nep-hea New Economics Papers
on Health Economics
Issue of 2017‒01‒15
twenty papers chosen by
Yong Yin
SUNY at Buffalo

  1. Impacts of Universal Health Coverage: Financing, Income Inequality, and Social Welfare By Huang, Xianguo; Yoshino, Naoyuki
  2. Maybe "honor thy father and thy mother": uncertain family aid and the design of social long term care insurance By Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
  3. Burden of smoking-related disease and potential impact of cigarette price increase in Peru By Hernandez-Vasquez, Akram
  4. Primary Prevention and Health Outcomes: Treatment of Residential Lead Based Paint Hazards and the Prevalence of Childhood Lead Poisoning By David J. Jones
  5. Health Insurance Costs and Employee Compensation: Evidence from the National Compensation Survey By Priyanka Anand
  6. The Impact of Improving Capital Stock on the Utilization of Local Health Services: Preliminary Findings on the Evaluation of the Health Facilities Enhancement Program By Picazo, Oscar F.; Dela Cruz, Nina Ashley O.; Ortiz, Danica Aisa P.; Pantig, Ida Marie T.; Aldeon, Melanie P.; Tanghal, Juan Alfonso O.
  7. Putting Prevention of Childhood Stunting into the Forefront of the Nutrition Agenda: A Nutrition Sector Review By Herrin, Alejandro N.
  8. Stress, Child Care, and Fertility By Kazumasa Oguro; Masaya Yasuoka
  9. Optimal Incentives for Patent Challenges in the Pharmaceutical Industry By Enrico Böhme; Jonas Severin Frank; Wolfgang Kerber
  10. Physician emigration: should they stay or should they go? A policy analysis By Mário Amorim Lopes; Álvaro Almeida; Bernardo Almada-Lobo
  11. The Impact of Transitioning Stairstep Children from Separate CHIP to Medicaid on Use of Health Services: Evidence from Colorado and New York By Sean Orzol; Lindsey Leininger; Lauren Hula; Cara Orfield; Richard Chapman; Matthew Mleczko
  12. New York City Drunk Driving After Uber By Jessica Lynn Peck
  13. Gender Peer Effects Heterogeneity in Obesity By Rokhaya Dieye; Bernard Fortin
  14. Effects of Female Labor Participation on Smoking Behavior in Japan: Selection Model Approach By Eiji Yamamura
  16. Analysis and Forecast of Romania’s Population Ageing by Non-Linear Methods By Mariana BĂLAN; Brînduşa-Mihaela RADU
  17. Rescuing the Golden Age of Antibiotics: Can Economics Help Avert the Looming Crisis? By Eswaran, Mukesh; Gallini, Nancy
  18. Impact of a text messaging program on adolescent reproductive health: A cluster–randomized trial in Ghana By Slawa Rokicki; Jessica Cohen; Joshua A. Salomon; Günther Fink
  19. Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids By Abby Alpert; David Powell; Rosalie Liccardo Pacula
  20. Health Financing for the Poor in the Philippines: Final Report By Cabalfin, Michael R.

  1. By: Huang, Xianguo (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute)
    Abstract: This paper studies the impact of tax-financed universal health coverage schemes on macroeconomic aspects of labor supply, asset holding, inequality, and welfare, while taking into account features common to developing economies, such as informal employment and tax avoidance, by constructing a dynamic stochastic general equilibrium model with heterogeneous agents. Agents have different education levels, employment statuses, and idiosyncratic shocks. Given three tax financing options, calibration results based on the Thai economy suggest that the financing options matter for outcomes both at the aggregate and disaggregate levels. Universal health coverage, financed by labor income tax revenue, could reduce inequality due to its large redistributive role. Social welfare cannot be improved when labor decisions are endogenous and distortions are higher than the redistributive gains for all tax financing options. In the absence of labor supply choice, mild welfare gains are found. In a broader sense, the paper aims to provide a frame for policy evaluation of socioeconomic policies from both macro and micro perspectives, taking different social groups into consideration.
