nep-hea New Economics Papers
on Health Economics
Issue of 2018‒01‒22
twenty-six papers chosen by
Yong Yin
SUNY at Buffalo

  1. Cost-Sharing Design Matters: A Comparison of the Rebate and Deductible in Healthcare By Bijlsma, Michiel; Boone, Jan; Douven, Rudy; Remmerswaal, Minke
  2. The Value of Pharmacogenomic Information By John A. Graves; Shawn Garbett; Zilu Zhou; Josh Peterson
  3. The Influence of Peer Genotypes and Behavior on Smoking Outcomes: Evidence from Add Health By Ramina Sotoudeh; Dalton Conley; Kathleen Mullan Harris
  4. The importance of periodicity in modelling infectious disease outbreaks By George Verikios
  5. The health benefits of a targeted cash transfer: the UK Winter Fuel Payment By Thomas Crossley; Federico Zilio
  6. Tax design in the alcohol market By Rachel Griffith; Martin O'Connell; Kate Smith
  7. Who benefits from free health insurance: evidence from Mexico By Gabriella Conti; Rita Ginja
  8. Effects of payment instruments on unhealthy purchases By Frank van der Horst; Jelle Miedema; Daniël Schreij; Martijn Meeter
  9. Regional Inequalities in Child Malnutrition in Egypt, Jordan and Yemen: A Blinder-Oaxaca Decomposition Analysis By Mesbah Sharaf; Ahmed Rashad
  10. Determinants and Impact of Households’s Out-of-Pocket Health Care Expenditure in Sudan: Evidence From Urban and Rural Population By Ebaidalla Mahjoub Ebaidalla; Mohammed Elhaj Mustafa Ali
  11. Does Postpartum Depression Affect Employment? By Komodromou, Maria Elena
  12. Can Regional Decentralisation Shift Health Care Preferences? By Costa-Font, Joan; Ferrer-i-Carbonell, Ada
  13. Early-Life Correlates of Later-Life Well-Being: Evidence from the Wisconsin Longitudinal Study By Clark, Andrew E.; Lee, Tom
  14. Resource Abundance and Life Expectancy By Bahram Sanginabadi
  15. Health shocks and labour market outcomes: evidence from professional football By Carrieri, V.;; Jones, A.M.;; Principe, F.;
  16. Open Enrollment Periods and Plan Choices By Francesco Decarolis; Andrea Guglielmo; Calvin Luscombe
  17. Personalized Medicine When Physicians Induce Demand By David H. Howard; Jason Hockenberry; Guy David
  18. Characterizing the Drug Development Pipeline for Precision Medicines By Amitabh Chandra; Craig Garthwaite; Ariel Dora Stern
  19. Orphan Drug Designations as Valuable Intangible Assets for IPO Investors in Pharma-Biotech Companies. By Philippe Gorry; Diego Useche
  20. Family Health Behaviors By Itzik Fadlon; Torben Heien Nielsen
  21. How can pricing and reimbursement policies improve affordable access to medicines? Lessons learned from European countries By Vogler, Sabine; Paris, Valérie; Ferrario, Alessandra; Wirtz, Veronika J.; Joncheere, Kees de; Schneider, Peter; Pedersen, Hanne Bak; Dedet, Guillaume; Babar, Zaheer-Ud-Din
  22. Hospital Readmission is Highly Predictable from Deep Learning By Damien Échevin; Qing Li; Marc-André Morin
  23. Whistle While You Work: Job Insecurity and Older Workers' Mental Health in the United States By Italo A. Gutierrez; Pierre-Carl Michaud
  24. Physical Disability and Labor Market Discrimination: Evidence from a Field Experiment By Charles Bellemare; Marion Goussé; Guy Lacroix; Steeve Marchand
  25. Premature Deaths, Accidental Bequests and Fairness By Marc Fleurbaey; Marie-Louise Leroux; Pierre Pestieau; Grégory Ponthière; Stéphane Zuber
  26. Moral Hazard in Health Insurance: What We Know and How We Know It By Liran Einav; Amy Finkelstein

  1. By: Bijlsma, Michiel; Boone, Jan; Douven, Rudy; Remmerswaal, Minke
    Abstract: Since 2006, the Dutch population has faced two different cost-sharing schemes in health insurance for curative care: a mandatory rebate of 255 euros in 2006 and 2007, and since 2008 a mandatory deductible. Using administrative data for the entire Dutch population, we compare the effect of both cost-sharing schemes on healthcare consumption between 2006 and 2013. We use a regression discontinuity design which exploits the fact that persons younger than eighteen years old neither face a rebate nor a deductible. Our fixed effect estimate shows that for individuals around the age of eighteen, a one euro increase of the deductible reduces healthcare expenditures 18 eurocents more than a euro increase of the rebate. These results demonstrate that differences in the design of a cost-sharing scheme can lead to substantial different effects on total healthcare expenditure.
