nep-hea New Economics Papers
on Health Economics
Issue of 2017‒07‒16
nineteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. The Effect of Private Health Insurance on Self-assessed Health Status and Health Satisfaction in Germany By René Petilliot
  2. Mutual Learning About Health System Performance in Australia's Intergovernmental Health Committee System? By Amanda Smullen
  3. Caregivers in the family: daughters, sons and social norms By Barigozzi, Francesca; Cremer, Helmuth; Roeder, Kerstin
  4. Effectiveness of Obesity Prevention and Control By Thavorncharoensap, Montarat
  5. On Discrimination in Health Insurance By Thomas Boyer-Kassem; Sébastien Duchêne
  6. The Effect of Health Care Entrepreneurship on Local Health: The Case of MedExpress in Appalachia By Amir B. Ferreira Neto; Joshua Hall
  7. Assessing primary care performance in Indonesia: An application of frontier analysis techniques By Firdaus Hafidz; Tim Ensor; Sandy Tubeuf
  8. Prescription Drug Monitoring Programs on Oxycodone Prescriptions, Heroin Substitution, and Crime Rates By Justine Mallatt
  9. E-Cigarettes: Use, Effects on Smoking, Risks, and Policy Implications By Glantz, Stanton A PhD; Bareham, David W BSc, MSc
  10. Exploring Variations in Healthcare Expenditures – What is the Role of Practice Styles? By Alexander Ahammer; Thomas Schober
  11. Accounting for Fetal Origins: Health Capital vs. Health Deficits By Carl-Johan Dalgaard; Casper Worm Hansen; Holger Strulik
  12. Human Health and Aging over an Infinite Time Horizon By D. Dragone; H. Strulik
  13. Early diagnosis of chronic conditions and lifestyle modification By Paul Andres Rodriguez-Lesmes
  14. Introducing Risk Adjustment and Free Health Plan Choice in Employer-Based Health Insurance: Evidence from Germany By Pilny, Adam; Wübker, Ansgar; Ziebarth, Nicolas R.
  15. Exit, Voice or Loyalty? An Investigation into Mandated Portability of Front-Loaded Private Health Plans By Atal, Juan Pablo; Fang, Hanming; Karlsson, Martin; Ziebarth, Nicolas R.
  16. Life after Lead: Effects of Early Interventions for Children Exposed to Lead By Billings, Stephen B.; Schnepel, Kevin T.
  17. Does Daughter Deficit Promote Parental Substance Use? Longitudinal Evidence on Smoking from Rural China By Chen, Xi
  18. The Value of a Healthy Home: Lead Paint Remediation and Housing Values By Billings, Stephen B.; Schnepel, Kevin T.
  19. If Looks Could Heal: Child Health and Paternal Investment By Tracey, Marlon R.; Polachek, Solomon

  1. By: René Petilliot
    Abstract: In Germany, private health insurance covers more innovative and costly treatments than public insurance. Moreover, privately insured individuals are treated preferentially by doctors. In this article, I use subjective health data to examine whether these superior features of private insurance actually transfer into better health. I focus on German adolescents who are still in education to control for selection and account for differences in health-conscious behavior between publicly and privately insured individuals. I find that privately and publicly insured individuals do not differ in health, which contrasts with previous research. Hence, doctors appear to be the sole profiteers of the private insurance system and billions of euros could be saved by aligning private and public health insurance.
    Keywords: Health satisfaction, Self-assessed health status, Private health insurance, Public health insurance, Selection
    JEL: I11 I12 I13 I18 I31
    Date: 2017
  2. By: Amanda Smullen
    Abstract: Since the early 1990s Australia, through the Australian Health Minister’s Advisory Council, began the process of developing a national health system performance framework. This includes service delivery measures for hospitals and has been used as a template for national data collections in mental health services. National performance frameworks have since become part of promoting greater integration of policy making and service delivery across Commonwealth and State jurisdictional health functions. The key focus of this paper is upon inter-governmental processes and routines to develop Australian national performance regimes in the realms of health and mental health care services. It presents initial findings from 26 elite interviews working across the inter-governmental interface, including some data about experiences of service managers. The report provides two contributions to the existing literature on Australia’s federal health system and more specifically health governance. Firstly, it presents a literature review of studies and theoretical concepts that have been deployed to examine cross jurisdictional processes of decision making. There is particular attention for the European literature on inter-governmental committee systems. Secondly, the paper presents initial findings from an explorative study of Australia’s inter-governmental machinery in the realms of health and mental health care services. This explorative study was based upon an initial 26 elite interviews from respondents working (or having worked in) Australia’s inter-governmental machinery, including some respondents from representatives of relevant Commonwealth semi-autonomous bodies. The researcher also observed two inter-governmental committee proceedings although reported data here draws only from interviews. These findings provide a first insight into the inner workings of Australia’s inter-governmental health machinery. It is argued that there has been evidence of mutual learning from Australia’s National Health Performance initiatives, and, exchanges and recommendations for future research to further investigate and pinpoint the causal processes through which mutual learning occurs are provided.
