nep-hea New Economics Papers
on Health Economics
Issue of 2017‒02‒12
28 papers chosen by
Yong Yin
SUNY at Buffalo

  1. The economics of health inequality in the English NHS – the long view By Miqdad Asaria
  2. Defining and measuring unmet need to guide healthcare funding:identifying and filling the gaps By Maria Jose Aragon Aragon; Martin Chalkley; Maria Goddard
  3. Paying for performance for health care in low- and middle-income countries: an economic perspective By Martin Chalkley; Andrew Mirelman; Luigi Siciliani; Marc Suhrcke
  4. Plague and long-term development: the lasting effects of the 1629-30 epidemic on the Italian cities By Guido Alfani; Marco Percoco
  5. The Effect of Medical Marijuana Laws on the Labor Supply of Older Adults: Evidence from the Health and Retirement Study By Hersch Nicholas, Lauren; Maclean, J. Catherine
  6. The Effect of the Affordable Care Act on the Labor Supply, Savings, and Social Security of Older Americans By Eric French; Hans-Martin von Gaudecker; John Bailey Jones
  7. Mental Health of Small and Medium Enterprise Workers: An Empirical Analysis using Medical Claims Data from Japan Health Insurance Association By Juntaro Yamaoka; Yoshihide Fujioka; Kazufumi Yugami; Jun Suzuki; Yoshimi Adachi
  8. Agricultural Fires and Infant Health By Marcos A. Rangel; Tom S. Vogl
  9. Market Power, Contracts and Outcomes: The Case of Patients with Long-Term Diseases in the Colombian Health Care System By Juan Esteban Carranza; Álvaro J. Riascos; Natalia Serna
  10. The Unexpected Consequences of Asymmetric Competition. An Application to Big Pharma By Castanheira, Micael; de Frutos, Maria-Angeles; Ornaghi, Carmine; Siotis, Georges
  11. The “Double Expansion of Morbidity” Hypothesis: Evidence from Italy By Vincenzo Atella; Federico Belotti; Claudio Cricelli; Desislava Dankova; Joanna Kopinska; Alessandro Palma; Andrea Piano Mortari
  12. Ranking of Unwarranted Variations in Healthcare Treatments By Moes, Herry; Brekelmans, Ruud; Hamers, Herbert; Hasaart, F.
  13. The role of public health insurance in protecting against the costs of ill health By Belén Sáenz de Miera Juárez
  14. The incorporation of data on pre-analytical and analytical factors in model-based Health Technology Evaluations (HTAs) of medical tests: a systematic review protocol By Alison F. Smith; Mike Messenger; Peter Hall; Claire Hulme
  15. The effects of competition on medical service provision By Brosig-Koch, Jeannette; Hehenkamp, Burkhard; Kokot, Johanna
  16. The Effects of a Universal Child Care Reform on Child Health – Evidence from Sweden By Siflinger, Bettina; van den Berg, Gerard
  17. Kickbacks in Medical Expert Markets By Felder, Stefan
  18. Optimal social insurance and health inequality By Grossmann, Volker; Strulik, Holger
  19. Psychological gender differences in general health examinations: evidence from a 2016 Vietnamese cross-section dataset By Quan-Hoang Vuong
  20. Motorcycle Fatalities Revisited: A Classical and Bayesian Analysis By Richard Fowles; Peter Loeb; Chompoonuh Permpoonwiwat
  22. The Benefits of Avoiding Cancer (or Dying from Cancer): Evidence from a Four-country Study By Anna Alberini; Milan Šcasný
  23. Healthcare Spending and Utilization in Public and Private Medicare By Vilsa Curto; Liran Einav; Amy Finkelstein; Jonathan D. Levin; Jay Bhattacharya
  24. Secondary Pharmaceutical Patenting: A Global Perspective By Bhaven N. Sampat; Kenneth C. Shadlen
  25. Price-Linked Subsidies and Health Insurance Markups By Sonia P. Jaffe; Mark Shepard
  26. Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals By Liran Einav; Amy Finkelstein; Neale Mahoney
  27. The Impact of the Affordable Care Act Young Adult Provision on Childbearing, Marriage, and Tax Filing Behavior: Evidence from Tax Data By Bradley Heim; Ithai Lurie; Kosali I. Simon
  28. The determinants of self-medication: Evidence from urban Vietnam By Hoai, Nguyen Trong; Dang, Thang

  1. By: Miqdad Asaria (Centre for Health Economics, University of York, York, UK.)
    Abstract: In this paper, I briefly outline some of the key milestones of health inequality policy in England. I describe how socioeconomic inequalities in health, government policy towards it, and the academic literature about it, have evolved over time and in relation to each other. Whilst this historical review is far from comprehensive, its aim is to provide sufficient context within which to interpret current NHS health inequality policy from the perspective of an economist.
