nep-hea New Economics Papers
on Health Economics
Issue of 2015‒06‒20
24 papers chosen by
Yong Yin
SUNY at Buffalo

  1. Improving the Quality of Behavioral Health Care for Medicaid Beneficiaries By Allison Siegwarth
  2. Informal Caregivers Research Project: Characteristics, Networks, and Needs of Informal Caregivers and Parents in California By Jaime Thomas; Cleo Jacobs Johnson; Kimberly Boller; Madeline Young
  3. Did You Get Your Shots? Experimental Evidence on the Role of Reminders By Matías Busso; Julián Cristia; Sarah Humpage
  4. Formal volunteering and self-perceived health. Causal evidence from the Uk-SILC By Fiorillo, D.;; Nappo, N.;
  5. The Long-Term Determinants of Female HIV Infection in Africa: The Slave Trade, Polygyny, and Sexual Behavior By Bertocchi, Graziella; Dimico, Arcangelo
  6. Did Longer Lives Buy Economic Growth? From Malthus to Lucas and Ben-Porath By David de la Croix
  7. The impact of waiting time on health gains from surgery: Evidence from a national patient reported outcomes dataset By Silviya Nikolova; Mark Harrison; Matt Sutton
  8. The effect on mental health of retiring during the economic crisis By Liudmila Antonova; Michele Belloni; Elena Meschi; Giacomo Pasini
  9. What can the G7 do to achieve the Global Health 2035 goals? By Yamey, Gavin; Fewer, Sara; Campe, Sabine
  10. Means of increasing economic efficiency in the health care system By Mihaela Cristina Dragoi
  12. An online automated psychoterapeutic intervention: efficacy and therapeutic relationship. By Cezar Giosan; Muresan Vlad; Oana Cobeanu; Aurora Szentagotai; Oana David
  13. Evaluating the efficacy of a general education university course in reducing stress and enhancing well-being By Susanna LAI-YEUNG
  14. Determinants of tobacco consumption in Papua New Guinea : challenges in changing behaviors By Hou,Xiaohui; Xu,Xiaochen; Anderson,Ian
  15. Home Sweet Home? Public Financing and Inequalities in the use of Home Care Services in Europe By Vincenzo Carrieri; Cinzia Di Novi; Cristina Orso
  16. What is the link between mothers’ level of education and low birthweight? By Lidia Panico; Maxime Tô; Olivier Thévenon
  17. Barriers to Prosperity: Parasitic and Infectious Diseases, IQ and Economic Development By Jakob B Madsen
  18. The Effect of Statutory Sick Pay Regulations on Workers’ Health By Martin Halla, Susanne Pech, Martina Zweimüller
  19. Estimating the impact of health on NEET status By Daniel Gladwell; Gurleen Popli; Aki Tsuchiya
  20. Estimating Equilibrium in Health Insurance Exchanges: Analysis of the Californian Market under the ACA By Pietro Tebaldi
  21. HIV disease severity and employment outcomes in affected households in Zambia By Tirivayi J.N.; Koethe J.
  22. Watersheds in Infant Mortality: The Role of Effective Water and Sewerage Infrastructure, 1880 to 1915 By Marcella Alsan; Claudia Goldin
  23. The Mortality Cost of Political Connections By Raymond Fisman; Yongxiang Wang
  24. Medical Spending of the U.S. Elderly By Mariacristina De Nardi; Eric French; John Bailey Jones; Jeremy McCauley

  1. By: Allison Siegwarth
    Abstract: Highlights Mathematica’s work to work to find opportunities for quality improvement in Medicaid’s behavioral health services, to develop measures that can help monitor the quality of care, and to identify innovative strategies to better coordinate behavioral and physical health care.
    Keywords: Behavioral Health, Medicaid, Quality, Measures
    JEL: I J
    Date: 2015–05–29
  2. By: Jaime Thomas; Cleo Jacobs Johnson; Kimberly Boller; Madeline Young
    Keywords: InCare, Informal Caregivers, California
    JEL: I
    Date: 2015–06–05
  3. By: Matías Busso; Julián Cristia; Sarah Humpage
    Abstract: Many families fail to vaccinate their children despite the supply of these services at no cost. This study tests whether personal reminders can increase demand for vaccination.