    Keywords: universal health insurance; dynamic stochastic general equilibrium model; tax finance; social welfare; labor supply
    JEL: E24 E26 E62 H23 H51 J11
    Date: 2016–12–31
  2. By: Canta, Chiara; Cremer, Helmuth; Gahvari, Firouz
    Abstract: We study the role and design of private and public insurance programs when informal care is uncertain. Children's degree of altruism is randomly distributed over some interval. Social insurance helps parents who receive a low level of care, but it comes at the cost of crowding out informal care. Crowding out occurs both at the intensive and the extensive margins. We consider three types of LTC policies: (i) a topping up (TU) scheme providing a transfer which is non exclusive and can be supplemented; (ii) an opting out (OO) scheme which is exclusive and cannot be topped up and (iii), a mixed policy combining these two schemes. TU will involve crowding out both at the intensive and the extensive margins, whereas OO will crowd out informal care solely at the extensive margin. However, OO is not necessarily the dominant policy as it may exacerbate crowding out at the extensive margin. The distortions of both policies can be mitigated by using an appropriately designed mixed policy.
    Keywords: long term care; opting out.; private insurance; public insurance; topping up; uncertain altruism
    JEL: H2 H5
    Date: 2017–01
  3. By: Hernandez-Vasquez, Akram
    Abstract: Objectives. To calculate the burden of smoking-related disease and evaluate the potential economic and health impact of tax-induced cigarette price increase in Peru. Materials and methods. A microsimulation model was used to estimate smoking-attributable impact on mortality, quality of life, and costs associated with heart and cerebrovascular disease, chronic obstructive pulmonary disease, pneumonia, lung cancer, and another nine cancers. Three scenarios, involving increased taxes, were evaluated. Results. A yearly total of 16,719 deaths, 6,926 cancer diagnoses, 7,936 strokes, and 7,548 hospital admissions due to cardiovascular disease can be attributed to smoking in Peru. Similarly, 396,069 years of life are lost each year from premature death and disability, and the cost of treating smoking-attributable health issues rises to 2,500 million soles (PEN 2015). Currently, taxes on tobacco cover only 9.1% of this expense. If cigarette prices were to increase by 50% over the next 10 years, 13,391 deaths, 6,210 cardiovascular events, and 5,361 new cancers could be prevented, representing an economic benefit of 3,145 million (PEN) in savings in health costs and increases in tax revenues. Conclusions. Smoking-attributable burden of disease and costs to the health system are very high in Peru. Higher cigarette taxes could have substantial health and economic benefits for the country.
    Keywords: Health Economics, Tobacco use, Cost of illness, Cost-Benefit analysis Taxes, Peru
    JEL: H2 I1 I18
    Date: 2016–09–18
  4. By: David J. Jones
    Abstract: Childhood lead poisoning presents an interesting case study of the potential of preventive care in reducing the prevalence of a disease.
    Keywords: Health economics , Preventive care, Childhood lead poisoning, Urban environmental health , Demographics
    JEL: I
  5. By: Priyanka Anand
    Abstract: This paper examines the relationship between rising health insurance costs and employee compensation.
    Keywords: health insurance costs, employee compensation, national compensation survey
    JEL: I
  6. By: Picazo, Oscar F.; Dela Cruz, Nina Ashley O.; Ortiz, Danica Aisa P.; Pantig, Ida Marie T.; Aldeon, Melanie P.; Tanghal, Juan Alfonso O.
    Abstract: This impact evaluation of the Health Facilities Enhancement Program (HFEP) of the Department of Health provides a preliminary analysis on its effects, particularly on the utilization of local health services, due to the improvement in capital stock. Furthermore, the evaluation attempts to present certain problems and issues encountered in the implementation of the program. The first part of this paper provides a general overview of what an impact evaluation is and gives the sampling frame of the study. Site visits were conducted in 107 hospitals/infirmaries and 159 rural health units/city health offices. These include HFEP-recipient and a few non-HFEP recipient facilities. An overview of facilities that received HFEP grants is then provided, as well as the completion and functionality of HFEP infrastructure projects in visited facilities. In the conduct of the impact evaluation, health service utilization through number of birth deliveries, outpatient consultations, and inpatients was compared in both HFEP and non-HFEP facilities. The aim is to identify trends and patterns in utilization, if there is an increase. Subsequently, bottlenecks in the evaluation were also revealed, particularly in comparing the volume of services before, during, and after HFEP. In connection to this, some analytical challenges concerning confounding factors and some proposed analytical approaches in undertaking an impact evaluation of capital investments are also given. The final part of this paper provides a conclusion on the impact of HFEP in health utilization, and some proposed areas for further study and research.