  2. By: Maria Jose Aragon Aragon (Centre for Health Economics, University of York, York, UK.); Martin Chalkley (Centre for Health Economics, University of York, York, UK.); Maria Goddard (Centre for Health Economics, University of York, York, UK.)
    Abstract: Budget allocations to Clinical Commissioning Groups include adjustments for unmet need for healthcare, but there is a lack of robust evidence to support this. This article describes a literature review with an objective to understand the available evidence regarding unmet need. We developed a conceptual framework for what constitutes ideal evidence that; defines unmet need for a given population, indicates how that need can be met by health care, establishes the barriers to meeting need and provides relevant proxies based on observable measures. Our search focused on recent and empirical UK data and conceptual papers. We found no one article which satisfied all requirements of ideal evidence; the literature was strongest in defining need but weakest in regard to establishing observable proxies of need capable of being used in budget allocations. Our review was limited by its timescale and a vast body of literature, which translated into a limited number of key words for the search. We conclude that further research to inform budget allocation is required and should focus on conditions or services where adverse health outcomes from unmet need are amenable to healthcare interventions and which affect a sizeable proportion of the population
  3. By: Martin Chalkley (Centre for Health Economics, University of York, York, UK.); Andrew Mirelman (Centre for Health Economics, University of York, York, UK.); Luigi Siciliani (Department of Economics and Related Studies, University of York, York, UK.); Marc Suhrcke (Centre for Health Economics, University of York, York, UK.)
    Abstract: Pay for Performance (P4P) arrangements, which are fixtures of health systems in high-income countries (HIC), have been deployed across many low- and middle-income country (LMIC) settings as well. P4P programs in HICs have typically addressed the challenge of ‘over delivery’, controlling costs while maintaining adequate services and getting the best clinical practice, or quality of care. In LMICs, health systems are similarly concerned with issues of quality, but they may also grapple with problems of low demand, lack of resources and poor governance. By revisiting the overall framework for understanding P4P arrangements, their benefits and their risks in the context of healthcare delivery, this paper draws on experiences with P4P in HIC to assess how the insights from economic theory apply in practice in LMICs. Issues of programme design and unintended consequences are summarized and LMIC case examples of where these concepts apply and are missing from the evidence of P4P programs in LMIC settings are also reviewed. The evidence on P4P in LMICs is still in its infancy, both in terms of evidence of impact (especially as far as health outcomes are concerned), and in in terms of the attention to potential unintended consequences. However, it is critical to return to basic economic understanding of how the contractual arrangements and incentives of P4P inform program design and ultimately impact health outcomes and service delivery.
    Date: 2016–12
  4. By: Guido Alfani (PAM, Università Bocconi (Italy) Dondena Centre and IGIER); Marco Percoco (PAM, Università Bocconi (Italy) Dondena Centre)
    Abstract: The paper aims to analyze the effects of plague on the long-term development of Italian cities, with particular attention to the 1629-30 epidemic. By using a new dataset on plague mortality rates in 49 cities covering the period 1575-1700 ca., an economic geography model verifying the existence of multiple equilibria is estimated. It is found that cities severely affected by the 1629-30 plague were permanently displaced to a lower growth path. It is also found that plague caused a long-lasting damage to the size of Italian urban populations and to urbanization rates. These findings support the hypothesis that seventeenth-century plagues played a fundamental role in triggering the process of relative decline of the Italian economies.