    Keywords: Vaccination, Guatemala, Reminders, Field Experiment, Health, International
    JEL: F Z
    Date: 2015–05–30
  4. By: Fiorillo, D.;; Nappo, N.;
    Abstract: The paper assesses the causal relationship between formal volunteering and individual health. The econometric analysis employs data provided by the Income and Living Conditions Survey for the United Kingdom carried out by the European Union’s Statistics (UK-SILC) in 2006. Based on 2SLS, treatment effect and recursive bivariate probit models, and religious participation as instrument variable, and controlling for social and cultural capital, our results show a positive and causal relationship between formal volunteering and self-perceived health.
    Keywords: individual health; formal volunteering; social capital; instrumental variable; treatment effect model; recursive bivariate probit model; UK;
    JEL: C31 C36 D64 I10 I18 Z10
    Date: 2015–06
  5. By: Bertocchi, Graziella; Dimico, Arcangelo
    Abstract: We study the long-term determinants of the high rates of HIV infection in sub-Saharan Africa, particularly among women, with a focus on family structure and sexual behavior as shaped by the demographic shock following the transatlantic slave trade. First we show that, in clusters where polygyny is more widespread, HIV infection rates are higher. By instrumenting polygyny with the demographic shock we can also establish that this link is causal. Next we turn to the channels through which polygyny is likely to affect HIV infection by focusing on sexual behavior, as captured by the intensity of sexual activity and the frequency of extramarital partnerships. We document relevant gender differences in behavior: in clusters affected by a larger demographic shock men (but not women) display a more intense sexual activity, while women (but not men) are more likely to engage in extramarital partnerships. We employ these findings to instrument sexual behavior when estimating its influence on HIV infection and we show that clusters exhibiting more frequent female extramarital partnerships are affected by significantly higher infection rates. We interpret our results as follows. The demographic shock induced by the slave trade represents a “primordial” risk factor which is still shaping contemporary family structure and sexual behavior. Polygyny is associated with unsatisfying marital relationships, particularly for women, with consequent female infidelity and an increased risk of infection, which is further multiplied for women co-habiting within polygynous households.
    Keywords: HIV; polygyny; sexual behavior; slave trade
    JEL: I15 J12 N37 O10
    Date: 2015–06
  6. By: David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: The note provides a summary of the possible impact of increases in adult longevity on economic growth with a focus on two particular channels: the contact time effect and the incentive effect. After documenting empirical evidence concerning the rise of longevity, two methods to measure longevity are presented, namely the Gompertz Law and the BCL Law of Mortality. These methods are then applied qualitatively and quantitatively to various models to show the effect of longevity on growth. Overall, the note concludes that increases in longevity are quantitatively significant for the increases in growth observed over the last two centuries and calls for the consideration of demographic factors when examining determinants of growth.
    Date: 2015–06–11
  7. By: Silviya Nikolova (Leeds Institute of Health Sciences, University of Leeds); Mark Harrison (Manchester Centre for Health Economics, Institute of Population Health, University of Manchester, Manchester, U.K.); Matt Sutton (Manchester Centre for Health Economics, Institute of Population Health, University of Manchester, Manchester, U.K.)
    Abstract: Reducing waiting times has been a major focus of the English National Health Service (NHS) for many years but little is known about the impact on health outcomes. The collection of data on Patient Reported Outcome Measures (PROMs) for all patients undergoing four large-volume procedures facilitates analysis of the impact of waiting times on patient outcomes. The availability of PROMs before and after surgery allows us to estimate the impact of waiting times on the effectiveness of treatment, controlling for pre-surgery health and the endogeneity of waiting times caused by prioritisation with respect to pre-intervention health. We find that waiting time has a negative and statistically significant impact on the health gain from hip and knee replacement surgery and no impact on the effectiveness of varicose vein and hernia surgery. The magnitude of this effect at patient level is small, 0.1% of the outcome measure range for each additional week of waiting. However, the value of this effect is substantially larger than existing estimates of the disutility experienced during the waiting period. The health losses associated with an additional week of waiting for annual populations of hip and knee replacement patients are worth £11.1 million and £11.5 million respectively.
