nep-hea New Economics Papers
on Health Economics
Issue of 2017‒10‒29
fifteen papers chosen by
Yong Yin
SUNY at Buffalo

  1. The Future of Human Health, Longevity, and Health Costs By Böhm, Sebastian; Grossmann, Volker; Strulik, Holger
  2. Effects of Episode-Based Payment on Health Care Spending and Utilization: Evidence from Perinatal Care in Arkansas By Caitlin Carroll; Michael Chernew; A. Mark Fendrick; Joe Thompson; Sherri Rose
  3. The Effects of Perceived Disease Risk and Access Costs on Infant Immunization By Jessamyn Schaller; Lisa Schulkind; Teny Maghakian Shapiro
  4. Trade in unhealthy foods and obesity: Evidence from Mexico By Osea Giuntella
  5. Prevalence of Diseases and Health Care Utilization ofthe Self-Employed Artists and TheirEmpirical Determinants: Evidence From a Slovenian Survey By Andrej Sarkar
  6. Electronic Health Records Prospects in Egypt: A Demand-Side Perspective By Badran; Mona Farid
  7. How Do Peers Influence BMI? Evidence from Randomly Assigned Classrooms in South Korea By Jaegeum Lim; Jonathan Meer
  8. The Lifetime Costs of Bad Health By De Nardi, Mariacristina; Pashchenko, Svetlana; Porapapakkarm, Ponpoje
  9. Competition and physician behaviour: Does the competitive environment affect the propensity to issue sickness certificates? By Kurt R. Brekke; Tor Helge Holmäs; Karin Monstad; Odd Rune Straume
  10. Consumption and Investment Demand when Health Evolves Stochastically By Bolin, Kristian; Caputo, Michael R.
  11. The Aggregate and Relative Economic Effects of Medicaid and Medicare Expansions By Dupor, William D.; Rodrigo , Guerrero
  12. Non-Contributory Health Insurance and Household Labor Supply: Evidence from Mexico By Gabriella Conti; Rita Ginja, Renata Narita
  13. Malaria Risk and Civil Violence By Matteo Cervellati; Elena Esposito; Uwe Sunde; Simona Valmori
  14. Reforming Medicaid Long Term Care Insurance By Minchung Hsu; Gary Hansen; Elena Capatina
  15. Neonatal Health of Parents and Cognitive Development of Children By Kreiner, Claus T.; Sievertsen, Hans Henrik

  1. By: Böhm, Sebastian; Grossmann, Volker; Strulik, Holger
    Abstract: We investigate the future of human longevity, morbidity and health costs in a novel, multi-period OLG model with endogenous medical R&D and endogenous survival. Our calibrated model implies substantial future increases in longevity that are associated with both reductions in morbidity and a rising health expenditure share in GDP. Extending health care rationing has potentially sizable effects on morbidity and longevity, with dramatic welfare losses particularly for future generations.
    JEL: H50
    Date: 2017
  2. By: Caitlin Carroll; Michael Chernew; A. Mark Fendrick; Joe Thompson; Sherri Rose
    Abstract: We study how physicians respond to financial incentives imposed by episode-based bundled payment (EBP), which encourages lower spending and improved quality for an entire episode of care. Specifically, we study the impact of the Arkansas Health Care Payment Improvement Initiative, a multi-payer program that requires providers in the state to enter into EBP arrangements for perinatal care. Because of its multi-payer nature and the requirement that providers participate, the program covers the vast majority of births in the state. Unlike fee-for-service reimbursement, EBP holds physicians responsible for all care within a discrete clinical episode, rewarding physicians not only for efficient use of their own services but also for efficient management of other health care inputs. In a difference-in-differences analysis of commercial claims, we find that perinatal spending decreased by 3.8% overall in Arkansas after the introduction of EBP, compared to surrounding states. We find that the decrease was driven by reduced spending on non-physician health care inputs, specifically the prices paid for inpatient facility care, and that our results are robust to a number of sensitivity and placebo tests. We additionally find that EBP was associated with a limited improvement in quality of care.
    JEL: I1 I11
    Date: 2017–10
  3. By: Jessamyn Schaller; Lisa Schulkind; Teny Maghakian Shapiro
    Abstract: This paper examines the determinants of parental decisions about infant immunization. Using the exact timing of vaccination relative to birth, we estimate the effects of local pertussis outbreaks occurring in-utero and during the first two months of life on the likelihood of on-time initial immunization for pertussis and other immunizations. We find that parents respond to changes in perceived disease risk: pertussis outbreaks within a state increase the rate of on-time receipt of the pertussis vaccine at two months of age. This response is concentrated among low-socioeconomic status (SES) subgroups. In addition, we find that pertussis outbreaks increase the likelihood of immunization against other vaccine-preventable diseases. These spillover effects are almost as large the direct effects and are present only for vaccines that are typically given during the same visit as the pertussis vaccine, which suggests that healthcare access costs play an important role in parents' vaccination decisions.