    Keywords: cost-sharing; deductible; healthcare consumption; panel data; rebate; regression discontinuity design
    Date: 2017–12
  2. By: John A. Graves; Shawn Garbett; Zilu Zhou; Josh Peterson
    Abstract: Pharmacogenomics, or the application of genetic testing to guide drug selection and/or dosing, is often cited as integral to the vision of how precision medicine can be integrated into routine clinical practice. Yet despite a growing base of scientific discovery on genetic variation that predicts drug response, reimbursement for genetic testing among health systems and payers remains uneven. In large measure this is because the cascading impacts of genetic testing on individual and provider incentives and behavior, as well as downstream health care spending and outcomes, remain poorly understood. In this study, we couple evidence from a real-world implementation of pharmacogenomic testing with a discrete event simulation model. We use this framework to evaluate the cost-effectiveness of various genetic testing strategies. We find that the cost-effectiveness of multiplexed genetic testing (e.g., whole genome sequencing) hinges on the ability of a health system to ensure that dense genotypic information is routinely utilized by physicians. Moreover, while much attention has been paid to lowering the cost of genetic tests, we demonstrate that in practice, other scientific and behavioral factors, focused on certain high-yield drug-gene pairs, are key to implementing precision medicine in ways that maximize its value.
    JEL: I1 I13
    Date: 2017–12
  3. By: Ramina Sotoudeh; Dalton Conley; Kathleen Mullan Harris
    Abstract: We introduce a novel use of genetic data for studying social influences on behavior: Using data from the National Longitudinal Study of Adolescent to Adult Health (Add Health), we deploy the distribution of genotypes in a given grade within a school to instrument the influence of peer smoking on an individual’s own smoking behavior. We argue that this design alleviates many problems inherent to estimating peer effects. Using this approach, we find the relationship between peer smoking and individual smoking to be larger than that estimated by prior studies. Further, we explore the reduced form relationship between peer genotypes and ego smoking and find that the impact of peers’ genetic risk for smoking on ego’s smoking behavior is at least half as large as the effect of individual’s own genotype and sex, and 30% the effect of age. Moreover, peer influence on smoking appears heterogeneous by race: although whites and non-whites are equally susceptible to peer influence with respect to smoking, white egos are more likely to be influenced by white alters. This analysis suggests a promising way that genetic information can be leveraged to identify peer effects that avoids the reflection problem, contextual effects and selection into peer groups.
    JEL: D79 I12 I20
    Date: 2017–12
  4. By: George Verikios
    Keywords: Computable general equilibrium, infectious diseases, pandemic influenza, periodicity, trade linkages
    JEL: E32 C68 I18 F15
    Date: 2017–11
  5. By: Thomas Crossley (Institute for Fiscal Studies and Institute for Fiscal Studies, University of Essex); Federico Zilio (Institute for Fiscal Studies and Institute for Social & Economic Research)
    Abstract: Each year the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment” (WFP), a labelled but unconditional cash transfer to households with a member above the Female State Pension Age. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self-reports of chest infection, measured hypertension and biomarkers of infection and inflammation. We find a robust and statistically significant six percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are not robustly statistically significant.