    Keywords: health care, waiting times
    JEL: I1
    Date: 2015
  8. By: Liudmila Antonova (Department of Economics, University of Venice Cà Foscari); Michele Belloni (Department of Economics, University of Venice Cà Foscari); Elena Meschi (Department of Economics, University of Venice Cà Foscari); Giacomo Pasini (Department of Economics, University of Venice Cà Foscari)
    Abstract: This paper investigates the causal impact of retirement on late life depression, a growing concern for public health as major depressive disorders are the second leading cause of disability. We shed light on the role of economic conditions in shaping the effect of retirement on mental health by exploiting the time and regional variation in the severity of the economic crisis across ten European countries over the 2004-2013 period. We use data from four waves of the Survey of Health, Ageing and Retirement in Europe (SHARE) and address the potential endogeneity of retirement decision to mental health by applying a fixed-effect instrumental variable approach. Results indicate that retirement improves mental health of men, but not of women. This effect is stronger for those men working in regions that are severely hit by the economic crisis and in blue-collar jobs. These findings may be explained by the worsening of working conditions and the rise in job insecurity stemming from the economic downturn: In these circumstances, the exit from the labor force is perceived as a relief.
    Keywords: depression, stress, retirement, crisis
    JEL: I10 J26 J28
    Date: 2015
  9. By: Yamey, Gavin; Fewer, Sara; Campe, Sabine
    Abstract: The Global Health 2035 report shows that there is tremendous potential to achieve dramatic gains in global health over the next 20 years, particularly with regards to the G7's priorities of eliminating NTDs, preparing effectively for pandemics, and tackling AMR. These challenges require urgent international collective action and demand the leadership and focused investment of the G7. To maximize its impact and help mobilize action for the post-2015 health agenda, the G7 should target its efforts towards four critical policy options: investing in new tools, supporting policy and implementation research, strengthening national health systems, and fostering global coordination. By working in partnership with donor, low- and middle-income countries on these policy options, the G7 can set the course to achieve a grand convergence in global health.
    Date: 2015
  10. By: Mihaela Cristina Dragoi (Bucharest University of Economic Studies)
    Abstract: Health management is permanently confronted with decisions to allocate limited resources so as to best cover health needs. Considering that the multiple types of health interventions need more than a few simple mathematical formulas, we suggested a framework methodology which can be adapted to each case by the addition of case-particular elements. Since health policy is primarily evaluated in terms of added value, we chose to measure differential efficiency through a method focused on high-interest social policies with impact on a large number of stakeholders, starting from the formula Ui =
    Keywords: economic efficiency, health management, prioritization, health resource allocation
    JEL: H51 I18
  11. By: Sertaç ERC (, Atatürk University, Collega of Physical Education and sport, Recreation Department,)
    Abstract: Goal: The goal of this study is to investigate the contribution of mountaineering and wall bars exercises to the physical development of the hearing impaired students. Material and Method: 36 hearing impaired students were involved in the study ( 18 in the experimental group - 18 in the control group). The ages of the students were between 10 and 15. 12 of the students were girls ( 6 in the experimental group - 6 in the control group), and 24 of the students were boys ( 12 in the experimental group - 12 in the control group). 8 of the students study in a primary school and the rest 28 study in a secondary school.All of the students were permitted to take part in the study by both their schools and parents. A special movement training programme was prepared for the research. This programme included the exercises related to dynamic balance, static balance, flexibility, grip strength, back strength and leg strength. During the programme preparation process, great support was received from the associates of the Department of Recreation and Department of Mountaineering. Both the experimental group and the control group students were subjected to some pretests (dynamic balance, static balance, flexibility, grip strength, back strength, leg strength) before the application of that special movement training programme. The study lasted for 12 weeks. At the end of the study, some retests (dynamic balance, static balance, flexibility, grip strength, back strength, leg strength) were applied to the experimental group and the control group, and finally the comparisons were performed.Analysis: Analysing the obtained data with SSPS.16 Program, frequency, percentage, Z values and significance levels were determined. Conclusion and Discussion: A significant (p>0,05 ve p>0, 001) improvement was not observed in the pre-test and post-test data of the control group. On the other hand, in the pre-test and post-test comparisons of the experimental group there were some significant findings reached in the data of (p>0,05) dynamic balance, static balance and flexibility, and in the data (p>0,001) of grip strength, back strength and leg strength.
