nep-hea New Economics Papers
on Health Economics
Issue of 2014‒12‒13
sixteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Widowhood and barriers to seeking health care in Uganda By Tirivayi J.N.
  2. Moral Hazard and Less Invasive Medical Treatment for Coronary Artery Disease: The Case of Cigarette Smoking By Margolis, Jesse; Hockenberry, Jason; Grossman, Michael; Chou, Shin-Yi
  3. Commercial Plasma Donation and Individual Health in Impoverished Rural China By Chen, Xi
  4. Job Insecurity, Employability, and Health: An Analysis for Germany across Generations By Otterbach, Steffen; Sousa-Poza, Alfonso
  5. Does Privatized Health Insurance Benefit Patients or Producers? Evidence from Medicare Advantage By Marika Cabral; Michael Geruso; Neale Mahoney
  6. The Early Impact of the Affordable Care Act State-By-State By Amanda E. Kowalski
  7. The Contribution of Behavior Change and Public Health to Improved U.S. Population Health By Susan T. Stewart; David M. Cutler
  8. Risk Corridors and Reinsurance in Health Insurance Marketplaces: Insurance for Insurers By Timothy J. Layton; Thomas G. McGuire; Anna D. Sinaiko
  9. Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees By Jonathan Gruber; Robin McKnight
  10. Electronic Health Information Exchange, Competition, and Network Effects By Sunita Desai
  11. A care pathway analysis of tuberculosis patients in benin: highlights on direct costs and critical stages for an evidence-based decision-making. By Samia Laokri; Arnaud Amoussouhui; Edgard Marius Ouendo; Athanase Hounnankan; Séverin Anagonou; Martin Gninafon; Ferdinand Kassa; Léon Tawo; Bruno Dujardin
  12. Wages and return to work of injured workers By Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena
  13. Does the extension of primary care practice opening hours reduce the use of emergency services? By M. Lippi Bruni; I. Mammi; C. Ugolini
  14. Housing and health By Angel, Stefan; Bittschi, Benjamin
  15. Income inequality and health: Evidence from developed and developing countries By Herzer, Dierk; Nunnenkamp, Peter
  16. Average-cost pricing and dynamic selection incentives in the hospital sector By Kifmann, Mathias; Siciliani, Luigi

  1. By: Tirivayi J.N. (UNU-MERIT)
    Abstract: This study examined whether widowhood was associated with experiencing barriers to seeking health care in Uganda. Data from 8674 women aged between 15 and 49 years in the 2011 Uganda Demographic Health Survey, were analysed using multivariable logistic regression models. Compared to other women, widows were more likely to identify getting money for treatment and not wanting to visit health facilities alone as barriers. The odds for encountering barriers were higher for poor and uneducated widows and to some extent for non-poor widows and those with a basic education. Widows are at greater risk of experiencing barriers to health care seeking than other women and may require special consideration in poor countries.
    Keywords: Health and Inequality; Welfare and Poverty: General;
    JEL: I14 I30
    Date: 2014
  2. By: Margolis, Jesse (CUNY Graduate Center); Hockenberry, Jason (Emory University); Grossman, Michael (CUNY Graduate Center); Chou, Shin-Yi (Lehigh University)
    Abstract: Comparisons of the effectiveness of two common procedures for Coronary Artery Disease: Percutaneous Coronary Intervention (PCI) and Coronary Artery Bypass Graft (CABG). Evidence indicates that CABG – the more invasive procedure – leads to superior long term outcomes for otherwise similar patients, though there is little consensus as to why. In this article, we propose a novel explanation: patient offsetting behavior. We hypothesize that patients who undergo the more invasive procedure, CABG, are more likely to improve their behavior – eating, exercise, smoking, and drinking – in a way that increases longevity. To test our hypothesis, we use Medicare records linked to the National Health Interview Survey to study one such behavior: smoking. We find that CABG patients are 12 percentage points more likely to quit smoking in the one-year period immediately surrounding their procedure than PCI patients, a result that is robust to alternative specifications.
