nep-hea New Economics Papers
on Health Economics
Issue of 2017‒09‒17
twenty-one papers chosen by
Yong Yin
SUNY at Buffalo

  1. Medically Necessary but Forbidden: Reproductive Health Care in Catholic-owned Hospitals By Elaine L. Hill; David Slusky; Donna Ginther
  2. Are Many Retirees with Dementia Lacking Help? By Anek Belbase; Geoffrey T. Sanzenbacher; Sara Ellen King
  3. Medical Malpractice: How Legal Liability Affects Medical Decisions By Paola Bertoli; Veronica Grembi
  4. The Political Economy of Diagnosis-Related Groups By Paola Bertoli; Veronica Grembi
  5. Do Speed Cameras Save Lives? By Cheng Keat Tang
  6. Transition gap in self-rated health By Obrizan, Maksym
  7. Does the negative effect of caregiving on work persist over time? By Heger, Dörte; Korfhage, Thorben
  8. Operational and economic efficiency analysis of public hospitals in Greece By George Fragkiadakis; Michael Doumpos; Constantin Zopounidis; Christophe Germain
  9. Energy Consumption and Health Outcomes in Africa By Adel Ben Youssef; Laurence Lannes; Christophe Rault; Agnès Soucat
  10. Kidney exchange with immunosuppressants By Youngsub Chun; Eun jeong Heo; Sunghoon Heo
  11. Safety in Numbers and Safety in Congestion for Bicyclists and Motorists at Urban Intersections By Kristin Carlson; Alireza Ermagun; Brendan Murphy; Andrew Owen; David Levinson
  12. The decomposition of the difference between two healthy life expectancies. Which formula is right? By Vladimir M. Shkolnikov; Evgueni M. Andreev
  13. Politics, Hospital Behavior, and Health Care Spending Effect Methods to Examine Treatment Effect Heterogeneity in Experiments for the Young and Privately Insured? By Zack Cooper; Amanda E. Kowalski; Eleanor Neff Powell; Jennifer Wu
  14. Reconsidering the Income-Illness Relationship using Distributional Regression: An Application to Germany By Alexander Silbersdorff; Julia Lynch; Stephan Klasen; Thomas Kneib
  15. Moral hazard, optimal healthcare-seeking behavior, and competitive equilibrium. By Malakhov, Sergey
  16. Long-Term Care in Latin America and the Caribbean? Theory and Policy Considerations By Martín Caruso; Sebastian Galiani; Pablo Ibarrarán
  17. Using Supply- and Demand-Side Strategies to Improve Maternal and Child Health in Bihar, India: Process Evaluation Findings By Swetha Sridharan; Anu Rangarajan; Mercy Manoranjini; Sukhmani Sethi
  18. "Cost Effect of Mergers in Public Hospitals in Japan" (in Japanese) The purpose of the paper is to assess the extent to which the merger between public hospitals reduce the operation costs in Japan. To deal with the endogeneity of the hospitals' decisions to merger, we employ two approaches; (1) a generalized difference in difference by use of hospitals' fixed effects, and (2) an instrumental variable that identify whether municipal jurisdiction in which public hospitals locate consolidate. The estimates indicate that the operation costs reduce by approximately 20 percent because of the merger. Two major components of this cost reduction are salaries to doctors and nurses; and material costs. For the former, the paper observes that an increase in the average salaries to doctors working at the merged public hospitals; this is because more experienced doctors remain to work at the merged hospitals. By Sahoko Furuta; Daiya Isogawa; Hiroshi Ohashi
  19. Evaluating the HCIA - Behavioral Health/Substance Abuse Awards: Third Annual Report By Henry Ireys; Tricia Higgins; Ellen Bouchery; Jonathan Brown; Crystal Blyler; Liz Babalola; Michael Barna; Dan Friend; Matt Kehn; Lareina La Flair; Jennifer Lyons; Rachel Miller; Brenda Natzke; Laura Ruttner; Allison Siegwarth; Michaela Vine; Aparajita Zutshi
  20. Evaluating the HCIA – Behavioral Health/Substance Abuse Awards: Second Annual Report By Henry Ireys; Jonathan Brown; Ellen Bouchery; Liz Babalola; Michael Barna; Crystal Blyler; Dan Friend; Christine Fulton; Matt Kehn; Tricia Higgins; Jasmine Little; Jennifer Lyons; Jessica Nysenbaum; Laura Ruttner; Allison Siegwarth; Kate Stewart; Michaela Vine
