nep-hea New Economics Papers
on Health Economics
Issue of 2014‒12‒19
twenty papers chosen by
Yong Yin
SUNY at Buffalo

  1. Gravity for Health: an Application to State Mental Hospital Admissions in Texas By de Mello-Sampayo, Felipa
  2. 'The Choice Agenda' in European Health Systems: The Role of 'Middle Class Demands' By Joan Costa-i-Font; Valentina Zigante
  3. Big and Tall: Is there a Height Premium or Obesity Penalty in the Labor Market? By Lee, Wang-Sheng
  4. Health Risk Factors among the Older European Populations: Personal and Country Effects By García-Muñoz, Teresa; Neuman, Shoshana; Neuman, Tzahi
  5. Allergy Test: Seasonal Allergens and Performance in School By Marcotte, Dave E.
  6. The Impact of Health Insurance on Stockholding: A Regression Discontinuity Approach By Dimitris Christelis; Dimitris Georgarakos; Anna Sanz-de-Galdeano
  7. Do We Really Value Identified Lives More Highly Than Statistical Lives? By Louise B Russell
  8. Patents and the Global Diffusion of New Drugs By Iain M. Cockburn; Jean O. Lanjouw; Mark Schankerman
  9. Expanding Patients' Property Rights In Their Medical Records By Laurence C. Baker; Kate Bundorf; Daniel Kessler
  10. Second Trimester Sunlight and Asthma: Evidence from Two Independent Studies By Nils Wernerfelt; David Slusky; Richard Zeckhauser
  11. Long-Term Care Insurance and Carers' Labor Supply: A Structural Model By Johannes Geyer; Thorben Korfhage
  12. Wage-setting in the Hospital Sector By James Buchan; Ankit Kumar; Michael Schoenstein
  13. Weather shocks and health at birth in Colombia By Andalon, Mabel; Azevedo, Joao Pedro; Rodriguez-Castelan, Carlos; Sanfelice, Viviane; Valderrama, Daniel
  14. Does malaria control impact education? A study of the Global Fund in Africa By Maria Kuecken; Josselin Thuilliez; Marie-Anne Valfort
  15. Persistent Differences in Mortality Patterns across Industrialized Countries By Hippolyte D'Albis; Loesse Jacques Esso; Héctor Pifarré I Arolas
  16. The Self-Medication Hypothesis: Evidence from Terrorism and Cigarette Accessibility By Michael Pesko; Christopher F Baum
  17. The Relative (in)Efficiency of South African Municipalities in Providing Public Health Care By Josue Mbonigaba and Saidou Baba Oumar
  18. Unintended effects of reimbursement schedules in mental health care By Rudy Douven; Minke Remmerswaal; Ilaria Mosca (Ecorys)
  19. Social Networks and Health Knowledge in India: Who You Know or Who You Are? By Niels-Hugo Blunch; Nabanita Datta Gupta
  20. Medical insurance and free choice of physician shape patient overtreatment: A laboratory experiment By Huck, Steffen; Lünser, Gabriele; Spitzer, Florian; Tyran, Jean-Robert

  1. By: de Mello-Sampayo, Felipa
    Abstract: This paper discusses competing-destinations formulation of the gravity model for the flows of patients from their residential areas to health supplier regions. This approach explicitly acknowledges the interdependence of the patient flows between a set of alternative health supplier regions. This competing-destinations based approach may be implemented as a probabilistic demand function or conditional logit model, with a Poisson outcome. A Texas based case study of residential areas and State Mental Hospitals (SMHs) is presented. The results of the estimation do not lend support to the presence of scale effects in SMHs due to the size of population. This result, combined with the negative effect of ALOS and with the positive effect of the provision of forensic services on patient flows, highlights the problem of caseload growth in SMHs.
