nep-hea New Economics Papers
on Health Economics
Issue of 2015‒11‒07
27 papers chosen by
Yong Yin
SUNY at Buffalo

  1. A Sequential Approach to Combined Clinical Trial and Health Technology Adoption Decisions By Jacco Thijssen; Daniele Bergantini
  2. An Evaluation of Factors Affecting Drug Quality: Evidence from the Antimalarial Market in Uganda By Esther Atukunda; Anne Fitzpatrick
  3. Chinese Yellow Dust and Korean Infant Health By Deokrye Baek; Duha T. Altindag; Naci Mocan
  4. Diabetes and Diet: Behavioral Response and the Value of Health By Emily Oster
  5. Does Trade Make Asian Children Healthier? By Vishalkumar Jani; Dholakia, Ravindra H.
  6. Evidence-based decision making in healthcare in Central Eastern Europe By Alessandra Ferrario; Dragana Baltezarević; Tanja Novakovic; Mark Parker; Janko Samardzic
  7. Health Effects of Economic Crises By Christopher J. Ruhm
  8. Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector By Amitabh Chandra; Amy Finkelstein; Adam Sacarny; Chad Syverson
  9. How much should be paid for Prescribed Specialised Services? By Chris Bojke; Katja Grasic; Andrew Street
  10. Increasing anti-malaria bednets uptake using information and distribution strategies By BONAN Jacopo; LEMAY-BOUCHER Philippe; SCOTT Douglas; TENIKUE Michel
  11. Measuring Educational Inequalities in Mortality Statistics By Johan P. Mackenbach; Gwenn Menvielle; Domantas Jasilionis; Rianne de Gelder
  12. Measuring Health Insurance Benefits: The Case of People with Disabilities By Richard V. Burkhauser; Jeff Larrimore; Sean Lyons
  13. Parental health and children’s cognitive and non-cognitive development: New evidence from the Longitudinal Survey of Australian Children By Le, Huong; Nguyen, Ha
  14. Patient Preferences for Pain Management Services in Advanced Cancer: Results from a Discrete Choice Experiment By David Meads; John O'Dwyer; Claire Hulme; Phani Chintakayala; Karen Vinall-Collier
  15. Pollution and Mortality in the 19th Century By W. Walker Hanlon
  16. Pollution, Infectious Disease, and Mortality: Evidence from the 1918 Spanish Influenza Pandemic By Karen Clay; Joshua Lewis; Edson Severnini
  17. Private Safety-Net Clinics: Effects of Financial Pressures and Community Characteristics on Closures By Suhui Li; Avi Dor; Jesse M. Pines; Mark S. Zocchi; Renee Y. Hsia
  18. Sibling Health, Schooling and Longer-Term Developmental Outcomes By Chris Ryan; Anna Zhu
  19. The Anatomy of Physician Payments: Contracting Subject to Complexity By Jeffrey Clemens; Joshua D. Gottlieb; Tímea Laura Molnár
  20. The Efficiency Consequences of Health Care Privatization: Evidence from Medicare Advantage Exits By Mark Duggan; Jonathan Gruber; Boris Vabson
  21. The Gift of Time? School Starting Age and Mental Health By Thomas S. Dee; Hans Henrik Sievertsen
  22. The Pros and Cons of Sick Pay Schemes: Testing for Contagious Presenteeism and Shirking Behavior By Stefan Pichler; Nicolas Ziebarth
  23. The Relationship between Health and Schooling: What’s New? By Michael Grossman
  24. Welfare State Regimes and Social Determinants of Health in Europe By Johannes Pöschl; Katarina Valkova
  25. What Does a Deductible Do? The Impact of Cost-Sharing on Health Care Prices, Quantities, and Spending Dynamics By Zarek C. Brot-Goldberg; Amitabh Chandra; Benjamin R. Handel; Jonathan T. Kolstad
  26. What drives public health care expenditure growth? Evidence from Swiss cantons, 1970-2012 By Brändle, Thomas; Colombier, Carsten
  27. Why Do People Lapse Their Long-Term Care Insurance? By Wenliang Hou; Wei Sun; Anthony Webb

  1. By: Jacco Thijssen (The York Management School, University of York); Daniele Bergantini (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds)
    Abstract: We introduce a model to sequentially analyse both clinical trials and cost effectiveness of a new health technology. This provides a consistent decision-making framework for evaluating (i) evidence from clinical trials, (ii) the expected value of further trials, (iii) the costs and benefits of adoption/abandonment. We derive the optimal decision rule by appropriately extending the Bayesian framework of sequential hypothesis testing. We find that increased noise in the trial observations lowers the value of the new technology, but leads to decisions, in expectation, being taken faster. The expected total discounted costs of the trial are non-monotonic in the incremental trial costs. The proposed method numerically outperforms a frequentist approach in terms of total value, and expected trial duration and costs. Delays in trial observations can have big qualitative effects on value. The model is illustrated using data on standard versus robot-assisted laporascopic prostatectomy.