    Keywords: Plague, Italian cities, Urban development, Urban demography, Multiple equilibria, Early modern period, Mortality crises, Urbanization, Italy
    JEL: N30 N33 N93 D31
    Date: 2016–11
  5. By: Hersch Nicholas, Lauren (Johns Hopkins University); Maclean, J. Catherine (Temple University)
    Abstract: We study the effect of state medical marijuana laws on labor supply among older adults; the demographic group with the highest rates of many health conditions for which marijuana may be an effective treatment. We use the Health and Retirement Study to study this question and estimate differences-in-differences regression models. We find that passage of a state medical marijuana law leads to increases in labor supply among older adults. These effects should be considered as policymakers determine how best to regulate access to medical marijuana.
    Keywords: older adults, labor supply, medical marijuana, regulation, medication
    JEL: I10 I18 J20
    Date: 2017–01
  6. By: Eric French (University College London); Hans-Martin von Gaudecker (Universität Bonn); John Bailey Jones (Federal Reserve Bank of Richmond and University at Albany, SUNY)
    Abstract: This paper assesses the effect of the Affordable Care Act (ACA) on the labor supply of Americans ages 50 and older. Using data from the Health and Retirement Study and the Medical Expenditure Panel Survey, we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Importantly, we model the two key channels by which health insurance rates are predicted to change: the Medicaid expansion and the subsidized private exchanges.
    Date: 2016–10
  7. By: Juntaro Yamaoka (Graduate School of Economics, Kobe University); Yoshihide Fujioka (Graduate School of Economics, Kobe University); Kazufumi Yugami (Graduate School of Economics, Kobe University); Jun Suzuki (Graduate School of Economics, Kobe University); Yoshimi Adachi (Graduate School of Economics, Konan University)
  8. By: Marcos A. Rangel (Duke University and BREAD); Tom S. Vogl (Princeton University, BREAD, and NBER)
    Abstract: Fire has long served as a tool in agriculture, but this practice’s human capital consequences have proved difficult to study. Drawing on data from satellites, air monitors, and vital records, we study how smoke from sugarcane harvest fires affects infant health in the Brazilian state that produces one-fifth of the world’s sugarcane. Because fires track economic activity, we exploit wind for identification, finding that late-pregnancy exposure to upwind fires decreases birth weight, gestational length, and in utero survival, but not early neonatal survival. Other fires positively predict health, highlighting the importance of disentangling pollution from economic activities that drive it.
    Keywords: Brazil
    JEL: I00 Q19 J13
    Date: 2016–12
  9. By: Juan Esteban Carranza; Álvaro J. Riascos; Natalia Serna
    Abstract: The Colombian health system has two main types of agents: the insurers and the service providers, which interact with each other through bilateral contracts. The types of contracts that these agents can write is restricted to a limited menu established by the regulator. The two most prevalent types of contract in the data are, by far, capitation contracts and fee-for-service contracts, which distribute risk and incentives differentially across both parties. We use a detailed data set of services and payments of all insurers and service providers at the individual user level to study the determinants of contract choice and their effect on health outcomes of a large sample of patients with chronic diseases. We focus on patients who are identical at the type of diagnosis, except for the contract type under which they are served, and show that capitation contracts are strongly correlated with lower rates of return to emergency care and lower rates of reincidence, compared with fee-for-service contracts. Both types of contracts lead to statistically different treatment paths. These results are consistent with contract theory and the economics of asymmetric information. Moreover, we show that the contract type depends on the market power of insurers and providers as predicted by a bargaining model. More generally, the results highlight the relevance of vertical contracts for the performance of health systems.
    Keywords: Vertical contracts, health insurance, asymmetric information
    JEL: D86 I11 L14
    Date: 2017–01–30
  10. By: Castanheira, Micael; de Frutos, Maria-Angeles; Ornaghi, Carmine; Siotis, Georges
    Abstract: This paper shows that a pro-competitive shock leading to a steep price drop in one market segment may benefit substitute products. Consumers move away from the cheaper product and demand for the substitutes increases, possibly leading to a drop in consumer surplus. The channel leading to this outcome is non-price competition: the competitive shock on thefirst set of products decreases the firms' ability to invest in promotion, which cripples their ability to lure consumers. To assess the empirical relevance of these findings, we study the effects of generic entry into the pharmaceutical industry by exploiting a large product-level dataset for the US covering the period 1994Q1 to 2003Q4. We find strong empirical support for the model's theoretical predictions. Our estimates rationalize a surprising finding, namely that a molecule that loses patent protection (the originator drug plus its generic competitors) typically experiences a drop in the quantity market share-despite being sold at a fraction of the original price.