    Keywords: Philippines, Health Facilities Enhancement Program (HFEP), impact evaluation, health facilities, health infrastructure, medical equipment, health utilization
    Date: 2016
  7. By: Herrin, Alejandro N.
    Abstract: In 2015, based on the latest survey of the Food Nutrition Research Institute, childhood stunting affected one-third (33%) of children under five years. This is equivalent to 3.78 million children in 2015. Moreover, there has been little progress in reducing stunting prevalence in the last 20 years. The strategic importance of stunting prevention cannot be overemphasized in view of its short- and long-term consequences on health, learning, and economic productivity, and the short period of time that it can be effectively prevented (the first 1000 days from conception to age 2 years). Moreover, cost-effective interventions to address the situation are known and regularly updated. Assessments of specific nutrition projects have uncovered various implementation issues of targeting, coordination, management structures, logistics, and sustainability. On the other hand, recent sector-level assessment has uncovered a number of structural issues of governance--local mobilization to implement nutrition program; limited resources for nutrition; and organizational--effective coordination by the National Nutrition Council National Secretariat in a devolved set-up. Responding to these structural issues requires a new approach to address them. An approach suggested in the paper is to take advantage of existing opportunities offered, first, by the increasing global interest in child stunting, and second, by the existing platforms for identifying the poor and for delivering and financing health services. The paper outlines an approach for consideration and discussion.
    Keywords: Philippines, health service delivery, childhood stunting, maternal and child care, micronutrients
    Date: 2016
  8. By: Kazumasa Oguro (Faculty of Economics, Hosei University); Masaya Yasuoka (School of Economics, Kwansei Gakuin University)
    Abstract: In economically developed countries, an aging society with fewer children is progressing. Especially, Japan’s aging society is rapidly progressing. There, child care policies are actively provided to mitigate effects of the rapidly aging society. Child care services have increased. Female labor participation has also increased. As the empirical data show, female labor participation is positively correlated with fertility, as shown also by results from OECD countries. However, our analyses show that the fertility rate cannot always be raised by child care service improvement, although child care services can raise the female labor participation rate. Additionally, our analyses consider work balance and the fertility rate. A fixed working time for the father reduces female labor participation and increases child care time of the mother.
    Keywords: Child care service, Endogenous fertility, Stress, Work life balance
    JEL: J13 J22
    Date: 2017–01
  9. By: Enrico Böhme (University of Marburg); Jonas Severin Frank (University of Marburg); Wolfgang Kerber (University of Marburg)
    Abstract: Since the patent system relies on private litigation for challenging weak patents, and patent settlements might influence the incentives for challenging patents, the question arises whether the antitrust assessment of patent settlements should also consider their impact on the incentives to challenge potentially invalid patents. Patent settlements in the pharmaceutical industry between originator and generic firms have been scrutinized critically by competition authorities for delaying the market entry of generics and therefore harming consumers. In this paper we present a model that analyzes the tradeoff between limiting the delay of generic entry through patent settlements and giving generic firms more incentives for challenging weak patents of the originator firms. We show that allowing patent settlements with a later market entry of generics than the expected market entry under patent litigation can increase consumer welfare under certain conditions. We introduce a policy parameter for determining the optimal additional period for collusion that would maximize consumer welfare and show that the size of this policy parameter depends on the size of the challenging costs, the intensity of competition, and the duration between the generics’ market entry decisions.