    Keywords: optimal stopping; clinical trials; health technology assessment;
    JEL: C11 C12 C44
    Date: 2015
  2. By: Esther Atukunda; Anne Fitzpatrick
    Abstract: The quality of healthcare, and specifically medicines, is reportedly low in developing countries. We purchase and test 879 antimalarial drugs from 459 outlets in 44 randomly selected parishes (131 villages) in Uganda to estimate the average rate of drug quality. We focus on artemether-lumefantrine (AL), the first-line treatment for malaria in Uganda. Purchased drugs are tested for quality using a handheld spectrometer. Our methodology allows us to differentiate between counterfeit and substandard drugs; counterfeit drugs are different than a high quality drug of the same brand, while substandard drugs are different and also likely medically ineffective. Data are then linked to surveys of drug vendors at the same outlets to test hypotheses of how low quality drugs arrive at market. In contrast to previous literature, we find that AL is widely available and drug quality is relatively high in the study area. While 17% of samples are counterfeit, only 3.4% of purchased drugs are substandard. We subsequently establish three new empirical facts regarding low-quality drugs. First, substandard drugs are typically dilutions of high quality doses, rather than dosages of all ineffective tablets. Dilution increases noise and makes it more difficult for customers to recognize when they have been sold a substandard dosage. Second, we show that counterfeit dugs are priced slightly lower, but substandard drugs are priced the same as high quality drugs. These results are consistent with consumer deception as opposed to a low willingness to pay for quality. Third, a small percentage of vendors are complicit in selling deceptively ineffective medicines. However, identifying which vendors and outlets sell low-quality medicines is difficult.
    JEL: D8 I15 L15
    Date: 2015–10
  3. By: Deokrye Baek; Duha T. Altindag; Naci Mocan
    Abstract: Naturally-occurring yellow sand outbreaks, which are produced by winds flowing to Korea from China and Mongolia, create air pollution. Although there is seasonal pattern of this phenomenon, there exists substantial variation in its timing, strength and location from year to year. Thus, exposure to the intensity of air pollution exhibits significant randomness and unpredictability. To warn residents about air pollution in general, and about these dust storms in particular, Korean authorities issue different types of public alerts. Using birth certificate data on more than 1.5 million babies born between 2003 and 2011, we investigate the impact of air pollution, and the avoidance behavior triggered by pollution alerts on various birth outcomes. We find that exposure to air pollution during pregnancy has a significant negative impact on birth weight, the gestation weeks of the baby, and the propensity of the baby being low weight. Public alerts about air quality during pregnancy have a separate positive effect on fetal health. We show that Korean women do not time their pregnancy according to expected yellow dust exposure, and that educated women’s pregnancy timing is not different from those who are less-educated. The results provide evidence for the effectiveness of pollution alert systems in promoting public health. They also underline the importance of taking into account individuals’ avoidance behavior when estimating the impact of air quality on birth outcomes. Specifically, we show that the estimated impact of air pollution on infant health is reduced by half when the preventive effect of public health warnings is not accounted for.
