from 1994 to 2010 we show that residents are inputs in all rural and in public non-teaching hospitals, but outputs in urban-area teaching not-for-profit hospitals. We also demonstrate that the status of residents is related to the case-mix index and that it can sometimes vary with hospital size.
    Keywords: hospitals, directional distance functions
    JEL: C13 D24 I12
    Date: 2014–02
  5. By: Schurer, Stefanie (University of Sydney)
    Abstract: Policy-makers worldwide are embarking on school programmes aimed at boosting students' resilience. One facet of resilience is a belief about cause and effect in life, locus of control. I test whether positive control beliefs work as a psychological buffer against health shocks in adulthood. To identify behavioural differences in labour supply, I focus on a selected group of full-time employed men of working age and similar health. Men with negative control beliefs, relative to men with positive beliefs, are 230-290% more likely to work part-time or drop out of the labour market after a health shock. In old age men with negative control beliefs are by a factor of 2.7 more likely to die after a health shock. The heterogeneous labour supply responses are also observed for other non-cognitive skills, but only for the ones which correlate with control beliefs. Interventions aimed at correcting inaccurate beliefs and negative perceptions may be a low-cost tool to moderate rising public expenditures on social protection and health care.
    Keywords: non-cognitive skills, locus of control, labor supply, mortality, health shocks, SOEP
    JEL: I12 J24
    Date: 2014–05
  6. By: Pabilonia, Sabrina Wulff (U.S. Bureau of Labor Statistics)
    Abstract: This paper uses individual-level data from both the 2003-2011 American Time Use Survey and Youth Risk Behavior Survey and state-level unemployment rates to examine the effects of the Great Recession on teenagers' activities. I present results by gender and gender by race/ethnicity. Over the period, I find changes in sexual activity for males associated with changes in time spent with parents; but results vary significantly by race. In addition, Hispanic males gained weight during the recession, due perhaps to a decrease in time spent playing sports. Hispanic females, on the other hand, made greater educational investments while spending less time working. All females significantly decreased TV viewing during the Great Recession. However, there were signs that female teenagers were stressed as they slept less and were more likely to smoke regularly.
    Keywords: teenagers, risky behaviors, time use, Great Recession, economy
    JEL: J22 J11
    Date: 2014–05
  7. By: Böckerman, Petri (Labour Institute for Economic Research); Kanninen, Ohto (Labour Institute for Economic Research); Suoniemi, Ilpo (Labour Institute for Economic Research)
    Abstract: This paper examines the effect of the replacement rule of the Finnish sickness insurance system on the duration of sickness absence. A pre-determined, piecewise linear policy rule in which the replacement rate is determined by past earnings allows identification of the effect using a regression kink design. We find a substantial and robust behavioral response. The statistically significant point estimate of the elasticity of the duration of sickness absence with respect to the replacement rate is on the order of 1.4.
    Keywords: sick pay, labor supply, sickness absence, paid sick leave, regression kink design
    JEL: I13 I18 J22
    Date: 2014–05
  8. By: Beuchert, Louise Voldby (Aarhus University); Humlum, Maria Knoth (Aarhus University); Vejlin, Rune Majlund (Aarhus University)
    Abstract: We study the relationship between the length of maternity leave and the physical and psychological health of the family. Using a reform of the parental leave scheme in Denmark that increased the number of weeks of leave with full benefit compensation, we estimate the effect of the length of maternity leave on a range of health indicators including the number of hospital admissions for both mother and child and the probability of the mother receiving antidepressants. The reform led to an increase in average post-birth maternity leave of 32 days. We find limited evidence that the increase in the length of maternity leave matters for child or maternal health outcomes and thus we complement the existing evidence on maternity leave expansions that tends to find limited effects on children's later developmental, educational, and labor market outcomes. Our results suggest that any beneficial effects of increasing the length of maternity leave are greater for low-resource families.
    Keywords: maternity leave, family health, regression-discontinuity
    JEL: I18 J13 J18
    Date: 2014–05
  9. By: Dalsgaard, Søren (Aarhus University); Nielsen, Helena Skyt (Aarhus University); Simonsen, Marianne (Aarhus University)
    Abstract: This paper estimates effects of early ADHD medication use on key human capital outcomes for children diagnosed with ADHD while using rarely available register based data on diagnoses and prescription drug purchases. Our main identification strategy exploits plausible exogenous assignment of children to hospitals with specialist physicians, while our analysis of health outcomes also allows for an individual level panel data strategy. We find that the behavior of specialist physicians varies considerably across hospitals and that the prescribing behavior does affect the probability that a given child is treated. Results show that children diagnosed with ADHD in pharmacological treatment have fewer hospital contacts if treated and that treatment to some extent protects against criminal behavior.