    Keywords: Asymmetric competition; Generic entry; Pharmaceutical industry
    JEL: D22 I11 L13
    Date: 2017–01
  11. By: Vincenzo Atella (CEIS,University of Rome "Tor Vergata"); Federico Belotti (CEIS,University of Rome "Tor Vergata"); Claudio Cricelli (SIMG); Desislava Dankova (CEIS, University of Rome Tor Vergata); Joanna Kopinska (CEIS, University of Rome "Tor Vergata"); Alessandro Palma (CEIS, University of Rome Tor Vergata); Andrea Piano Mortari (CEIS, University of Rome "Tor Vergata")
    Abstract: The gains in life expectancy (LE) experienced over the last decades have been accompanied by the increases in the number of years lived in bad health, lending support to the “expansion of morbidity” hypothesis. In this paper we revise this theory and propose the “Double Expansion of Morbidity” (DEM) hypothesis, arguing that not only have life expectancy gains been transformed into years lived in bad health, but also, due to anticipated onset of chronic diseases, the number of years spent in “good health” is actually reducing. Limited to the Italian case, we present and discuss a set of empirical evidence confirming the DEM hypothesis. In particular, we find that from 2000 to 2014 the average number of years spent with chronic conditions in Italy has increased by 6.4 years, of which 3.4 years due to the increase in LE and 3 years due to the reduction in the onset age of chronic conditions. Compared to the year 2000, in 2014 this phenomenon has generated an extra public health expenditure of 8.7 billion euros. We discuss the policy implications of these findings.
    Keywords: Life expectancy,Double expansion hypothesis,Health expenditure,Italy.
    JEL: I10 I11 H51
    Date: 2017–02–03
  12. By: Moes, Herry (Tilburg University, Center For Economic Research); Brekelmans, Ruud (Tilburg University, Center For Economic Research); Hamers, Herbert (Tilburg University, Center For Economic Research); Hasaart, F.
    Abstract: In this paper, we introduce a framework designed to identify and rank possible unwarranted variation of treatments in healthcare. The innovative aspect of this framework is a ranking procedure that aims to identify healthcare institutions where unwarranted variation is most severe, and diagnosis treatment combinations which appear to be the most sensitive to unwarranted variation. By adding a ranking procedure to our framework, we have taken our research a step beyond the existing literature. This ranking procedure is intended to assist health insurance companies in their search for violations, and to help find them more quickly, enabling more effective corrective and preventive actions on behalf of the healthcare institutions concerned.
    Keywords: unwarranted variation; practice variation; upcoding; diagnosis-related group; healthcare data; health insurance
    JEL: L13
    Date: 2017
  13. By: Belén Sáenz de Miera Juárez
    Abstract: In the absence of health insurance, households have to self-insure against the risk of ill health, which may involve the use of mechanisms that have long-term consequences. This study analyses whether Mexican households are able to smooth consumption after severe health shocks, as well as the contribution of public health insurance in the form of social security and, more recently, the Seguro Popular programme. Using data from the Mexican Family Life Survey, a nationally representative longitudinal survey, the results indicate that unexpected health events such as accidents and deterioration in physical capacity are associated with large declines in non-medical consumption. Social security seems to provide protection against both types of shocks, but the endogeneity-corrected estimates indicate that the Seguro Popular programme only protects consumption against accidents. This suggests that income losses associated with disability shocks, for which the programme does not offer protection, are likely larger than medical care expenditures, and poses the question of whether other social security benefits, such as disability insurance, should also be extended to non-beneficiaries.