    JEL: H23 I12 Q51 Q53 Q54
    Date: 2015–10
  4. By: Emily Oster
    Abstract: Individuals with obesity often appear reluctant to undertake dietary changes. Evaluating the reasons for this reluctance, as well as appropriate policy responses, is hampered by a lack of data on behavioral response to dietary advice. I use household scanner data to estimate food purchase response to a diagnosis of diabetes, a common complication of obesity. I infer diabetes diagnosis within the scanner data from purchases of glucose testing products. Households engage in statistically significant but small calorie reductions following diagnosis. The changes are sufficient to lose 4 to 8 pounds in the first year, but are only about 10% of what would be suggested by a doctor. The scanner data allows detailed analysis of changes by food type. In the first month after diagnosis, healthy foods increase and unhealthy foods decrease. However, only the decreases in unhealthy food persist. Changes are most pronounced on large, unhealthy, food categories. Those individuals whose pre-diagnosis diet is concentrated in one or a few foods groups show bigger subsequent calorie reductions, with these reductions occurring primarily occurring in these largest food groups. I suggest the facts may be consistent with a psychological framework in which rule-based behavior change is more successful. I compare the results to a policy of taxes or subsidies.
    JEL: I12 J17
    Date: 2015–10
  5. By: Vishalkumar Jani; Dholakia, Ravindra H.
    Abstract: This paper empirically examines the impact of globalization and international trade on the child health status of the Asian countries. In contrast to previous studies we have introduced the initial level of development and income status that seem to play an important role. We have also checked whether the impact on child health status of trade in services is different from the trade in goods. The fixed effects panel data analysis shows that economic and political globalization have positive impact on the child health status measured by child mortality rates and malnutrition. International trade across all countries has no impact on child health but when different groups of countries classified by their initial levels of income and development are considered, trade shows significant impact on the child health. Further decomposing the trade, trade in services show more positive impact on the child health status than the trade in goods.
  6. By: Alessandra Ferrario; Dragana Baltezarević; Tanja Novakovic; Mark Parker; Janko Samardzic
    JEL: R14 J01
    Date: 2014–10
  7. By: Christopher J. Ruhm
    Abstract: This analysis summarizes prior research and uses national, state and county level data from the United States from 1976-2013 to examine whether the mortality effects of economic crises differ in kind from those of the more typical fluctuations. The tentative conclusion is that economic crises affect mortality rates (and presumably other measures of health) in the same way as less severe downturns: namely, they lead to improvements in physical health. The effects of severe national recessions in the United States, appear to have a beneficial effect on mortality that is roughly twice as strong as that predicted due to the elevated unemployment rates alone while the higher predicted rate of suicides during typical periods of economic weakness is approximately offset during severe recessions. No consistent pattern is obtained for more localized economic crises occurring at the state level – some estimates suggest larger protective mortality effects while others indicate offsetting deleterious consequences.
    JEL: E32 I1 I12 I18 J68
    Date: 2015–10
  8. By: Amitabh Chandra; Amy Finkelstein; Adam Sacarny; Chad Syverson
    Abstract: The conventional wisdom in health economics is that idiosyncratic features of the healthcare sector leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across a variety of conditions and performance measures that higher quality hospitals tend to have higher market shares at a point in time and expand more over time. Moreover, we find that the relationship between performance and allocation is stronger among patients who have greater scope for hospital choice, suggesting a role for patient demand in allocation in the hospital sector. Our findings suggest that the healthcare sector may have more in common with “traditional” sectors subject to standard market forces than is often assumed.
    JEL: D22 D24 I11
    Date: 2015–10
  9. By: Chris Bojke (Centre for Health Economics, University of York, UK.); Katja Grasic (Centre for Health Economics, University of York, UK); Andrew Street (Centre for Health Economics, University of York, UK.)
