nep-hea New Economics Papers
on Health Economics
Issue of 2016‒06‒18
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo

  1. A shortage of nurses? By David Metcalf
  2. The impact of taxation and signposting on diet: an online field study with breakfast cereals and soft drinks By Daniel John Zizzo; Melanie Parravano; Ryota Nakamura; Suzanna Forwood; Marc Suhrcke
  3. Econometric Analysis of Ratings: With an Application to Health and Wellbeing By Raphael Studer; Rainer Winkelmann
  4. The missing link: Are individuals with more social capital in better health? Evidence from low- income countries By Baris Alpaslan
  5. Inequity in unmet medical need among the European elderly By Bora Kim
  6. Life Expectancy and Mother-Baby Interventions: Evidence from a Historical Trial By Bhalotra, Sonia; Karlsson, Martin; Nilsson, Therese
  7. Effects of Forced Displacement on Health By Ivan Zilic
  8. How Physicians Affect Patients’ Employment Outcomes Through Deciding on Sick Leave Durations By Alexander Ahammer
  9. Up or Down? Intergenerational Mental Health Transmission and Cash Transfers in South Africa By Katherine Eyal; Justine Burns
  10. Evaluation of the AHRQ Healthcare Horizon Scanning System By Nancy Duda; Christopher Fleming; Brendan Kirwan; Brian Roff; Eugene Rich
  11. Evaluation of Health Care Innovation Awards (HCIA): Primary Care Redesign Programs First Annual Report, Volume II: Individual Program Summarires By Boyd Gilman; Sheila Hoag; Lorenzo Moreno; Greg Peterson; Linda Barterian; Laura Blue; Kristin Geonnotti; Tricia Higgins; Mynti Hossain; Lauren Hula; Rosalind Keith; Jennifer Lyons; Brenda Natzke; Brenna Rabel; Rumin Sarwar; Rachel Shapiro; Cara Stephanczuk; Victoria Peebles; KeriAnn Wells; Joseph Zickafoose
  12. The Effect of Cigarette Prices on Cigarette Sales: Exploring Heterogeneity in Price Elasticities at High and Low Prices By John A. Tauras; Michael F. Pesko; Jidong Huang; Frank J. Chaloupka; Matthew C. Farrelly
  13. The Influence of Geography and Measurement in Estimating Cigarette Price Responsiveness By Michael F. Pesko; John A. Tauras; Jidong Huang; Frank J. Chaloupka, IV
  14. Understanding the Improvement in Disability Free Life Expectancy In the U.S. Elderly Population By Michael Chernew; David M. Cutler; Kaushik Ghosh; Mary Beth Landrum
  15. Price Elasticities of Pharmaceuticals in a Value-Based-Formulary Setting By Kai Yeung; Anirban Basu; Ryan N. Hansen; Sean D. Sullivan
  16. Adult Mortality Five Years after a Natural Disaster: Evidence from the Indian Ocean Tsunami By Jessica Y. Ho; Elizabeth Frankenberg; Cecep Sumantri; Duncan Thomas
  17. Tuskegee and the Health of Black Men By Marcella Alsan; Marianne Wanamaker
  18. Approaches and issues in valuing the costs of inaction of air pollution on human health By Anna Alberini; Andrea Bigano; Jessica Post; Elisa Lanzi
  19. Whither voluntary communities? A study of co-located patients in Vietnam By Quan-Hoang Vuong; Trong-Khang Nguyen; Thuy-Dzung Do; Thu Trang Vuong
  20. A Lasting Effect of the HIV/AIDS Pandemic: Orphans and Pro-Social Behavior By Joshua Hall; Shree Baba Pokharel
  21. The effects of non-adherence on health care utilisation: panel data evidence on uncontrolled diabetes By Gil, J.; Sicras-Mainar, A.; Zucchelli, E.

  1. By: David Metcalf
    Abstract: The government's Migration Advisory Committee (MAC) has reluctantly recommended that nurses remain on the 'shortage occupation list', while criticising the health sector for failing to maintain a sufficient supply of UK nurses. Sir David Metcalf, MAC chair and an active CEP researcher for three decades, summarises the recent report in the new CentrePiece. He notes that the supply of nurses is influenced by workforce planning, training places and retention efforts. The UK's shortage of nurses is mostly down to factors that should have been anticipated by the Department of Health. What's more, the restraint on nurses' pay is presented as an immutable fact; but it's a choice. And nurses could crowd out skilled migrants from occupations not in shortage.