    Keywords: coronary artery disease, moral hazard, smoking
    JEL: I10 I12
    Date: 2014–09
  3. By: Chen, Xi (Yale University)
    Abstract: Blood collection following nonstandard operations largely increases the risks of infectious diseases through cross-contamination. Commercial plasma donation and the resulting HIV/AIDS and hepatitis C epidemics in central China in the 1990s killed more than one million people. Many blood banks have since moved to more remote southwest provinces, which have become new suppliers of blood plasma. Utilizing a primary longitudinal survey, this paper documents commercial plasma donation and estimates its negative health impacts in impoverished rural China using individual fixed effect models. Both the linear regression model and generalized linear models are utilized. Attracted by the financial compensation, a majority of plasma donors are poor, and bear grave consequences of malnutrition and worse health status as a result of unhygienic and frequent donations. Donating plasma is associated with a .83 standard deviation (SD) decline in self-rated health, a .54 SD lower self-rated health relative to peers in their age group, a .74 SD higher chance of being infected with hepatitis, lacking of strength to conduct farm work, and experiencing appetite loss, fatigue, nausea, and vomiting. Results indicate an urgent need of more comprehensive and effective interventions on hepatitis screening, diagnosis, and treatment among plasma donors in less developed contexts to eliminate cross-infection of infectious diseases and possible widespread epidemic in the future. Besides, we should encourage voluntary plasma donation to gradually crowd out paid donation.
    Keywords: paid plasma donation, poverty, panel data, HIV/AIDS, hepatitis, health status
    JEL: D1 I14 I18 J22 J24 J4
    Date: 2014–10
  4. By: Otterbach, Steffen (University of Hohenheim); Sousa-Poza, Alfonso (University of Hohenheim)
    Abstract: In this paper, we use 12 waves of the German Socio-Economic Panel to examine the relationship between job insecurity, employability and health-related well-being. Our results indicate that being unemployed has a strong negative effect on life satisfaction and health. They also, however, highlight the fact that this effect is most prominent among individuals over the age of 40. A second observation is that job insecurity is also associated with lower levels of life satisfaction and health, and this association is quite strong. This negative effect of job insecurity is, in many cases, exacerbated by poor employability.
    Keywords: job insecurity, employment, employability, well-being, health, Germany
    JEL: J21 J22
    Date: 2014–08
  5. By: Marika Cabral; Michael Geruso; Neale Mahoney
    Abstract: The debate over privatizing Medicare stems from a fundamental disagreement about whether privatization would primarily generate consumer surplus for individuals or producer surplus for insurance companies and health care providers. This paper investigates this question by studying an existing form of privatized Medicare called Medicare Advantage (MA). Using difference-in-differences variation brought about by payment floors established by the 2000 Benefits Improvement and Protection Act, we find that for each dollar in increased capitation payments, MA insurers reduced premiums to individuals by 45 cents and increased the actuarial value of benefits by 8 cents. Using administrative data on the near-universe of Medicare beneficiaries, we show that advantageous selection into MA cannot explain this incomplete pass-through. Instead, our evidence suggests that insurer market power is an important determinant of the division of surplus, with premium pass-through rates of 13% in the least competitive markets and 74% in the markets with the most competition.
    JEL: D4 H22 I11 I13 L1
    Date: 2014–09
  6. By: Amanda E. Kowalski
    Abstract: I examine the impact of state policy decisions on the early impact of the ACA using data through the first half of 2014. I focus on the individual health insurance market, which includes plans purchased through exchanges as well as plans purchased directly from insurers. In this market, at least 13.2 million people were covered in the second quarter of 2014, representing an increase of at least 4.2 million beyond pre-ACA state-level trends. I use data on coverage, premiums, and costs and a model developed by Hackmann, Kolstad, and Kowalski (2013) to calculate changes in selection and markups, which allow me to estimate the welfare impact of the ACA on participants in the individual health insurance market in each state. I then focus on comparisons across groups of states. The estimates from my model imply that market participants in the five "direct enforcement" states that ceded all enforcement of the ACA to the federal government are experiencing welfare losses of approximately $245 per participant on an annualized basis, relative to participants in all other states. They also imply that the impact of setting up a state exchange depends meaningfully on how well it functions. Market participants in the six states that had severe exchange glitches are experiencing welfare losses of approximately $750 per participant on an annualized basis, relative to participants in other states with their own exchanges. Although the national impact of the ACA is likely to change over the course of 2014 as coverage, costs, and premiums evolve, I expect that the differential impacts that we observe across states will persist through the rest of 2014.
    JEL: H75 I13
    Date: 2014–10
  7. By: Susan T. Stewart; David M. Cutler
    Abstract: Adverse behavioral risk factors contribute to a large share of deaths. We examine the effects on life expectancy (LE) and quality-adjusted life expectancy (QALE) of changes in six major behavioral risk factors over the 1960-2010 period: smoking, obesity, heavy alcohol use, and unsafe use of motor vehicles, firearms, and poisonous substances. These risk factors have moved in opposite directions. Reduced smoking, safer driving and cars, and reduced heavy alcohol use have led to health improvements, which we estimate at 1.82 years of quality-adjusted life. However, these were roughly offset by increased obesity, greater firearm deaths, and increased deaths from poisonous substances, which together reduced quality-adjusted life expectancy by 1.77 years. We model the hypothetical effects of a 50% decline in morbid obesity and in poisoning deaths, and a 10% decline in firearm fatalities, roughly matching favorable trends in smoking and increased seat belt use. These changes would lead to a 0.92 year improvement in LE and a 1.09 year improvement in QALE. Thus, substantial improvements in health by way of behavioral improvements and public health are possible.