  21. Evaluating the HCIA - Behavioral Health/Substance Abuse Awards: Addendum to the Third Annual Report By Henry Ireys; Ellen Bouchery; Crystal Blyler; Tricia Higgins; Michael Barna; Dan Friend; Matt Kehn; Jennifer Lyons; Rachel Miller; Brenda Natzke; Laura Ruttner; Allison Siegwarth; Michaela Vine; Aparajita Zutshi

  1. By: Elaine L. Hill; David Slusky; Donna Ginther
    Abstract: The United States has recently seen a large increase in hospital mergers and acquisitions, and Catholic hospital systems have actively participated in this. As of 2016, 40% of the largest healthcare systems were faith-based, with 141 mergers between Catholic and non-Catholic systems since 1997. Mergers that affiliate a hospital with a Catholic owner, network, or system, are consequential because they reduce the set of possible medical procedures since Catholic hospitals are generally prohibited from providing procedures like tubal ligation. We examine the effect of changes in ownership from secular to Catholic (and vice versa) on reproductive health procedures that are likely to be affected. Using hospital-level variation in ownership status for 1002 hospitals, we estimate a difference-in-differences model with year and hospital fixed effects. We find that Catholic hospitals reduce the per bed annual rates of inpatient abortions by 30% and tubal ligations by 31%, whereas there is no significant change in related procedures such as D&Cs or C-sections. Our results are primarily driven by hospitals that change from not Catholic to Catholic. Across a variety of measures, we find minimal overall welfare reductions. However, this decrease in tubal ligations rate alone represents nearly 10,000 fewer tubal ligations per year across the United States, which in itself imposes a substantial cost on women and their partners.
    JEL: J13 L31 Z12
    Date: 2017–09
  2. By: Anek Belbase; Geoffrey T. Sanzenbacher; Sara Ellen King
    Abstract: Many older individuals with cognitive impairment, including the vast majority of people with dementia, need help managing their finances. For retirees receiving Social Security benefits, the Representative Payee Program can serve as one source of this help. In the Representative Payee Program, a retiree’s benefit is sent to another person (often a relative) who spends it on the retiree’s behalf and submits records to Social Security documenting that the expenditures were in the beneficiary’s best interest. But the program seems to be seldom used by those with dementia: of those 65 and older, over 10 percent have dementia, but just 1.5 percent have a payee. This lack of participation may not be a problem as long as the retiree has some other source of help. This brief – based on a recent paper – uses data from the Health and Retirement Study (HRS) linked to administrative Social Security records to first document what share of retirees with mild cognitive impairment or dementia use the Representative Payee Program. Given that few use the program, the brief then turns to the question of what they do instead. The options considered include help from an informal caregiver (e.g., a non-impaired spouse or child), from the staff of a nursing home, or from a Power of Attorney they may have assigned. Once these sources of help are identified, the brief then focuses on the types of people who seem to lack any observed form of aid in order to help policymakers and community-based organizations better identify the most vulnerable individuals. The discussion proceeds as follows. The first section estimates the share of retirees with mild cognitive impairment and dementia. The second section documents what sources of help people have and what share of retirees with impairment are lacking it. The third section identifies groups who are especially likely to have no observed source of help available. The final section concludes that while few retirees with dementia use the Representative Payee Program, the vast majority have some potential source of assistance. Groups vulnerable to having no help available include those with less education, minorities, and individuals living in densely populated areas.