    Keywords: Gravity Model, Patients' Mobility, State Mental Hospital, Poisson Estimation
    JEL: C21 I11 R12
    Date: 2014
  2. By: Joan Costa-i-Font; Valentina Zigante
    Abstract: We examine the role of political economy drivers of the choice agenda in European health systems including middle class electoral support. Building on the reform trajectories and current institutional framework in eight western European countries where there have been significant choice reforms, we explore the preferences for choice and health system satisfaction in those countries. We find provider choice to be supported by middle class demands and health systems satisfaction, but weak evidence of other alternative political motivations for the expansion of provider choice. We conclude that in addition to efficiency improvements, provider choice is largely correlated with the demands for choice among the middle class. The provider choice agenda responds as much to political economy consideration as it does to efficiency arguments.
    Keywords: provider choice, health system satisfaction, tax funded health systems, middle class demands
    Date: 2014–11
  3. By: Lee, Wang-Sheng (Deakin University)
    Abstract: Previous studies have shown that both height and weight are associated with wages. However, by focusing on interpreting the partial effects of either height or weight on wages while holding all else constant, some gaps in our understanding of the complex relationship between body size and wages remain. Utilizing a semi-parametric spline approach, we first establish that a flexible analysis of height and weight provides a useful and meaningful proxy for beauty. A similar flexible analysis of height, weight and wages reveals that some combinations of anthropometric measurements attract higher wage premiums than others and that the optimal combination varies over the life cycle. A main contribution of the paper is in suggesting a novel and practical way of examining the returns to looks in the labor market based on objective anthropometric measurements.
    Keywords: height, P-spline, semi-parametric, wages, weight
    JEL: J31 J71
    Date: 2014–10
  4. By: García-Muñoz, Teresa (Universidad de Granada); Neuman, Shoshana (Bar-Ilan University); Neuman, Tzahi (Hebrew University, Jerusalem)
    Abstract: It is now common to use the individual's self-assessed-health-status (SAHS) 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, focusing on behavioral risk factors (smoking, alcohol consumption and obesity) – both at the individual and country levels. The main findings are: (i) SAHS regressions provide clear evidence of the significant effects of the three behavioral risk factors on the individual's SAHS, beyond and above effects of health conditions and of socio-economic personal variables; (ii) the second, more innovative, finding is related to the effects of country-specific risk factors (country-level measures of smoking, obesity, and alcohol consumption) on the subjective-health of the residents, controlling for personal characteristics. Adapting the technique presented in Oswald and Wu (2010), country effects derived from the SAHS regression are examined for correlations with a set of objective country macro measures. They include: share of smokers on a daily/regular basis; alcohol consumption (per-capita liters per year); share of obese individuals in the country. It appears that country-level smoking and obesity affect negatively aggregate country SAHS, while alcohol consumption has no effect. It is therefore not only 'who you are' that affects the subjective rating of health, but also 'in which country you live': both individual and country-level risk factors affect subjective-health and the two levels of behavioral risks accumulate and reinforce the subjective-health assessment. This suggests the economic cost-effectiveness of preventive obesity and smoking treatment and seems to be at odds with the 'Easterlin Paradox' that emphasizes within country individual effects and denies cross-country effects.
    Keywords: self-assessed-health-status, smoking, obesity, alcohol consumption, Europe, SHARE
    JEL: I1 J1 Z1
    Date: 2014–10
  5. By: Marcotte, Dave E. (University of Maryland, Baltimore County)
    Abstract: Seasonal pollen allergies affect approximately 1 in 5 school age children. Clinical research has established that these allergies result in large and consistent decrements in cognitive functioning, problem solving ability and speed, focus and energy. However, the impact of seasonal allergies on achievement in schools has received no attention at all from economists. Here, I use data on daily pollen counts merged with school district data to assess whether variation in the airborne pollen that induces seasonal allergies is associated with performance on state reading and math assessments. I find substantial and robust effects: A one standard deviation in ambient pollen levels reduces the percent of 3rd graders passing ELA assessments by between 0.2 and 0.3 standard deviations, and math assessments by between about 0.3 and 0.4 standard deviations. I discuss the empirical limitations as well as policy implications of this reduced-form estimate of pollen levels in a community setting.