    Keywords: treatment, Attention Deficit/Hyperactivity Disorder, hospital variation, health, crime
    JEL: I11 I12
    Date: 2014–05
  10. By: Bernal, Noelia (Universidad de Piura); Carpio, Miguel A. (Universidad de Piura); Klein, Tobias J. (Tilburg University)
    Abstract: Many developing countries have recently increased health insurance coverage at a large scale. While it is commonly believed that this has positive effects, to date, it is not well understood through which channels health insurance coverage contributes to the well-being of individuals. More generally, the effects are usually not quantified at the individual level. There are two main reasons for this. First, we lack detailed data on health care utilization and health outcomes, and second, it is not easy to control for selection into insurance. The second problem means that a regression of utilization or outcome measures on insurance coverage will yield biased results and will not estimate the causal effects of health insurance. In this paper, we make progress in both directions. We use rich survey data to evaluate the impact of access to the Peruvian Social Health Insurance called "Seguro Integral de Salud" for individuals outside the formal labor market on a variety of measures for health care utilization, preventive care, health expenditures, and health indicators. We address the second concern by exploiting a fuzzy regression discontinuity design. A household is eligible for the program if a welfare index that is calculated from a number of variables is below a specific threshold. We base our analysis on a natural experiment that is generated by variation in the index around the threshold. We interpret our results through the lens of a simple model. As expected, and in contrast to studies for a number of other countries, we find strong effects of insurance coverage on measures of health care utilization, such as visiting a doctor, receiving medication and medical analysis. The program does not strongly incentivice individuals or health care providers to invest into preventive care. In line with this, in general, we find no effects of insurance coverage on preventive care. The only exceptions to this are our findings that, controlling for selection into insurance coverage, women of fertile age with insurance are more likely to receive pregnancy care and that insured individuals are more likely to be vaccinated. This is in line with the stark decrease in maternal and child mortality that was observed after the program was introduced. As for health care expenditures, we generally find positive effects on the mean and the variability. We complement these findings with quantile treatment effect estimates that show increases at the high end of the distribution. Our interpretation is that insured individuals are encouraged by health care professionals to undertake important treatments and pay for this themselves. At the same time, we find no clear effects on health outcomes at the micro level.
    Keywords: public health insurance, informal sector, health care utilization, health, regression discontinuity design
    JEL: I13 O12 O17
    Date: 2014–05
  11. By: Greg Fischer; Dean Karlan; Margaret McConnell; Pia Raffler
    Abstract: Pricing policy for any experience good faces a key tradeoff. On one hand, a price reduction increases immediate demand and hence more people learn about the product. On the other hand, lower prices may serve as price anchors and, through a comparison effect, decrease subsequent demand. This tension is particularly important for the distribution of health products in low-income countries, where free or heavily subsidized distribution is a common but controversial practice. Based on a model combining the learning aspect of experience goods with reference-dependent preferences, we setup a field experiment in Northern Uganda in which three health products differing in their scope for learning were initially offered either for free or for sale at market prices. In line with prior studies, when the product has potential for positive learning, we do not find an effect of free distribution on future demand. However, for products without scope for positive learning, we find evidence of price anchors: future demand is lower after a free distribution than after a distribution at market prices.
    JEL: D11 D12 D83 I11 I18 O12
    Date: 2014–05
  12. By: Sarah Cohodes; Samuel Kleiner; Michael F. Lovenheim; Daniel Grossman
    Abstract: Public health insurance programs comprise a large share of federal and state government expenditure, and these programs are due to be expanded as part of the 2010 Affordable Care Act. Despite a large literature on the effects of these programs on health care utilization and health outcomes, little prior work has examined the long-term effects of these programs and resultant health improvements on important outcomes, such as educational attainment. We contribute to filling this gap in the literature by examining the effects of the public insurance expansions among children in the 1980s and 1990s on their future educational attainment. Our findings indicate that expanding health insurance coverage for low-income children has large effects on high school completion, college attendance and college completion. These estimates are robust to only using federal Medicaid expansions, and they are mostly due to expansions that occur when the children are older (i.e., not newborns). We present suggestive evidence that better health is one of the mechanisms driving our results by showing that Medicaid eligibility when young translated into better teen health. Overall, our results indicate that the long-run benefits of public health insurance are substantial.