    Date: 2017–08
  3. By: Paola Bertoli; Veronica Grembi
    Abstract: In health care, overuse and underuse of medical treatments represent equally dangerous deviations from an optimal use equilibrium and arouses concerns about possible implications for patients' health, and for the healthcare system in terms of both costs and access to medical care. Medical liability plays a dominant role among the elements that can affect these deviations. Therefore, a remarkable eco- nomic literature studies how medical decisions are in uenced by different levels of liability. In particular, identifying the relation between liability and treatments selection, as well as disentangling the effect of liability from other incentives that might be in place, is a task for sound empirical research. Several studies have already tried to tackle this issue, but much more needs to be done. In the present chapter, we offer an overview of the state of the art in the study of the relation between liability and treatments selection. First, we reason on the theoretical mechanisms underpinning the relationship under investigation by presenting the main empirical predictions of the related literature. Second, we provide a com- prehensive summary of the existing empirical evidence and its main weaknesses. Finally, we conclude by offering guidelines for further research.
    Keywords: medical malpractice; medial liability; treatment selection; defensive medicine; empirical analysis; general review
    Date: 2017–08
  4. By: Paola Bertoli; Veronica Grembi
    Abstract: We provide a political economy interpretation of the variations in the prices of 6 obstetric diagnosis-related groups (DRGs) using Italy as a case study. Italy provides a unique institutional setting since its 21 regional governments can decide to adopt the national DRG system or to adjust/waive it. Using a panel fixed effects model, we exploit the results of 66 electoral ballots between 2000 and 2013 to estimate how obstetric DRGs are affected by the composition and characteristics of regional governments. We find that the incidence of physicians among regional politicians explains variations in DRGs with low technological intensity, such as normal newborns, but not of those with high technological intensity, as severely premature newborns. We further investigate these results by exploiting the implementation of a budget constraint policy. Applying a difference-in-difference strategy, we observe a decrease in the average levels of DRGs after the implementation of the policy, but the magnitude of this decrease depends on the presence of physicians among politicians and the political alignment between the regional and the national government. Finally, we rely on patient data (6,500,000 infant deliveries) to assess whether any of the political economy variables have a positive impact on the quality of regional obstetric systems. We find no effect.
    Keywords: diagnosis-related groups; regional governments; difference in differences;
    JEL: H51 H70 I1
    Date: 2017–06
  5. By: Cheng Keat Tang
    Abstract: I evaluate whether speed enforcement cameras reduce the number and severity of traffic accidents by penalizing drivers for exceeding speed limits. Relying on micro data on accidents and speed cameras across Great Britain, I find that installing these devices significantly enhance road safety. Putting another 1,000 cameras reduce around 1130 collisions, 330 serious injuries, and save 190 lives annually, generating net benefits of around £21 million. However, these effects are highly localised around the camera and dissipate over distance, and there is suggestive evidence of more collisions away from the camera, illustrating the possible limitations associated with fixed speed cameras.
    Keywords: accidents, injuries, fatalities, speed camera, speeding
    JEL: H23 I18 R41
    Date: 2017–09
  6. By: Obrizan, Maksym
    Abstract: Previous literature has shown substantially lower levels of self-reported health in transition countries compared to developed and developing countries. The current paper provides the most recent estimates of the size of the transition gap in self-rated health by using up to 241,698 observations from the World Values Survey (WVS) and the European Values Study (EVS) collected between 1989 and 2014. During the earlier transition period of 1989–2007 transition countries were 0.088 to 0.127 lower on a 0 to 1 scale (from ‘Very poor’ to ‘Very good’ self-rated health). The transition gap remains in place in the second period after the Asian crisis (0.069 to 0.094 lower self-rated health) and even after the Global financial crisis of 2008 (0.062 to 0.105 lower self-rated health). Judging from these estimates the process of transition is far from completion at least based on a subjective evaluation of health, which is one of the key determinants of human development. It is also plausible that poor self-perceived health may ‘justify’ abnormally high health-care utilization and an excessive (and expensive) network of physicians and hospital beds per capita still characterizing transition countries.
