nep-hea New Economics Papers
on Health Economics
Issue of 2014‒11‒22
fourteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Consumer search behavior and willingness to pay for insurance under price dispersion By Malakhov, Sergey
  2. Health behaviours and the patient-doctor interaction: The double moral hazard problem By Eleonora Fichera; James Banks; Matt Sutton
  3. Improvement of Health Sector in Kenya By Mohajan, Haradhan
  4. Income receipt and mortality - Evidence from Swedish public sector employees By Andersson, Elvira; Lundborg, Petter; Vikström, Johan
  5. Is temporary employment a cause or consequence of poor mental health? By Chris Dawson; Michail Veliziotis; Gail Pacheco; Don Webber
  6. Money talks - Paying physicians for performance By Claudia Keser; Emmanuel Peterle; Cornelius Schnitzler
  7. Patient Dumping, Outlier Payments, and Optimal Healthcare Payment Policy under Asymmetric Information By Tsuyoshi Takahara
  8. Risk Regulation Lessons from Mad Cows By Aldy, Joseph E.; Viscusi, W. Kip
  9. Side-effects of anti-smoking policies on health behaviors. Evidence from the US. By Celidoni, Martina; Pieroni, Luca; Salmasi, Luca
  10. Tobacco Consumption Determinants in Russia By Juraev, Nosirjon
  11. Understanding the differences in in-hospital mortality between Scotland and England By Maria Jose Aragon; Martin Chalkley
  12. Unintended Benefits of Election Day Alcohol Bans: Evidence from Road Crashes and Hospitalizations in Brazil By Marcos Yamada Nakaguma; Brandon Restrepo
  13. Using Disability Adjusted Life Years to Value the Treatment of Thirty Chronic Conditions in the U.S. from 1987-2010 By Tina Highfill; Elizabeth Bernstein
  14. Workers' health and social relations in Italy By Fiorillo, Damiano

  1. By: Malakhov, Sergey
    Abstract: When the increase in income reduces the time of search and increases prices of purchases, the increase in price can be presented as the increase in the willingness to pay for insurance. The optimal consumer decision represents the trade-off between the propensity to search for proficient insurance and marginal savings on insurance policy. Under price dispersion the indirect utility function takes the form of cubic parabola, where the saddle point represents the comprehensive insurance. The comparative static analysis of the saddle point of the utility function discovers the ambiguity of the departure from risk-neutrality. This ambiguity can produce the ordinary risk seeking behavior as well as mathematical catastrophes of Veblen-effect’s imprudence and over prudence of family altruism. The comeback to risk aversion is also ambiguous and it results either in increasing or in decreasing relative risk aversion. The paper argues that the decreasing risk aversion results in the optimum quantity of money.
    Keywords: consumer search, risk, insurance, real balances, Veblen effect, family altruism, mathematical catastrophe
    JEL: D11 D81
    Date: 2014–10–28
  2. By: Eleonora Fichera; James Banks; Matt Sutton
    Date: 2014
  3. By: Mohajan, Haradhan
    Abstract: Kenya faces major socio-economic and health challenges since the independent 1963. Tuberculosis, HIV/AIDS and malaria are the leading causes of morbidity and mortality in Kenya. The Government of Kenya has been trying to build a health system which can effectively provide quality health services to the population of the country. In Kenya, health services are provided through a network of over 5,000 health facilities countrywide. The country spends 5.1% of its GDP on health sector. As a result both mortality and morbidity rates are decreasing in Kenya. Infant and under-5 mortality rates are high in the country compare to the some other developing countries. Despite many attempts are taken by the Government yet the health sector of Kenya is far to reach the Millennium Development Goals. The paper discusses aspects of health of Kenya to make a healthy nation in the world.
    Keywords: Health sector, Malaria, TB, HIV/AIDS, ART, Kenya.
    JEL: I15
    Date: 2014–07–29
  4. By: Andersson, Elvira (Department of Economics and Centre for Economic Demography); Lundborg, Petter (Lund University, and IZA); Vikström, Johan (Uppsala Center for Labor Studies)
    Abstract: In this paper, we study the short-run effect of salary receipt on mortality among Swedish public sector employees. By using data on variation in pay-days across work-places, we completely control for mortality patterns related to, for example, public holidays and other special days or events coinciding with paydays and for general within-month and within-week mortality patterns. We find a dramatic increase in mortality on the day salaries arrive. The increase is especially pronounced for younger workers and for deaths due to activity-related causes such as heart conditions and strokes. Additionally,the effect is entirely driven by an increase in mortality among low income individuals, who are more likely to experience liquidity constraints. All things considered, our results suggest that an increase in general economi activity on salary receipt is an important cause of the excess mortality.
