nep-hea New Economics Papers
on Health Economics
Issue of 2018‒01‒01
twenty-two papers chosen by
Yong Yin
SUNY at Buffalo

  1. Unequal Access and Socioeconomic Gradients in Perceived Oral Health: Evidence from an Emerging Country By Andrea Repetto; Francisco Gallego; Cristian Larroulet; Leonor Palomer
  2. Malaria and Education: Evidence from Mali By Josselin Thuilliez; Hippolyte D'Albis; Hamidou Niangaly; Ogobara Doumbo
  3. Retirement and Unexpected Health Shocks By Apouey, Bénédicte H.; Guven, Cahit; Senik, Claudia
  4. More Doctors, Better Health? Evidence from a Physician Distribution Policy By Carrillo, B.; Feres, J.;
  5. Healthy Babies: Does Prenatal Care Really Matter? By Ji Yan
  6. Sanctioned to Death? The Impact of Economic Sanctions on Life Expectancy and its Gender Gap By Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian
  7. Tax Reform, Unhealthy Commodities and Endogenous Health By Jiunn Wang; Laura Marsiliani; Thomas Renstrom
  8. A New Year, a New You ?Heterogeneity and Self-control in Food Purchases By Laurens Cherchye; Bram De Rock; Rachel Griffith; Martin O'Connell; Kate Smith; Frederic Vermeulen
  10. Family Health Behaviors By Itzik Fadlon; Torben Heien Nielsen
  11. Do Financial Incentives Alter Physician Prescription Behavior? Evidence from Random Patient-GP Allocations By Alexander Ahammer; Ivan Zilic
  12. Does purchase centralization reduce public expenditure? Evidence from the Italian healthcare system By Massimiliano Ferraresi; Gianluca Gucciardi; Leonzio Rizzo
  13. Divided by choice? Private providers, patient choice and hospital sorting in the English National Health service By Walter Beckert; Elaine Kelly
  14. The impact of health on labour supply near retirement By Richard Blundell; Jack Britton; Monica Costa Dias; Eric French
  15. Healthier when retiring earlier? Evidence from France By Pierre-Jean Messe; François-Charles Wolff
  16. Against All Odds: The Contribution of the Healthcare Sector to Productivity. Evidence from Italy and UK from 2004 to 2011 By Vincenzo Atella; Federico Belotti; Chris Bojke; Adriana Castelli; Katja Grašic; Joanna Kopinska; Andrea Piano Mortari; Andrew Street
  17. Longevity-induced vertical innovation and the tradeoff between life and growth By Baldanzi, Annarita; Prettner, Klaus; Tscheuschner, Paul
  18. The Affordable Care Act, Public Insurance Expansion and Opioid Overdose Mortality By Mark McInerney
  19. Umbrella Branding in Pharmaceutical Markets By Suppliet, Moritz
  20. The Golden Rule of Longevity By Gylfi Zoega; Gylfi Zoega
  21. Can Community Development Improve Health? Emerging Opportunities for Collaboration between the Health and Community Development Sectors By Fazili, Sameera
  22. Can HIV alter the quantity-quality switch and delay the fertility transition in Sub-Saharan Africa? By Luca Gori; Enrico Lupi; Piero Manfredi; Mauro Sodini

  1. By: Andrea Repetto (Escuela de Gobierno, Universidad Adolfo Ibáñez); Francisco Gallego; Cristian Larroulet; Leonor Palomer
    Date: 2016–05
  2. By: Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Hippolyte D'Albis (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Hamidou Niangaly (MRTC - Malaria Research and Training Center - Faculté de Médecine de Bamako); Ogobara Doumbo (DEAP - Département d'épidémiologie des affections parasitaires - Université de Bamako - Malaria Research and Training Center (MRTC) - Facultés de Médecine, de Pharmacie et d'Odonto-Stomatologie - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This article examines the influence of malaria on human capital accumulation in the village of Diankabou in Mali. To account for malaria endogeneity and its interaction with unobservable risk factors, we exploit natural variations in malaria immunity across individuals of several sympatric ethnic groups—the Fulani and the non-Fulani—who differ in their susceptibility to malaria. The Fulani are known to be less susceptible to malaria infections, despite living with a similar malaria transmission intensity to those seen among other ethnic groups. We also use natural variation of malaria intensity in the area (during and after the malaria transmission season) and utilise this seasonal change as a treatment. We found that malaria has an impact on cognitive and educational outcomes in this village.