    Keywords: Hearing- impaired, wall bars, movement training programme, recreation
    JEL: A20 A22
  12. By: Cezar Giosan (Babes-Bolyai University); Muresan Vlad (Babes-Bolyai University); Oana Cobeanu (Babes-Bolyai University); Aurora Szentagotai (Babes-Bolyai University); Oana David (Babes-Bolyai University)
    Abstract: Depression and anxiety problems are widespread, lifetime risks for developing anxiety are between 6.7% and 18.1% according to the National Institute of Mental Health. Depression is often associated with unemployment and poverty, and is the leading cause of disease burden in high-income countries. Cognitive-behavioral therapy (CBT) is the best researched psychological treatment approach to emotional and behavioral problems. Lately, computerized and online CBT interventions have emerged as a cheaper, anonymous and location independent alternative to classical face-to-face therapy. Online CBT may reduce therapist time, reduce waiting lists, save travel expenses and allow access to people with disabilities, while having similar efficacy to classical therapy formats. The current study investigates the efficacy of a novel web-based therapeutic intervention in reducing depressive and anxiety symptomatology on a sub-clinical sample, as well as measuring the efficacy of a new way of improving the therapeutic relationship via animated avatars. Results show that the new treatment is efficient in reducing depressive symptoms, dysfunctional thoughts and negative emotionality. Additionally, perceived empathy was increased in the avatar-enhanced intervention, while therapeutic alliance was unaffected. Implications are discussed in the context on online CBT vs. classical face-to-face interventions.
    Keywords: online CBT, internet, cognitive behavioral therapy, depression, anxiety
    JEL: I10 I19 I29
  13. By: Susanna LAI-YEUNG (The Open University of Hong Kong)
    Abstract: The literature documents that a substantial percentage of university students experience considerable level of stress and psychological problems that negatively impact on their well-being. Though different student support programmes are often offered on campus, because of various reasons, such as limited number of places in the programmes, time constraint, and students' reluctance to seek-help; such programmes cannot adequately meet students' needs. To address this problem, the author has designed a general education course entitled "Stress and Well-Being" to teach students stress management skills and strategies to enhance their well-being. The course employed a holistic health framework which covers the physical, intellectual, emotional, social and spiritual dimensions of health. It lasted for 14 weeks with two 2-hour sessions each week. Perceived stress, social problem-solving orientations and depression scores were obtained from one hundred and ninety nine studentsat the end of the course. Comparison with a control group of seventy-four students taking another general education course unrelated to stress and well-being was made. It was found that students in the "treatment" group reported lower level of interpersonal stress and had lower depression scores than students in the control group, though the social problem-solving orientation scores of the two groups were similar. Implications of the present preliminary study and recommendations for future studies are discussed.
    Keywords: stress and well-being, stress management, general education course, university students
  14. By: Hou,Xiaohui; Xu,Xiaochen; Anderson,Ian
    Abstract: This paper analyzes smoking prevalence and smoking behaviors in Papua New Guinea. Using the 2009?10 Papua New Guinea Household Income and Expenditure Survey, the paper analyzes the determinants of tobacco use and tobacco choices in Papua New Guinea. The results show that adults (18 years and above) in the poorest quartile are more likely to smoke. Tobacco consumption imposes a large financial burden to poor households. Tobacco consumption accounts for about 23 percent of total household food expenditure for households in the poorest quartile, compared with 15 percent for the entire sample. However, most of these households consume non-processed tobacco. The study reveals the urgency to control tobacco consumption in Papua New Guinea and considers some practical challenges that the country may face.
    Keywords: Health Monitoring&Evaluation,Early Child and Children's Health,Adolescent Health,Tobacco Use and Control,Alcohol and Substance Abuse
    Date: 2015–06–10
  15. By: Vincenzo Carrieri (Department of Economics and Statistics, University of Salerno; Health, Econometrics and Data Group, University of York.); Cinzia Di Novi (Department of Economics, University Of Venice Cà Foscari); Cristina Orso (Department of Economics, University Of Venice Cà Foscari)
    Abstract: Income-related inequalities in health care access have been found in several European countries but little is known about the extent of inequalities in the provision of Long Term Care services (LTC). This paper fills this gap: it addresses equity issues related to the provision of home care services across three macro-areas in Europe which are highly heterogeneous in terms of the degree of public financing of LTC and the strength and the social value of family ties. Using cross-country comparative micro-data from SHARE (Survey of Health, Ageing and Retirement in Europe) survey, we estimate and decompose an Erreygers concentration index of the use of both paid domestic help (“unskilled” care) and personal nursing care (“skilled” care), measuring the contribution of income, needs and non-needs factors to overall inequality. We base the decomposition on a bivariate probit model which takes into account the reciprocal interaction between formal and informal home care use. We find evidence of high horizontal inequity in the use of unskilled home care in areas where public financing of LTC is relatively low (Southern Europe) while moderate inequalities emerges in areas where public-private mix of financing is more balanced (Continental Europe). At the same time, we do not detect inequity in Northern Europe characterized by high public spending on universal services equitable for all, including LTC public coverage. In all areas, informal care has been found to be a substitute for paid unskilled care among the poor and this contributes to further skewing the distribution of the use of formal care services towards the rich.