    Keywords: patent settlements, collusion, patent challenges
    JEL: L10 L40 O34
    Date: 2017
  10. By: Mário Amorim Lopes (CEGI, Faculdade de Engenharia da Universidade do Porto, INESC-TEC); Álvaro Almeida (CEF.UP and Faculdade de Economia, Universidade do Porto); Bernardo Almada-Lobo (CEGI, Faculdade de Engenharia da Universidade do Porto, INESC-TEC)
    Abstract: Physician emigration can either function as an escape valve to help the health labour market clear from a supply surplus, or aggravate the problem further in case of a shortage. Either way, policy-makers should be particularly aware and devise policies to minimize the occurrence of an imbalance in the physician workforce, which may require physician retention policies if barriers to entry and other market rigidities can not be removed. To this purpose we have developed an agent-based computational economics model to analyse physician emigration, and used it to study the impact of potential short-term and long-term retention policies. As a real case study we have calibrated it with data from Portugal, which features a very particular health system with many rigidities. Results show that all policies are capable of increasing the workforce size, but not all reduce migration. Furthermore, the welfare impact of the policies varies considerably. Whether policies to retain physicians should be enacted or whether policy makers should let physicians go will depend on the type of imbalance present in the health system.
    Keywords: Healthcare workforce planning; Health policy; Agent-based computational economics; International migration; Physician migration; International medical graduates
    JEL: I18 I19 I28 J61
    Date: 2017–01
  11. By: Sean Orzol; Lindsey Leininger; Lauren Hula; Cara Orfield; Richard Chapman; Matthew Mleczko
    Keywords: CHIP, Medicaid, health services, Colorado, New York
    JEL: I
  12. By: Jessica Lynn Peck (Ph.D. Program in Economics, Graduate Center, CUNY)
    Abstract: This study investigates the effect of the introduction of Uber in New York City in May 2011 on drunk-driving outcomes. A difference-in-differences estimation of this effect implies a 20-30% decrease in the alcohol-related collision rate for the affected New York City boroughs, or about 40 collisions per month. With differentiated treatment effects for each effected county, the difference-in-differences effect is higher for Manhattan, average for the Bronx and Brooklyn, and lower for Queens. A synthetic control analysis shows similar effects that are pronounced over time in the Bronx and Brooklyn, and a permutation test confirms the effect is not commonly reproducible using untreated counties.
    Keywords: drunk driving, alcohol, taxi, ride-sharing
    JEL: H75 I12 R41
    Date: 2017–01–13
  13. By: Rokhaya Dieye; Bernard Fortin
    Abstract: This paper explores gender peer effects heterogeneity in adolescent Body Mass Index (BMI). We propose a utility-based non-cooperative social network model with effort technology. We allow the gender composition to influence peer effects. We analyze the possibility of recovering the fundamentals of our structural model from the best-response functions. We provide identification conditions of these functions generalizing those of the homogeneous version of the model. Extending Liu and Lee [2010], we consider 2SLS and GMM strategies to estimate our model using Add Health data. We provide tests of homophily in the formation of network and reject them after controlling for network (school) fixed effects. The joint (endogenous plus contextual) gender homogeneous model is rejected. However, we do not reject that the endogenous effects are the same. This suggests that the source of gender peer effects heterogeneity is the contextual effects. We find that peers’ age, parents’ education, health status, and race are relevant for the latter effects and are gender-dependent.
    Keywords: Obesity, Social Networks, Gender, Heterogeneity, Peer Effects, Identification, Add Health,
    JEL: L12 C31 Z13 D85
    Date: 2017–01–11
  14. By: Eiji Yamamura
    Abstract: Using individual level data (the Japanese General Social Survey), this paper aims to explore how interaction between genders contributes to the cessation of smoking in Japan, where females are distinctly less inclined to smoke than males. Controlling for various socioeconomic factors and selection bias, I find through a Heckman-type selection estimation that rates of female employment in workplaces are negatively associated with male smoking but not with female smoking. These results suggest that male smokers are more inclined to cease smoking when they are more likely to have contact with nonsmokers of the opposite sex. Overall, this empirical study provides evidence that the psychological effect of the presence of people in one’s surroundings has a direct significant effect upon smoking behavior. However, this effect is observed only among males and not females.