    Date: 2017
  3. By: Apouey, Bénédicte H.; Guven, Cahit; Senik, Claudia
    Abstract: Do people form correct expectations about the impact of retirement on their health? This paper looks at unexpected health shocks that hit people after they retire. Using data from the Household, Income and Labour Dynamics in Australia survey (waves 2001-2014), we construct measures of unexpected health shocks for each year, using information on respondents’ views about the expected and past evolution of their health status. By definition, unexpected health shocks are immune to the problem of reverse causality (running from health condition to retirement). Our findings indicate that retirement increases the likelihood of positive health shocks and decreases the probability of negative shocks for men, with no clear results for women. These shocks are mirrored by variations in life satisfaction of the same nature (e.g. increased life satisfaction in case of unexpected positive health shocks). Other indicators of mental and physical health taken from the SF-36 vary in the same way, i.e. improve unexpectedly after retirement for men. These findings suggest that, at least in the case of men, people’s desire to retire may not be based on perfectly correct expectations about the impact of this move, but is aligned with its actual consequence: retirement exerts a positive causal impact on health.
    Keywords: Australia, HILDA, Health, Retirement, Health Shocks, Life Satisfaction
    Date: 2017–12
  4. By: Carrillo, B.; Feres, J.;
    Abstract: In 2013, the Brazilian government implemented one of the largest physician distribution programs on record. Using a difference-in-difference framework, we document that the number of physicians increased by 17 percent in treated areas, with effects that are substantially larger in magnitude for family doctors. This expansion increased doctor visits by 4.3 percent and prenatal care by physicians by 10 percent. Yet despite these improvements in physician supply and utilization of doctors, we find little evidence that the program led to better infant health, measured by low birth weight, prematurity and infant mortality.
    Keywords: primary care physicians; doctor utilization; infant health; policy evaluation;
    JEL: I12 I18 I38
    Date: 2017–11
  5. By: Ji Yan
    Abstract: Recent economic literature on child development has underscored the importance of giving babies a healthy start. Despite the widespread use of prenatal care, whether this early investment improves infant health is not well understood. This study provides new causal evidence on this crucial issue using 1.4 million sibling births. The baseline within-family analysis yields robust evidence that either early care onset or an increase in visits has a salient payoff in terms of newborn health stock. Furthermore, this study exploits two quasi-experiments to respectively deal with potential bias in the within-mother estimates and investigate the effectiveness of prenatal care under a Medicaid managed care reform. Overall, the results suggest it is important to improve care access for childbearing women especially those with low socioeconomic status. Moreover, caution is needed in design and delivery of managed care plans not to undermine provision of adequate prenatal care. Key Words: prenatal care; infant health; early childhood environment; in utero health investments; Medicaid managed care; sibling data
    JEL: I12 I18
    Date: 2017
  6. By: Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian
    Abstract: In this paper, we empirically analyze the effect of UN and US economic sanctions on life expectancy and its gender gap in target countries. Our sample covers 98 less developed and newly industrialized countries over the period 1977–2012. We employ a matching approach to account for the endogeneity of sanctions. Our results indicate that an average episode of UN sanctions reduces life expectancy by about 1.2–1.4 years. The corresponding decrease of 0.4–0.5 years under an average episode of US sanctions is significantly smaller. These average effects conceal that the damage to life expectancy is accumulating over time; with every additional year under UN (US) sanctions the size of the adverse effect on life expectancy increases by 0.3 (0.2) years. Finally, we find evidence that women are affected more severely by the imposition of sanctions. The fact that sanctions are not “gender-blind” can be interpreted as evidence that sanctions disproportionately affect (the life expectancy of) the more vulnerable members of society.