    Keywords: benefits, health, biomarkers, heating, regression discontinuity
    JEL: H51 I12
    Date: 2017–10–18
  6. By: Rachel Griffith (Institute for Fiscal Studies and IFS and Manchester); Martin O'Connell (Institute for Fiscal Studies and Institute for Fiscal Studies); Kate Smith (Institute for Fiscal Studies and Institute for Fiscal Studies)
    Abstract: We study optimal corrective taxation in the alcohol market. Consumption generates negative externalities that are non-linear in the total amount of alcohol consumed. If tastes for products are heterogeneous and correlated with marginal externalities, then varying tax rates on different products can lead to welfare gains. We study this problem in an optimal tax framework and empirically for the UK alcohol market. Welfare gains from optimally varying rates are higher the more concentrated externalities are amongst heavy drinkers. A sufficient statistics approach is informative about the direction of reform, but not about optimal rates when externalities are highly concentrated. This is an updated version of previous working paper see here.
    Keywords: externality, corrective taxes, alcohol
    JEL: D12 D62 H21 H23
    Date: 2017–12–11
  7. By: Gabriella Conti (Institute for Fiscal Studies and University College London); Rita Ginja (Institute for Fiscal Studies and University of Bergen)
    Abstract: We present the first comprehensive evidence on the health impacts of the introduction and expansion of a large non-contributory health insurance program in Mexico, the Seguro Popular (SP). SP provided access to health services without co-pays to individuals with no Social Security protection. To identify the impacts of the program we use its staggered rollout across municipalities between 2002 and 2010. Our intent-to-treat estimates show that SP reduced infant mortality by 10% in poor municipalities. We are unable to detect program impacts on mortality for children ages 1-4, adults or elderly. The decline in infant mortality is driven by reductions in deaths due to perinatal conditions, congenital malformations, diarrhea and respiratory infections. Also in poor municipalities, the introduction of SP is associated with an immediate 7% increase in obstetric-related hospital admissions and with a 6% increase in hospital admissions due to diarrhea and respiratory infections among infants. The decline in infant mortality attributed to SP closes 84% of the gap in infant mortality rates between poor and rich Mexican municipalities.
    Keywords: Health Insurance, Child Mortality, Health Care Utilization, Mexico
    Date: 2017–11–02
  8. By: Frank van der Horst; Jelle Miedema; Daniël Schreij; Martijn Meeter
    Abstract: In this online replication study we investigate if the pain of paying in cash - as opposed to paying by cards - can curb impulsive urges to purchase unhealthy or 'vice' products. This effect was found by Thomas et al (2011) when comparing the payment instruments cash and credit card. We investigate whether these results also hold in the Netherlands, where the dominant payment methods are cash and debit card. In total, 2,213 participants bought on average 12.3% more unhealthy supermarket products when paying with cards compared to cash. Participants who paid with cards bought more products in general (5.1%), however, the difference for healthy or 'virtue' products was not significant. The pattern of the mean scores per payment instrument indicate that paying with cards has a specific effect on vice purchases, but this study does not have the statistical power to show that convincingly. A regression analysis shows that the number of purchases of vice products is partly explained by paying with cards. Other explanatory variables are impulsivity, seduceability, gender, age, education and conscious eating behaviour. Pain of paying did not differ by payment instrument, but was larger for participants that paid with their usual means of payment, either debit card or cash. The present study contributes to the literature of so-called "pay cash, eat less trash" - studies, as it shows that the use of cash limits overall spending and purchases of vice products.
    Keywords: payment instruments; consumer behaviour; virtual reality study; pain of paying
    JEL: D12 D14 D18 D83 I12 E58 Z13
  9. By: Mesbah Sharaf (University of Alberta, Edmonton, Canada); Ahmed Rashad
    Abstract: There is substantial evidence that on average, urban children have better health outcomes than rural children. This paper investigates the underlying factors that account for the regional disparities in child malnutrition in three Arab countries, namely; Egypt, Jordan, and Yemen. We use data on a nationally representative sample from the most recent rounds of the Demographic and Health Survey. A Blinder-Oaxaca decomposition analysis is conducted to decompose the rural-urban differences in child nutrition outcomes into two components; one that is explained by regional differences in the level of the determinants (covariate effects), and another component that is explained by differences in the effect of the determinants on the child nutritional status (coefficient effects). Results show that the under-five stunting rates are 20% in Egypt, 46.5 % in Yemen, and 7.7% in Jordan. The rural- urban gap in child malnutrition was minor in the case of Egypt (2.3%) and Jordan (1.5%), while the regional gap was significant in the case of Yemen (17.7%). Results of the Blinder-Oaxaca decomposition show that the covariate effect is dominant in the case of Yemen while the coefficients effect dominates in the case of Jordan. Income inequality between urban and rural households explains most of the malnutrition gap. Results were robust to the different decomposition weighting schemes. By identifying the underlying factors behind the rural- urban health disparities, the findings of this paper help in designing effective intervention measures aimed at reducing regional inequalities and improving population health outcomes.