    Keywords: NHS, nursing, immigration, UK health sector, Migration Advisory Committee, workforce, wages, trade unions
    Date: 2016–06
  2. By: Daniel John Zizzo (BENC and Newcastle University, UK); Melanie Parravano (BHRU and Newcastle University, UK); Ryota Nakamura (Centre for Health Economics, University of York, UK); Suzanna Forwood (Anglia Ruskin University, UK); Marc Suhrcke (Centre for Health Economics, University of York, UK)
    Abstract: We present a large scale study where a nationally representative sample of 1,000 participants were asked to make real purchases within an online supermarket platform. The study captured the effect of price changes, and of the signposting of such changes, for breakfast cereals and soft drinks. We find that such taxes are an effective means of altering food purchasing, with a 20% rate being sufficient to make a significant impact. Signposting represents a complementary nudge policy that could enhance the impact of the tax without imposing severe welfare loss, though the effectiveness may depend on the product category.
    Keywords: taxes, signposting, healthy diet, nudges, public health
    JEL: C93 D12 H31 I1
    Date: 2016–06
  3. By: Raphael Studer; Rainer Winkelmann
    Abstract: We propose a new non-linear regression model for rating dependent variables. The rating scale model accounts for the upper and lower bounds of ratings. Parametric and semi-parametric estimation is discussed. An application investigates the relationship between stated health satisfaction and physical and mental health scores derived from self-reports of various health impairments, using data from the German Socio-Economic Panel. We compare our new approach to modeling ratings with ordinary least squares (OLS). In one specification, OLS average effects exceed that from our rating scale model by up to 50 percent. Also, OLS in-sample mean predictions violate the upper bound of the dependent variable in a number of cases.
    Keywords: Quasi maximum likelihood, bounded dependent variable, German Socio-Economic Panel
    JEL: C25 I10
    Date: 2016
  4. By: Baris Alpaslan
    Abstract: This paper offers a new model to critically examine associations between human capital, social capital, and health outcomes within the context of a two-period Overlapping Generations (OLG) model of endogenous growth model. Basically, individuals with higher level of human capital can build strong social ties, and those individuals who have more robust social networks are less likely to have health problems and are physically healthier. In an attempt to gain a better understanding of broader policy implications, a numerical analysis for low-income countries has been utilised and a sensitivity analysis under a different set of parameter values has been employed in the paper. We provide a comparison of three main experiments: an increase in the share of public spending on education, social capital-related activities, and health. The results confirm the association between education, social capital, and health outcomes, and its favourable effect on long-run growth in low-income countries.
    JEL: H51 H52 H59 I15 I25 O41
    Date: 2016–05
  5. By: Bora Kim
    Abstract: This study evaluates unfair inequality, namely inequality of opportunity (IOp), in access to medical care among the elderly population. I compare the magnitude of IOp across 14 European countries using data from the Survey of Health, Aging and Retirement in Europe (SHARE) collected in 2013. Self-reported unmet medical need caused by cost-related reasons is used as a measure of medical access. Separate models are introduced to accommodate two competing philosophical views (e.g. control and preference approaches) that result in a different definition of the scope of individual responsibility. A joint estimation strategy is applied to take unobserved heterogeneity into account. We find the highest IOp to exist in medical access in EE and IT, and the lowest in AT, CH, SI, NL, SE and DK. However, some results are sensitive to normative assumptions. For instance, EE, IT and DE show greater IOp when it is assumed that individuals are responsible for their decisions made on the basis of genuine preference rather than control. Additional results from a policy simulation suggest that IOp could have been significantly reduced due to educational promotion in many countries, with the exception of EE, NL, SI, SE and DK.