    Keywords: Gender Gap,Human Development,Life Expectancy,Sanctions,United Nations,United States
    JEL: F51 F52 F53 I15
    Date: 2017
  7. By: Jiunn Wang (Durham Business School); Laura Marsiliani (Durham Business School); Thomas Renstrom (Durham Business School)
    Abstract: This paper explores how tax reforms with taxes on unhealthy commodities impact consumer behaviours and welfare when individual health is endogenised. We employ a dynamic general equilibrium model which includes both goods and health sectors. Although unhealthy commodities provide utility, they pose a detrimental effect on health. The analytical results show that the introduction of taxes on unhealthy commodities does not have direct effects on health in the steady state. However, based on our simulation results, with a revenue-neutral tax reform where labour income taxes are adjusted, the introduction of taxes on unhealthy commodities improves both health and welfare, but reduces leisure in the long run. On the other hand, a tax reform where capital income taxes are adjusted contributes to even higher welfare as both health and leisure improve. Our analysis may inform policy making decisions on taxation of unhealthy commodities when government can adjust pre-existing taxes
    Keywords: Unhealthy commodities taxation, endogenous health, tax reform
    JEL: D91 E20 H20 I18
    Date: 2017–12
  8. By: Laurens Cherchye; Bram De Rock; Rachel Griffith; Martin O'Connell; Kate Smith; Frederic Vermeulen
    Abstract: We document considerable within-person (over time) variation in diet quality that is not fully explained by responses to fluctuations in the economic environment. We propose a two-selves model that provides a structural interpretation to this variation, in which food choices are a compromise between a healthy and an unhealthy self, each with well-behaved preferences. We show that the data are consistent with this model using revealed preference methods. The extent of self-control problems is higher among younger and lower income consumers, though this is overstated if we do not control for responses to fluctuations in the economic environment. Our results are intuitively related to stated attitudes on self-control.
    Keywords: two-selves model; self-control; revealed preferences
    JEL: C14 D12 D90 I12
    Date: 2017–12
  9. By: Shirlee Lichtman-Sadot (BGU)
    Keywords: Public Transportation, Accidents, Risky Behavior, Drunk Driving
    JEL: R41 R42 R51 R58 I12 K42
    Date: 2017
  10. By: Itzik Fadlon (Department of Economics, University of California); Torben Heien Nielsen (Department of Economics, University of Copenhagen)
    Abstract: This paper studies how health behaviors and investments are shaped through intra- and inter-generational family spillovers. Specffically, leveraging administrative healthcare data, we identify the effects of health shocks to individuals on their family members' consumption of preventive care and utilization indicative of health-related behaviors. Our identification strategy relies on the timing of shocks by constructing counterfactuals to affected households using households that experience the same shock but a few years in the future. We find that spouses and adult children immediately increase their health investments and improve their health behaviors in response to family shocks, and that these effects are both significant and persistent for at least several years. Notably, we find that these spillover effects in consumption of healthcare are far-reaching and cascade to siblings, stepchildren, sons and daughters in-law, and even "close" coworkers. Using different strategies we show that while a variety of mechanisms seem to be at play, including learning new information about one's own health, there is consistent evidence in support of salience as a major operative explanation, even when the family shock was likely uninformative. Our results have implications for models of health behaviors, by underscoring the importance of one's family and social network in their determination, and are potentially informative for policies that aim to improve population health.