    Date: 2017–12–14
  10. By: Ebaidalla Mahjoub Ebaidalla (University of Khartoum); Mohammed Elhaj Mustafa Ali
    Abstract: This study examines the determinants of out of pocket (OOP) health expenditures and the factors that associated with the risk of catastrophic health expenditure in Sudan. It also investigates the effect of OOP health expenditure on poverty incidence in the country. The study uses the National Baseline Household Survey (NBHS) data, 2009, for national, urban and rural levels of population. To strengthen the insight of findings, the analysis of OOP expenditure is also executed for different income groups. The results show that factors such as household’s income, incidence of disease, education, household size, number of household’s members over 65 years and below 5 years old are the most important factors affecting health expenditures. The results also indicate that the number of elderly member and children and household belonging to the lowest income quintiles are the most significant variables that increase the risk of incurring catastrophic health expenditures. In addition, the results reveal that a household with catastrophic health expenditure tends to reduce its budget share allocated to education, food and other items. Moreover, the empirical results indicate that health expenditure pushes a considerable portion of Sudanese households into poverty, thus, increases poverty rates in the country. Finally, the paper ends with some recommendations that aim at assisting policymakers in designing an appropriate health system strategy to protect households against the risk of OOP health expenditures and to reduce impoverishment effect when become catastrophic.
    Date: 2017–12–21
  11. By: Komodromou, Maria Elena
    Abstract: This paper examines the effect of postpartum depression (PPD) on maternal employment in the UK and assesses the extent of the direct and indirect link between PPD and maternal employment up to eleven years after the birth of the child. The study tests a range of factors (marital status, physical longstanding health problems, mental health problems, children’s outcomes) as mediators in order to assess the indirect effect of PPD on maternal employment, utilising several waves of data from the Millennium Cohort Study. The findings are of significance to policy makers as they indicate that PPD has a direct effect on maternal employment 5 years after the birth of the child and an indirect effect after 7 and 11 years. The indirect effects are mediated primarily through subsequent maternal mental and physical health problems.
    Date: 2018–01–11
  12. By: Costa-Font, Joan (London School of Economics); Ferrer-i-Carbonell, Ada (IAE Barcelona (CSIC))
    Abstract: Uniform health care delivered by a mainstream public insurer – such as the National Health Service (NHS), seldom satisfies heterogeneous demands for care, and some unsatisfied share of the population either use private health care, or purchase private insurance (PHI). One potential mechanism to partially satisfy heterogeneous preferences for health care, and discourage the use of private health care, is regional health care decentralisation. We find robust estimates suggesting that the development of regional health services shifted both perceptions of, and preferences for, using the NHS, making it more likely individuals would use public health care and, consequently, reducing the uptake of PHI. These results are heterogeneous by income, education, and age groups; and are robust to placebo and other robustness and falsification checks.
    Keywords: National Health Service (NHS), political decentralization, use of private health care, private health insurance, health system satisfaction, demand for private health care
    JEL: H7 I18
    Date: 2017–11
  13. By: Clark, Andrew E. (Paris School of Economics); Lee, Tom (Institute for Fiscal Studies, London)
    Abstract: We here use data from the Wisconsin Longitudinal Study (WLS) to provide one of the first analyses of the distal (early-life) and proximal (later-life) correlates of older-life subjective well-being. Unusually, we have two distinct measures of the latter: happiness and eudaimonia. Even after controlling for proximal covariates, outcomes at age 18 (IQ score, parental income and parental education) remain good predictors of well-being over 50 years later. In terms of the proximal covariates, mental health and social participation are the strongest predictors of both measures of well-being in older age. However, there are notable differences in the other correlates of happiness and eudaimonia. As such, well-being policy will depend to an extent on which measure is preferred.