    Keywords: education, health, air quality
    JEL: I10 I20 I21
    Date: 2014–10
  6. By: Dimitris Christelis (CSEF, CFS and CEPAR); Dimitris Georgarakos (Goethe University Frankfurt, CFS and University of Leicester); Anna Sanz-de-Galdeano (University of Alicante and IZA)
    Abstract: Using data from the US Health and Retirement Study, we study the causal effect of increased health insurance coverage through Medicare and the associated reduction in health-related background risk on financial risk-taking. Given the onset of Medicare at age 65, we identify our effect of interest using a regression discontinuity approach. We find that getting Medicare coverage induces stockholding for those with at least some college education, but not for their less-educated counterparts. Hence, our results indicate that a reduction in background risk induces financial risk-taking in individuals for whom informational and pecuniary stock market participation costs are relatively low.
    Keywords: Health Insurance, Medicare, Stockholding, Regression Discontinuity, Household Finance
    JEL: D14 I13 G11
    Date: 2014–11–11
  7. By: Louise B Russell (Department of Economics and Institute for Health)
    Abstract: Value of Statistical Life (VSL) studies suggest that people’s willingness to pay for statistical lives is consistent with their willingness to pay for identified lives. The idea that the valuations are different may be no more than an artifact of the economic method for valuing statistical lives, the human capital approach, that was dominant at the time the distinction was proposed.
    Keywords: Value of Statistical Life, Identified Lives
    JEL: D6 I1 H4
    Date: 2014–09–30
  8. By: Iain M. Cockburn; Jean O. Lanjouw; Mark Schankerman
    Abstract: This paper studies how patent rights and price regulation affect how fast new drugs are launched in different countries, using newly constructed data on launches of 642 new drugs in 76 countries for the period 1983-2002, and information on the duration and content of patent and price control regimes. Price regulation strongly delays launch, while longer and more extensive patent protection accelerates it. Health policy institutions, and economic and demographic factors that make markets more profitable, also speed up diffusion. The effects are robust to using instruments to control for endogeneity of policy regimes. The results point to an important role for patents and other policy choices in driving the diffusion of new innovations.
    JEL: I15 I18 K19 L65 O31 O33 O34 O38
    Date: 2014–09
  9. By: Laurence C. Baker; Kate Bundorf; Daniel Kessler
    Abstract: Although doctors and hospitals own their patients' medical records, state and federal laws require that they provide patients with a copy at "reasonable cost." We examine the effects of state laws that cap the fees that doctors and hospitals are allowed to charge patients for a copy of their records. We test whether these laws affected patients' propensity to switch doctors and the prices of new- and existing-patient visits. We also examine the effect of laws on hospitals' adoption of electronic medical record (EMR) systems. We find that patients from states adopting caps on copy fees were significantly more likely to switch doctors, and that hospitals in states adopting caps were significantly more likely to install an EMR. We also find that laws did not have a systematic, significant effect on prices.
    JEL: I1 I10 I11
    Date: 2014–10
  10. By: Nils Wernerfelt; David Slusky; Richard Zeckhauser
    Abstract: One in twelve Americans suffers from asthma and its annual costs are estimated to exceed $50 billion. Simultaneously, the root causes of the disease remain unknown. A recent hypothesis speculates that maternal vitamin D levels during pregnancy affect the probability the fetus later develops asthma. In two large-scale studies, we test this hypothesis using a natural experiment afforded by historical variation in sunlight, a major source of vitamin D. Specifically, holding the birth location and month fixed, we see how exogenous within-location variation in sunlight across birth years affects the probability of asthma onset. We show that this measurement of sunlight correlates with actual exposure, and consistent with pre-existing results from the fetal development literature, we find substantial and highly significant evidence in both datasets that increased sunlight during the second trimester lowers the subsequent probability of asthma. Our results suggest policies designed to augment vitamin D levels in pregnant women, the large majority of whom are vitamin D insufficient, could be very cost-effective.
