nep-hea New Economics Papers
on Health Economics
Issue of 2015‒09‒11
eleven papers chosen by
Yong Yin
SUNY at Buffalo

  1. Insurer Competition in Health Care Markets By Ho, Katherine; Lee, Robin S.
  2. Business Models for E-Health: Evidence From Ten Case Studies By Chris Kimble
  3. Hospital Employment and Local Unemployment: Evidence from French Health Reforms By Andrew E. Clark; Carine Milcent
  4. Potential Effects of the Affordable Care Act on Loss Calculations By Joshua Congdon-Hohman; Victor Matheson
  5. Preliminary Observations on Social Security and Health Care Systems of the BRICS By Pedro Lara de Arruda; Mary MacLennan
  6. The Cost-Effectiveness of Developmental Screenings: Evidence from a Nationwide Programme By Halla, Martin; Pruckner, Gerald J.; Schober, Thomas
  7. Has Suburbanization Caused Obesity? Evidence Across Gender, Race, and Income By Naghsh Nejad, Maryam; Ross, Amanda
  8. Toilets Can Work: Short and Medium Run Health Impacts of Addressing Complementarities and Externalities in Water and Sanitation By Esther Duflo; Michael Greenstone; Raymond Guiteras; Thomas Clasen
  9. Assessing Incentives for Adverse Selection in Health Plan Payment Systems By Timothy J. Layton; Randall P. Ellis; Thomas G. McGuire
  10. Regulation of Insurance with Adverse Selection and Switching Costs: Evidence from Medicare Part D. By Maria Polyakova
  11. Long-run health effects of sports and exercise in Canada By Sari, Nazmi;