    Keywords: public insurance, consumption, catastrophic risks, health shocks
    Date: 2017
  14. By: Alison F. Smith (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Mike Messenger (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds; National Institute of Health Research (NIHR) Diagnostic Evidence Cooperative (DEC) Leeds, UK); Peter Hall (Edinburgh Cancer Research Centre, University of Edinburgh, Edinburgh, UK); Claire Hulme (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds)
    Abstract: Background: Medical tests are becoming increasingly important in modern health care. As the number of tests coming to the global market continues to rise, Health Technology Assessments (HTAs) will play an increasingly important role in directing test adoption decisions. Assessment of health-economic outcomes within HTAs – most often informed via decision model-based evaluations – have not routinely addressed the impact of pre-analytical and analytical factors on test performance, which can have a significant effect on test outcomes. This systematic review will investigate methods utilised in HTA model-based economic evaluations, to identify if and how data on the impact of pre-analytical and analytical factors on test performance is being assessed. Methods: The Cochrane HTA database and key HTA authority websites will be searched to identify published papers and reports relating to HTAs of in-vitro tests including a model-based economic evaluation. Title and abstract screening will be conducted by a primary reviewer and 10% independently screened by a second reviewer. Full text screening and data extraction will be conducted by the primary reviewer, with 10% of data extraction independently conducted by a second reviewer. For all included studies, basic characteristics of the study, disease area and test technology assessed will be extracted. For studies identified as including an assessment of pre-analytical and analytical factors, additional data on the type of factors assessed, methods utilised, impact on the cost-effectiveness results and study quality will be recorded. Discussion: Understanding the methods used in this area will enable identification of key gaps in current methodology and potential avenues for future research. The findings of this work will be disseminated via a peer-reviewed journal publication and at national and international conferences.
    Keywords: Diagnostics, Economic Evaluation, Economic Models, Health Technology Assessment, In Vitro Techniques, Systematic Review
    JEL: C50 I10
    Date: 2017
  15. By: Brosig-Koch, Jeannette; Hehenkamp, Burkhard; Kokot, Johanna
    Abstract: We explore how competition between physicians affects medical service provision. Previous research has shown that, in the absence of competition, physicians deviate from patient-optimal treatment under payment systems like capitation and fee-for-service. While competition might potentially eliminate or reduce these distortions, physicians usually interact with each other repeatedly over time. This leaves scope for collusive behavior. Moreover, only a fraction of patients switches providers at all. Both patterns might prevent competition to work in the desired direction. To analyze the behavioral effects of competition, we develop a theoretical benchmark which is then tested in a controlled laboratory experiment. Experimental conditions vary regarding physician payment (fee-for-service vs. capitation) and the severity of patients’ illness (low vs. high). In our setting, two physicians repeatedly treat patients from a homogeneous patient population. While half of the patients always attend the physician providing the highest patient benefit, the other ones always visit the same physician. Treatment decisions made in the experiment affect real patients’ health. Our results reveal that, in line with the theoretical prediction, introducing competition can reduce overprovision and underprovision, respectively. The observed effects depend on patient characteristics, though. Compared to related experimental research on price competition, collusive behavior is less frequently observed in our setting of medical service provision.
    JEL: I10 C91 C72
    Date: 2016
  16. By: Siflinger, Bettina; van den Berg, Gerard
    Abstract: This paper studies the effect of a Swedish universal, public child care reform on child health outcomes. We draw on a unique set of merged population register data from the province of Skane, following over the period 1999-2008. It contains merged information at the individual level from the population register, the income tax register, the medical birth register and the inpatient and outpatient registers. The outpatient register contains all ambulatory care contacts including all contacts with physicians and therapists. Visits are recorded by day, and diagnoses are recorded for each visit. Our identification strategy relies on a sibling sample design that allows to compare the impact of the reform across siblings within households. Despite exploiting a rather general measure of the reform impact, we additionally make use of detailed information on household-specific monthly child care fee. Our results suggest that children being fully affected by the reform have better physical health at ages 4-5 and 6-7, are significantly better off in development and psychological conditions at age 6-7. These effects are particularly distinct for children from low income families, being in line with the literature on early child interventions. Changes in child care prices also predict better physical health for younger children. The results are mainly driven by two mechanisms, a crowding out effect of informal care and an income effect, and are strongly supported by the so called hygiene hypothesis. The findings suggest that the availability of affordable high quality and universal, public child care plays a crucial role for health development throughout childhood. An analysis of children's health costs moreover provides important implications for public health expenditures.