    Date: 2016–05
  6. By: Bhalotra, Sonia (University of Essex); Karlsson, Martin (University of Duisburg-Essen); Nilsson, Therese (Research Institute of Industrial Economics (IFN))
    Abstract: This paper investigates the potential of an infant intervention to improve life expectancy, contributing to emerging interest in the early life origins of chronic disease. We analyse a pioneering program trialled in Sweden in the 1930s, which provided information, support and monitoring of infant care. Using birth certificate data from parish records matched to death registers, we estimate that the average duration of program exposure in infancy led to a 1.54% point decline in the risk of infant death (23% of baseline risk) and a 2.37% decline in the risk of dying by age 75 (6.5% of baseline risk).
    Keywords: Maternal care; Infant care; Early life interventions; Barker Hypothesis; Program
    JEL: H41 I15 I18
    Date: 2016–05–27
  7. By: Ivan Zilic
    Abstract: This paper analyzes health consequences of forced civilian displacement that occurred during the war in Croatia 1991-1995 which accompanied the demise of Yugoslavia. Using the Croatian Adult Health Survey 2003 we test whether displacement is relevant in explaining various dimensions of measured and self-assessed health. We adopt an instrumental variable approach where civilian casualties per county are used as an instrument for displacement. We find robust significant adverse effects on self-assessed health, on probability of suffering from systolic and diastolic hypertension, and on mental health and role emotional SF-36 dimensions. We also address possible channels of adverse effect, and find that displacement did not induce a change in healthy behaviors, and that the negative effect of displacement is channeled through adverse economic conditions that the displaced individuals face.
    Keywords: conflict, migration, health.
    JEL: I10 O12 O15
    Date: 2015–09
  8. By: Alexander Ahammer
    Abstract: I analyze how general practitioners (GPs) indirectly a ect their patients’ employment outcomes by deciding on the length of sickness absences. I use an instrumental variables framework where spell durations are identified through supply-side certification measures estimated from the data. I find that a marginal day of sick leave – that is, a day of sick leave which is only certified because a worker’s GP has a high propensity to certify sick leaves – decreases employment probabilities persistently by 0.45 percentage points – 0.69 percentage points up to 18 months after the sick leave. Conversely, the risk of becoming unemployed increases by 0.28 percentage points – 0.44 percentage points due to the additional day of sick leave. These e ects are mostly driven by men with comparably low job tenure and migratory background. Several robustness checks show that identification is not impaired by endogenous matching between patients and GPs. My results bear important implications for doctors: Whenever medically justifiable, it may be beneficial to certify shorter sick leaves in order to protect employment status of the patient.
    Keywords: Sick leave duration; employment; general practitioners; supply-variation
    JEL: I10 J21 J60
    Date: 2016–06
  9. By: Katherine Eyal (SALDRU, School of Economics, University of Cape Town); Justine Burns (School of Economics, University of Cape Town)
    Abstract: We investigate the intergenerational transmission of depression in South Africa from parents to teens, and the positive role income shocks (in the form of cash transfers) can play to reduce this transmission effect. South Africa is characterised by high levels of mental illness, concurrent with poor access to the appropriate care. The consequences of untreated psychiatric disorders are profound, especially in the formative period of adolescence. A dearth of research and data exists in South Africa in this area. We use the National Income Dynamics Survey, the only recent nationally representative survey which collects data both on mental illness and socio-economic factors. Cash transfers are found to be particularly important as a protective factor against teens developing mental illness, and specifically for those teens with parents who themselves suffer from mental illnesses. Pensions are also found to be a positive factor for teen mental health. Using a number of methods, we find that the impact of parental depression on child depression is high - one third of children (adult or teen) who have parents who suffer from depression will themselves suffer from depression. We investigate the temporal nature of this relationship and find that it is mainly current parental depression and current CSG receipt which are important - gaining the grant between waves, and having a parent who suffers from depression in previous waves does not significantly impact on one's current mental health status.
    Keywords: Intergenerational transmission, Depression, Cash Transfers, Mental Illness, National Income Dynamics Study, South Africa
    Date: 2016
  10. By: Nancy Duda; Christopher Fleming; Brendan Kirwan; Brian Roff; Eugene Rich
    Abstract: This report summarizes findings from ECRI Institute and Mathematica’s evaluation of the Agency for Healthcare Research and Quality Healthcare Horizon Scanning System.