  1. By: Ho, Katherine; Lee, Robin S.
    Abstract: We analyze the impact of insurer competition on health care markets using a model of premium setting, hospital-insurer bargaining, household demand for insurance, and individual demand for hospitals. Increased insurer competition may lead to lower premiums; it may also increase health providers' leverage to negotiate higher prices, thereby mitigating premium reductions. We use detailed California admissions, claims, and enrollment data from a large benefits manager. We estimate our model and simulate the removal of an insurer from consumers' choice sets. Although premiums rise and annual consumer surplus falls by $50-120 per capita, hospital prices and spending fall in certain markets as remaining insurers negotiate lower rates. Overall, the impact on negotiated prices is heterogeneous, with increases or decreases of up to 15% across markets. We conclude that insurer competition can increase consumer surplus but also generate a redistribution of rents across hospitals and greater medical spending in certain markets.
    Keywords: bargaining; health care markets; vertical contracts
    JEL: I11 L10
    Date: 2015–09
  2. By: Chris Kimble (Euromed Marseille - École de management - Association Euromed Management - Marseille, MRM - Montpellier Research in Management - UPVD - Université de Perpignan Via Domitia - Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School - Université Paul Valéry - Montpellier III - UM2 - Université Montpellier 2 - Sciences et Techniques - UM1 - Université Montpellier 1)
    Abstract: An increasingly aging population and spiraling health care costs have made the search for financially viable health care models an imperative of this century. The careful and creative application of information technology (IT) can play a significant role in meeting that challenge. Valuable lessons can be learned from an analysis of ten innovative telemedicine and e-health initiatives. Having proven their effectiveness in addressing a variety of medical needs, they have progressed beyond small-scale implementations to become an established part of health care delivery systems around the world.
    Date: 2015
  3. By: Andrew E. Clark (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC)); Carine Milcent (CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: We here ask whether French local authorities respond to depressed local labour markets by increasing employment in State-owned hospitals. We use 2006-2010 panel data to examine within-hospital employment changes: higher local unemployment is associated with greater employment in State-owned hospitals, but not for any other hospital type. Our data cover a reimbursement reform introducing competition between hospitals. This reform reduced public-hospital employment, but had no overall effect on the relationship between public-hospital employment and local unemployment. Further analysis shows that this continuing relationship is only found in higher unemployment areas, where public-hospital employment remained counter-cyclical.
    Date: 2015–08
  4. By: Joshua Congdon-Hohman (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross)
    Abstract: This paper examines how the Affordable Care Act might affect the analysis of future care costs in medical malpractice, product or accident liability, or workplace injury cases. Prior to the ACA, it was reasonable to presume that a great deal of a victim’s future health care costs would be paid for out-of-pocket as there was little guarantee that the plaintiff would have access to affordable insurance. Since January 2014, however, a plaintiff can obtain insurance that will cover a significant portion of any future medical costs. This paper examines the basic structure of the ACA, how it has affected health insurance markets, and provides examples of how the ACA might be introduced into an analysis of future life care costs. In addition, case law regarding the application of the ACA is examined as well as arguments for and against considering the availability of health insurance in medical litigation. Finally, additional details regarding the application of the ACA by the practicing forensic economist are addressed. Length: 20 pages
    Keywords: Affordable Care Act, forensic economics, tort awards, lawsuits, health insurance
    JEL: I13 I18 K41
    Date: 2015–09
  5. By: Pedro Lara de Arruda (IPC-IG); Mary MacLennan (IPC-IG)
    Abstract: "This summary provides some preliminary findings of research on social security and health care policies in the BRICS countries. Thus far, our research demonstrates some basic institutional information about the social security and health care policies of the BRICS countries, as well as about their complementary policy aims." (...)
    Keywords: Social Security, Health Care Systems, BRICS
    Date: 2015–06
  6. By: Halla, Martin (University of Innsbruck); Pruckner, Gerald J. (University of Linz); Schober, Thomas (University of Linz)
    Abstract: Early intervention is considered the optimal response to developmental disorders in children. We evaluate a nationwide developmental screening programme for preschoolers in Austria and the resulting interventions. Identification of treatment effects is determined by a birthday cutoff-based discontinuity in the eligibility for a financial incentive to participate in the screening. Assigned preschoolers are about 14 percentage points more likely to participate in the programme. For participants with high socio-economic status (SES), we find little evidence for interventions and consistently no effect on healthcare costs in the long run. For participants with low SES preschoolers, we find evidence for substantial interventions, but only weak evidence for cost savings in the long run.
    Keywords: early intervention, child development, developmental disorder, developmental screening, healthcare costs
    JEL: I12 J13 I18 H51 H75
    Date: 2015–08
  7. By: Naghsh Nejad, Maryam (IZA); Ross, Amanda (West Virginia University)
    Abstract: In this paper, we examine the effect of suburbanization on obesity rates. Our study is an improvement over the existing literature because we will use county level data for our analysis, enabling us to look at the effect of moving from the central city to the suburbs. Previous research has only had health data at the MSA level, and therefore could not look at the effect of urban growth on obesity rates within an MSA, particularly the suburbs versus the central city. To estimate the relationship between obesity and urban sprawl, we will use county-level data on obesity rates from the Behavioral Risk Factor Surveillance System (BRFSS). Because there are likely unobserved selection issues regarding obesity and urban sprawl, we instrument for population density using the 1947 Interstate Highway Program. We find that counties that are less sprawled, defined by a higher population density, have lower obesity rates.
    Keywords: obesity, health, suburbanization
    JEL: I12 I14 O18
    Date: 2015–08
  8. By: Esther Duflo; Michael Greenstone; Raymond Guiteras; Thomas Clasen
    Abstract: Poor water quality and sanitation are leading causes of mortality and disease in developing countries. However, interventions providing toilets in rural areas have not substantially improved health, likely because of incomplete coverage and low usage. This paper estimates the impact of an integrated water and sanitation improvement program in rural India that provided household-level water connections, latrines, and bathing facilities to all households in approximately 100 villages. The estimates suggest that the intervention was effective, reducing treated diarrhea episodes by 30-50%. These results are evident in the short term and persist for 5 years or more. The annual cost is approximately US$60 per household.
    JEL: I15 O13 Q53 Q56
    Date: 2015–09
  9. By: Timothy J. Layton; Randall P. Ellis; Thomas G. McGuire
    Abstract: Health insurance markets face two forms of adverse selection problems. On the demand side, adverse selection leads to plan price distortions and inefficient sorting of consumers across health plans. On the supply side, adverse selection creates incentives for plans to inefficiently distort benefits to attract profitable enrollees. These problems can be addressed by features of health plan payment systems such as reinsurance, risk adjustment, and premium categories. In this paper, we develop Harberger- type measures of the efficiency consequences of price and benefit distortions under a given payment system. Our measures are valid, that is, based on explicit economic models of adverse selection. Our measures are complete, in that they are able to incorporate multiple features of plan payment systems. Finally, they are practical, in that they are based on the ex ante data available to regulators and researchers during the design phase of payment system development, prior to observing actual insurer and consumer behavior. After developing the measures, we illustrate their use by comparing the performance of the payment system planned for implementation in the ACA Marketplaces in 2017 to several policy alternatives. We show that, in protecting against both types of selection problems, a payment system that incorporates reinsurance and prospective risk adjustment out-performs the planned payment system which includes only concurrent risk adjustment.
    JEL: I11 I13 I18
    Date: 2015–09
  10. By: Maria Polyakova
    Abstract: I take advantage of regulatory and pricing dynamics in Medicare Part D to empirically explore interactions among adverse selection, switching costs, and regulation. I first document novel evidence of adverse selection and switching costs within Part D using detailed administrative data. I then estimate a contract choice and pricing model in order to quantify the importance of switching costs for risk-sorting, and for policies that may affect risk sorting. I first find that in Part D, switching costs help sustain an adversely-selected equilibrium and are likely to mute the ability of ACA policies to improve risk allocation across contracts, leading to higher premiums for some enrollees. I then estimate that, overall, decreasing the cost of active decision-making in the Part D environment could lead to a substantial gain in consumer surplus of on average $400-$600 per capita, which is around 20%-30% of average annual per capita drug spending.
    JEL: H0 H50 H51 I1 I13 L51 L78
    Date: 2015–09
  11. By: Sari, Nazmi;
    Abstract: Even though insufficient participation in physical activity is shown to be one of the major contributors to chronic diseases, and poor health, participation in physical activity still remains to be substantially low in developed countries including Canada. In this paper, we examine the long-run health effects of participation in sports and exercise among inactive Canadian adults. Based on informative Canadian panel data and semiparametric matching estimation, we show that participation in sports and exercise generally improves physical health and mental well-being of individuals. While this effect is statisti¬cally significant and persistent for men, we do not find a similar effect for women. Our results also indicate that positive health effects are only achieved with a level of physical activity that is larger than the current national and international health o51 pages
    Keywords: Physical activity, sports, exercise, subjective health, mental health, treatment effect
    JEL: I12 I18 L83 C21 C23
    Date: 2015–09

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