    JEL: I0 I12 J13
    Date: 2017–10
  4. By: Osea Giuntella
    Abstract: This paper investigates the effects of trade in food on obesity in Mexico. We classifyMexican food imports from the U.S. into healthy and unhealthy and match thesewith anthropometric and food expenditure survey data. We exploit variation acrossMexican states in their exposure to food imports from the U.S.. We fi nd that imports ofunhealthy foods signi cantly contribute to the rise of obesity in Mexico. The empiricalevidence also suggests that unhealthy food imports may widen health disparitiesbetween education groups. By linking imports to food expenditure and obesity, thepaper sheds light on an important channel through which globalization may affecthealth.
    Date: 2017–01
  5. By: Andrej Sarkar (Institute for Economic Research (IER) and Faculty of Economics, University of Ljubljana, Ljubljana, Slovenia)
    Abstract: Empirical studies on precarious work are still at their beginnings, even more so when the health of precarious workers is under concern. Commonly, precarious workers are assumed to have the inferior health to the employees and even to the population in general, although some recent studiesfound counter evidence to this claim. In particular, studies on the labor market of artists have so far almost completely neglected the question of the health of the artists,and this study tries to fill in this large and important void. In the study, we employ a survey of Slovenian self-employed artists, undertaken in 2015, to study the determinants of the prevalence of diseases and health utilization of self-employed artists in Slovenia using econometric modelling and network analysis. We study and find the determinants, influencing the prevalence of each type of the most common disease among the self-employed artists, determine the most common groupings/multiple diseases among this population, and, finally, study the determinants of health care utilization of self-employed artists and model the heterogeneity in the observed sample. Aninteresting result lies in determining two differentgroups according to their health care utilization and providingtheir interpretation which fits into the existing literature on artist labor markets.
    Keywords: self-employed artists, diseases, health care utilization, multiple diseases, determinants, heterogeneity
    JEL: Z11 Z18 C45 C38 J44 I14
    Date: 2017–09
  6. By: Badran; Mona Farid
    Abstract: The present study sheds light on the expected factors that would impact the Electronic Health Records (EHR) service in Egypt from the demand-side perspective, i.e. the health care consumer. This empirical study is motivated by the widespread use of EHR as a method of promoting health services globally, where it is considered as an efficiency enhancing, cost effective technology. Moreover, the healthcare sector in Egypt is gaining momentum, especially that the comprehensive healthcare and social insurance law are expected to be discussed in the Egyptian Parliament in the near future. The underlying theoretical framework of this study implicates the Unified Theory of Acceptance and Use of Technology in Consumer Context (UTAUT2). It also applies an integrated framework from multifaceted perceptions to explain the expected adoption decision or behavior of the Egyptian consumer of EHR. The study relies on primary data, a survey of 559 respondents. Responses were collected by a telephone-based nationwide survey of respondents who completed college education or above. Their opinions were collected towards the EHR and the best way to apply this system in Egypt. The sample covered urban governorates, Lower Egypt and Upper Egypt, and it was collected in December 2015. Logistic regression results reveal that statistically significant constructs include the following: whether or not EHR is useful, willingness to pay for it, the gender perspective, the person in charge for uploading results, expected difficulties in using EHR, and the interaction term between gender and internet usage. Finally, more insight and recommendations are provided to policy makers.
    Keywords: Healthcare sector,e-health,UTAUT2,Egypt,Logistic regression
    JEL: I10 I15 I18 L96
    Date: 2017
  7. By: Jaegeum Lim; Jonathan Meer
    Abstract: Obesity among children is an important public health concern, and social networks may play a role in students' habits that increase the likelihood of being overweight. We examine data from South Korean middle schools, where students are randomly assigned to classrooms, and exploit the variation in peer body mass index. We use the number of peers' siblings as an instrument to account for endogeneity concerns and measurement error. Heavier peers increase the likelihood that a student is heavier; there is no spurious correlation for height, which is unlikely to have peer contagion. Public policy that targets obesity can have spillovers through social networks.