    Abstract: Overview. Current policy in the English National Health Service (NHS) promotes concentration of the specialised treatment of relatively rare and complex conditions into a limited number of specialist centres. However if a more complex patient case-mix leads to specialised treatments being systematically more costly than non-specialised treatment, then the national tariff payment system based on Healthcare Resource Groups (HRGs) may punitively penalise centres that perform this activity.
    Date: 2015–10
  10. By: BONAN Jacopo; LEMAY-BOUCHER Philippe; SCOTT Douglas; TENIKUE Michel
    Abstract: Abstract This paper studies the effect of information on malaria and of distribution strategies on the demand for anti-malaria bednets. We use a randomized experiment in the city of Thies in Senegal. We offer two orthogonal treatments to a random sample of households. The first is a sale treatment and consists of (1) an offer to purchase on the spot a bednet at a subsidized price or (2) an offer to purchase a bednet at the same subsidized price with a voucher valid for 7 days. The second is an information treatment that consists of a ten-minute information session on malaria related issues. We find that information has no significant effect on the demand of bednets and that, receiving a voucher increases purchasing by 20%. Our results suggest that selling bednets at a subsidized prize allowing for some flexibility with a short period of seven days increases purchase compared to the on-the-spot sale approach.
    Keywords: bednet; information; malaria; prevention
    Date: 2015–10
  11. By: Johan P. Mackenbach; Gwenn Menvielle; Domantas Jasilionis; Rianne de Gelder
    Abstract: All OECD countries are faced with substantial inequalities in health status between socioeconomic groups within their populations. One aspect of these inequalities for which data are routinely available in many countries is inequalities in mortality by level of education: people with a lower level of education typically have considerably higher death rates and lower life expectancy than people with a higher level of education. The OECD recently started a project to generate measures of the distributions of ages at death by educational level, gender and cause of death for as many countries as possible. This working paper aims to highlight the most important methodological issues to be faced when trying to create valid statistics on mortality by level of education, and to highlight how different methodologies may affect results and comparisons. Topics covered include study designs (e.g. use of cross-sectional census-unlinked versus longitudinal census-linked data), data harmonization issues (e.g. use of a common educational classification scheme), and data analysis issues (e.g. choice of a summary measure of inequalities in mortality). The paper ends with a number of recommendations for data analysts.<BR>On observe dans tous les pays de l’OCDE des inégalités considérables entre les différents groupes socioéconomiques de leur population du point de vue de l'état de santé. Ces inégalités, pour lesquelles des données sont régulièrement disponibles dans de nombreux pays, se manifestent notamment par une mortalité différente selon le niveau d’études : en effet, les individus ayant un faible niveau d’instruction enregistrent généralement des taux de mortalité beaucoup plus élevés et ont une espérance de vie plus courte que ceux ayant suivi de plus longues études. L’OCDE a récemment lancé un projet visant à élaborer des indicateurs de la répartition de l’âge au décès par niveau d’études, par sexe et par cause du décès dans le plus grand nombre de pays possible. Ce document mets en évidence les principales difficultés d’ordre méthodologique que l’on rencontre lorsque l’on tente d’établir des statistiques valables sur la mortalité par niveau d’études, et à montrer comment des méthodologies différentes risquent d’avoir un impact sur les résultats et les comparaisons. Parmi les thèmes abordés figurent la conception des études (par exemple l’exploitation de données transversales non liées au recensement ou à l’inverse de données longitudinales extraites du recensement), la question de l’harmonisation des données (par exemple l’utilisation d’un dispositif commun de classification de l’éducation), et celle relative à l’analyse des données (par exemple le choix d’un indicateur synthétique des inégalités en matière de mortalité). Le document se termine par un certain nombre de recommandations à l’intention des responsables de l’analyse des données.
    Date: 2015–11–05
  12. By: Richard V. Burkhauser; Jeff Larrimore; Sean Lyons
    Abstract: Since 2012 the Congressional Budget Office has included an estimate of the market value of government-provided health insurance coverage in its measures of household income. We follow this practice for both public and private health insurance to capture the impact of greater access to government-provided health insurance for working-age people with disabilities, whose value rose in 2010 dollars from $11.7B in 1980 to $114.3B in 2012. We then consider the more general implications of incorporating estimates of the market price of insurance, equivalent to that provided by the government, into policy analyses in a post-Affordable Care Act world.
