nep-hea New Economics Papers
on Health Economics
Issue of 2016‒03‒06
seventeen papers chosen by
Yong Yin
SUNY at Buffalo

  1. Adjusting the Measurement of the Output of the Medical Sector for Quality: A Review of the Literature By Anne E. Hall
  2. The Cost and Cost-Effectiveness of Alternative Strategies to Expand Treatment to HIV-Positive South Africans: Scale Economies and Outreach Costs - Working Paper 401 By Gesine Meyer-Rath, Mead Over, Daniel J. Klein, and Anna Bershteyn
  3. Cost analysis of the legal declaratory relief requirement for withdrawing Clinically Assisted Nutrition and Hydration CANH) from patients in the Permanent Vegetative State (PVS) in England and Wales By Adam Formby; Richard Cookson; Simon Halliday
  4. QALYs in cost-effectiveness analysis: an overview for cardiologists By Olivier J. Wouters; Huseyin Naci; Nilesh J Samani
  5. Inequalities of income and inequalities of longevity: a cross-country study By Eric Neumayer; Thomas Plümper
  6. The healthcare complaints analysis tool: development and reliability testing of a method for service monitoring and organisational learning By Alex Gillespie; Tom W. Reader
  7. Health Capacity to Work at Older Ages: Evidence from Spain By Pilar García-Gómez; Sergi Jiménez-Martín; Judit Vall Castello
  8. Advertising and Risk Selection in Health Insurance Markets By Aizawa, Naoki; Kim, You Suk
  9. “Eat, my child”. Overweight and obesity among children in developing countries By Dimitrios Minos
  10. Emergency Medical Service System Design under Service Level Constraints for Heterogeneous Patients By Jayaswal, Sachin
  11. It's About Time: Effects of the Affordable Care Act Dependent Coverage Mandate on Time Use By Colman, Gregory; Dave, Dhaval M.
  12. The Economics of Healthy Ageing in China By Heshmati, Almas
  13. Intergenerational Persistence of Health in the U.S.: Do Immigrants Get Healthier as They Assimilate? By Akbulut-Yuksel, Mevlude; Kugler, Adriana
  14. Reporting on Pathways to Health Insurance Coverage: California's Experience By Maggie Colby; Sarah Croake
  15. Smoking Initiation: Peers and Personality By Chih-Sheng Hsieh; Hans van Kippersluis
  16. Differential Mortality and the Progressivity of Social Security? By Shantanu Bagchi
  17. Prenatal testosterone exposure predicts mindfulness: Does this mediate its effect on happiness? By Neyse, Levent; Ring, Patrick; Bosworth, Steven

  1. By: Anne E. Hall (Bureau of Economic Analysis)
    Date: 2015–06
  2. By: Gesine Meyer-Rath, Mead Over, Daniel J. Klein, and Anna Bershteyn
    Abstract: The South African government is currently discussing various alternative approaches to the further expansion of antiretroviral treatment (ART) in public-sector facilities. Alternatives under consideration include the criteria under which a patient would be eligible for free care, the level of coverage with testing and care, how much of the care will be delivered in small facilities located closer to the patients, and how to assure linkage to care and subsequent adherence by ART patients. We used the EMOD-HIV model to generate 12 epidemiological scenarios. The EMOD-HIV model is a model of HIV transmission which projects South African HIV incidence and prevalence and ARV treatment by age group for alternative combinations of treatment eligibility criteria and testing. We treat as sunk costs the projected future cost of one of these 12 scenarios, the baseline scenario characterizing South Africa’s 2013 policy to treat people with CD4 counts less than 350. We compute the cost and benefits of the other 11 scenarios relative to this baseline. Starting with our own bottom-up cost analyses in South Africa, we separate outpatient cost into non-scale-dependent costs (drugs and laboratory tests) and scale-dependent cost (staff, space, equipment and overheads) and model the cost of production according to the expected future number and size of clinics. On the demand side, we include the cost of creating and sustaining the projected incremental demand for testing and treatment. Previous research with EMOD-HIV has shown that more vigorous recruitment of patients with CD4 counts less than 350 appears to be an advantageous policy over a five-year horizon. Over 20 years, however, the model assumption that a person on treatment is 92 percent less infectious improves the cost-effectiveness of higher eligibility thresholds over more vigorous recruitment at the lower threshold of 350, averting HIV infections for between $1,700 and $2,800 (under our central assumptions), while more vigorous expansion under the current guidelines would cost more than $7,500 per incremental HIV infection averted. Granular spatial models of demand and cost facilitate the optimal targeting of new facility construction and outreach services. Based on analysis of the sensitivity of the results to 1,728 alternative parameter combinations at each of four discount rates, we conclude that better knowledge of the behavioral elasticities would be valuable, reducing the uncertainty of cost estimates by a factor of 4 to 10.