    JEL: I12 J13
    Date: 2017–10
  8. By: De Nardi, Mariacristina; Pashchenko, Svetlana; Porapapakkarm, Ponpoje
    Abstract: Health shocks are an important source of risk. People in bad health work less, earn less, face higher medical expenses, die earlier, and accumulate much less wealth compared to those in good health. Importantly, the dynamics of health are much richer than those implied by a low-order Markov process. We first show that these dynamics can be parsimoniously captured by a combination of some lag-dependence and ex-ante heterogeneity, or health types. We then study the effects of health shocks in a structural life-cycle model with incomplete markets. Our estimated model reproduces the observed inequality in economic outcomes by health status, including the income-health and wealth-health gradients. Our model has several implications concerning the pecuniary and non-pecuniary effects of health shocks over the life-cycle. The (monetary) lifetime costs of bad health are very concentrated and highly unequally distributed across health types, with the largest component of these costs being the loss in labor earnings. The non-pecuniary effects of health are very important along two dimensions. First, individuals value good health mostly because it extends life expectancy. Second, health uncertainty substantially increases lifetime inequality by affecting the variation in lifespans.
    Keywords: health; Health Insurance; life-cycle models; medical spending; wealth-health gradient
    JEL: D52 D91 E21 H53 I13 I18
    Date: 2017–10
  9. By: Kurt R. Brekke (Department of Economics, Norwegian School of Economics); Tor Helge Holmäs (Uni Research Rokkan Centre); Karin Monstad (Uni Rokkan Centre); Odd Rune Straume (NIPE/University of Minho)
    Abstract: Competition among physicians is widespread, but compelling empirical evidence on the impact on service provision is limited, mainly due to lack of exogenous variation in the degree of competition. In this paper we exploit that many GPs, in addition to own practice, work in local emergency centres, where the matching of patients to GPs is random. This allows us to observe the same GP in two dfferent competitive environments; with competition (own practice) and without competition (emergency centre). Using rich administrative patientlevel data from Norway for 2006-14, which allow us to estimate high-dimensional fixed-effect models to control for time-invariant patient and GP heterogeneity, we and that GPs with a fee-for-service (fixed salary) contract are 11 (8) percentage points more likely to certify sick leave at own practice than at the emergency centre. Thus, competition has a positive impact on GP´s sick listing that is reinforced by financial incentives.
    Keywords: Physicians, Competition, Sickness certification
    JEL: I11 I18 L13
    Date: 2017
  10. By: Bolin, Kristian (Department of Economics, School of Business, Economics and Law, Göteborg University); Caputo, Michael R. (Department of Economics University of Central Florida)
    Abstract: The health capital model of Grossman (1972) is extended to account for uncertainty in the rate at which a stock of health depreciates. Two versions of the model are contemplated, one with a fully functioning financial market and the other in its absence. The comparative dynamics of the consumption and health-investment demand functions are studied in both models in a general setting, where it is shown that the key to deriving refutable results is to determine how a parameter or state variable affects the lifetime marginal utilities of health and wealth. To add further bite to the results, a stochastic control problem is solved for its feedback consumption and health-investment demand functions, thereby yielding estimable structural demand functions.
    Keywords: comparative dynamics; health capital; stochastic optimal control; structural equations
    JEL: C61 D11 I12
    Date: 2017–10
  11. By: Dupor, William D. (Federal Reserve Bank of St. Louis); Rodrigo , Guerrero (Federal Reserve Bank of St. Louis)
    Abstract: Government-financed health care (GFHC) expenditures, through Medicare and Medicaid, have grown from roughly zero to over 7.5 percent of national income over the past 50 years. Recently, some advocates (e.g., the Council of Economic Advisers (2014)) have argued that an expansion of GFHC (in particular Medicaid) has large positive employment effects. Using quarterly data between 1976 and 2016, this paper estimates the impact of GFHC spending on the unemployment rate by using an instrumental variables strategy that exploits exogenous variation in Medicare spending. We find that an exogenous GFHC expansion either increases or has no effect on the unemployment rate. Although the unemployment rate responses using aggregate data are estimated imprecisely, they are considerably sharper when estimated using state-level data. We also show the so-called relative (or local) multiplier approach based on the state-level panel provides similar estimates to those based on aggregate data. Finally, we show how the absence of a negative effect of GFHC expansions on the unemployment rate may be due to the implications these policies have for taxes across states.