    JEL: D31 H24 I18 J31
    Date: 2015–10
  13. By: Le, Huong; Nguyen, Ha
    Abstract: This paper examines the effects of maternal and paternal health on cognitive and non-cognitive development in Australian children. The underlying nationally representative panel data and a child fixed effects estimator are used to overcome most of the previous cross-sectional study limitation in dealing with unobserved heterogeneity. While previous literature has found evidence supporting the adverse impact of poor parental health on child development our results found little evidence to support this. We also found little differential effect based on the gender of the child, the parent, or household income levels. However, we found a small amount of evidence suggesting that poor parental health may worsen some cognitive and non-cognitive skills of young children only. Our results demonstrate that either failing to account for parent-child fixed effects or using child non-cognitive skills reported by parents could over-estimate the harmful impact of poor parental health on child development.
    Keywords: Intergenerational transmission, health, education, panel data, Australia
    JEL: I14 J24
    Date: 2015–10
  14. By: David Meads (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); John O'Dwyer (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Claire Hulme (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Phani Chintakayala (Leeds University Business School & Consumer Data Research Centre, University of Leeds); Karen Vinall-Collier (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds)
    Abstract: Pain from advanced cancer remains prevalent, severe and often under-treated. New services are required to improve quality of life for patients with cancer pain. A discrete choice experiment (DCE) was conducted with patients to understand their preferences for pain management services to inform service development. Focus groups were used to develop the DCE ‘attributes’ and ‘levels’. The attributes were waiting time, type of healthcare professional, out-of-pocket costs, side-effect control, quality of communication, quality of information, and pain control. Patients from 13 English palliative care services completed the DCE along with clinical and health-related quality of life (HRQoL) questions. A conditional logit model was used to analyse the data. 221 patients completed the survey (45% female; mean age=64.6, range 21.6-92.2). The most important aspects of services were: good pain control, zero out-of-pocket costs and good side-effect control. Poor/ moderate pain control and £30 costs drew the highest negative preferences. Respondents were willing to incur costs ranging £10.26-£12.51 to reduce waiting time by 2 days, receive good information, good communication or to see a specialist pain doctor. Those with lower HRQoL were less willing to wait for treatment and willing to incur higher costs. Outcomes attributes (good pain control, few side effects) were more important than process attributes (waiting times, type of healthcare professional). However, the preference for good information and communication was greater than that to see some types of healthcare professional. Patients were willing to incur small costs (£10) and wait times to receive their preferred level of service.
    Keywords: discrete choice experiment; cancer pain; patient preferences;
    JEL: J1
    Date: 2015
  15. By: W. Walker Hanlon
    Abstract: Mortality was extremely high in the industrial cities of the 19th century, but little is known about the role played by pollution in generating this pattern, due largely to a lack of direct pollution measures. I overcome this problem by combining data on the local composition of industries in Britain with information on the intensity with which industries used polluting inputs. Using this new measure, I show that pollution had a strong impact on mortality as far back as the 1850s. Industrial pollution explains 30-40% of the relationship between mortality and population density in 1851-60, and nearly 60% of this relationship in 1900. Growing industrial coal use from 1851-1900 reduced life expectancy by at least 0.57 years. A back-of-the envelope estimate suggests that the value of this loss of life, expressed as a one-time cost, was equal to at least 0.33-1.00 of annual GDP in 1900. Overall, these results show that industrial pollution was a major cause of mortality in the 19th century, particularly in urban areas, and that industrial growth during this period came at a substantial cost to health.