    Keywords: Australia, Health System
    Date: 2017–07
  3. By: Barigozzi, Francesca; Cremer, Helmuth; Roeder, Kerstin
    Abstract: Daughters are the principal caregivers of their dependent parents. In this paper, we study long-term care (LTC) choices by bargaining families with mixed- or same-gender siblings. LTC care can be provided either informally by children, or formally at home or in an institution. A social norm implies that daughters suffer a psychological cost when they provide less informal care than the average child. We show that the laissez-faire (LF) and the utilitarian first-best (FB) differ for two reasons. First, because informal care imposes a negative externality on daughters via the social norm, too much informal care is provided in LF. Second, the weights children and parents have in the family bargaining problem might differ in general from their weights in social welfare. We show that the FB allocation can be achieved through a system of subsidies on formal home and institutional care. Except when children and parents have equal bargaining weights these subsidies are gender-specific and reflect Pigouvian as well as "paternalistic" considerations.
    Keywords: Social norms; formal and informal LTC; daughters; sons
    JEL: D13 H23 H31 I19
    Date: 2017–06
  4. By: Thavorncharoensap, Montarat (Asian Development Bank Institute)
    Abstract: Implementation of evidence-based interventions to control obesity is regarded as a public health priority. In this working paper, effectiveness and cost-effectiveness evidence of sugar-sweetened beverage (SSB) taxes, nutrition labeling, advertising bans on unhealthy food, and school-based interventions are reviewed. The review indicates that SSB taxes may be an effective and cost-effective intervention for obesity prevention and control. Regarding nutrition labeling, current evidence indicates that this has a significant impact on food selection. Although there is limited evidence on its impact on body mass index (BMI) and obesity prevalence, nutrition labeling is considered a cost-effective intervention in many settings. Further, while current evidence indicates that unhealthy food and beverage advertisements may increase dietary intake and the preference for unhealthy foods, especially in children, limited evidence demonstrates the impact of restricted unhealthy food advertising on BMI and obesity prevalence. However, such an intervention is considered to be cost-effective in many settings. Concerning school-based interventions, due to the limited number of good-quality studies as well as high variation across studies, the effectiveness of these interventions is inconclusive. Current evidence also suggests that school-based interventions are less likely to be cost-effective.
    Keywords: health; obesity; nutrition; nutrition labeling; sugar-sweetened beverage (SSB) taxes
    JEL: I12 I18
    Date: 2017–01–31
  5. By: Thomas Boyer-Kassem (Tilburg University); Sébastien Duchêne (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: In many countries, private health insurance companies are allowed to vary their premiums, or to reject applicants, based on some information on individuals. This practice is intuitively justified by the idea that people should pay the premium corresponding to their own known risk. However, one may consider this as a form of discrimination, that is, of a wrongful differential treatment. Our goal i this paper is to assess whether profiling is morally permissible in health insurance. We go beyond the existing literature in considering any possible parameter in profiling, be it genetic, non-genetic, or even non-medical (such as age or place of living). Reviewing several moral theories, and tackling the difficult question of responsibility, we argue that profiling is unjust in health insurance on any parameter.
    Keywords: Discrimination, Health Economics, Insurance, Profiling, Ethics, Social Choice, Welfare
    JEL: I10 I13 I14 J14
    Date: 2017–06
  6. By: Amir B. Ferreira Neto (West Virginia University, Department of Economics); Joshua Hall (West Virginia University, Department of Economics)
    Abstract: We test the hypothesis that the opening of an Urgent Care Center (UCC) has positive impacts on the local community. There are several mechanisms through which a UCC can have an impact: lower health care costs, emergency room decongestion, and improved access to medical information. We examine the entry of MedExpress into Appalachian counties between 2001 and 2013. Employing data from Health Resources Files, which provides information for all counties for specific years, we use Propensity Score Matching to create a year 2000 control group for the counties “treated†by MedExpress entry beginning in 2001. We then employ a standard difference-in-difference model on an unbalanced panel between 2001 and 2013. Our results suggest that MedExpress has a positive impact on different health outcome variables.