    Keywords: horizon, scanning, AHRQ, healthcare, technology, diagnostic testing, system
    JEL: I
  11. By: Boyd Gilman; Sheila Hoag; Lorenzo Moreno; Greg Peterson; Linda Barterian; Laura Blue; Kristin Geonnotti; Tricia Higgins; Mynti Hossain; Lauren Hula; Rosalind Keith; Jennifer Lyons; Brenda Natzke; Brenna Rabel; Rumin Sarwar; Rachel Shapiro; Cara Stephanczuk; Victoria Peebles; KeriAnn Wells; Joseph Zickafoose
    Keywords: Primary Care Redesign, Implementation Evaluation, Impact Evaluation, Delivery Systems Innovation, Clinician Behavior, Workforce Development, Medicare, Medicaid
    JEL: I
  12. By: John A. Tauras; Michael F. Pesko; Jidong Huang; Frank J. Chaloupka; Matthew C. Farrelly
    Abstract: Numerous studies have examined the effect of cigarette prices on cigarette consumption. These studies either evaluate the price elasticity of demand for each observation and report the average price elasticity across all observations or report the price elasticity of demand at the mean of the price variable. Policy makers rely on these average price elasticity estimates for public health and revenue generation purposes. The use of an average price elasticity may yield misleading predictions given the substantial variation in cigarette prices between states. This research is the first econometric study to examine the price elasticity of cigarette demand at different price levels. We use aggregate state-level data for years 1991 – 2012 and employ generalized linear models with log link and gamma distribution to estimate cigarette demand equations. We find that the absolute value of the price elasticity of demand monotonically increases with price. The findings from this study will be valuable to policymakers contemplating the use of cigarette excise taxes to reduce cigarette consumption or to generate revenue.
    JEL: I1 I12 I18
    Date: 2016–05
  13. By: Michael F. Pesko; John A. Tauras; Jidong Huang; Frank J. Chaloupka, IV
    Abstract: We use data from the 2006-07 and 2010-11 waves of the Tobacco Use Supplement of the Current Population Survey to calculate cigarette price elasticities that compensate for within-state cigarette prices, which includes variation from the local tax environment. We use four state-level cigarette price measures and two sub-state-level cigarette price measures. For the two local price measures, we exploit month specific changes in these two prices in 446 sub-state areas of the United States. We document substantial variation in within-state prices, and we calculate that this variation approximately triples estimates of cigarette price responsiveness compared to using state-level prices. When using local prices, we calculate that a 10% rise in cigarette prices reduces cigarette consumption by a mean of 2.5%, which ranges from a 1.7% reduction at a price level $3 to a 5.6% reduction at a price level of $9. Our results suggest an important role for the local tax environment in studies of cigarette price responsiveness.
    JEL: I12 I18
    Date: 2016–06
  14. By: Michael Chernew; David M. Cutler; Kaushik Ghosh; Mary Beth Landrum
    Abstract: Understanding how healthy lifespans are changing is essential for public policy. This paper explores changes in healthy lifespan in the U.S. over time and considers reasons for the changes. We reach three fundamental conclusions. First, we show that healthy life increased measurably in the US between 1992 and 2008. Years of healthy life expectancy at age 65 increased by 1.8 years over that time period, while disabled life expectancy fell by 0.5 years. Second, we identify the medical conditions that contribute the most to changes in healthy life expectancy. The largest improvements in healthy life expectancy come from reduced incidence and improved functioning for those with cardiovascular disease and vision problems. Together, these conditions account for 63 percent of the improvement in disability-free life expectancy. Third and more speculatively, we explore the role of medical treatments in the improvements for these two conditions. We estimate that improved medical care is likely responsible for a significant part of the cardiovascular and vision-related extension of healthy life.