    JEL: I10 N33 N53 Q53
    Date: 2015–10
  16. By: Karen Clay; Joshua Lewis; Edson Severnini
    Abstract: This paper uses the 1918 influenza pandemic as a natural experiment to examine whether air pollution affects susceptibility to infectious disease. The empirical analysis combines the sharp timing of the pandemic with large cross-city differences in baseline pollution measures based on coal-fired electricity generating capacity for a sample 183 American cities. The findings suggest that air pollution exacerbated the impact of the pandemic. Proximity to World War I military bases and baseline city health conditions also contributed to pandemic severity. The effects of air pollution are quantitatively important. Had coal-fired capacity in above-median cities been reduced to the median level, 3,400-5,860 pandemic- related infant deaths and 15,575-23,686 pandemic-related all-age deaths would have been averted. These results highlight the complementarity between air pollution and infectious disease on health, and suggest that there may be large co-benefits associated with pollution abatement policies.
    JEL: I15 I18 N32 N52 Q40 Q53
    Date: 2015–10
  17. By: Suhui Li; Avi Dor; Jesse M. Pines; Mark S. Zocchi; Renee Y. Hsia
    Abstract: In order to better understand what threatens vulnerable populations’ access to primary care, it is important to understand the factors associated with closing safety-net clinics. This paper examines how a clinic’s financial position, productivity, and community characteristics are associated with its risk of closure. We examine patterns of closures among private-run primary care clinics (PCCs) in California between 2006 and 2012. We use a discrete-time proportional hazard model to assess relative hazard ratios of covariates, and a random-effect hazard model to adjust for unobserved heterogeneity among PCCs. We find that lower net income from patient care, smaller amount of government grants, and lower productivity were associated with significantly higher risk of PCC closure. We also find that federally qualified health centers (FQHCs) and non-FQHCs generally faced the same risk factors of closure. These results underscore the critical role of financial incentives in the long-term viability of safety-net clinics.
    JEL: D22 I11 L31
    Date: 2015–10
  18. By: Chris Ryan (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Anna Zhu (The University of Melbourne; and ARC Centre of Excellence for Children and Families over the Life Course)
    Abstract: We explore the extent to which starting primary school earlier by up to one year can help shield children from the detrimental, long-term developmental consequences of having an ill or disabled sibling. Using data from the Longitudinal Study of Australian Children, we employ a Regression Discontinuity Design based on birthday eligibility cut-offs. We find that Australian children who have a sibling in poor health persistently lag behind other children in their cognitive development — but only for the children who start school later. In contrast, for the children who commence school earlier, we do not find any cognitive developmental gaps. The results are strongest when the ill-health in the sibling is of a temporary rather than longer-term nature. We hypothesise that an early school start achieves this by lessening the importance of resource-access inequalities within the family home. However, we find mixed impacts on the gaps in non-cognitive development. Classification-J13, I21
    Keywords: Educational economics, human capital, school starting age, sibling health
    Date: 2015–10
  19. By: Jeffrey Clemens; Joshua D. Gottlieb; Tímea Laura Molnár
    Abstract: The reimbursement rates that private insurers pay to physicians are closely linked to those set by Medicare, despite the well-known limitations of Medicare's fee schedule. We ask to what extent this relationship reflects the use of Medicare's relative price menu as a benchmark, in order to reduce transaction costs in an otherwise complex pricing environment. We analyze 71 million claims from a large private insurer, which represent $6.3 billion in spending over three years. Using two empirical approaches, we estimate that 75 percent of services, accounting for 65 percent of dollars, are benchmarked to Medicare's relative prices. The Medicare-benchmarked share is higher for services provided by small physician groups. It is lower for capital-intensive treatment categories, for which Medicare's average-cost reimbursements deviate most from marginal cost pricing. When the insurer deviates from Medicare's relative prices, these deviations are consistent with adjusting towards the marginal costs of treatment. Our results suggest that providers and private insurers coordinate around Medicare's menu of relative payments for simplicity, but innovate when the value of doing so is likely highest.