    Keywords: Female labor participation, Labor market, Smoking behavior
    JEL: I10 Z13
    Date: 2016–11–22
  15. By: M. M. Goel, Ishu Garg
    Abstract: Health is an important factor for human resource development and is affected by availability of healthcare services. In this regard, the role of public expenditure on health to provide better health facilities and to improve health status of the masses becomes indispensible in any economy including Haryana. With this backdrop, the present study is an attempt to examine the impact of public expenditure (PEH) on health infrastructure and health status for the State of Haryana. For the same, the indicators of health infrastructure and status are selected and the data on the specified indicators are collected for the period of 1990-91 to 2011-12. Thereafter, the indicators of health infrastructure and health status are regressed on public expenditure on health (PEH) and its ingredients namely development revenue expenditure on health (DREH) and capital expenditure on health (CEH). It is found that these three expenditures have same direction of influences but difference occurs in the magnitude of their impacts. These expenditures having appreciable compound annual growth rate (CAGR) are impacting number of primary health centers (PHCs), community health centers (CHCs), sub-centers (SCs), total number of allopathic as well as ayurvedic, unani and homoeopathic (AUH) institutions positively. While their impact on number of hospitals, dispensaries, beds, BR, DR and IMR is negative. However, the remaining indicators are found to be expenditure inelastic which calls for further judgments of the cause of such results along with negative impact of public expenditure on health infrastructure. Also, magnitude of effects is found to be more in case of DREH followed by PEH and CEH despite lower CAGR of DREH than PEH and CEH. Accordingly, DREH calls for more emphasis; due to its highest impacts and a hope can be made that increase in DREH will essentially enhance health infrastructure and health status efficiently. Moreover, with DREH, there is strong case to raise CEH being a major source of creating health infrastructure. Above all, Government must increase public expenditure on health with its components (DREH and CEH) in every year’s budget; so that their positive impact could be sustained and demand-supply gaps in health facilities could be filled. Along with this, there is rationale for adopting good governance to check corrupt practices; and to allocate funds adequately on each and every health facility without financial leakages and wastages of funds so that our health infrastructure could be developed in sufficient quantity and better quality; and consequently, health status can be upgraded in Haryana. Key words: Public Expenditure, DREH, CAGR, Health infrastructure, Health Policy
    Date: 2016–09
  16. By: Mariana BĂLAN (Institute for Economic Forecasting, Romanian Academy); Brînduşa-Mihaela RADU (Institute for Economic Forecasting, Romanian Academy)
    Abstract: Demographic ageing of population turned lately into an extremely sensible issue, even thorny at times, and with deep impact on all generations and on most fields of economic activity. Romania, like all other European countries, is faced currently with demographic decrease. Demographic changes in the next decades are susceptible of having significant impact on the development of the Romanian economy. Population ageing, as a whole, affects negatively the GDP increase, by diminishing factor entries. At the same time, this phenomenon has negative impact also on GDP per capita, in particular for the future, mainly because of the decline in the employed population segment. In this context, knowing about the future evolution of the population plays a determinant role in adopting the measures and policies of economic growth. The paper intends in this stage of research to analyse and forecast Romania’s population ageing by using non-linear models.
    Keywords: population ageing; indicators of natural population movement; non-linear models; forecasts
    JEL: C53 E20 E27 J10 J11
    Date: 2015–08
  17. By: Eswaran, Mukesh; Gallini, Nancy
    Abstract: Countries world wide face an imminent global health crisis. As resistant bacteria render the current stock of antibiotics ineffective and the pipeline of back-up drugs runs dry, pharmaceutical companies are abandoning their research in antibiotics. In this paper we ask: Why are pharmaceutical companies closing antibiotic research labs when the stakes are so high? Implementing a simple dynamic framework, we show that the environment for new antibiotics is relatively hostile, compared to other medicines, due to market failures that result in excessive use and acceleration of natural selection. The analysis reveals, however, that increased competition between drugs can actually slow down the rate of resistance without, in some cases, diluting research incentives. Bolstered by scientific evidence, this result arises from a fundamental interplay between economic and biological externalities. We propose a patent-antitrust regime for achieving efficient drugrnresearch and usage that calls for a revised justification of the patent system.rn