    Keywords: Health Behaviors, Health Shocks, Spillovers, Family, Coworkers
    JEL: D10 D83 I12
    Date: 2017–12
  11. By: Alexander Ahammer (Department of Economics, Johannes Kepler University Linz); Ivan Zilic (The Institute of Economics, Zagreb)
    Abstract: Do physicians respond to financial incentives? We address this question by an- alyzing the prescription behavior of physicians who are allowed to dispense drugs themselves through onsite pharmacies. Using administrative data comprising over 16 million drug prescriptions between 2008 and 2012 in Upper Austria, a naïve com- parison of raw figures reveals that self-dispensing GPs induce 33.2% higher drug expenses than others. Our identification strategy rests on multiple pillars. First, we use an extensive array of covariates along with multi-dimensional fixed effects which account for patient and GP-level heterogeneity as well as sorting of GPs into onsite pharmacies. Second, we use a novel approach that allows us to restrict our sam- ple to randomly allocated patient-GP matches which rules out endogenous sorting as well as principal-agent bargaining over prescriptions between patients and GPs. Contrary to our descriptive analysis, we find evidence that onsite pharmacies have a small negative effect on prescriptions. Although self-dispensing GPs seem to pre- scribe slightly more expensive medication, this effect is absorbed by a much smaller likelihood to prescribe in the first place, causing the overall effect to be negative.
    Keywords: physician dispensing, drug expenses, physician agency, moral hazard
    JEL: I11 I12
    Date: 2017–04
  12. By: Massimiliano Ferraresi (European Commission - JRC); Gianluca Gucciardi (University of Ferrara); Leonzio Rizzo (University of Ferrara and IEB)
    Abstract: The introduction of Central Purchasing Bodies within the regional health care systems in Italy during the first decade of 2000s constituted a call for cost reduction and public expenditure restraint in the public health sector. Indeed, regional CPBs operating for local hospitals were introduced to centralize purchases of goods and services, with the aim of reducing prices and facilitate cost reductions, mainly leveraging on economies of scale and larger bargaining power. In this work, we examine this hypothesis adopting a difference-in-difference model to test the causal relationship of the introduction of regional CPBs operating in the health-care systems. Our findings show that per capita total expenditure is reduced to a range of 3-4%, according to the specification of the model, where local hospitals are supplied through a regional CPB. Specifically, this reduction is mainly driven by a subset of supplies, that is health services (e.g., medical and other health-related professional consultancies), while the impact on goods and other non-health services expenditure is not significant. Moreover, the obtained expenditure reduction is achieved without a significant downsizing of local services to citizens.
    Keywords: Purchase centralization Difference-In-Difference Health-care Public expenditure Expenditure reduction
    JEL: H69 L88
    Date: 2017–12
  13. By: Walter Beckert (Institute for Fiscal Studies and Birkbeck, University of London); Elaine Kelly (Institute for Fiscal Studies and Institute for Fiscal Studies)
    Abstract: A common reform used to increase consumer choice and competition in public services has been to allow private providers to compete with public incumbents. However, there remains a concern that not all consumers are able to bene fit equally from wider choice. We consider the case of publicly funded elective surgery in England, where reforms in the 2000s enabled privately owned hospitals to enter the market. We show that, post-reform, poor and ethnic minority patients were much less likely to choose private hospitals; and that dominant drivers of sorting between public and private providers are health based criteria for treatment by private providers and the geographic distribution of hospitals. Counterfactual simulations suggest differences in health explain 18% of the difference in the use of private providers between rich and poor patients, while the geographic distribution of hospitals explains 61% once other sorting mechanisms - ethnicity, patient preferences, physician referral patterns - are accounted for. Although much of the observed sorting does not appear to be the result of market frictions, limited variation in payments made to hospitals according to patient health means that sorting is estimated to cost public hospitals in excess of $426,426 ($625,000) per year.
    Keywords: Patient choice, demand for healthcare, healthcare reform, inequality
    JEL: D03 D80 G02 C91 D81
    Date: 2017–08–25
  14. By: Richard Blundell (Institute for Fiscal Studies and IFS and UCL); Jack Britton (Institute for Fiscal Studies); Monica Costa Dias (Institute for Fiscal Studies and Institute for Fiscal Studies); Eric French (Institute for Fiscal Studies and IFS and UCL)
    Abstract: Estimates of the effect of health on employment differ signi cantly from study to study due to differences in method, data, institutional background and health measure. We assess the importance of these differences using a unifi ed framework to interpret and contrast estimates of the impact of health on employment based on various measures of health and estimation procedures. This is done for the US and England. We fi nd that subjective and objective health measures, as well as subjective measures instrumented by objective measures produce similar estimates if a sufficiently large number of objective measures is used. Reducing the number of objective measures used compromises their ability to capture work capacity and biases estimates downwards. Failure to account for initial conditions leads to an overstatement of the effect of health on employment. We also find that a carefully constructed single index of subjective health yields estimates that are very similar to those obtained with multiple measures. Overall, declines in health can explain between 3% and 15% of the decline in employment between ages 50 and 70. These effects are larger among high-school dropouts and tend to drop with education; they are also larger in the US than in England. Finally, cognition has little added explanatory power once we also control for health, suggesting that cognition is not a key driver of employment at these ages.