    JEL: I12 I18 J13
    Date: 2014–10
  11. By: Johannes Geyer; Thorben Korfhage
    Abstract: In Germany, individuals in need of long-term care receive support through benefits of the long-term care insurance. A central goal of the insurance is to support informal care provided by family members. Care recipients can choose between benefits in kind (formal home care services) and benefits in cash. From a budgetary perspective family care is a cost-saving alternative to formal home care and to stationary nursing care. However, the opportunity costs resulting from reduced labor supply of the carer are often overlooked. We focus on the labor supply decision of family carers and the incentives set by the long-term care insurance. We estimate a structural model of labor supply and the choice of benefits of family carers. We find that benefits in kind have small positive effects on labor supply. Labor supply elasticities of cash benefits are larger and negative. If both types of benefits increase, negative labor supply effects are offset to a large extent.
    Keywords: labor supply, long-term care, long-term care insurance, structural model
    JEL: J22 H31 I13
    Date: 2014
  12. By: James Buchan; Ankit Kumar; Michael Schoenstein
    Abstract: This paper examines wage setting mechanisms for health workers in hospitals across eight different OECD countries. It describes similarities and differences and how fixed or fluid these approaches have been in recent years through health system reforms, labour market dynamics and economic pressures. Based on a review of grey literature and expert interviews with officials from the covered countries, it finds that prior to the economic downturn, several countries had signalled a shift to more local and flexible wage setting in the hospital sector but this ambition does not seem to have been realised in full for public sector hospitals in most OECD countries. Fiscal pressures have led to some “recentralisation” of wage setting, particularly in France, Portugal and the United Kingdom. While the extent of centralisation has been a question of considerable debate, the countries covered in this paper suggest that the benefits of centralised and/ or co-ordinated wage setting generally appear to have been given more attention by policy makers. The current research base on the effectiveness of different wage setting approaches is limited. Policy-making would benefit from developing a better understanding of the impact of wage setting on improved hospital performance and quality.<BR>Ce document analyse les mécanismes de détermination des salaires des agents hospitaliers dans huit pays de l’OCDE. Il décrit les similitudes et les différences entre ces mécanismes et évalue la capacité d’adaptation dont ils ont fait preuve ces dernières années face aux réformes des systèmes de santé, à la dynamique du marché du travail et aux pressions économiques. Il ressort d’un examen de la documentation parallèle et d’entretiens menés avec des experts des pays concernés que si, avant la crise économique, plusieurs pays de l’OCDE avaient annoncé que la détermination des salaires dans le secteur hospitalier allait être plus locale et flexible, la plupart d’entre eux semblent ne pas avoir complètement atteint ces objectifs dans les hôpitaux du secteur public. Les difficultés budgétaires ont en effet contraint à une « recentralisation », notamment en France, au Portugal et au Royaume-Uni. L’intérêt de la centralisation fait l’objet d’un large débat, mais dans les pays couverts dans ce document, il semblerait que les décideurs mettent généralement en avant les avantages de la centralisation et/ou de l’harmonisation de la détermination des salaires. La base de recherches sur l’efficacité des différentes approches est actuellement limitée et le processus décisionnel gagnerait à meilleur compréhension des effets de la détermination des salaires sur l’amélioration de la performance et de la qualité des hôpitaux.
    JEL: I11 J45 J50
    Date: 2014–09–05
  13. By: Andalon, Mabel; Azevedo, Joao Pedro; Rodriguez-Castelan, Carlos; Sanfelice, Viviane; Valderrama, Daniel
    Abstract: Poor health at birth has negative long-run effects on individual well-being and is also detrimental for intergenerational mobility. This paper examines whether health outcomes at birth are affected by in utero increased exposure to rainfall and temperature shocks in Colombia, one of the countries in the world with the highest incidence of extreme weather events per year. The paper uses a fixed effects design to gauge the causal effect using variation in fetal exposure to these shocks by municipality and date of birth. The analysis finds negative effects of temperature shocks on birth health outcomes and no effect of rainfall shocks. The results indicate that heat waves lead to a 0.5 percentage point reduction in the probability of being born at full term and a decline of 0.4 percentage point in the probability of newborns classified as healthy. The timing of exposure to the shock matters and it matters differently for different outcomes. These findings are critical to prioritize responses to counteract the negative effects of weather, particularly hot shocks, which are projected to become more frequent and intense with changing climate.