    JEL: H44 H51 H57 I11 I13 L98
    Date: 2015–10
  20. By: Mark Duggan; Jonathan Gruber; Boris Vabson
    Abstract: There is considerable controversy over the use of private insurers to deliver public health insurance benefits. We investigate the efficiency consequences of patients enrolling in Medicare Advantage (MA), private managed care organizations that compete with the traditional fee-for-service Medicare program. We use exogenous shocks to MA enrollment arising from plan exits from New York counties in the early 2000s, and utilize unique data that links hospital inpatient utilization to Medicare enrollment records. We find that individuals who were forced out of MA plans due to plan exit saw very large increases in hospital utilization. These increases appear to arise through plans both limiting access to nearby hospitals and reducing elective admissions, yet they are not associated with any measurable reduction in hospital quality or patient mortality.
    JEL: H51 I13 I18 L33
    Date: 2015–10
  21. By: Thomas S. Dee; Hans Henrik Sievertsen
    Abstract: In many developed countries, children now begin their formal schooling at an older age. However, a growing body of empirical studies provides little evidence that such schooling delays improve educational and economic outcomes. This study presents new evidence on whether school starting age influences student outcomes by relying on linked Danish survey and register data that include several distinct, widely used, and validated measures of mental health that are reported out-of-school among similarly aged children. We estimate the causal effects of delayed school enrollment using a "fuzzy" regression-discontinuity design based on exact dates of birth and the fact that, in Denmark, children typically enroll in school during the calendar year in which they turn six. We find that a one-year delay in the start of school dramatically reduces inattention/hyperactivity at age 7 (effect size = -0.7), a measure of self regulation with strong negative links to student achievement. We also find that this large and targeted effect persists at age 11. However, the estimated effects of school starting age on other mental-health constructs, which have weaker links to subsequent student achievement, are smaller and less persistent.
    JEL: I1 I2
    Date: 2015–10
  22. By: Stefan Pichler; Nicolas Ziebarth
    Abstract: This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the test exploiting German sick pay reforms and administrative industry-level data on certiï¬ed sick leave by diagnoses. The labor supply adjustment for contagious diseases is signiï¬cantly smaller than for non-contagious diseases. Lastly, using Google Flu data and the staggered implementation of US sick leave reforms, we show that flu rates decrease after employees gain access to paid sick leave.
    Keywords: sickness insurance, paid sick leave, presenteeism, contagious diseases, infections, negative externalities, shirking, US, Germany
    JEL: I12 I13 I18 J22 J28 J32
    Date: 2015–10
  23. By: Michael Grossman
    Abstract: Many studies suggest that years of formal schooling completed is the most important correlate of good health. There is much less consensus as to whether this correlation reflects causality from more schooling to better health. The relationship may be traced in part to reverse causality and may also reflect “omitted third variables” that cause health and schooling to vary in the same direction. The past five years (2010-2014) have witnessed the development of a large literature focusing on the issue just raised. I deal with that literature and what can be learned from it in this paper. I conclude that there is enough conflicting evidence in the studies that I have reviewed to warrant more research on the question of whether more schooling does in fact cause better health outcomes.
    JEL: I10 I12
    Date: 2015–10
  24. By: Johannes Pöschl (The Vienna Institute for International Economic Studies, wiiw); Katarina Valkova
    Abstract: Abstract The aim of the paper is to identify social determinants of poor health when considering differences across countries and types of welfare states. In order to do so, we first perform a cluster analysis to classify countries into groups of welfare state models. The innovation of the paper is clustering method using the information about the actual redistributional effects and country health care expenditures instead of concentrating on country institutional arrangements. Thereafter, a logistic regression model is used to investigate the social determinants of poor health status in Europe, taking into account demographic and socioeconomic factors, indicators of relative poverty and finally environmental factors. Following the recent literature, we also apply an alternative estimation strategy and employ a multilevel logistic regression of individuals nested within countries with random intercept on the country level. The results show that, apart from age, inequality at the individual level is mostly determined by the education level, income and employment status as well as indicators of relative poverty. Environmental factors as well as other demographic characteristics such as migration or the marital status seem to matter less. Moreover, welfare state models play an important role in determining health inequalities across countries, even after controlling for a large number of socioeconomic characteristics at the individual level.