    JEL: I1 I10 I12 I18
    Date: 2014–10
  8. By: Timothy J. Layton; Thomas G. McGuire; Anna D. Sinaiko
    Abstract: In order to encourage entry and lower prices, most regulated markets for health insurance include policies that seek to reduce the uncertainty faced by insurers. In addition to risk adjustment of premiums paid to plans, the Health Insurance Marketplaces established by the Affordable Care Act implement reinsurance and risk corridors. Reinsurance limits insurer costs associated with specific individuals, while risk corridors protect against aggregate losses. Both tighten the insurer's distribution of expected costs. This paper considers the economic costs and consequences of reinsurance and risk corridors. Drawing a parallel to individual insurance principles first described by Arrow (1963) and Zeckhauser (1970), we first discuss the optimal insurance policy for insurers. Then, we simulate the insurer's cost distribution under reinsurance and risk corridors using health care utilization data for a group of individuals likely to enroll in Marketplace plans from the Medical Expenditure Panel Survey. We compare reinsurance and risk corridors in terms of insurer risk reduction and incentives for cost containment, finding that one-sided risk corridors achieve more risk reduction for a given level of cost containment incentives than both reinsurance and two-sided risk corridors. We also find that the ACA policies being implemented in the Marketplaces (a mix of reinsurance and two-sided risk corridor policies) substantially limit insurer risk but that they are outperformed by a simpler one-sided risk corridor policy according to our measures of insurer risk and incentives.
    JEL: I11 I13
    Date: 2014–09
  9. By: Jonathan Gruber; Robin McKnight
    Abstract: Recent years have seen enormous growth in limited network plans that restrict patient choice of provider, particularly through state exchanges under the ACA. Opposition to such plans is based on concerns that restrictions on provider choice will harm patient care. We explore this issue in the context of the Massachusetts GIC, the insurance plan for state employees, which recently introduced a major financial incentive to choose limited network plans for one group of enrollees and not another. We use a quasi-experimental analysis based on the universe of claims data over a three-year period for GIC enrollees. We find that enrollees are very price sensitive in their decision to enroll in limited network plans, with the state's three month "premium holiday" for limited network plans leading 10% of eligible employees to switch to such plans. We find that those who switched spent considerably less on medical care; spending fell by almost 40% for the marginal complier. This reflects both reductions in quantity of services used and prices paid per service. But spending on primary care actually rose for switchers; the reduction in spending came entirely from spending on specialists and on hospital care, including emergency rooms. We find that distance traveled falls for primary care and rises for tertiary care, although there is no evidence of a decrease in the quality of hospitals used by patients. The basic results hold even for the sickest patients, suggesting that limited network plans are saving money by directing care towards primary care and away from downstream spending. We find such savings only for those whose primary care physicians are included in limited network plans, however, suggesting that networks that are particularly restrictive on primary care access may fare less well than those that impose only stronger downstream restrictions.
    JEL: I13
    Date: 2014–09
  10. By: Sunita Desai (The Wharton School University of Pennsylvania, Health Care Management & Economics, 3640 Locust Walk, 19104 Philadelphia, PA)
    Abstract: As in most industries, in health care, information is a competitive asset, and we expect that health care providers may have incentive to protect their information from competitors. This study aims to understand how this incentive to protect information may be a barrier to the development of a health information network. Health information networks are designed to facilitate electronic information sharing across health care providers. The electronic exchange of health information is widely considered a promising tool to improve quality, costs, and efficiency of health care. Federal and state governments have invested over $30 billion to support the development of health information networks and electronic health information sharing. However, uptake has been slow suggesting that barriers to adoption exist. We first develop a model of firms' decisions to enter a health information network given this potential loss of competitive advantage. Guided by implications of the model, we conduct a two part empirical analysis to test for evidence that providers may be reluctant to join a health information network out of competitive concern. First, we conduct a national hospital-level analysis. Second, we construct a novel data set to conduct a physician-level analysis focused on New York State. In both analyses, we find supporting evidence that competitive pressure may be a barrier to entry by health care firms. We discuss implications for policy and network design given our findings.