    Keywords: Health Monitoring&Evaluation,Disease Control&Prevention,Population Policies,Gender and Health,Climate Change Impacts
    Date: 2014–11–01
  14. By: Maria Kuecken (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Marie-Anne Valfort (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We examine the middle-run effects of the Global Fund's malaria control programs on the educational attainment of primary schoolchildren in Sub-Saharan Africa. Using a quasi-experimental approach, we exploit geographic variation in pre-campaign malaria prevalence (malaria ecology) and variation in exogenous exposure to the timing and expenditure of malaria control campaigns, based on individuals' years of birth and year surveyed. In a large majority of countries (14 of 22), we find that the program led to substantial increases in years of schooling and grade level as well as reductions in schooling delay. Moreover, although by and large positive, we find that the marginal returns of the Global Fund disbursements in terms of educational outcomes are decreasing. Our findings, which are robust to both the instrumentation of ecology and use of alternative ecology measures, have important policy implications on the value for money of malaria control efforts.
    Keywords: Malaria; Sub-Saharan Africa; education; quasi-experimental; Global Fund
    Date: 2013–10
  15. By: Hippolyte D'Albis (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Loesse Jacques Esso (ENSEA - Ecole nationale supérieure de statistique et d'économie appliquée - Ministère de l'Enseignement Supérieur et de la Recherche Scientifique); Héctor Pifarré I Arolas (TSE - Toulouse School of Economics - Toulouse School of Economics)
    Abstract: The epidemiological transition has provided the theoretical background for the expectation of convergence in mortality patterns. We formally test and reject the convergence hypothesis for a sample of industrialized countries in the period from 1960 to 2008. After a period of convergence in the decade of 1960 there followed a sustained process of divergence with a pronounced increase at the end of the 1980's, explained by trends within former Socialist countries (Eastern countries). While Eastern countries experienced abrupt divergence after the dissolution of the Soviet Union, differences within Western countries remained broadly constant for the whole period. Western countries transitioned from a strong correlation between life expectancy and variance in 1960 to no association between both moments in 2008 while Eastern countries experienced the opposite evolution. Taken together, our results suggest that convergence can be better understood when accounting for shared structural similarities amongst groups of countries rather than through global convergence.
    Date: 2014–09–02
  16. By: Michael Pesko (Department of Healthcare Policy and Research, Weill Cornell Medical College, Cornell University); Christopher F Baum (Boston College; DIW Berlin)
    Abstract: We use single equation and simultaneous instrumental variable models to explore if individuals smoke during times of stress (i.e., motivation effect) and if they are successful in self-medicating short-term stress (i.e., self-medication effect). Short-term stress is a powerful motivator of smoking, and the decision to smoke could trigger biological feedback that immediately reduces short-term stress. This feedback confounds estimates of the relationship between stress and smoking. Omitted variables, such as genetic or social factors, could also suggest a spurious correlation. We use data on self- reported smoking and stress from 240,388 current and former smokers. We instrument stress with temporal distance from September 11, 2001 (using date of interview). We instrument smoking with cigarette accessibility variables of cigarette price changes and distance to state borders. In the absence of accounting for feedback and other forms of endogeneity, we find that smoking is associated with increases in short-term stress. This is opposite of our theoretical prediction for self-medication. However, when we account for endogeneity we find no evidence of smoking affecting short-term stress. We do find a consistent positive effect of stress on smoking.
    Keywords: smoking, self-medication, stress, tobacco taxes
    JEL: C26 C36 I19
    Date: 2014–11–12
  17. By: Josue Mbonigaba and Saidou Baba Oumar
    Abstract: Previous studies in South Africa have not dis-aggregated efficiency analysis across municipalities which are health system components of the broader national health system. The purpose of this paper is therefore to assess whether the relative efficiency of South African municipalities in primary health care and hospital care is different and whether South African municipalities can learn from each other to improve on their efficiency. The paper employs efficiency scores, estimated with Data Envelopment Analysis (DEA) using data from the District Health Barometer of the Health Systems Trust to rank South African municipalities across primary health care and hospital health care. The finding is that that the ranking of municipalities is not the same across both types of health care when efficiency scores and efficiency score growth are contemplated. These results imply that municipalities in South Africa are generally inefficient, but with the possibility of learning from each other’s practice in order to increase their technical efficiency. The health system authority should monitor service-specific best practices among municipalities so that they can use them as practice guidelines for other municipalities.