    Keywords: health, welfare regimes, health care expenditures, poverty, cluster analysis, multilevel analysis
    JEL: H51 I18
    Date: 2015–07
  25. By: Zarek C. Brot-Goldberg; Amitabh Chandra; Benjamin R. Handel; Jonathan T. Kolstad
    Abstract: Measuring consumer responsiveness to medical care prices is a central issue in health economics and a key ingredient in the optimal design and regulation of health insurance markets. We study consumer responsiveness to medical care prices, leveraging a natural experiment that occurred at a large self-insured firm which forced all of its employees to switch from an insurance plan that provided free health care to a non-linear, high deductible plan. The switch caused a spending reduction between 11.79%-13.80% of total firm-wide health spending ($100 million lower spending per year). We decompose this spending reduction into the components of (i) consumer price shopping (ii) quantity reductions (iii) quantity substitutions, finding that spending reductions are entirely due to outright reductions in quantity. We find no evidence of consumers learning to price shop after two years in high-deductible coverage. Consumers reduce quantities across the spectrum of health care services, including potentially valuable care (e.g. preventive services) and potentially wasteful care (e.g. imaging services). We then leverage the unique data environment to study how consumers respond to the complex structure of the high-deductible contract. We find that consumers respond heavily to spot prices at the time of care, and reduce their spending by 42% when under the deductible, conditional on their true expected end-of-year shadow price and their prior year end-of-year marginal price. In the first-year post plan change, 90% of all spending reductions occur in months that consumers began under the deductible, with 49% of all reductions coming for the ex ante sickest half of consumers under the deductible, despite the fact that these consumers have quite low shadow prices. There is no evidence of learning to respond to the true shadow price in the second year post-switch.
    JEL: D12 G22 H51 I11 I13
    Date: 2015–10
  26. By: Brändle, Thomas; Colombier, Carsten
    Abstract: A better understanding of the determinants of public health care expenditures is key to designing effective health policies. We integrate supply and demand-side determinants, factors from political economy and health policy reforms into an empirical analysis of the highly decentralized Swiss health care system. We compile a novel data set of the cantonal health care expenditure in Switzerland spanning the period 1970 - 2012. Using dynamic panel estimation methods, we find that per capita income, the unemployment rate and the share of foreigners are positively related to public health care expenditure growth. With regard to political economy aspects, public health care expenditures increase with the share of women elected to parliament. However, institutional restrictions for politicians, such as fiscal rules and mandatory fiscal referenda, do not appear to limit public health care expenditure growth.
    Keywords: Public health care expenditure,Panel data,Fiscal rules,Political selection
    JEL: H75 D72 C23 I18
    Date: 2015
  27. By: Wenliang Hou; Wei Sun; Anthony Webb
    Abstract: Long-term care, including both nursing home and home health care, is a substantial financial risk for most retired households. Yet few buy long-term care insurance, and many who do let the policies lapse even after holding them for years. This brief summarizes a new study that shows more than one third of individuals with long-term care insurance at age 65 will lapse their policies before death, forfeiting all benefits. Economic theory predicts that individuals at high risk of needing care should retain coverage while those at low risk should lapse, but the data show the opposite pattern: people who subsequently use care are more likely to lapse, even though many have a good understanding of their relative risk of going into care. This brief seeks to explain why individuals lapse – specifically whether the decision reflects the financial burden of insurance premiums, a strategic calculation, or a deterioration in cognitive ability. The brief proceeds as follows. The first section presents data on lapse rates. The second section lays out alternative explanations for lapse rates. The third section tests these explanations by examining who lapses and then assesses the consequences of lapsing by exploring who uses long-term care. The final sec­tion concludes that two types of individuals are more likely to lapse: 1) those with low cognitive ability, who may lose the capacity to manage their finances; and 2) those with lower incomes and less wealth, who may find that their policy has become unaffordable.
    Date: 2015–10

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