    JEL: I1 I31
    Date: 2016–06
  15. By: Kai Yeung; Anirban Basu; Ryan N. Hansen; Sean D. Sullivan
    Abstract: Ever since the seminal RAND Health insurance experiment (HIE) was conducted, most health care services, including pharmaceuticals, are deemed to be price inelastic with price elasticities of demand (PED) close to -0.20. However, most studies of PED exploit natural experiments that change demand prices for multiple components of health care. Consequently, these experiments usually do not produce estimates for the true own-price elasticities of demand but rather composite own-price elasticities that are driven by concomitant price changes to their substitutes and complements. Hence, an estimate of price elasticity is expected to vary based on the setting in which it was estimated, and likely not be applicable to other settings. In this work, exploiting a natural experiment of exogenous policy implementation of a value-based formulary (VBF) that was designed based on drug-specific incremental cost-effectiveness ratios, we estimate price elasticities of pharmaceuticals within a VBF design, formally accounting for the nature of composite elasticities that such a setting would generate. We also calculate welfare effects of such a policy using a consumer surplus approach. We show theoretically that VBF designs can increase dispersion of price elasticities of demand among pharmaceutical products compared to their true own-price elasticities and affect their magnitude based on direction of price change. Aligning these PEDs with value VBF is also likely to produce positive welfare effects. We estimate an overall PED for pharmaceuticals to be -0.16, close to the estimate of RAND HIE. However, we see substantial dispersion of PED across the VBF tiers ranging from -0.09 to -0.87 with trends aligned with the levels of value as reflected by the cost-effectiveness ratio (p
    JEL: C10 D61 I13 I18
    Date: 2016–06
  16. By: Jessica Y. Ho; Elizabeth Frankenberg; Cecep Sumantri; Duncan Thomas
    Abstract: Exposure to extreme events has been hypothesized to affect subsequent mortality because of mortality selection and scarring effects of the event itself. We examine survival at and in the five years after the 2004 Indian Ocean earthquake and tsunami for a population-representative sample of residents of Aceh, Indonesia who were differentially exposed to the disaster. For this population, the dynamics of selection and scarring are a complex function of the degree of tsunami impact in the community, the nature of individual exposures, age at exposure, and gender. Among individuals from tsunami-affected communities we find evidence for positive mortality selection among older individuals, with stronger effects for males than for females, and no evidence of scarring. Among individuals from other communities, property loss is associated with elevated mortality risks in the five years after the disaster only for those who were age 50 or older at the time of the disaster.
    JEL: I10 J10 Q54
    Date: 2016–06
  17. By: Marcella Alsan; Marianne Wanamaker
    Abstract: For forty years, the Tuskegee Study of Untreated Syphilis in the Negro Male passively monitored hundreds of adult black males with syphilis despite the availability of effective treatment. The study's methods have become synonymous with exploitation and mistreatment by the medical community. We find that the historical disclosure of the study in 1972 is correlated with increases in medical mistrust and mortality and decreases in both outpatient and inpatient physician interactions for older black men. Our estimates imply life expectancy at age 45 for black men fell by up to 1.4 years in response to the disclosure, accounting for approximately 35% of the 1980 life expectancy gap between black and white men.
    JEL: I14 O15
    Date: 2016–06
  18. By: Anna Alberini; Andrea Bigano; Jessica Post; Elisa Lanzi
    Abstract: This paper presents a review of existing approaches to estimate the costs of inaction, as well as the benefits of policy action, for air pollution. It focuses primarily on health impacts from air pollution. The paper presents the “impact pathway approach”, which includes various steps in the analysis of the costs of air pollution. These include quantifying emissions, calculating the concentrations of the pollutants, applying epidemiologic studies to calculate the physical health effects and applying valuation methods to calculate the economic costs of the health impacts. The report also reviews applications of the impact pathway approach to applied economic studies that aim at calculating the macroeconomic costs of air pollution. It proposes possible approaches for including the feedbacks from the health impacts of air pollution in an applied economic framework. While ideally this requires serious modifications of the modelling frameworks and an improvement of the available empirical results, some impacts, such as changes in health expenditures and labour productivity, can easily been incorporated, following the literature on the economic costs of the health impacts of climate change. Ce document présente une revue des études existantes qui estiment les coûts de l'inaction, ainsi que les effets bénéfiques de l'action politique, relatif à la pollution de l'air. Il se concentre principalement sur les impacts de la pollution atmosphérique sur la santé. Le document présente l'approche qui se base sur une "analyse de voies d'impact” et ses différentes étapes. Il s’agit notamment de quantifier les émissions, de calculer des concentrations de polluants, d’appliquer les résultats des études épidémiologiques pour calculer les effets sur la santé physique et des méthodes d'évaluation pour calculer les coûts économiques des impacts sur la santé. Le rapport passe également en revue les applications de l'analyse de voies d'impact dans les études économiques appliquées qui calculent les coûts macroéconomiques de la pollution de l'air. Il propose des stratégies possibles pour inclure une évaluation des impacts de la pollution de l'air sur la santé dans un modèle économique appliquée. Bien qu'idéalement cela nécessite des modifications importantes des cadres de modélisation et une plus grande disponibilité des résultats empiriques, certains impacts tels que les changements de dépenses de santé et de productivité du travail peuvent facilement être incorporés en se basant sur la littérature sur les coûts économiques des impacts sur la santé liés au changement climatique.