    Keywords: ART, HIV/AIDS, South Africa
    JEL: I15 I18
    Date: 2015–04
  3. By: Adam Formby (School of Sociology and Social Policy, University of Leeds, UK); Richard Cookson (Centre for Health Economics, University of York, UK); Simon Halliday (York Law School, University of York, UK)
    Abstract: Aim is to estimate the NHS cost per case of the legal declaratory relief process in relation to withdrawal of clinically assisted nutrition and hydration (CANH) from patients diagnosed as being in a permanent vegetative state (PVS), in relatively ‘straightforward’ cases where family and clinicians agree this is in the best interests of the patient.
    Date: 2015–02
  4. By: Olivier J. Wouters; Huseyin Naci; Nilesh J Samani
    Abstract: In recent years, cost-effectiveness data have strongly influenced clinical practice guidelines for several cardiovascular treatments. Economic considerations are increasingly common as health systems are under mounting pressure to maximise value for money. The quality-adjusted life year (QALY)—an outcome measure that expresses the duration and quality of life—is the main pillar of cost-effectiveness analyses. It is widely used in assessments of the clinical and economic value of new cardiovascular treatments, but how the QALY is derived is often unclear to clinicians. In this article, we first explain how QALYs are defined and calculated. We then review a selected set of cost-effectiveness analyses of recently introduced cardiovascular treatments and outline how these studies derived their QALYs. Finally, we discuss the limitations of the QALY and how the presentation of the measure could be improved in cost-effectiveness studies.
    JEL: R14 J01
    Date: 2015–12–01
  5. By: Eric Neumayer; Thomas Plümper
    Abstract: Objectives. We examined the effects of market income inequality (income inequality before taxes and transfers) and income redistribution via taxes and transfers on inequality in longevity. Methods. Life tables were used to compute Gini coefficients of longevity inequality for all individuals and for individuals that survived at least to the age of ten. Longevity inequality was regressed on market income inequality and income redistribution controlling for a range of potential confounders in a cross-sectional time-series sample of up to 28 predominantly Western developed countries and up to 37 years. Results. Income inequality before taxes and transfers is positively associated with inequality in the number of years lived, while income redistribution (the difference between market income inequality and income inequality after taxes and transfers have been accounted for) is negatively associated with longevity inequality in our sample. Conclusions. To the extent that our estimated effects based on observational data are causal, governments can reduce inequality in the number of years lived not only via public health policies, but also via their influence on market income inequality and the redistribution of incomes from the relatively rich to the relatively poor.
    JEL: N0
    Date: 2016–01
  6. By: Alex Gillespie; Tom W. Reader
    Abstract: Background Letters of complaint written by patients and their advocates reporting poor healthcare experiences represent an under-used data source. The lack of a method for extracting reliable data from these heterogeneous letters hinders their use for monitoring and learning. To address this gap, we report on the development and reliability testing of the Healthcare Complaints Analysis Tool (HCAT). Methods HCAT was developed from a taxonomy of healthcare complaints reported in a previously published systematic review. It introduces the novel idea that complaints should be analysed in terms of severity. Recruiting three groups of educated lay participants (n=58, n=58, n=55), we refined the taxonomy through three iterations of discriminant content validity testing. We then supplemented this refined taxonomy with explicit coding procedures for seven problem categories (each with four levels of severity), stage of care and harm. These combined elements were further refined through iterative coding of a UK national sample of healthcare complaints (n= 25, n=80, n=137, n=839). To assess reliability and accuracy for the resultant tool, 14 educated lay participants coded a referent sample of 125 healthcare complaints. Results The seven HCAT problem categories (quality, safety, environment, institutional processes, listening, communication, and respect and patient rights) were found to be conceptually distinct. On average, raters identified 1.94 problems (SD=0.26) per complaint letter. Coders exhibited substantial reliability in identifying problems at four levels of severity; moderate and substantial reliability in identifying stages of care (except for ‘discharge/transfer’ that was only fairly reliable) and substantial reliability in identifying overall harm. Conclusions HCAT is not only the first reliable tool for coding complaints, it is the first tool to measure the severity of complaints. It facilitates service monitoring and organisational learning and it enables future research examining whether healthcare complaints are a leading indicator of poor service outcomes. HCAT is freely available to download and use.
    JEL: J50
    Date: 2016
  7. By: Pilar García-Gómez; Sergi Jiménez-Martín; Judit Vall Castello
    Abstract: In a world with limited PAYGO financing possibilities this paper explores whether older Spanish individuals have the health capacity to work longer. For that purpose we use Milligan-Wise and Cutler-Meara Cutler-Meara- Richards-Shubik simulation methods. Our results suggest that Spanish workers have significant additional capacities to extend their working careers.