    Keywords: inequality, long term care, home care, Europe
    JEL: I11 I14
    Date: 2015
  16. By: Lidia Panico (INED); Maxime Tô; Olivier Thévenon (INED)
    Abstract: The lower a mother’s educational level, the higher the risk that she will have a low birthweight baby (below 2.5kg). The risk is 50% higher for women with no qualifications than for women with a highschool diploma. Differences by educational level narrow slightly when household income and other factors such as birth order, mother’s age and parents’ height are taken into account, but they do not disappear. Smoking and alcohol consumption during pregnancy appear to play a role, partially explaining the higher proportion of low birthweight babies born to the least educated mothers. The variations in the risk of low birthweight by socioeconomic status are similar in France and the United Kingdom.
    Date: 2015
  17. By: Jakob B Madsen
    Abstract: IQ scores differ substantially across nations. This study argues that cross-country variations in IQ scores, to a large extent, reflect the burden of parasitic and infectious diseases (PID) and iron and iodine deficiency (IID) in infancy and in utero. Furthermore, it is shown that the prevalence of health insults, through the channel of cognitive ability, is influential for the level as well as the growth in productivity across the world. Using data for 115 countries and an instrumental variable approach, regressions reveal that the prevalence of PID-IIDs is influential for growth and income inequalities globally. Furthermore, the exclusion restriction in this paper is found to hold up against the institutional hypothesis of income inequality.
    Keywords: cross-country income inequality, parasitic and infectious diseases, cognitive ability
    JEL: O1 O3 O4
    Date: 2015–01
  18. By: Martin Halla, Susanne Pech, Martina Zweimüller
    Abstract: Social insurance programs typically comprise sick leave insurance. An important policy parameter is how the cost of sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior, but also workers’ subsequent health. To inform our empirical analysis we propose a simple model, where workers’ absence decision is taken conditional on the sharing rule, health, and a dismissal probability. Our empirical analysis is based on high-quality administrative data sources from Austria. Identification is guaranteed by idiosyncratic variation in the sharing rule (caused by different policy reforms and sharp discontinuities at certain tenure levels and firm sizes). An increase in either the workers’ or the firms’ cost share (both at the public expense) decrease the number of sick leave days. Variations in the workers’ cost are quantitatively more important (by a factor of about two). Policy-induced variation in sick leave has a significant effect on subsequent health (care cost). The average worker in our sample is in the domain of presenteeism, i. e. an increase in sick leave (due to reductions in the workers’ or the firms’ cost share) would reduce health care cost.
    Keywords: Statutory sick-pay regulations, sick leave, presenteeism, absenteeism, moral hazard, health care cost.
    JEL: I18 J22 J38
    Date: 2015–05
  19. By: Daniel Gladwell (School of Health and Related Research, University of Sheffield); Gurleen Popli (Department of Economics, University of Sheffield); Aki Tsuchiya (School of Health and Related Research & Department of Economics, University of Sheffield)
    Abstract: This paper uses a dynamic Structural Equation Model of ability formation to investigate the determinants of NEET (not in education, employment or training) status in adolescents, with special focus on health. The model addresses the issue of measurement error in estimating ability and mental health; and explores the determinants of ability and NEET status through time. The analysis finds that ability remains the key predictor of NEET status; and while general health plays an important role in the formation of ability for both girls and boys, the impact of mental health differs between the sexes.