    Keywords: Health, cognition, labor supply, retirement
    JEL: I10 J26 E24
    Date: 2017–08–25
  15. By: Pierre-Jean Messe; François-Charles Wolff
    Date: 2017
  16. By: Vincenzo Atella (DEF & CEIS, University of Rome "Tor Vergata"); Federico Belotti (DEF & CEIS, University of Rome "Tor Vergata"); Chris Bojke (Centre for Health Economics, University of York); Adriana Castelli (Centre for Health Economics, University of York); Katja Grašic (Centre for Health Economics, University of York); Joanna Kopinska (CEIS, University of Rome "Tor Vergata"); Andrea Piano Mortari (CEIS, University of Rome "Tor Vergata"); Andrew Street (University of York & London School of Economics)
    Abstract: We assess the productivity growth of the English and Italian healthcare systems over the period from 2004 to 2011. The English (NHS) and the Italian (SSN) healthcare systems share many similar features, facilitating comparison: basic founding principles, financing, organization, management, and size. We measure productivity growth as the rate of change in outputs over the rate of change in inputs. We find that the overall NHS productivity growth index increased by 10% over the whole period, at an average of 1.39% per year, while SSN productivity increased overall by 5%, at an average of 0.73% per year. Differential growth reflects different policy objectives. In England, the NHS focused on increasing activity, reducing waiting times and improving quality. Italy focused more on cost containment and rationalized provision, in the hope that this would reduce unjustified and inappropriate provision of services.
    Keywords: Health system productivity,output growth,input growth
    JEL: C43 D24 I11 I18
    Date: 2017–12–12
  17. By: Baldanzi, Annarita; Prettner, Klaus; Tscheuschner, Paul
    Abstract: We analyze the economic growth effects of rising longevity in a framework of endogenous growth driven by quality-improving innovations. We show that a rise in longevity raises savings and thereby reduces the market interest rate. Since the monopoly profits generated by a successful innovation are discounted by the endogenous market interest rate, this raises the net present value of innovations, which, in turn, fosters R&D. The associated increase in the employment of scientists leads to faster technological progress and a higher long-run economic growth rate. From a welfare perspective, we show that the direct effect of an increase in life expectancy on lifetime utility is much larger than the indirect effect of the induced higher consumption due to faster economic growth. Consequently, the debate on rising health care expenditures should not predominantly be based on the growth effects of health care.
    Keywords: long-run growth,vertical innovation,increasing life expectancy,welfare effects of changing longevity,size of health-care sectors
    JEL: J11 J17 O31 O41
    Date: 2017
  18. By: Mark McInerney (University of Connecticut)
    Abstract: This study examines the impact of expanded public insurance, resulting from the Patient Protection and Affordable Care Act of 2010, on opioid related mortality. I utilize variation in states’ decisions to expand Medicaid and variation in the timing of expansion among expanding states to measure this impact. Opioid related mortality data are examined from 1999-2015 using the National Vital Statistics multiple cause of death files. My findings suggest that public insurance expansion led to reductions in opioid related overdose deaths for heroin and other narcotics by about 26% and increases in methadone related deaths by about 18%. My study builds on recent work that shows increases in prescriptions to treat opioid use disorder in expanding states relative to non-expanding states.