    Keywords: health, eudaimonia, well-being, life-course, happiness
    JEL: I31 I38
    Date: 2017–11
  14. By: Bahram Sanginabadi
    Abstract: This paper investigates the impacts of major natural resource discoveries since 1960 on life expectancy in the nations that they were resource poor prior to the discoveries. Previous literature explains the relation between nations wealth and life expectancy, but it has been silent about the impacts of resource discoveries on life expectancy. We attempt to fill this gap in this study. An important advantage of this study is that as the previous researchers argued resource discovery could be an exogenous variable. We use longitudinal data from 1960 to 2014 and we apply three modern empirical methods including Difference-in-Differences, Event studies, and Synthetic Control approach, to investigate the main question of the research which is 'how resource discoveries affect life expectancy?'. The findings show that resource discoveries in Ecuador, Yemen, Oman, and Equatorial Guinea have positive and significant impacts on life expectancy, but the effects for the European countries are mostly negative.
    Date: 2017–12
  15. By: Carrieri, V.;; Jones, A.M.;; Principe, F.;
    Abstract: The negative association between health shocks and labour market outcomes is a well-established finding in the health and labour economics literatures. However, due to lack of data, most of the contributions focus on elderly workers and analyse labour force participation as their main outcome. This paper uses traumatic injuries as a source of exogenous variation in professional football players’ health to provide estimates of the causal impact of a health shock on two main labour market outcomes: annual net wages and the probability of renegotiating the contract between club and player. We have built a unique longitudinal dataset recording information about wages, injuries and other characteristics of the universe of professional football players in the Italian Serie A from 2009 to 2014. We employ panel fixed effects models combined with an IV strategy, which uses the average number of yellow cards received by the team as an instrument. We find that injuries reduce the net wage in the following season by around 12%. This result is mainly driven by precautionary reasons due to the club’s concern about depreciation in the player’s human capital rather than by a direct effect of the shock on the player’s productivity.
    Keywords: health shocks; top incomes; football; panel data; instrumental variables;
    JEL: C26 D31 I1 J24 J31
    Date: 2018–01
  16. By: Francesco Decarolis; Andrea Guglielmo; Calvin Luscombe
    Abstract: Open enrollment periods are pervasively used in insurance markets to limit adverse selection risks resulting when enrollees can switch plans at will. We exploit a change in the open enrollment rules of Medicare Part C and Part D to analyze how Medicare beneficiaries responded to the option of switching to 5-star rated plans at anytime, in a setting where insurers adjusted premiums and benefit design to counterbalance the increased selection risk. We find that within-year switches to 5-star plans increased by 7-16% and that those who switch are advantageously selected. Furthermore, demand for 5-star plans across the years did not change
    JEL: I11 I18 L22
    Date: 2017–12
  17. By: David H. Howard; Jason Hockenberry; Guy David
    Abstract: Advocates for “personalized medicine” tests claim they can reduce health care spending by identifying patients unlikely to benefit from costly treatments. But most tests are imperfect, and so physicians have considerable discretion in how they use the results. We show that when physicians face incentives to provide a treatment, the introduction of an imperfect prognostic test will increase treatment rates. We study the interaction of incentives and information in physicians’ choice between conventional radiotherapy and intensity modulated radiation therapy (IMRT) for Medicare patients with breast cancer. IMRT is far more costly. Patients with left-side tumors are more likely to benefit from IMRT, though it is unnecessary for the vast majority of patients. IMRT use is 18 percentage points higher in freestanding clinics, where physician-owners share in the lucrative fees generated by IMRT, than in hospital-based clinics. Patients with left-side tumors are more likely to receive IMRT in both types of clinics. However, IMRT use in patients with right-side tumors (the low benefit group) treated in freestanding clinics is actually higher than use in patients with left-side tumors (high benefit group) treated in hospital-based clinics. Prognostic information affects use but does nothing to counter incentives to overuse IMRT.
