nep-hea New Economics Papers
on Health Economics
Issue of 2018‒11‒05
sixteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Information frictions and adverse selection: policy interventions in health insurance markets By Handel, Benjamin R.; Kolstad, Jonathan T.; Spinnewijn, Johannes
  2. Fatal Attraction? Extended Unemployment Benefits, Labor Force Exits, and Mortality By Andreas Kuhn; Stefan Staubli; Jean-Philippe Wuellrich; Josef Zweimüller
  3. The Effect of Medical Cannabis Dispensaries on Opioid and Heroin Overdose Mortality By Garin, Julio; Pohl, R. Vincent; Smith, Rhet A.
  4. Labor Market Effects of the Affordable Care Act: Evidence from a Tax Notch By Kavan Kucko; Kevin Rinz; Benjamin Solow
  5. Causes of regional variation in Dutch healthcare expenditures: evidence from movers By Rudy Douven; Minke Remmerswaal; Ana Moura; Martin Salm
  6. Estimating the Effect of Physical Exercise on Juveniles' Health Status and Subjective Well-Being in China By J. Guan; J.D. Tena
  7. An analysis on regulations on graphic warnings on cigarette packs in domestic and overseas non-smoking policies By Sungwoo Park; Minji Kim; Euitay Jung
  8. Obesity inequality and the changing shape of the bodyweight distribution in China By Nie, Peng; Ding, Lanlin; Sousa-Poza, Alfonso
  9. Hospital choice with high long-distance mobility By S. Balia; R. Brau; D. Moro
  10. Heterogeneity in Hospital Consolidation By Christina DePasquale
  11. Happiness at Different Ages: The Social Context Matters By John F. Helliwell; Max B. Norton; Haifang Huang; Shun Wang
  12. Air Quality, Human Capital Formation and the Long-term Effects of Environmental Inequality at Birth By John Voorheis
  13. Medicare Coverage and Reporting By Renuka Bhaskar; James Noon; Brett O'Hara; Victoria Velkoff
  14. Response Error & the Medicaid undercount in the CPS By James M. Noon; Leticia E. Fernandez; Sonya R. Porter
  15. Reporting of Indian Health Service Coverage in the American Community Survey By Renuka Bhaskar; Rachel M. Shattuck; James Noon
  16. Medical Errors Must be Reduced for the Welfare of the Global Health Sector By Mohajan, Haradhan

  1. By: Handel, Benjamin R.; Kolstad, Jonathan T.; Spinnewijn, Johannes
    Abstract: Despite evidence that many consumers in health insurance markets are subject to information frictions, approaches used to evaluate these markets typically assume informed, active consumers. This gap between actual behavior and modeling assumptions has important consequences for positive and normative analysis. We develop a general framework to study insurance market equilibrium in the presence of choice frictions and evaluate key policy interventions, designed to combat adverse selection or to combat poor choices. We identify sufficient relationships between the underlying distributions of consumer (i) costs, (ii) surplus from risk protection and (iii) choice frictions that determine whether friction-reducing policies will be on net welfare increasing, due to improved consumer matching, or welfare reducing, due to increased adverse selection. We show that the impact of insurer risk-adjustment transfers, a supply-side policy designed to combat adverse selection, depends crucially on how effective consumer choices are, and is generally complementary to choice-improving policies. We implement our approach empirically, show how these key sufficient objects can be measured in practice, and illustrate the theoretically-motivated link between these objects and key policy outcomes.
    JEL: J1 F3 G3
    Date: 2018–01–24
  2. By: Andreas Kuhn; Stefan Staubli; Jean-Philippe Wuellrich; Josef Zweimüller
    Abstract: We estimate the causal effect of permanent and premature exits from the labor force on mortality. To overcome the problem of negative health selection into early retirement, we exploit a policy change in unemployment insurance rules in Austria that allowed workers in eligible regions to exit the labor force 3 years earlier compared to workers in non-eligible regions. Using administrative data with precise information on mortality and retirement, we find that the policy change induced eligible workers to exit the labor force significantly earlier. Instrumental variable estimation results show that for men retiring one year earlier causes a 6.8% increase in the risk of premature death and 0.2 years reduction in the age at death, but has no significant effect for women.
    JEL: I10 I12 J14 J26
    Date: 2018–10
  3. By: Garin, Julio; Pohl, R. Vincent; Smith, Rhet A.
    Abstract: Opioid overdose is the most common cause of accidental death in the United States and no policy response has been able to contain this epidemic to date. We examine whether local access to medical cannabis can reduce opioid-related mortality. Using a unique data set of medical cannabis dispensaries combined with county-level mortality data, we estimate the effect of dispensaries operating in a county on the number of overdose deaths. We find that counties with dispensaries experience 6% to 8% fewer opioid-related deaths among non-Hispanic white men. Mortality involving heroin declines by approximately 10% following the opening of a dispensary.