    Keywords: Income; Mortality; Health; Consumption; Liquidity constraints; Permanent income hypothesis
    JEL: D91 H31 H55 I10 I12 I38
    Date: 2014–08–10
  5. By: Chris Dawson (School of Management, University of Bath, UK); Michail Veliziotis (Department of Accounting, Economics and Finance, University of the West of England, Bristol, UK); Gail Pacheco (Department of Economics, Faculty of Business and Law, Auckland University of Technology); Don Webber (Department of Accounting, Economics and Finance, University of the West of England, Bristol, UK)
    Abstract: Mental health status often has a strong association with labour market outcomes. If people in temporary employment have poorer mental health than those in permanent employment then it is consistent with two mutually inclusive possibilities: temporary employment generates adverse mental health effects and/or individuals with poorer mental health select into temporary from permanent employment. We reveal that permanent workers with poor mental health appear to select into temporary employment thus signalling that prior cross sectional studies may overestimate the influence of employment type on mental health. We also reveal that this selection effect is significantly mitigated by job satisfaction.
    Keywords: Employment transitions; Psychological distress; Anxiety; Life satisfaction; Job dissatisfaction
    Date: 2014–10
  6. By: Claudia Keser; Emmanuel Peterle; Cornelius Schnitzler
    Abstract: Pay-for-performance 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 a traditional fee-for-service payment system to a hybrid 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. It follows that a patient treated under the hybrid payment system is significantly more likely to receive optimal treatment than a similar fee-for-service patient. Pay-for-performance generally tends to alleviate over- and under-provision of medical treatment relative to fee-for-service. Irrespective of the payment system, we observe unethical treatment behavior, i.e., the provision of medical services with zero benefit to the patient.
    Keywords: Experimental economics; physician remuneration; pay-for-performance (P4P).,
    Date: 2014–10–01
  7. By: Tsuyoshi Takahara
    Abstract: We analyze a rationale for official authorization of patient dumping in the prospective payment policy framework. We show that when the insurer designs the healthcare payment policy to let hospitals dump high-cost patients, there is a trade-off between the disutility of dumped patients (changes in hospitals' rent extraction due to low-severity patients) and the shift in the level of cost reduction efforts for high-severity patients. We also clarify the welfare-improving conditions by allowing hospitals to dump high-severity patients. Finally, we show that if the efficiency of the cost reduction efforts varies extensively and the healthcare payment cost is substantial, or if there are many private hospitals, the patient dumping policy can improve social welfare in a wider environment.
    Date: 2013–12
  8. By: Aldy, Joseph E. (Harvard University); Viscusi, W. Kip (Vanderbilt University)
    Abstract: The mad cow disease crisis in the United Kingdom (U.K.) was a major policy disaster. The government and public health officials failed to identify the risk to humans, created tremendous uncertainty regarding the human risks once they were identified, and undertook a series of policies that undermined public trust. In contrast, the mad cow disease risk never became a major problem in the United States (U.S.). The lead time that the U.S. had in responding to the disease that was first identified in the U.K. assisted in planning the policy response to avert a crisis. The absence of a comparable U.S. crisis, however, does not imply that the U.S. risk management approach was a success. Until recently, there was no systematic assessment of the domestic risks of mad cow disease. Moreover, U.S. government agencies have never undertaken a comprehensive assessment of the benefits and costs of any U.S. regulation dealing with mad cow disease. The absence of a sound economic basis for policy is reflected in the United States Department of Agriculture's (USDA) ill-considered decision to prohibit the private testing of beef for mad cow disease. This decision disadvantaged companies that sought such testing in order to comply with foreign testing regulations. In the absence of such testing, U.S. beef exports plummeted. One company that attempted to implement a testing program launched a legal challenge to the USDA prohibition and thus far has been successful. The policy failures in both the U.K. and the U.S. provide several lessons for regulating invasive species risks and dealing with emerging risks more generally. We conclude with a series of ten public policy lessons for dealing with similar emerging risks.
    Date: 2013–11
  9. By: Celidoni, Martina; Pieroni, Luca; Salmasi, Luca
    Abstract: In this paper, we use US data from the Behavioral Risk Factor Surveillance System to examine unintended side-effects related to smoking bans, and cigarette prices, and taxes on health behaviors. Our findings show that smoking bans not only had positive direct effects on smoking but also induced healthier lifestyles: the bans significantly reduced drinking participation and consumption and promoted physical activity, with heterogeneous effects in certain socio-economic groups, whereas cigarette prices and taxes affected the health behaviors of disadvantaged population groups. Robustness analyses show that results do not change when we consider ever-smokers or control for unobservable state-specific time-varying confounders.