    Keywords: Appalachia, Health, MedExpress, Urgent Care Center
    JEL: R5
    Date: 2017–07
  7. By: Firdaus Hafidz (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds); Tim Ensor (Leeds Institute of Health Sciences, University of Leeds); Sandy Tubeuf (Academic Unit of Health Economics, Leeds Institute of Health Sciences, University of Leeds)
    Abstract: Despite increased national health expenditure in health facilities in Indonesia, health outcomes remain low. The aim of our study is to examine the factors determining the relative efficiency of public primary care facilities. Using linked national data sources from facility-, households, and village-based surveys, we measure the efficiency of 185 primary care facilities across fifteen provinces in Indonesia with output oriented data envelopment analysis (DEA) and stochastic frontier analysis (SFA). Inputs include the number of doctors, midwife and nurses, and other staff while outputs are the number of outpatients and maternal child health patients. We run truncated regression in second stage DEA and one stage SFA analysis to assess contextual characteristics influencing health facilities performance. Our results indicate a wide variation in efficiency between health facilities. High-performing primary care facilities are in affluent areas. Primary care facilities located in urban areas, in Java and Bali Island, with high coverage of insurance scheme for the poor perform better than other geographical location.We find an inconclusive impact of quality of care, patient mix, and availability of inpatient services on efficiency. This paper concludes by highlighting the characteristics of primary care facilities that have the potential to increase efficiency.
    Keywords: Efficiency, Primary care facilities, frontier analysis, data envelopment analysis, stochastic frontier analysis, Indonesia
    JEL: C50 I10
    Date: 2017
  8. By: Justine Mallatt
    Abstract: In response to growing abuse of prescription opioid painkillers, 49 U.S. states have implemented electronic prescription drug monitoring programs which record patients into a state-wide system when a prescription opioid is received. In response to low prescriber utilization of the prescription monitoring databases, 12 states passed legislation that strengthened the prescription monitoring programs by legally requiring prescribers to use the systems. This paper uses a di erence-in-di erences regression framework and interactive xed e ects factor models to identify the e ect of the early prescription drug monitoring programs and subsequent legislation that strengthened the programs on the types and strengths of opioid painkiller prescriptions lled and on drug crime rates. The initial implementation of prescription drug monitoring databases caused a decrease in the amount of oxycodone and strong-dose oxycodone among the Medicaid population. PDMPs cause an increase in the number of crime incidents where an o ender is carrying heroin. PDMPs do not a ect the number of drug dealers selling heroin, suggesting a demand-side response, which indicates that abusers of high-dose pills substitute to heroin in response to the additional obstacles a PDMP imposes to obtaining prescription opioids. PDMPs have an ambiguous e ect on illegally obtained prescription opioids because the databases create opposing market forces. There is no evidence that a mandate requiring that prescribers use the PDMP reduces prescriptions further, and no evidence of the mandates a ecting drug crime rates.
    Date: 2017–04
  9. By: Glantz, Stanton A PhD; Bareham, David W BSc, MSc
    Keywords: Medicine and Health Sciences, Social and Behavioral Sciences
    Date: 2018–03–01
  10. By: Alexander Ahammer; Thomas Schober
    Abstract: Variations in the use of medical resources, both across and within geographical regions, have been widely documented. Whenever these variations cannot be explained by differences in patient needs or preferences, they may result in some individuals being over-treated, while others are under-treated, thus raising questions on the equity and efficiency of healthcare systems. One explanation for these variations is differences in medical practice styles; that is, physicians may develop their own treatment patterns based on their beliefs about the efficacy of medical interventions. We use a large administrative data set from Upper Austria to study the practice styles among primary care physicians. We decompose the use of healthcare services into patient characteristics, patient and physician fixed effects, and stochastic health shocks. Physician fixed effects are interpreted as a measure of practice styles, which are then related to observable physician characteristics and to attributes of the local healthcare sector.