    Keywords: water scarcity, water use, CGE model, economic growth
    JEL: C68 O44 Q15 Q25
    Date: 2016–06–07
  19. By: Quan-Hoang Vuong; Trong-Khang Nguyen; Thuy-Dzung Do; Thu Trang Vuong
    Abstract: While much research has focused on issues related to patients’ quality of life and access to health care in developing countries, the life of ill people in poverty still hasn’t been approached in numerous facets, and is especially embryonic in many emerging economies. This study of a 336-patient data set examines how a patient community’s benefits and how meeting patients’ imperative needs impact their perception of the future of a voluntary community. The results show that patients are much more likely to be positive in predicting community growth when their expectations are met, and also tend to appreciate financial benefits more. But there is empirical evidence showing patients’ reluctance to contribute to the community, which likely results from their struggle with unfulfilled financial needs and may also imply unstated concern about the fate of voluntary communities of co-located patients.
    Keywords: Health behavior; co-located patients; community; healthcare cost
    JEL: I12 I19
    Date: 2016–06–01
  20. By: Joshua Hall (West Virginia University, Department of Economics); Shree Baba Pokharel (West Virginia University, Department of Economics)
    Abstract: The HIV/AIDS pandemic has caused numerous deaths. One unfortunate consequence of this is the deterioration in family structure and the prevalence of orphanhood. We investigate whether individuals who were orphaned as a child suffer long-term consequences through a underinvestment in their social capital. We conduct a framed field experiment in rural, southern Uganda where the HIV/AIDS pandemic hit hardest. In the experiment, subjects made decisions to contribute to a public good. Results indicate that adults who were orphaned as a child free ride more contributing less to the public good. We explore the mechanism through which their background operates. We provide evidence that an important channel is through social norms. Subjects orphaned when young tend to have lower expectations regarding typical behavior of others. A strong interaction effect is identified where those with the lowest expectations who were also orphaned contribute the least to the public good. Thus, we document long-term consequences to a community of the adverse health event.
    Keywords: HIV/AIDS, orphan, pro-social behavior, public good, social capital, social norm, Uganda
    JEL: I15 D03 C93
    Date: 2016–06
  21. By: Gil, J.; Sicras-Mainar, A.; Zucchelli, E.
    Abstract: Despite size and relevance of non-adherence to health treatments, robust evidence on its effects on health care utilisation is very limited. We focus on non-adherence to diabetes treatments, a widespread problem, andemploy longitudinal administrative data from Spain (2004-2010) to identify and quantify the effects of uncontrolled type 2 diabetes on health care utilisation. We use a biomarker (glycated haemoglobin, HbA1c) to detect the presence of uncontrolled diabetes and explore its effects on both primary and secondary health care. We estimate a range of panel count data models, including negative binomials with random effects, dynamic and hurdle specifications to account for unobserved heterogeneity, previous utilisation and selection. We find uncontrolled diabetes in around 30% of patients of both genders. Although women appear to systematically consume more health care compared to men, their consumption levels do not appear to be influenced by uncontrolled diabetes. Conversely, among men uncontrolled diabetes increases the average number of GP visits per year by around 4%, specialist visits by 4.4% and greatly extends hospital length of stay.
    Keywords: non-adherence; diabetes; biomarkers; health care utilisation; panel count data;
    JEL: C23 I1 I12
    Date: 2016–06

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