    Keywords: Self-rated health, transition countries, World Values Survey, European Values Study
    JEL: I15 N34 P46
    Date: 2017–09–05
  7. By: Heger, Dörte; Korfhage, Thorben
    Abstract: Informal caregivers provide valuable services to elderly persons with long-term care needs. However, the time commitment of caregiving often competes against time spent in the labour force. In addition to the momentary trade-off, long-term consequences are possible since especially older workers might find it difficult to re-enter the labour market after a caregiving spell. While several studies document a negative relationship between caregiving and work, little is known about whether this effect is persistent over time. Analysing a large panel data set of 15 European countries and Israel, we show that care provision to an elderly parent has lasting negative effects on employment for both men and women but only women reduce their working hours.
    Keywords: informal care,labour market outcomes,short and medium term effects
    JEL: J14 J22
    Date: 2017
  8. By: George Fragkiadakis (Technical University of Crete [Chania]); Michael Doumpos (Technical University of Crete [Chania]); Constantin Zopounidis (Audencia Business School - Audencia Business School, Technical University of Crete [Chania]); Christophe Germain (Audencia Business School - Audencia Business School)
    Abstract: The continuous growth of hospital costs has driven governments in many countries to seek ways to improve their efficiency. In Greece, this has consistently been a major issue for almost two decades, as efficiency assessment and monitoring systems are lacking. In response to this need, the evaluation of the National Health System hospitals’ efficiency level is a precondition for planning, implementing and monitoring any promising reform. In this paper, a non-parametric modeling approach is employed to assess and analyze the efficiency of 87 Greek public hospitals over the period 2005–2009, using data envelopment analysis. The operational and economic aspects of the hospitals’ operation are considered on the basis of their service/case mix and cost structure. We also investigate the efficiency trends over time with the Malmquist index and a second stage regression analysis is performed to explain the operational and economic efficiency results in terms of the hospitals’ operating characteristics and the environment in which they operate.
    Keywords: Hospital efficiency, Technical efficiency, Data envelopment analysis
    Date: 2016–12
  9. By: Adel Ben Youssef (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Laurence Lannes (The World Bank - The World Bank); Christophe Rault (LEO - Laboratoire d'économie d'Orleans - CNRS - Centre National de la Recherche Scientifique - UO - Université d'Orléans); Agnès Soucat (WHO - World Health Organisation - WHO(OMS))
    Abstract: We examine causal links between energy consumption and health indicators (Mortality rate under-5, life expectancy, greenhouse effect, and government expenditure per capita) for a sample of 16 African countries over the period 1971-2010 (according to availability of countries' data). We use the panel-data approach of Kónya (2006), which is based on SUR systems and Wald tests with country specific bootstrap critical values. Our results show that health and energy consumption are strongly linked in Africa. Unilateral causality is found from energy consumption to life expectancy and child under-5 mortality for Senegal, Morocco, Benin, DRC, Algeria, Egypt, and South Africa. At the same time, we found a bilateral causality between energy consumption and health indicators in Nigeria. In particular, our findings suggest that electricity consumption Granger causes health outcomes for several African countries.
    Keywords: Energy consumption,Electricity,Health outcomes,Africa
    Date: 2016–09–15
  10. By: Youngsub Chun (Seoul National University); Eun jeong Heo (Vanderbilt University); Sunghoon Heo (Korea Institute of Public Finance)
    Abstract: We investigate the implications of introducing immunosuppressants to the kidney exchange problem. Immunosuppressants relax biological constraints between patients and donors, allowing patients to receive transplants from any donor. Given the limited availability, we propose how to assign immunosuppressants and how to match patients to donors to facilitate transplants. We ask whether there exist Pareto efficient solutions that satisfy additional requirements of monotonicity and maximal improvement. We propose modifications of the top-trading cycles solutions to achieve these requirements. To quantify the welfare improvement as per our proposal, we conduct counterfactual analyses using transplant data from South Korea. Our result suggests that the current use of immunosuppressants could have been reduced by 55 percent.