    JEL: I11 I18
    Date: 2017–11
  18. By: Amitabh Chandra; Craig Garthwaite; Ariel Dora Stern
    Abstract: Precision medicines – therapies that rely on genetic, epigenetic, and protein biomarkers – create a better match between individuals with specific disease subtypes and medications that are more effective for those patients. These treatments are expected to be both more effective and more expensive than conventional therapies, implying that their introduction is likely to have a meaningful effect on health care spending patterns. In addition, precision medicines can change the expected profitability of therapies both by allowing more sophisticated pricing systems and potentially decreasing the costs of drug development through shorter and more focused trials. As a result, this could change the types of products that can be profitably brought to market. To better understand the landscape of precision medicines, we use a comprehensive database of over 130,000 global clinical trials, over the past two decades. We identify clinical trials for likely precision medicines (LPMs) as those that use one or more relevant biomarkers. We then further segment trials based on the nature of the biomarker(s) used and other trial features with economic implications. Given potential changes in the incentives for bringing products to market, we also examine the relative importance of public agencies such as the National Institutes of Health (NIH) and different types of private firms in developing precision medicines.
    JEL: I1 L5 O3
    Date: 2017–11
  19. By: Philippe Gorry; Diego Useche
    Abstract: Orphan Drug (OD) legislation has been implemented with regulatory and financial incentives to encourage drug innovation in order to treat rare diseases. This study aims to test whether OD Designations (ODD) granted by the Food and Drug Administration (FDA) to pharmaceutical and biotechnology start-up companies may be considered as relevant signals in attracting entrepreneurial finance and increasing the amount invested at the time of the Initial Public Offering (IPO) in the US stock markets. We found that the signaling power of ODD is positively and statistically significant for IPO investors in stock markets. Regression results also suggest that ODDs are stronger than patent applications in attracting IPO investors. Scholarly and policy implications are discussed in the light of the signaling theory and drug development policies.
    JEL: G11 G24 I1 L65 O32 O34
    Date: 2017–11
  20. By: Itzik Fadlon; Torben Heien Nielsen
    Abstract: This paper studies how health behaviors and investments are shaped through intra- and inter-generational family spillovers. Specifically, 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.
    JEL: D1 D83 I12
    Date: 2017–11
  21. By: Vogler, Sabine; Paris, Valérie; Ferrario, Alessandra; Wirtz, Veronika J.; Joncheere, Kees de; Schneider, Peter; Pedersen, Hanne Bak; Dedet, Guillaume; Babar, Zaheer-Ud-Din
    Abstract: This article discusses pharmaceutical pricing and reimbursement policies in European countries with regard to their ability to ensure affordable access to medicines. A frequently applied pricing policy is external price referencing. While it provides some benchmark for policy-makers and has been shown to be able to generate savings, it may also contribute to delay in product launch in countries where medicine prices are low. Value-based pricing has been proposed as a policy that promotes access while rewarding useful innovation; however, implementing it has proven quite challenging. For high-priced medicines, managed-entry agreements are increasingly used. These agreements allow policy-makers to manage uncertainty and obtain lower prices. They can also facilitate earlier market access in case of limited evidence about added therapeutic value of the medicine. However, these agreements raise transparency concerns due to the confidentiality clause. Tendering as used in the hospital and offpatent outpatient sectors has been proven to reduce medicine prices but it requires a robust framework and appropriate design with clear strategic goals in order to prevent shortages. These pricing and reimbursement policies are supplemented by the widespread use of Health Technology Assessment to inform decision-making, and by strategies to improve the uptake of generics, and also biosimilars. While European countries have been implementing a set of policy options, there is a lack of thorough impact assessments of several pricing and reimbursement policies on affordable access. Increased cooperation between authorities, experience sharing and improving transparency on price information, including the disclosure of confidential discounts, are opportunities to address current challenges.
    JEL: I10
    Date: 2017–06–01
  22. By: Damien Échevin; Qing Li; Marc-André Morin
    Abstract: Hospital readmission is costly and existing models are often poor or moderate in predicting readmission. We sought to develop and test a method that can be applied generally by hospitals. Such a tool can help clinicians identify patients who are more likely to be readmitted, either at early stages of hospital stay or at hospital discharge. Relying on state-of-the art machine learning algorithms, we predict probability of 30-day readmission at hospital admission and at hospital discharge using administrative data on 1,633,099 hospital stays from Quebec between 1995 and 2012. We measure performance of the predictions with the area under receiver operating characteristic curve (AUC). Deep Learning produced excellent prediction of readmission province-wide, and Random Forest reached very similar level. The AUC for these two algorithms reached above 78% at hospital admission and above 87% at hospital discharge, and the diagnostic codes are among the most predictive variables. The ease of implementation of machine learning algorithms, together with objectively validated reliability, brings new possibilities for cost reduction in the health care system.