    JEL: I14 I10 I28
    Date: 2016
  17. By: Felder, Stefan
    Abstract: This paper examines patient and overall welfare effects of kickbacks paid by a monopolistic hos-pital to competitive physicians in return for patient referrals. This practice is regarded as unethical and illegal in most cases. On the other hand, kickbacks can also enhance the distribution of labor in the production of medical services. In the context of medical services modelled as credence goods where patients need one of two possible treatments (minor or major), it is shown that pa-tient welfare is always lower with kickbacks than without. When the use of kickbacks is allowed, an equilibrium with overcharging (the patient requires the minor treatment but is charged for the expensive one) and one with overtreatment (the patient receives but does not require the major treatment) are possible. The latter results if patients can verify the treatment but not the diagno-sis, the former arises when no verifiability applies. Overall welfare is lowest in the equilibrium with overtreatment. Overcharging does not necessarily reduce overall welfare, as it depends on the degree of altruism among referring physicians. If they are solely extrinsically motivated, al-lowing kickbacks increases overall welfare. If physicians behave altruistically, a tradeoff arises between resource savings and guilt disutility from referrals. Additional equilibria emerge if the hospital can differentiate prices and post its own price for inexpensive treatments. Kickbacks continue to be predicted if physicians are not overly altruistic and no or only partial verifiability applies. In these cases, a prohibition of kickbacks improves the allocation. Kickbacks disappear, however, if treatment and diagnosis are verifiable, or if the hospital market is competitive.
    JEL: I11 I18 D80
    Date: 2016
  18. By: Grossmann, Volker; Strulik, Holger
    Abstract: This paper integrates into public economics a biologically founded, stochastic process of individual ageing. The novel approach enables us to quantitatively characterize the optimal joint design of health and retirement policy behind the veil of ignorance for today and in response to future medical progress. Calibrating our model to Germany, we find that future progress in medical technology calls for a potentially drastic increase in health spending that typically should be accompanied by a lower pension savings rate and a higher retirement age. Interestingly, medical progress and higher health spending are in conflict with the goal to reduce health inequality.
    Keywords: ageing,health expenditure,health inequality,social security system,retirement age
    JEL: H50 I10 C60
    Date: 2017
  19. By: Quan-Hoang Vuong
    Abstract: Whether or not periodic general health examinations (GHEs) should be maintained is a controversial issue. This study mainly focuses on the influence of gender and psychological factors on periodic GHEs. To clarify the relationship between the factors mentioned above, a survey has been carried out in Hanoi and surrounding areas, collecting 2,068 valid observations; the dataset was then analyzed using the baseline category logit model. Results show that most people are afraid of discovering diseases through general health examinations (76.64%), and among them the psychological fear of illness detection appears to be stronger for females than for males (β1(male)=-0.409, P
    Keywords: Periodic general health examination; psychological fear; gender; Vietnam
    JEL: I12 I18
    Date: 2017–02–06
  20. By: Richard Fowles; Peter Loeb; Chompoonuh Permpoonwiwat
    Abstract: This paper examines the determinants of motorcycle fatality rates using panel data and classical and Bayesian statistical methods. It focuses on five variables in particular: universal helmet laws, partial helmet laws, cell phone use, suicidal propensities, and beer consumption. Universal helmet laws are found to be favored over partial helmet laws to reduce motorcycle fatality rates while cell phone use is found to be a significant contributor to motorcycle fatalities as is alcohol consumption. Suicidal propensities are also shown to contribute to these accidents.