    Keywords: immunosuppressants, kidney exchange, top-trading cycles rules, Pareto efficiency, monotonicity, maximal improvement
    JEL: D0
    Date: 2017–09–06
  11. By: Kristin Carlson; Alireza Ermagun; Brendan Murphy; Andrew Owen; David Levinson (School of Civil Engineering, University of Sydney)
    Abstract: This study assesses the estimated crashes per bicyclist and per vehicle as a function of bicyclist and vehicle traffic, and tests whether greater traffic reduces the per-car crash rate. We present a framework for comprehensive bicyclist risk assessment modeling, using estimated bicyclist flow per intersection, observed vehicle flow, and crash records. Using a two-part model of crashes, we reveal that both the annual average daily traffic and daily bicyclist traffic have a diminishing return to scale in crashes. This accentuates the positive role of safety in numbers. Increasing the number of vehicles and cyclists decelerates not only the probability of crashes, but the number of crashes as well. Measuring the elasticity of the variables, it is found that a 1% increase in the annual average daily motor vehicle traffic increases the probability of crashes by 0.14% and the number of crashes by 0.80%. However, a 1% increase in the average daily bicyclist traffic increases the probability of crashes by 0.09% and the number of crashes by 0.50%. The saturation point of the safety in numbers for bicyclists is notably less than for motor vehicles. Extracting the vertex point of the parabola functions examines that the number of crashes starts decreasing when daily vehicle and bicyclist traffic per intersection exceed 29,568 and 1,532, respectively.
    Keywords: Safety; Bicyclist crashes; Returns to scale; Road intersection
    JEL: R41 R48
    Date: 2017
  12. By: Vladimir M. Shkolnikov (Max Planck Institute for Demographic Research, Rostock, Germany); Evgueni M. Andreev (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: -
    JEL: J1 Z0
    Date: 2017–09
  13. By: Zack Cooper (School of Public Health, Yale University); Amanda E. Kowalski (Cowles Foundation, Yale University); Eleanor Neff Powell (University of Wisconsin-Madison); Jennifer Wu (Department of Political Science, Yale University)
    Abstract: This paper examines the link between legislative politics, hospital behavior, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for reelection. We study a provision - Section 508 – that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of Representatives who voted ‘Yea’ on the MMA were significantly more likely to receive a 508 waiver than hospitals represented by members who voted ‘Nay.’ Following the payment increase generated by the 508 program, recipient hospitals treated more patients, increased payroll, hired nurses, added new technology, raised CEO pay, and ultimately increased their spending by over $100 million annually. Section 508 recipient hospitals formed the Section 508 Hospital Coalition, which spent millions of dollars lobbying Congress to extend the program. After the vote on the MMA and before the vote to reauthorize the 508 program, members of Congress with a 508 hospital in their district received a 22% increase in total campaign contributions and a 65% increase in contributions from individuals working in the health care industry in the members’ home states. Our work demonstrates a pathway through which the link between politics and Medicare policy can dramatically affect US health spending.
    JEL: I10 I18 H51 D72 P16
    Date: 2017–08
  14. By: Alexander Silbersdorff; Julia Lynch; Stephan Klasen; Thomas Kneib
    Abstract: In this paper we reconsider the relationship between income on health, taking a distributional perspective rather than one centered on conditional expectation. Using Structured Additive Distributional Regression, we find that the association between income on health is larger than generally estimated because aspects of the conditional health distribution that go beyond the expectation imply worse outcomes for those with lower incomes. Looking at German data from the Socio Economic Panel, we find that the risk of very bad health is roughly halved when doubling the net equivalent income from 15,000 Euro to 30,000 Euro, which is more than tenfold of the magnitude of change found when considering expected health measures. This paper therefore argues that when studying health outcomes, a distributional perspective that considers stochastic variation among observationally equivalent individuals is warranted.
    JEL: I14 C13 C21
    Date: 2017
  15. By: Malakhov, Sergey
    Abstract: The theory of the optimal-consumption leisure choice under price dispersion describes the phenomenon of moral hazard as the customer’s reaction on unfair insurance policy. The unfair insurance offer does not equalize marginal costs of propensity to seek healthcare with marginal benefits on purchase. Under unfair insurance policy consumers increase ex post healthcare seeking activities and they optimize their consumption of medical services. The analysis of moral hazard results in the assumption that for an unfair offer there is an increase in the time horizon of the insurance policy that makes it fair and moral hazard becomes inefficient. The time horizon competition between insurance companies can eliminate moral hazard effect that clears the way to the competitive equilibrium.