    Keywords: Opioids, Substance Use Disorder, Medicaid, Medicaid Expansion, Public Insurance
    JEL: I13 I12 I14 H75
    Date: 2017–12
  19. By: Suppliet, Moritz
    Abstract: Umbrella branding is a marketing practice whereby multi-product firms leverage their reputation across different product categories. This paper investigates how advertising in the market of over-the-counter (OTC) drugs affects the decision to buy prescription drugs from a promoted brand name. I exploit specific charac- teristics of market regulation in Germany to identify the effect of advertising and find positive effects of umbrella branding on sales of prescription drugs. Umbrella branding results in market expansion, particularly for generic firms which invest in OTC drug advertising. If the effect leads to more consumers of generic substitutes or to more patients in undertreated therapeutic areas, market expansion can have a positive effect on welfare.
    Keywords: umbrella branding; regulation; empirical io; pharmaceuticals ; marketing
    JEL: I3 L51 I1 M37 D22 C18
    Date: 2017
  20. By: Gylfi Zoega (Aarhus Universitet; University of Iceland); Gylfi Zoega (University of Iceland; Birkbeck, University of London)
    Abstract: How much should society invest in medical care that extends the lives of the older generations? We derive a golden rule for the level of health care expenditures and find that the optimal level of life-extending health care expenditures should increase with rising productivity, increase with the retirement age, and also increase with the population growth rate if a higher growth rate lowers the ratio of retirees to working-age people sufficiently, while the effects of an improvement in medical technology are ambiguous. Moreover, we find that a market economy may be inefficient in terms of the provision of life-extending health care because an individual ignores the effect of his own longevity on the income of others.
    Keywords: Health care expenditures, golden rule, productivity.
    JEL: E6 E2 I1
    Date: 2017–10
  21. By: Fazili, Sameera (Federal Reserve Bank of Atlanta)
    Abstract: The two sectors of community development and health have long worked in the same neighborhoods, but they have not always worked together. This is starting to change, due in part to a growing recognition among health experts of the social, economic, and environmental factors that drive health outcomes. These social determinants of health have become the basis for new collaborations between community development and health professionals. This paper introduces professionals in both sectors to this emerging area of practice through a series of case studies of innovators in the southeastern United States. Case studies look at ways to bring housing and health professionals together, opportunities to leverage community development finance tools, and efforts to use Pay for Success to improve Medicaid spending. This discussion paper reviews early lessons on how to build a successful health and community development partnership, including an examination of the incentives for community developers, health professionals, state and local governments, and philanthropy to participate in these collaborations.
    Keywords: social determinants of health; affordable housing; health and housing; community development financial institutions; Medicaid
    JEL: I11 I14 L31 P46 R51 Z18
    Date: 2017–12–01
  22. By: Luca Gori (Department of Political Science, University of Genoa); Enrico Lupi (DEF, University of Rome "Tor Vergata"); Piero Manfredi (Department of Economics and Management, University of Pisa); Mauro Sodini (Department of Economics and Management, University of Pisa)
    Abstract: According to the conventional theory of the demographic transition, mortality decline has represented the major trigger for fertility decline and eventually sustained economic development. In Sub-Saharan Africa (SSA), the HIV/AIDS epidemic has had a devastating impact on mortality, by dramatically reversing, in high HIV-prevalence countries, the long-term positive trend in life expectancies. Despite the fact that SSA as a whole is suffering a delayed and slow fertility transition compared to other world’s regions, and despite evidence for halting or even reverting fertility decline in countries with severe HIV epidemics, there seems to be little concern amongst international policy makers about the ultimate impact that HIV might have on SSA fertility. This work reports model-based evidence of the potential for a HIV-triggered reversal of fertility in high HIV-prevalent SSA countries induced by the fall in education and human capital investments following the drop in life expectancy for young adults. This eventually breaks down the virtuous circle promoting the switch quantity-to-quality of children. This result suggests that the current evidence on fertility halting and declining education in high HIV-prevalent SSA countries should be seriously taken into consideration to prioritise current international interventions.
    Keywords: Sub-Saharan Africa, fertility transition, quantity-quality switch, HIV/AIDS epidemics, human capital accumulation, fertility reversal.
    JEL: J11 J13 O1 O41
    Date: 2017–12–08

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