    Keywords: motorcycle fatalities, cell phones, helmet laws, alcohol consumption, suicide, Bayesian econometrics JEL Classification: I18, C11
    Date: 2016
  21. By: Arlene Garces-Ozanne (University of Otago); Edna Ikechi Kalu (University of New Brunswick); Richard Audas (University of Otago)
    Abstract: There remains a persistent gap in health outcomes between wealthy and poor countries. Basic measures such as life expectancy, infant and child mortality remain divergent, with preventable deaths being unacceptably high, despite significant efforts to reduce these disparities. We examine the impact of empowerment, measured by Freedom House’s ratings of country’s political and civil rights freedom, while controlling for per capita GDP, secondary school enrollment and income inequality, on national health outcomes. Using data from 1970-2013 across 149 countries, our results suggest, quite strongly, that higher levels of empowerment have a significant positive association with life expectancy, particularly for females, and lower rates of infant and child mortality. Our results point to the need for efforts to stimulate economic growth be accompanied with reforms to increase the levels of empowerment through increased political and economic freedom. empowerment, self-determination, political rights, civil liberties, per capita GDP, secondary school enrollment, income inequality, life expectancy, infant and child mortality
    Keywords: empowerment, self-determination, political rights, civil liberties, per capita GDP, secondary school enrollment, income inequality, life expectancy, infant and child mortality
    JEL: I14 I15
    Date: 2016–10
  22. By: Anna Alberini (AREC, University of Maryland and FEEM); Milan Šcasný (Charles University Environment Center)
    Abstract: We use stated-preference methods to estimate the cancer Value per Statistical Life (VSL) and Value per Statistical Case (VSCC) from a representative sample of 45-60-year olds in four countries in Europe. We ask respondents to report information about their willingness to pay for health risk reductions that are different from those used in earlier valuation work because they are comprised of two probabilities—that of getting cancer, and that of dying from it (conditional on getting it in the first place). The product of these two probabilities is the unconditional cancer mortality risk. Our hypothetical risk reductions also include two qualitative attributes—quality-of-life impacts and pain. The results show that respondents did appear to have an intuitive grasp of compound probabilities, and took into account each component of the unconditional cancer mortality risk when answering the valuation questions. We estimate the cancer VSL to be between € 1.9 and 5.7 million, depending on whether the (unconditional) mortality risk was reduced by lowering the chance of getting cancer, increasing the chance of surviving cancer, or both. The VSCC is estimated to be up to € 0.550 million euro, and its magnitude depends on the initial (conditional) cancer mortality and on the improvement in survival. We interpret these as “pure” mortality and cancer risk values, stripped of morbidity, pain or quality-of-life effects. The survey responses show that impacts on daily activities and pain have little or no effect on the WTP to reduce the adverse health risks.
    Keywords: Cancer Risk, Value of a Statistical Life, Value of a Statistical Case of Cancer, Mortality Risk Reduction, Stated Preferences
    JEL: I18 J17 K32 Q51
    Date: 2017–01
  23. By: Vilsa Curto; Liran Einav; Amy Finkelstein; Jonathan D. Levin; Jay Bhattacharya
    Abstract: We compare healthcare spending in public and private Medicare using newly available claims data from Medicare Advantage (MA) insurers. MA insurer revenues are 30 percent higher than their healthcare spending. Healthcare spending is 25 percent lower for MA enrollees than for enrollees in traditional Medicare (TM) in the same county with the same risk score. Spending differences between MA and TM are similar across sub-populations of enrollees and sub-categories of care, with similar reductions for "high value" and "low value" care. Spending differences primarily reflect differences in healthcare utilization; spending per encounter and hospital payments per admission are very similar in MA and TM. Geographic variation in MA spending is about 20 percent higher than in TM, but geographic variation in hospital prices is about 20 percent lower. We present evidence consistent with MA plans encouraging substitution to less expensive care, such as primary rather than specialist care, and outpatient rather than inpatient surgery, and with employing various types of utilization management. Some of the overall spending differences between MA and TM may be driven by selection on unobservables, and we report a range of estimates of this selection effect using mortality outcomes to proxy for selection.
    JEL: H11 H42 H51 I11 I13
    Date: 2017–01
  24. By: Bhaven N. Sampat; Kenneth C. Shadlen
    Abstract: Pharmaceutical firms’ use of secondary patents to extend periods of exclusivity generates concerns among policymakers worldwide. In response, some developing countries have introduced measures to curb the grant of these patents. While these measures have received considerable attention, there is limited evidence on their effectiveness. We follow a large sample of international patent applications in the US, Japan, the European Patent Office, and corresponding filings in three developing countries with restrictions on secondary patents, India, Brazil, and Argentina. We examine cross-country comparisons of primary vs. secondary grant rates, consider the differential fates of “twin” applications filed in multiple countries, and undertake detailed analyses of patent prosecution in the three developing countries. Our analyses indicate that measures to restrict secondary patents in developing countries are having limited impact. In none of these three countries are specific policies toward secondary patents the principal determinant of grant rates. Our analyses also suggest the importance of other procedural aspects of patent systems, beyond the formal policies targeting secondary applications, that affect outcomes for these applications in developing countries.