    Keywords: antibiotic resistence, market competition, R&D incentives, patents
    JEL: I11 I12 I13 O31 O38
    Date: 2016–07–04
  18. By: Slawa Rokicki (Interfaculty Initiative in Health Policy, Harvard University; Geary Institute for Public Policy, University College Dublin); Jessica Cohen (Department of Global Health and Population, Harvard T.H. Chan School of Public Health); Joshua A. Salomon (Department of Global Health and Population, Harvard T.H. Chan School of Public Health); Günther Fink (Department of Global Health and Population, Harvard T.H. Chan School of Public Health)
    Abstract: Objectives. To evaluate whether text-messaging programs can improve reproductive health among adolescent girls in low- and middle-income countries. Methods. We conducted a cluster–randomized controlled trial among 756 female students aged 14 to 24 years in Accra, Ghana, in 2014. We randomized 38 schools to unidirectional intervention (n=12), interactive intervention (n=12), and control (n=14). The unidirectional intervention sent participants text messages with reproductive health information. The interactive intervention engaged adolescents in text-messaging reproductive health quiz games. The primary study outcome was reproductive health knowledge at 3 and 15 months. Additional outcomes included self-reported pregnancy and sexual behavior. Analysis was by intent-to-treat. Results. From baseline to 3 months, the unidirectional intervention increased knowledge by 11 percentage points (95% confidence interval [CI]=7, 15) and the interactive intervention by 24 percentage points (95% CI=19, 28), from a control baseline of 26%. Although we found no changes in reproductive health outcomes overall, both unidirectional (odds ratio [OR]=0.14; 95% CI=0.03, 0.71) and interactive interventions (OR=0.15; 95% CI=0.03, 0.86) lowered odds of self-reported pregnancy for sexually active participants. Conclusions. Text-messaging programs can lead to large improvements in reproductive health knowledge and have the potential to lower pregnancy risk for sexually active adolescent girls.
    Keywords: reproductive health, sexual education, adolescent health, mobile health, text messaging, global health
    Date: 2017–01–12
  19. By: Abby Alpert; David Powell; Rosalie Liccardo Pacula
    Abstract: Overdose deaths from prescription opioid pain relievers nearly quadrupled between 1999 and 2010, making this the worst drug overdose epidemic in U.S. history. In response, numerous supply-side interventions have aimed to limit access to opioids. However, these supply disruptions may have the unintended consequence of increasing the use of substitute drugs, including heroin. We study the consequences of one of the largest supply disruptions to date to abusable opioids – the introduction of an abuse-deterrent version of OxyContin in 2010. Our analysis exploits across state variation in exposure to the OxyContin reformulation. Using data from the National Survey on Drug Use and Health (NSDUH), we show that states with higher pre-2010 rates of OxyContin misuse experienced larger reductions in OxyContin misuse, permitting us to isolate consumer substitution responses. We estimate large differential increases in heroin deaths immediately after reformulation in states with the highest initial rates of OxyContin misuse. We find less evidence of differential reductions in overall opioid-related deaths, potentially due to substitution towards other opioids, including more harmful synthetic opioids such as fentanyl. Our results imply that a substantial share of the dramatic increase in heroin deaths since 2010 can be attributed to the reformulation of OxyContin.
    JEL: I12 I18 K42
    Date: 2017–01
  20. By: Cabalfin, Michael R.
    Abstract: Indigent membership in PhilHealth has surged in recent years, driven by the nation-wide identification of the poor. However, the massive identification has led to the enrollment of more members than official poverty estimates, resulting in leakages in the government's social health insurance subsidy. The massive enrollment has been facilitated by the incremental revenues from the revised sin tax law. Subsidy for the poor now comprises over a third of the national health insurance fund, effectively subsidizing health-care services for other members, especially the informal sector. Hospitals also enroll the poor as well as the near poor in PhilHealth at point of care and may oversubscribe the poor given the higher reimbursement relative to the premium subsidy. The poor are covered by a No Balance Billing policy in which they are not liable to pay hospital fees over the case rate. Despite this, close to half of the poor still incur out-of-pocket expenses, especially for medication. Close to three-fourths of the poor are also covered by the Primary Care Benefit 2 Package, which pays for outpatient medicines for certain illnesses to prevent catastrophic conditions. Finally, close to 1 percent of the benefits for the poor is estimated to fall under the Z benefit package, which subsidizes catastrophic illnesses.
    Keywords: Philippines, poverty, PhilHealth, social protection, health insurance, vin, health-care services, Primary Care Benefit 2 Package, No Balance Billing, sin tax law
    Date: 2016

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