    Keywords: Machine learning; Logistic regression; Risk of re-hospitalisation; Healthcare costs
    JEL: I10 C52
    Date: 2017
  23. By: Italo A. Gutierrez; Pierre-Carl Michaud
    Abstract: We estimate the effects of job insecurity on older workers' health outcomes using an instrumental variables approach which exploits downsizing and state-industry level changes in employment. We provide evidence that job insecurity, as measured by the self-reported probability of job loss, increases stress at work, the risk of clinical depression and lowers self-reported health status. IV estimates are much larger than OLS estimates which we interpret as evidence that job insecurity which is outside the control of workers may have much larger effects on mental health. These findings suggest that employers ought to consider actions to offset the detrimental health effects of reducing personnel on their remaining (older) workers and pay attention at the stress that industry level changes in economic conditions may have on workers.
    Keywords: older workers, job insecurity, employer downsizing, health outcomes
    JEL: I12 M51
    Date: 2017
  24. By: Charles Bellemare; Marion Goussé; Guy Lacroix; Steeve Marchand
    Abstract: We investigate the determinants and extent of labor market discrimination toward people with acute physical disabilities (wheelchair users) using data from a large scale field experiment conducted in the province of Québec (Canada). Applications (cover letters and CVs) were randomly sent to 1477 private firms operating in two urban regions (Montréal and Québec City) advertising open positions requiring various skill levels. The applications were randomly generated to cover a broad spectrum of potential determinants of discrimination (gender, skill level, work history, workplace adjustment costs, etc.). We find that average callback rates of disabled and non-disabled applicants is 14.4% and 31%, respectively, yielding a differential callback rate of 46%. We also investigate whether the differential may result from accessibility constraints related to the physical infrastructures where firms are located (floor and access to an elevator, availability of wheelchair, etc.). The latter are found to have no explanatory power. In addition, applications which explicitly mention that the candidate is eligible to a government subsidy to cover the cost of workplace adaptations and assistive technology do not yield higher callback rates.
    Keywords: Discrimination, disabilities
    JEL: J71 J68
    Date: 2017
  25. By: Marc Fleurbaey; Marie-Louise Leroux; Pierre Pestieau; Grégory Ponthière; Stéphane Zuber
    Abstract: While little agreement exists regarding the taxation of bequests in general, there is a widely held view that accidental bequests should be subject to a confiscatory tax. We propose to reexamine the optimal taxation of accidental bequests in an economy where individuals care about what they leave to their offspring in case of premature death. We show that, whereas the conventional 100 % tax view holds under the standard utilitarian social welfare criterion, it does not hold under the ex post egalitarian criterion, which assigns a strong weight to the welfare of unlucky short-lived individuals. From an egalitarian perspective, it is optimal not to tax, but to subsidize accidental bequests. We examine the robustness of those results in a dynamic OLG model of wealth accumulation, and show that, whereas the sign of the optimal tax on accidental bequests depends on the form of the joy of giving motive, it remains true that the 100 % tax view does not hold under the ex post egalitarian criterion.
    Keywords: mortality, accidental bequests, optimal taxation, egalitarianism, OLG models
    JEL: D63 D64 D91 H31 J10
    Date: 2017
  26. By: Liran Einav; Amy Finkelstein
    Abstract: We describe research on the impact of health insurance on healthcare spending ("moral hazard"), and use this context to illustrate the value of and important complementarities between different empirical approaches. One common approach is to emphasize a credible research design; we review results from two randomized experiments, as well as some quasi-experimental studies. This work has produced compelling evidence that moral hazard in health insurance exists – that is, individuals, on average, consume less healthcare when they are required to pay more for it out of pocket – as well as qualitative evidence about its nature. These studies alone, however, provide little guidance for forecasting healthcare spending under contracts not directly observed in the data. Therefore, a second and complementary approach is to develop an economic model that can be used out of sample. We note that modeling choices can be consequential: different economic models may fit the reduced form but deliver different counterfactual predictions. An additional role of the more descriptive analyses is therefore to provide guidance regarding model choice.
    JEL: D12 G22
    Date: 2017–11

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