    JEL: I18 O3
    Date: 2017–01
  25. By: Sonia P. Jaffe; Mark Shepard
    Abstract: Subsidies in many health insurance programs depend on prices set by competing insurers – as prices rise, so do subsidies. We study the economics of these “price-linked” subsidies compared to “fixed” subsidies set independently of market prices. We show that price-linked subsidies weaken price competition, leading to higher markups and subsidy costs for the government. We argue that price-linked subsidies make sense only if (1) there is uncertainty about costs/prices, and (2) optimal subsidies increase as prices rise. We propose two reasons why optimal health insurance subsidies may rise with prices: doing so both insures consumers against cost risk and indirectly links subsidies to market-wide shocks affecting the cost of “charity care” used by the uninsured. We evaluate these tradeoffs empirically using a structural model estimated with data from Massachusetts’ health insurance exchange. Relative to fixed subsidies, price-linking increase prices by up to 5%, and by 5-10% when we simulate markets with fewer insurers. For levels of cost uncertainty that are reasonable in a mature market, we find that the losses from higher prices outweigh the benefits of price-linking.
    JEL: I11 I13 L11
    Date: 2017–01
  26. By: Liran Einav; Amy Finkelstein; Neale Mahoney
    Abstract: We study the design of provider incentives in the post-acute care setting – a high-stakes but under-studied segment of the healthcare system. We focus on long-term care hospitals (LTCHs) and the large (approximately $13,000) jump in Medicare payments they receive when a patient's stay reaches a threshold number of days. The descriptive evidence indicates that discharges increase substantially after the threshold, and that the marginal patient discharged after the threshold is in relatively better health. Despite the large financial incentives and behavioral response in a high mortality population, we are unable to detect any compelling evidence of an impact on patient mortality. To assess provider behavior under counterfactual payment schedules, we estimate a simple dynamic discrete choice model of LTCH discharge decisions. When we conservatively limit ourselves to alternative contracts that hold the LTCH harmless, we find that an alternative contract can generate Medicare savings of about $2,100 per admission, or about 5% of total payments. More aggressive payment reforms can generate substantially greater savings, but the accompanying reduction in LTCH profits has potential out-of-sample consequences. Our results highlight how improved financial incentives may be able to reduce healthcare spending, without negative consequences for industry profits or patient health.
    JEL: D22 I11 L21
    Date: 2017–01
  27. By: Bradley Heim; Ithai Lurie; Kosali I. Simon
    Abstract: We use panel U.S. tax data spanning 2008-2013 to study the impact of the Affordable Care Act (ACA) young adult provision on two important demographic outcomes—childbearing and marriage. The impact on childbearing is theoretically ambiguous, as gaining insurance may increase access to contraceptive services, while also reducing the out-of-pocket costs of childbirth. The impact on marriage is also ambiguous, as marriage rates may decrease when young adults have less need for dependent health insurance through a spouse, but may increase when they are now allowed to stay on their parent’s plans even if they are married. Changes in childbearing and marriage can, in turn, lead to changes in the likelihood of filing a tax return. Since W-2 forms record access to employer-provided fringe benefits, we were able to examine the impact of the coverage expansion by focusing on young adults whose parents have access to benefits. We compare those who are slightly younger than the age threshold to those who are slightly older. Our results suggest that the ACA young adult provision led to a modest decrease in childbearing and marriage rates, though the propensity to file a tax return did not change significantly.
    JEL: I13 J12 J13
    Date: 2017–01
  28. By: Hoai, Nguyen Trong; Dang, Thang
    Abstract: This study examines the primary determinants of self-medica- tions among urban citizens in Ho Chi Minh City, Vietnam using survey data. Employing logistic models, the article finds that the probability of self-medication is positively associated with the respondents’ high school degree or vocational certificate, married status, and income while it is negatively related to employed status, the number of children, the geographical distance from home to the nearest hospital, doing exercise, and living in a central region. Meanwhile, using Poisson models the article finds that the frequency of self-medication is positively associated with the respondents’ high school and vocational, married, income, and chronic disease while the frequency of self-medica- tion is adversely related to male, employed, children number, distance, being close to health professional and central areas.
    Keywords: Ho Chi Minh City; self-medication; Vietnam
    JEL: I11 I18
    Date: 2017–01–23

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