    Date: 2016–02
  8. By: Aizawa, Naoki (University of Minnesota); Kim, You Suk (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: We study impacts of advertising as a channel of risk selection in Medicare Advantage. We show evidence that both mass and direct mail advertising are targeted to achieve risk selection. We develop and estimate an equilibrium model of Medicare Advantage with advertising to understand its equilibrium impacts. We find that advertising attracts the healthy more than the unhealthy. Moreover, shutting down advertising increases premiums by up to 40% for insurers that advertised by worsening their risk pools, which further reduces the demand of the unhealthy. We argue that risk selection may make consumers better off by improving insurers' risk pools.
    Keywords: Advertising; Health insurance; Medicare; Risk selection
    Date: 2015–11–09
  9. By: Dimitrios Minos (Georg-August University Göttingen)
    Abstract: Childhood obesity in developing countries is a topic that hasn’t found its way in the economic literature yet. Despite the fact that obesity rates are rising worldwide and the phenomenon is very present even among the poorest of households in developing countries, most of the attention is still drawn towards industrialized ones. This paper utilizes the South African NIDS panel data set to highlight some of the aspects policy makers should bear in mind. In particular, drivers of the phenomenon and their resulting policy options that are widely used in industrialized countries may not be appropriate in a developing setting, especially in one where excess body weight is considered by many as a positive outcome.
    Keywords: obesity; nutrition transition; developing country; South Africa
    JEL: I12 I18 P46
    Date: 2016–02–11
  10. By: Jayaswal, Sachin
    Abstract: We study the problem of locating Emergency Medical Service (EMS) facilities in the presence of service level constraints for patients with acuity levels ranging from resuscitation to non-urgent. Each patient arriving at any EMS facility is triaged as either resuscitation/high priority or less urgent/low priority, where high priority patients are always served on a priority basis. The problem is to optimally locate EMS facilities and allocate their service zones to satisfy the following coverage and service level constraints: (i) each user zone is served by an EMS facility that is within a given coverage radius; (ii) at least h proportion of the resuscitation cases at any EMS facility should be admitted immediately without having to wait; (iii) at least l proportion of the cases belonging to low priority class at any EMS facility should not have to wait for more than l minutes. For this, we model the network of EMS facilities as spatially distributed M/M/1 priority queues, whose locations and user allocations need to be determined. The resulting integer programming problem is challenging to solve, especially in absence of any known analytical expression for the waiting time distribution of low priority customers in an M/M/1 priority queue. We develop a cutting plane based solution algorithm, exploiting the concavity of the waiting time distribution of low priority customers to approximate its non-linearity using tangent planes, determined numerically using matrix geometric method. Using a case study of locating EMS facilities in Austin, Texas, we present computational results and managerial insights.
  11. By: Colman, Gregory (Pace University); Dave, Dhaval M. (Bentley University)
    Abstract: One of the main purposes of recent healthcare reform (Patient Protection and Affordable Care Act - ACA) in the U.S. is to enable Americans to make more productive use of their time. We examine how the ACA's dependent care coverage mandate (DCM) affected young adults' time allocation. Based on more accurate measures from the American Time Use Surveys and difference-in-difference methods, we first confirm that the DCM reduced labor supply. The question then arises, what have these adults done with the extra time? We provide some of the first evidence on this issue. Estimates suggest that the DCM has reduced job-lock, as well as the duration of the average doctor's visit, including time spent waiting for as well as receiving medical care, among persons ages 19-25. The latter effect is consistent with substitution from hospital ER utilization to more routine physician care. The extra time has gone into socializing, and to a lesser extent, into educational activities and job search. A related question is whether these changes have made young adults better off. We find that the availability of insurance and change in work time appear to have increased their subjective well-being, enabling them to spend time on activities they view as more meaningful than those they did before insurance became available.
    Keywords: health insurance, labor supply, time use, leisure, medical care, Affordable Care Act, waiting time, well-being, work
    JEL: I1 J2 H0
    Date: 2016–02
  12. By: Heshmati, Almas (Jönköping University, Sogang University)
    Abstract: Healthy ageing is a challenge for many countries with significant shares of elderly people. Literature refers to China's ageing population as a ticking time bomb which paradoxically is both a challenge and an opportunity for the country. Health is considered an important determinant of economic growth and competitiveness. The health of the elderly population determines its need for resources and care. Thus, investing in healthy ageing contributes to economic and social well-being. This study is a review of literature on the social and economic aspects of healthy ageing. It summarizes alternative approaches presented in literature to ease pressures of a rapidly growing ageing population. The main focus is on strategies for healthy ageing, policy practices and measures, organization, finances and manpower resources to promote healthy ageing in China. Up-to-date theories and methods applied to household surveys and population statistics are used to quantify the problem, resource requirements and estimating the social and economic benefits of having policies and measures for healthy ageing. Conclusions are drawn with respect to conditions of healthy ageing in China and about the state policy in this regard.