    Keywords: Government spending; multipliers; government-financed health care
    JEL: E62
    Date: 2017–10–16
  12. By: Gabriella Conti; Rita Ginja, Renata Narita
    Abstract: A central topic in the global health agenda is universal health coverage (UHC). The primary goal of social health insurance schemes is to protect beneficiaries from the health and financial consequences of adverse health events. While in this sense there is scope for government intervention in providing insurance, the impacts of UHC on labor markets in developing countries are less clear. We study this issue using the case of Mexico, which introduced in 2002 a non-contributory health insurance scheme directed to the half of the country’s population uncovered by Social Security protection (the Seguro Popular, SP). Since before SP uninsured individuals could only access affordable health care through their employer, the introduction of a non-contributory public health insurance scheme could have resulted in large effects on the labor market. In practice, SP is a transfer(tax) to the informal(formal) sector workers and to the nonemployed. On the one hand, if the value placed on SP benefits is high, the introduction of fully subsidized health insurance can lead to negative impacts on employment and/or formality. On the other hand, wages in equilibrium might compensate the increase in benefits in the informal sector, in which case the impact on formality and employment is ambiguous. We start analyzing the effects of SP on labor market outcomes by exploiting its staggered introduction across municipalities using a difference-in-differences strategy on the Mexican Labor Force Survey data. We show that the implementation of SP in a municipality is associated with an increase in informality by 4% for low-education families with children. Then, to study why the policy change had limited impacts on the labor market, we develop and estimate a novel household search model which incorporates the value of SP as well as the pre-reform valuation assigned to the amenities in the formal sector relative to the alternatives (i.e., informal sector and non-employment), in order to understand whether access to free health services is valued by household members when they make their labor market decisions. Our structural model is able to replicate both the stocks of household types by Social Security coverage and the transitions in and out of employment and between formal and informal jobs in the pre-reform period. The results show that the steady-state marginal willingness to pay for the health insurance coverage provided by SP is very low, amounting to only 1.3%-4.2% of the mean wage in the informal sector. Lastly, using the model to simulate counterfactual scenarios of employment and labor formality under different valuations of the new health system implemented in Mexico, we find that the willingness to pay for SP would have had to be significantly greater than it was to have substantial impacts on the economy.
    Keywords: Health Insurance; Social Security; Informality
    JEL: I13 J33 J42 O17
    Date: 2017–10–23
  13. By: Matteo Cervellati; Elena Esposito; Uwe Sunde; Simona Valmori
    Abstract: Using high-resolution data from Africa over the period 1998-2012, this paper investigates the hypothesis that a higher exposure to malaria increases the incidence of civil violence. The analysis uses panel data at the 1o grid cell level at monthly frequency. The econometric identification exploits exogenous monthly within-grid-cell variation in weather conditions that are particularly suitable for malaria transmission. The analysis compares the effect across cells with different malaria exposure, which affects the resistance and immunity of the population to malaria outbreaks. The results document a robust effect of the occurrence of suitable conditions for malaria on civil violence. The effect is highest in areas with low levels of immunities to malaria. Malaria shocks mostly affect unorganized violence in terms of riots, protests, and confrontations between militias and civilians, rather than geo-strategic violence, and the effect spikes during short, labor-intensive harvesting periods of staple crops that are particularly important for the subsistence of the population. The paper ends with an evaluation of anti-malaria interventions.
    Keywords: malaria risk, civil violence, weather shocks, immunity, cell-level data, Africa
    JEL: D74 J10
    Date: 2017
  14. By: Minchung Hsu (National Graduate Institute for Policy Studies); Gary Hansen (UCLA); Elena Capatina (UNSW Business School)
    Abstract: We build a life-cycle model of household consumption and saving decisions, where long term care (LTC) expenditures are endogenous. We use an LTC-state dependent utility function where regular consumption and LTC are valued differently. The model includes both married and single households, thus capturing important family dynamics that are important for precautionary savings and LTC decisions. Married individuals face the risk of a spouse needing LTC and quickly depleting joint assets. However, those needing LTC can benefit from the presence of a healthy spouse who provides informal care, lowering the costs of LTC given a fixed quality of care. We use the calibrated model to estimate the importance of family dynamics for savings and consumption decisions, and also to quantify the impacts of LTC policy reforms such as the provision of a universal public system that pays for a minimum level of LTC costs.
    Date: 2017
  15. By: Kreiner, Claus T.; Sievertsen, Hans Henrik
    Abstract: This paper documents a strong relationship between birth endowments of parents and the cognitive development of their children. The association between maternal birth weight and child school test scores corresponds to 80 percent of the association between the child's own birth weight and test scores (both in univariate and multivariate settings). We find a strong relationship, even when controlling for family differences, by looking at birth weight variation between sisters and the test score outcomes of their children, and when controlling for parental education and economic resources. Child test scores are also strongly related to paternal birth weight. To assess external validity, we replicate recent results from the US on the relationship between child birth weight and test scores. Our intergenerational results suggest that inequality in birth endowments may be important for inequality in key outcomes of the next generation.
    Keywords: human capital formation; intergenerational dependency; Neonatal health
    JEL: I12 J13 J24
    Date: 2017–10

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