    Keywords: Health care expenditures, variation, practice styles, physician behavior
    JEL: I11 I12 C23
    Date: 2017–05
  11. By: Carl-Johan Dalgaard (Department of Economics, University of Copenhagen); Casper Worm Hansen (Department of Economics, University of Copenhagen); Holger Strulik (Department of Economics, University of Goettingen)
    Abstract: The Fetal Origins hypothesis has received considerable empirical support, both within epidemiology and economics. The present study compares the ability of two rival theoretical frameworks in accounting for the kind of path dependence implied by the Fetal Origins Hypothesis. We argue that while the health capital model due to Grossman (Journal of Political Economy, 80(2), 223-255, 1972) is irreconcilable with Fetal Origins of late-in-life health outcomes, the more recent health deficit model due to Dalgaard and Strulik (Journal of the European Economic Association, 12(3), 672-701, 2014) can generate shock amplification consistent with the hypothesis.
    Keywords: Fetal Origins; Health Capital; Health Deficits
    JEL: I10 D91
    Date: 2017–07–03
  12. By: D. Dragone; H. Strulik
    Abstract: Although death occurs with certainty, the time of death is uncertain. In this paper we build on this conceptualization and show that, although life ends at some point in time, human life can be meaningfully conceptualized as a strive for immortality that is never reached. We consider an intertemporal problem where health investments and consumption choices are made, taking into account that mortality depends on environmental factors, which are not controlled by the agent, and the agent's health condition, which is endogenous to lifestyle and health behavior. Formally, the infinite horizon approach has the advantage that adjustment dynamics to the steady state (i.e. human aging) can be discussed analytically. We explore the determinants of health deficits in this framework and show how individuals choose consumption and health expenditure over their lifetime in order to slow down (biological) aging. We compute analytically the impulse response functions for unexpected parameter changes. Specifically, we investigate how higher prices for medical goods and advancing medical technology affect individual behavior and health deficit accumulation.
    JEL: D91 I12 J17
    Date: 2017–06
  13. By: Paul Andres Rodriguez-Lesmes
    Abstract: This study estimates the potential impact of early diagnosis programmes on medication, subjective health and lifestyle. To deal with potential selection bias due to screening, I employ a feature of the English Longitudinal Study of Ageing that motivates a regression discontinuity design based on respondents’ blood pressure. If their measurements are above a threshold, individuals are advised to visit their family doctor to check for high blood pressure. There is evidence of a temporal increase in use of medication for treating the condition (6.6 percentage points), which almost doubled in the proportion of people taking medication for such blood pressure levels. At the same time, there is a permanent reduction of the probability of consuming alcohol twice a week (10 percentage points) and an increase in fruits consumption. However, there is also evidence of higher smoking frequency (eight cigarettes per week) in those above the threshold. Such lifestyle responses are not related to extra medication. However, no clear effects on either objective or subjective health were found after 4 years of intervention.
    Keywords: Hypertension; Biomarkers; Health behaviours; Health investment;Prevention
    Date: 2017–06–15
  14. By: Pilny, Adam (RWI); Wübker, Ansgar (RWI); Ziebarth, Nicolas R. (Cornell University)
    Abstract: To equalize differences in health plan premiums due to differences in risk pools, the German legislature introduced a simple Risk Adjustment Scheme (RAS) based on age, gender and disability status in 1994. In addition, effective 1996, consumers gained the freedom to choose among hundreds of existing health plans, across employers and state-borders. This paper (a) estimates RAS pass-through rates on premiums, financial reserves, and expenditures and assesses the overall RAS impact on market price dispersion. Moreover, it (b) characterizes health plan switchers and investigates their annual and cumulative switching rates over time. Our main findings are based on representative enrollee panel data linked to administrative RAS and health plan data. We show that sickness funds with bad risk pools and high pre-RAS premiums lowered their total premiums by 42 cents per additional euro allocated by the RAS. Consequently, post-RAS, health plan prices converged but not fully. Because switchers are more likely to be white collar, young and healthy, the new consumer choice resulted in more risk segregation and the amount of money redistributed by the RAS increased over time.