    Keywords: Adolescence, NEET, Health, Structural Equation Modelling
    JEL: I10 I21 J21
    Date: 2015–06
  20. By: Pietro Tebaldi (Stanford University)
    Abstract: This paper develops and estimates a model of a regulated health insurance exchange, in which insurers’ ability to adjust prices across buyers with different observed risk or preferences is restricted. I show conditions under which the joint distribution of risk and preferences is identified, even when the econometrician does not observe any information on individual risk. These primitives can then be used to simulate equilibrium under alternative regulations. I estimate the model with data from the first year of the Californian exchange under the Affordable Care Act, where age-rating restrictions and a subsidy program determine the way in which insurers’ decisions translate to expected profits. For this market, I investigate alternative designs of the subsidy program. Compared to the subsidy formula mandated by the healthcare reform, the adoption of a voucher program – providing buyers with a lump-sum equal to 70-80% of their expected expenditure – would transfer welfare away from insurers, favoring consumers and/or taxpayers. Simulations of equilibrium under this alternative policy result in total coverage between 100-115% of the levels achieved by the current regulations, while also reducing government expenditure, average premiums, and markups, by 0-20%, 12-15%, and 22-27%, respectively.
    Keywords: Health insurance, health reform, ACA, health exchanges, subsidies, regulation.
    JEL: I11 I13 I18 L51 H51 L88
    Date: 2015–06
  21. By: Tirivayi J.N.; Koethe J. (UNU-MERIT)
    Abstract: The relationship between immune status and employment outcomes in HIV-infected patients on long-term antiretroviral therapy ART in sub-Saharan Africa and their HIV-affected households is not well understood. We assessed the relationship between CD4 T-cell counts of ART-treated adults at public-sector clinics in Lusaka, Zambia median treatment duration 973 days and labour force participation in the HIV-affected households using clinical and survey data. In multivariable models, patients with a CD4 count 350 cells/l were 22 percentage points more likely to be engaged in labour 95 CI 0.02, 0.42 and worked approximately 6 more days per month compared to patients with a CD4 count 350 cells/l. A similar relationship between patient CD4 count and labour participation was observed for other adult family members in the HIV-affected household, but it was not statistically significant. These findings suggest interventions that promote and maintain robust immune recovery on ART may confer economic benefits.
    Keywords: Health: General; Health: Government Policy; Regulation; Public Health; Time Allocation and Labor Supply;
    JEL: I10 I18 J22
    Date: 2015
  22. By: Marcella Alsan; Claudia Goldin
    Abstract: We explore the first period of decline in infant mortality in the U.S. and provide estimates of the independent and combined effects of clean water and effective sewerage systems on infant mortality. Our case is Massachusetts, 1880-1915, when state authorities developed a sewerage and water district for municipalities in the Boston Greater Metropolitan area. We find that the two interventions were complementary and together accounted for approximately 37 percent of the total decline in log infant mortality among treated municipalities during the 36 years considered. Considerable research has documented the importance of clean water interventions for improvement in population health, but there is less evidence on the importance of sewerage systems. Our findings are directly relevant to urbanization in the developing world and suggest that a dual-pronged approach of safe water and sewerage is important to improving infant and early child survival.
    JEL: H51 I15 J1 N3
    Date: 2015–06
  23. By: Raymond Fisman; Yongxiang Wang
    Abstract: We study the relationship between the political connections of Chinese firms and workplace fatalities. In our preferred specification we find that the worker death rate for connected companies is two to three times that of unconnected firms (depending on the sample employed), a pattern that holds for within-firm estimations. The connections-mortality relationship is attenuated in provinces where safety regulators' promotion is contingent on meeting safety targets. In the absence of fatalities, connected firms receive fewer reports of major violations for safety compliance, whereas in years of fatal accidents the rate of reported violations is identical. Moreover, fatal accidents produce negative returns at connected companies and are associated with the subsequent departure of well-connected executives. These results provide suggestive evidence that connections enable firms to avoid (potentially costly) compliance measures, rather than using connections to avoid regulatory response after accidents occur. Our findings emphasize the social costs of political connections, and suggest that appropriate regulatory incentives may be useful in mitigating these costs.
    JEL: D73 J81 P26
    Date: 2015–06
  24. By: Mariacristina De Nardi; Eric French; John Bailey Jones; Jeremy McCauley
    Abstract: We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10% of all spenders are responsible for 52% of medical spending in a given year. In addition, those currently experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for 65% of the elderly's medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the U.S.
    JEL: D12 D14 I13 I14
    Date: 2015–06

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