    Keywords: moral hazard, health insurance, healthcare seeking behavior, optimal consumption-leisure choice
    JEL: D11 D83 I13
    Date: 2017–09–07
  16. By: Martín Caruso; Sebastian Galiani; Pablo Ibarrarán
    Abstract: This paper discusses theoretical and practical issues related to long-term care (LTC) services in Latin America. Demand for these services will rise as the region undergoes a swift demographic transition from its currently young population to a rapidly aging one, especially since the region’s aging cohorts are more prone to experience a decline in their functional and physical abilities than elderly people elsewhere in the world. We argue that private insurance markets are ill-equipped to provide coverage to meet the need for LTC, while the amount of personal savings required to afford self-insurance would be prohibitively high. We study how developed economies have dealt with the issue of LTC and pay special attention to the most salient features of their LTC programs. We then direct the discussion to Latin America, where LTC may not be an immediate priority, but governments are likely to encourage the development of LTC programs as demand for them steadily grows. In particular, policymakers are probably going to focus initially on LTC programs for the poor and vulnerable, for whom affordability of LTC is a greater problem. We therefore study how basic elements of policy design affect cost-effectiveness of LTC programs by means of a formal model. Our study shows that pro-poor programs are more cost effective when people have the option to receive cash subsidies, and the availability of in-kind and in-cash choices reduces program costs overall.
    JEL: J14
    Date: 2017–09
  17. By: Swetha Sridharan; Anu Rangarajan; Mercy Manoranjini; Sukhmani Sethi
    Abstract: The Ananya program in Bihar, India, has implemented both supply- and demand-side strategies to improve coverage and uptake of maternal and child health, reproductive health, and nutrition services. This report summarizes the results of a process study of the program, which gathered information on the main successes and challenges associated with implementation and elicited lessons related to the sustainability of key interventions.
    Keywords: maternal and child health, reproductive health, nutrition, family health, community health workers, process study, implementation study, implementation analysis, qualitative research, India, Bihar, Gates Foundation
    JEL: F Z
  18. By: Sahoko Furuta (The Bank of Japan); Daiya Isogawa (Graduate School of Public Policy, The University of Tokyo); Hiroshi Ohashi (Faculty of Economics, University of Tokyo)
    Date: 2017–08
  19. By: Henry Ireys; Tricia Higgins; Ellen Bouchery; Jonathan Brown; Crystal Blyler; Liz Babalola; Michael Barna; Dan Friend; Matt Kehn; Lareina La Flair; Jennifer Lyons; Rachel Miller; Brenda Natzke; Laura Ruttner; Allison Siegwarth; Michaela Vine; Aparajita Zutshi
    Abstract: In this third annual report, we focus on the third goal: “telling the story†of each awardee by describing its program objectives, implementation experiences, and participants’ outcomes, using CMMI’s four core measures to the extent possible.
    Keywords: HCIA, Health Care Innovation Awards, Behavioral Health, Substance Abuse
    JEL: I
  20. By: Henry Ireys; Jonathan Brown; Ellen Bouchery; Liz Babalola; Michael Barna; Crystal Blyler; Dan Friend; Christine Fulton; Matt Kehn; Tricia Higgins; Jasmine Little; Jennifer Lyons; Jessica Nysenbaum; Laura Ruttner; Allison Siegwarth; Kate Stewart; Michaela Vine
    Abstract: In this report, we focus on questions selected in collaboration with our contracting officer representative as the most feasible and important to examine at this stage of the evaluation.
    Keywords: HCIA, Behavioral Health, Substance Abuse
    JEL: I
  21. By: Henry Ireys; Ellen Bouchery; Crystal Blyler; Tricia Higgins; Michael Barna; Dan Friend; Matt Kehn; Jennifer Lyons; Rachel Miller; Brenda Natzke; Laura Ruttner; Allison Siegwarth; Michaela Vine; Aparajita Zutshi
    Abstract: This addendum extends the analyses reported in the third annual report.
    Keywords: HCIA, Health Care Innovation Awards, Behavioral Health, Substance Abuse
    JEL: I

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