    Keywords: health, technology, networks
    JEL: I18 L14 L15
    Date: 2014–10
  11. By: Samia Laokri; Arnaud Amoussouhui; Edgard Marius Ouendo; Athanase Hounnankan; Séverin Anagonou; Martin Gninafon; Ferdinand Kassa; Léon Tawo; Bruno Dujardin
    Abstract: Free tuberculosis control fail to protect patients from substantial medical and non-medical expenditure, thus a greater degree of disaggregation of patient cost is needed to fully capture their context and inform policymaking.
    Date: 2014
  12. By: Monica Galizzi; Roberto Leombruni; Lia Pacelli; Antonella Bena
    Abstract: This is the first analysis of determinants of the return to work of injured workers in an institutional setting where workers earnings are fully compensated during the disability spell. Employers carry the costs associated to the time off work; hence they could face an incentive to put pressure on workers to shorten their leave. We use a matched employer-employees panel data merged with Italian workers compensation records. We find that even when we control for measures of commitment and job security, workers with high wages and high relative wages (who are more costly for the employer) return to work sooner.
    Keywords: Return to Work; Injury; Workers’ Compensation; Relative wages; Commitment; Hazard models
    JEL: J22 J28
    Date: 2014
  13. By: M. Lippi Bruni; I. Mammi; C. Ugolini
    Abstract: Over-crowding in Emergency Departments (EDs) generates potential inefficiencies. Using regional administrative data, we investigate the impact of an increase in the accessibility of primary care on ED visits in Italy. We test whether extending practice opening hours up to 12 hours/day reduces inappropriate ED visits. We estimate count data models, considering different measures for ED visits recorded at the list level. Since the extension programme is voluntary, we also account for the potential endogeneity of participation, using a two-stage residual inclusion and a GMM approach. Our results show that improving primary care accessibility favours a more appropriate use of EDs.
    JEL: I11 I18 C31
    Date: 2014–11
  14. By: Angel, Stefan; Bittschi, Benjamin
    Abstract: Deprived housing conditions have long been recognized as a source of poor health. Nevertheless, there is scant empirical evidence of a causal relationship between housing and health. The literature identifies two different pathways by which housing deprivation affects health, namely, neighborhood effects and the effects of the individual dwelling unit. However, a joint examination of both pathways is absent from the literature. Moreover, endogeneity is a substantial concern in analyses of these two problems. Thus far, studies addressing endogeneity concerns have done so through experimental design or instrumental variables. While the first approach suffers from problems of external validity, we demonstrate the substantial diffculty in identifying robust and reliable instruments for the latter. Consequently, we adopt an alternative strategy to identify the causal effects of housing on health in 21 European countries by estimating fixed-effect models and considering both sources of endogeneity, neighborhoods and dwellings. Furthermore, using the panel dimension of our data, we reveal the accumulation dynamics of poor housing conditions. Our results indicate that living in poor housing is the chief socioeconomic determinant of health over the four-year observation period and that bad housing is a decisive, causal transmission pathway by which socioeconomic status affects health.
    Keywords: Housing,Health,Europe,EU-SILC data,Fixed-effects model
    JEL: I14 I18 I38
    Date: 2014
  15. By: Herzer, Dierk; Nunnenkamp, Peter
    Abstract: We assess the effect of income inequality on life expectancy by performing separate estimations for developed and developing countries. Our empirical analysis challenges the widely held view that inequality matters more for health in richer countries than for health in poorer countries. Employing panel cointegration and conventional panel regressions, we find that income inequality increases life expectancy in developed countries. By contrast, the effect on life expectancy is significantly negative in developing countries. While the quantitative effects are small, the striking contrast between the two country groups proves to be robust to modifications in measurement, specification and methodological choices.
    Keywords: Health,Inequality,Panel cointegration
    JEL: I14 C23
    Date: 2014
  16. By: Kifmann, Mathias; Siciliani, Luigi
    Abstract: This study investigates hospitals' dynamic incentives to select patients when hospitals are remunerated according to a prospective payment system of the DRG type. Given that prices typically reflect past average costs, we use a discrete-time dynamic framework. Patients differ in severity within a DRG. Providers are to some extent altruistic. For low altruism, a downward spiral of prices is possible which induces hospitals to focus on low-severity cases. For high altruism, dynamic price adjustment depends on relation between patients' severity and benefit. In a steady state, DRG prices are unlikely to give optimal incentives to treat patients.
    Keywords: hospitals,DRGs,selection,severity
    JEL: I11 I18 L13 L44
    Date: 2014

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