    Keywords: healthy ageing, ageing in China, active ageing, challenges and opportunities, economics of healthy ageing
    JEL: H75 I15 I18 I38 P36
    Date: 2016–02
  13. By: Akbulut-Yuksel, Mevlude (Dalhousie University); Kugler, Adriana (Georgetown University)
    Abstract: It is well known that a substantial part of income and education is passed on from parents to children, generating substantial persistence in socio-economic status across generations. In this paper, we examine whether another form of human capital, health, is also largely transmitted from generation to generation, contributing to limited socio-economic mobility. Using data from the NLSY, we first present new evidence on intergenerational transmission of health outcomes in the U.S., including weight, height, the body mass index (BMI), asthma and depression for both natives and immigrants. We show that both native and immigrant children inherit a prominent fraction of their health status from their parents, and that, on average, immigrants experience higher persistence than natives in weight and BMI. We also find that mothers' education decreases children's weight and BMI for natives, while single motherhood increases weight and BMI for both native and immigrant children. Finally, we find that the longer immigrants remain in the U.S., the less intergenerational persistence there is and the more immigrants look like native children. Unfortunately, the more generations immigrant families remain in the U.S., the more children of immigrants resemble natives' higher weights, higher BMI and increased propensity to suffer from asthma.
    Keywords: health status, intergenerational mobility, immigrants
    JEL: J61 J62 I12 I14
    Date: 2016–02
  14. By: Maggie Colby; Sarah Croake
    Abstract: The Affordable Care Act opened new and expanded pathways to public health insurance coverage. Since 2014, many states have broadened their eligibility criteria for Medicaid, and have introduced new access points for Medicaid enrollment.
    Keywords: insurance coverage, California, Medi-Cal, Health
    JEL: I
    Date: 2016–02–12
  15. By: Chih-Sheng Hsieh (The Chinese University of Hong Kong, Hong Kong, PR China); Hans van Kippersluis (Erasmus University Rotterdam, the Netherlands)
    Abstract: Social interactions are generally thought to play an important role in smoking initiation among adolescents. In this paper we exploit detailed friendship nominations in the US Add Health data, and extend the Spatial Autoregressive Model (SAR) model to deal with (i) endogenous peer selection, and (ii) unobserved contextual effects, in order to identify the endogenous peer effect. We show that peer effects in the uptake of smoking are predominantly affecting individuals who are emotionally unstable. That is, individuals with "weaker" personalities are more vulnerable to peer pressure. This finding not only helps understanding heterogeneity in peer effects, but additionally provides a promising mechanism through which personality affects later life health and socioeconomic outcomes.
    Keywords: Smoking, Peer effects, Personality, SAR model, Bayesian MCMC
    JEL: C11 C21 I12
    Date: 2015–08–03
  16. By: Shantanu Bagchi (Department of Economics, Towson University)
    Abstract: I examine how strongly Social Security benefits should be linked to past work-life income, while accounting for the fact that the wealthy live longer than the poor. Using a general equilibrium macroeconomic model calibrated to the U.S. economy, I find that the optimal Social Security arrangement warrants benefits that are flat and completely unrelated to past work-life income. While this arrangement leads to higher implicit tax rates for high-income households, their welfare losses are relatively small, because Social Security's current tax structure is regressive: the marginal tax rate is zero above the taxable maximum. On the other hand, full insurance from unfavorable labor income shocks generates large welfare gains to the low- and medium-income households. Under this flat-benefit arrangement, Social Security benefits increase by as much as a factor of 17 for low-income households, and decline by as much as 40% for high-income households, but the overall size of Social Security remains unchanged.
    Keywords: Differential mortality, Social Security, taxable maximum, mortality risk, labor income risk, incomplete markets, general equilibrium.
    JEL: E21 E62 H55
    Date: 2016–02
  17. By: Neyse, Levent; Ring, Patrick; Bosworth, Steven
    Abstract: This study investigates the connection between mindfulness and prenatal testosterone exposure and explores whether this is related to the relationship between mindfulness and human well-being as captured by three separate measures. In a sample of 90 German student participants, we find that subjects' digit ratio - a reliable indicator for exposure to prenatal testosterone - predicts their Mindful Attention Awareness Scale (MAAS) scores. Respondents with moderate levels of testosterone exposure have the highest MAAS scores. We additionally elicit participants' self-reported general life satisfaction and current happiness levels as well as their estimates about others' general life satisfaction. We find that MAAS strongly predicts absolute and relative life satisfaction and also current happiness levels, but digit ratios do not mediate the relationship between human well-being and mindfulness.
    Keywords: Mindfulness,Digit ratio (2D:4D),Prenatal Testosterone,Life Satisfaction,Happiness
    Date: 2015

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