    Keywords: Smoking bans, cigarette prices, health behaviors, instrumental variables.
    JEL: I10 I12 I18
    Date: 2014–07–01
  10. By: Juraev, Nosirjon
    Abstract: The following paper aims to contribute the existing literature on Russian tobacco use by analysing the determinants of smoking, and comparing the results to previous researches. We are also one of the few, if not the first to test the significance of BMI (Body Mass Index) with smoking habits. Our results mostly compromise with the results of previous English literature. Smokers generally tend to lose weight, and obese people naturally do not practice smoking. Educated people, religion believer smoke significantly less than school leavers, nonbelievers and army servers do.
    Keywords: Tobacco determinants, Russia
    JEL: D00
    Date: 2014–03–25
  11. By: Maria Jose Aragon (Centre for Health Economics, University of York, UK); Martin Chalkley (Centre for Health Economics, University of York, UK)
    Abstract: Aims-We describe differences in in-hospital mortality between Scotland and England and test whether these differences are robust to controlling for the case-mix of patients. In spite of Scotland and England having much in common in regard to their hospital systems and populations we observe trends in-hospital mortality – the percentage of elective and emergency Continuous Inpatient Spells (CIS) that ended in death – that are different: England’s in-hospital mortality rates have decreased faster than Scotland’s for both types of admissions. Data-Individual patient data from England (HES) and Scotland (SMR01) for the period 2003/04 – 2011/12. Episode data is linked into CIS. Sample: Elective and emergency admissions, including day cases and excluding maternity. Methods-Logit regression of in-hospital death on country and financial year dummies, and their interaction, controlling for age group, gender, deprivation decile, and HRG of the first episode; separately for elective and emergency admissions. Results-For elective admissions, England has a lower initial in-hospital mortality rate than Scotland, and this rate decreases in both countries but the decrease has been faster in England. For emergency admissions, England starts with a slightly higher in-hospital mortality rate and both countries in-hospital mortality rates reduce throughout the period but England’s does so faster. Conclusions-There are differences in in-hospital mortality between Scotland and England; these differences increase over time and persist when we account for patient characteristics. It is important to understand the causes and consequences of these differences and we make a number of suggestions for future research on this issue.
    Date: 2014–10
  12. By: Marcos Yamada Nakaguma; Brandon Restrepo
    Abstract: We analyze the impact of Election Day alcohol bans on road traffic accidents, traffic-related injuries, and alcohol-related hospitalizations. Our analysis focuses on the 2012 Municipal Elections in Brazil, during which 11 out of 27 states imposed on its 2,733 municipalities the decision to implement alcohol bans. Using daily-level data on municipalities, we find that alcohol bans caused substantial reductions in road crashes (15%), traffic-related injuries (30-70%), and traffic-related hospital admissions (18%). An analysis of the hospitalization costs associated with traffic accidents reveals that banning the sale of alcohol saved Brazil’s healthcare system $150,000 per day, which is likely to be a lower bound of the total societal cost savings. Using this figure as a benchmark, we estimate the total cost savings to be up to $1 million for a one-day ban on alcohol.
    Keywords: Alcohol; ban; election; drunk driving; traffic accident; road crash; hospitalization, hospital admission; cost analysis
    JEL: I12 I18
    Date: 2014–10–22
  13. By: Tina Highfill; Elizabeth Bernstein (Bureau of Economic Analysis)
    Date: 2014–08
  14. By: Fiorillo, Damiano
    Abstract: The paper investigates whether social relations are associated with the health of workers after controlling for demographic and worker characteristics, housing features, neighbourhood quality, size of municipality and regional dummies. We consider two level of social relationships: i) individual social relations that we proxy by the frequency of meetings with friends, and; ii) contextual social relations, the average frequency with which people meet friends at the community level. A Heckman selection model is estimated from the worker sample, employing both self-reported and objective health measures using new data from an income and living conditions survey carried out in 2006 by the Italian Statistics Office (IT-SILC). Results show that social relations at the individual level are positively correlated with self-perceived health, negatively associated with chronic condition but not related to limitations in daily activities. Contextual social relations are negatively linked with chronic condition and limitations in daily activities but not correlated with self-perceived health.
    Keywords: Self-perceived health, chronic condition, limitations in daily activities, social relations, income, work conditions, Italy.
    JEL: C35 I12 I18 Z10
    Date: 2014–09

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