    JEL: H51 H52 I13 I21 I28
    Date: 2014–05
  13. By: Christopher Afendulis; Anna Sinaiko; Richard Frank
    Abstract: Research in behavioral economics suggests that certain circumstances, such as large numbers of complex options or revisiting prior choices, can lead to decision errors. This paper explores the enrollment decisions of Medicare beneficiaries in the Medicare Advantage (MA) program. During the time period we study (2007-2010), private fee-for-service (PFFS) plans offered enhanced benefits beyond those of traditional Medicare (TM) without any restrictions on physician networks or additional cost, making TM a dominated choice relative to PFFS. Yet more than three quarters of Medicare beneficiaries remained in TM during our study period. We explore two possible explanations for this behavior: status quo bias and choice overload. Our results suggest that status quo bias plays an important role; the rate of MA enrollment was significantly higher among new Medicare beneficiaries than among incumbents. Our results also provide some evidence of choice overload; while the MA enrollment rate did not decline with an increase in the number of plans, among incumbent beneficiaries it failed to increase. Our results illustrate the importance of the choice environment that is in place when enrollees first enter the Medicare program.
    JEL: I13
    Date: 2014–05
  14. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Luigi Siciliani (Department of Economics and Related Studies; and Centre for Health Economics, University of York); Odd Rune Straume (Universidade do Minho - NIPE)
    Abstract: We study the effects of a hospital merger using a spatial competition framework with semialtruistic hospitals that invest in quality and expend cost-containment effort facing regulated prices. We find that the merging hospitals always reduce quality, whereas non-merging hospitals respond by increasing (reducing) quality if qualities are strategic substitutes (complements). A merger leads to higher average treatment cost efficiency and, if qualities are strategic substitutes, might also increase average quality in the market. If a merger leads to hospital closure, the resulting effect on quality is positive (negative) for all hospitals in the market if qualities are strategic substitutes (complements). Whether qualities are strategic substitutes or complements depends on the degree of altruism, the effectiveness of cost-containment effort, and the degree of cost substitutability between quality and treatment volume.
    Keywords: Hospital mergers; Quality competition; Cost efficiency; Antitrust
    JEL: I11 I18 L13 L44
    Date: 2014
  15. By: Giuseppe Schinaia (Department of Metodi e modelli per l'economia, il territorio e la finanza MEMOTEF - Sapienza University of Rome (Italy)); Valentino Parisi (DIPEG, Università degli Studi di Cassino e del Lazio Meridionale.)
    Abstract: This paper presents and discusses schemes of prevention measures in public health. A mathematical model is purposely designed to outline various features related to cost issues and a numerical application to Italian cancer data is used to show the flexibility and utilization of the model.
    Keywords: Public Health, Mathematical Modelling, Prevention Measures, Cost Analysis
    JEL: I18 C63 H89
  16. By: Santosh Kumar (Department of Economics and International Business, Sam Houston State University); Emily Dansereau (University of Washington)
    Abstract: Background: Health facilities in many low- and middle-income countries face several types of barriers in delivering quality health services. Availability of resources at the facility may significantly affect the volume and quality of services. We aim to investigate the effect of supply-side determinants of delivery care in India. Methods: Facility data from the District-Level Household Survey (DLHS-3) collected in 2007-2008 were analyzed to explore the effect of supply-side factors on the volume of delivery care at Indian health facilities. A Negative Binomial regression model was fit to the data due to the count and over-dispersion property of the outcome variable (number of deliveries performed at the facility). Results: Availability of a labor room (Incidence Rate Ratio [IRR]: 1.81; 95% Confidence Interval [CI]: 1.68-1.95) and facility opening hours (IRR: 1.43; CI: 1.35-1.51) were the most significant predictors of the volume of delivery care at the health facilities. Implementation of quality measures was not associated with more deliveries. Statistically significant but very small increases in the IRR were associated with increases in the types of medical (IRR: 1.05; 95% CI: 1.01-1.08) and paramedical (IRR: 1.06; CI: 1.04-1.08) staff available, and relevant staff trainings (IRR: 1.05; CI: 1.00-1.11). The volume of deliveries was also higher if adequate beds, essential obstetric drugs, medical equipment, communications infrastructure, and electricity were available at the clinic. Findings were robust to the inclusion of a catchment area population size, and district-level controls for education, insurance, religion, wealth, and fertility. Conclusions: Our study highlights the importance of supply-side barriers to health services utilization. To meet the Millennium Development Goal of reducing maternal mortality, policymakers should make additional investment in improving the availability of infrastructure at the primary-care level, including labor rooms and hours of operation.
    Date: 2014–06
  17. By: William H. Greene; Mark N. Harris; Bruce Hollingsworth
    Date: 2014

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