    Keywords: employer-based health insurance, free health plan choice, risk adjustment, health plan switching, adverse selection, German sickness funds, SOEP
    JEL: D12 H51 I11 I13 I18
    Date: 2017–06
  15. By: Atal, Juan Pablo (University of Pennsylvania); Fang, Hanming (University of Pennsylvania); Karlsson, Martin (University of Duisburg-Essen); Ziebarth, Nicolas R. (Cornell University)
    Abstract: We study theoretically and empirically how consumers in an individual private longterm health insurance market with front-loaded contracts respond to newly mandated portability requirements of their old-age provisions. To foster competition, effective 2009, the German legislature made the portability of standardized old-age provisions mandatory. Our theoretical model predicts that the portability reform will increase internal plan switching. However, under plausible assumptions, it will not increase external insurer switching. Moreover, the portability reform will enable unhealthier enrollees to reoptimize their plans. We find confirmatory evidence for the theoretical predictions using claims panel data from a big private insurer.
    Keywords: individual private health insurance, portability, old-age provisions, health plan switching, switching costs, health policy reform, consumer bargaining, retention
    JEL: G22 I11 I18
    Date: 2017–06
  16. By: Billings, Stephen B. (University of Colorado, Boulder); Schnepel, Kevin T. (University of Sydney)
    Abstract: Lead pollution is consistently linked to cognitive and behavioral impairments, yet little is known about the benefits of public health interventions for children exposed to lead. This paper estimates the long-term impacts of early-life interventions (e.g. lead remediation, nutritional assessment, medical evaluation, developmental surveillance, and public assistance referrals) recommended for lead-poisoned children. Using linked administrative data from Charlotte, NC, we compare outcomes for children who are similar across observable characteristics but differ in eligibility for intervention due to blood lead test results. We find that the negative outcomes previously associated with early-life exposure can largely be reversed by intervention.
    Keywords: early childhood intervention, early health shocks, lead exposure, human capital formation
    JEL: I12 I18 I21 J13 J24 K42 Q53 Q58
    Date: 2017–07
  17. By: Chen, Xi (Yale University)
    Abstract: China and some other Asian countries have experienced skewed sex ratios, triggering intense competition and pressure in the marriage market. Meanwhile, China has more smokers than any other country, with half of men smoke while few women smoke. Men are the major income earners in most Chinese families and thus bear much of the financial burden in preparation for children's marriage. This paper investigates how a demographic factor – a large number of surplus men in the marriage market in China – affects their fathers' smoking behavior. We utilize two household longitudinal surveys as well as a random subsample of the China Population Census to examine fathers' smoking in response to skewed sex ratios. Strikingly, fathers smoke more for families with a son living in communities with higher sex ratios. In contrast, those with a daughter do not demonstrate this pattern. Coping with the marriage market pressure is a more plausible pathway linking the observed skewed sex ratios among children and intense smoking among fathers. Considering worsening sex ratios and highly competitive marriage market in the coming decade as well as lasting health impacts due to smoking, policies suppressing unbalanced sex ratios could lead to welfare gains.
    Keywords: sex ratios, marriage market, paternal smoking, stress
    JEL: J13 D12 I19
    Date: 2017–06
  18. By: Billings, Stephen B. (University of Colorado, Boulder); Schnepel, Kevin T. (University of Sydney)
    Abstract: The presence of lead paint significantly impairs cognitive and behavioral development, yet little is known about the value to households of avoiding this residence-specific environmental health risk. In this paper, we estimate the benefits of lead-paint remediation on housing prices. Using data on all homes that applied to a HUD-funded program in Charlotte, North Carolina, we adopt a difference-in-differences estimator that compares values among remediated properties with those for which an inspection does not identify a lead paint hazard. Results indicate large returns for public and private investment in remediation with each $1 spent on lead remediation generating $2.60 in benefits as well as a reduction in residential turnover.
    Keywords: lead paint exposure, lead hazard remediation, value of environmental health risk, urban environmental health
    JEL: Q51 Q52 Q58 R21 R23 R31 I18
    Date: 2017–07
  19. By: Tracey, Marlon R. (Southern Illinois University Edwardsville); Polachek, Solomon (Binghamton University, New York)
    Abstract: Data from the first two waves of the Fragile Family and Child Wellbeing study indicate that infants who look like their father at birth are healthier one year later. The reason is such father-child resemblance induces a father to spend more time engaged in positive parenting. An extra day (per month) of time-investment by a typical visiting father enhances child health by just over 10% of a standard deviation. This estimate is not biased by the effect of child health on father-involvement or omitted maternal ability, thereby eliminating endogeneity biases that plague existing studies. The result has implications regarding the role of a father's time in enhancing child health, especially in fragile families.
    Keywords: child health, nonresident father, father-child resemblance
    JEL: I12 J12 J13
    Date: 2017–06

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