    Keywords: Municipalities, DEA, public, health care, technical efficiency, South Africa
    JEL: I12
    Date: 2014
  18. By: Rudy Douven; Minke Remmerswaal; Ilaria Mosca (Ecorys)
    Abstract: We evaluate the introduction of a reimbursement schedule for self-employed mental health care providers in the Netherlands in 2008. The reimbursement schedule follows a discontinuous discrete step function ―once the provider has passed a treatment duration threshold the fee is flat until a next threshold is reached. We use administrative mental health care data of the total Dutch population from 2008 to 2010. We find an efficiency effect: on the flat part of the fee schedule providers prolong treatment only if marginal benefits to patients outweigh marginal costs. We estimate a reduction in treatment duration by 2 to 6% and lower costs by 3 to 5% compared to a control group. However, we also find unintended effects: providers treat patients longer to reach a next threshold and obtain a higher fee. The data shows gaps and bunches in the distribution function of treatment durations, just before and after a threshold. In total, about 11 to 13% of treatments are shifted to over a next threshold, resulting in a cost increase of approximately 7 to 8%.
    JEL: I11 I12 I18
    Date: 2014–11
  19. By: Niels-Hugo Blunch (Washington and Lee University & IZA); Nabanita Datta Gupta (Department of Economics and Business, Aarhus University, Denmark)
    Abstract: Addressing several methodological shortcomings of the previous literature, this paper explores the relationship among health knowledge and caste and religion and a number of important mediating factors in India, estimating causal impacts through a combination of instrumental variables and matching methods. The results indicate the presence of a substantively large caste and religion health knowledge gap in the context of proper treatment of diarrhea in children favoring high caste women relative to low caste and Muslim women. We also provide evidence that while observed individual characteristics such as education and access to social networks explain part of the gap, a substantial part of the health knowledge gap is left unexplained. All groups have greater health knowledge in urban than in rural areas, but the gap is even wider in urban than in rural areas. Additionally, high caste women benefit more in terms of health knowledge from having health networks than women from other groups; except if the health person is of the same caste/religion, in which case low caste and Muslim women sometimes benefit by as much as double that of high caste women, or even more. It may therefore not be enough to give individuals access to high quality networks if caste and religion-related gaps in health knowledge are to be reduced; such networks also have to be homophilous, to have the maximum effect. Improved treatment from and confidence in the medical profession is found to be part of the mechanism linking health social network formation with improved health knowledge about the treatment of diarrhea in children.
    Keywords: Health knowledge, caste, religion, social networks, India
    JEL: I12 I14 I15
    Date: 2014–10–27
  20. By: Huck, Steffen; Lünser, Gabriele; Spitzer, Florian; Tyran, Jean-Robert
    Abstract: In a laboratory experiment designed to capture key aspects of the interaction be-tween physicians and patients in a stylized way, we study the effects of medical insurance and competition in the guise of free choice of physician. Medical treat-ment is an example of a credence good: only the physician (but not the patient) knows the appropriate treatment, and even after consulting, the patient is not sure whether he got proper treatment or got an unnecessary treatment, i.e. was overtreated. We find that with insurance, moral hazard looms on both sides of the market: patients consult more often and physicians overtreat more often than in the baseline condition. Competition decreases overtreatment compared to the baseline and patients therefore consult more often. When the two institutions are combined, competition is found to partially offset the adverse effects of insur-ance: most patients seek treatment, but overtreatment is moderated.
    Keywords: Credence good,Patient,Physician,Overtreatment,Competition,Insurance,Moral hazard
    JEL: C91 I11 I13
    Date: 2014

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