    Keywords: Cannabis Dispensaries; Medical Cannabis Laws; Marijuana; Opioid Overdoses; Heroin Overdoses; Opioid Epidemic
    JEL: I12 I18 K32
    Date: 2018–10–20
  4. By: Kavan Kucko; Kevin Rinz; Benjamin Solow
    Abstract: States that declined to raise their Medicaid income eligibility cutoffs to 138 percent of the federal poverty level (FPL) under the Affordable Care Act (ACA) created a "coverage gap'' between their existing, often much lower Medicaid eligibility cutoffs and the FPL, the lowest level of income at which the ACA provides refundable, advanceable "premium tax credits'' to subsidize the purchase of private insurance. Lacking access to any form of subsidized health insurance, residents of those states with income in that range face a strong incentive, in the form of a large, discrete increase in post-tax income (i.e. an upward notch) at the FPL, to increase their earnings and obtain the premium tax credit. We investigate the extent to which they respond to that incentive. Using the universe of tax returns, we document excess mass, or bunching, in the income distribution surrounding this notch. Consistent with Saez (2010), we find that bunching occurs only among filers with self-employment income. Specifically, filers without children and married filers with three or fewer children exhibit significant bunching. Analysis of tax data linked to labor supply measures from the American Community Survey, however, suggests that this bunching likely reflects a change in reported income rather than a change in true labor supply. We find no evidence that wage and salary workers adjust their labor supply in response to increased availability of directly purchased health insurance.
    Date: 2017–07
  5. By: Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis); Minke Remmerswaal (CPB Netherlands Bureau for Economic Policy Analysis); Ana Moura; Martin Salm
    Abstract: We assess the relative importance of demand and supply factors as determinants of regional variation in healthcare expenditures in the Netherlands. Our empirical approach follows individuals who migrate between regions. We use individual data on annual healthcare expenditures for the entire Dutch population between the years 2006 and 2013. Regional variation in healthcare expenditures is mostly driven by demand factors, with an estimated share of around 70%. Both demographics and other unobserved demand factors, e.g. patient preferences, are important components of the demand share. The relative importance of different causes varies with the groups of regions being compared.
    JEL: I11 I13 H51
    Date: 2018–10
  6. By: J. Guan; J.D. Tena
    Abstract: This study estimates the causal effect of physical exercise on health and happiness for Chinese junior high school students. We use a longitudinal database from the China Education Panel Survey (CEPS) which allows us to deal with the potential endogeneity of physical exercise by considering the use of instrumental variables and propensity score matching. Our findings suggest that physical exercise has a significantly positive effect on health, and also marginally improves students' happiness. Moreover, these improvements affect all types of students, even those relatively unhappy or in poor health. It is also found that the positive impact on health is higher for females, rural and low-income students and for students attending to schools subjected to high academic pressure.
    Keywords: health;happiness;endogeneity;Instrumental Variables;Propensity score;China
    Date: 2018
  7. By: Sungwoo Park (Inje University); Minji Kim (Inje University); Euitay Jung (Inje University)
    Abstract: As the issue of smoking has gradually been recognized as a social problem in Korea, the government has made efforts to prohibit smoking through direct and indirect contact with smokers by developing non-smoking policies including increases in the prices of cigarettes, bans on smoking in public, active promotions for of the evils of smoking, and operation of smoking cessation clinics. Among various non-smoking policies, a classic example which got the effectiveness in other countries as well as Korea is regulations on cigarette packets. Campaigns to try to stop smoking behaviors have widely been practiced in the world by posting graphic warnings with warnings or damages of smoking on packs of cigarettes and giving smokers warnings about the evils of smoking. Among OECD member countries, the countries which introduced graphic warnings on packs of cigarettes are 18 countries as of 2016. Among them, Canada first introduced them to them in 2001. However, Korea began to make smoking companies write warnings on packs of cigarettes and limit cigarette advertising in 1986 and the introduction of graphic warnings with damages of smoking to packs of cigarettes began from April 2013, which was later than that of other countries.Therefore, this study examines domestic and overseas non-smoking policies and investigates, compares, and analyzes the regulations on packs of cigarettes among them. The study tries to provide basic materials for development of Korean non-smoking policies and seek for the ways to proceed to develop packing design of cigarettes which is most suitable for Koreans.
    Keywords: non-smoking policy, cigarette pack, graphic warning
    Date: 2018–07
  8. By: Nie, Peng; Ding, Lanlin; Sousa-Poza, Alfonso
    Abstract: Using data from the China Health and Nutrition Survey (CHNS), this study analyses changes in bodyweight (BMI and waist circumference) distributions between 1991 and 2011 among adults aged 20+ in China. To do so, we quantify the source and extent of temporal changes in bodyweight and then decompose the increase in obesity prevalence into two components: a rightward shift of the bodyweight distribution (mean growth) and a (re)distributional skewing. Our analysis reveals a clear rightward distributional shift combined with a leftward skewing. Although the relatively large size of this skewing in the first decade analysed reflects an increase in obesity inequality, this inequality growth subsides in the second decade. Nevertheless, over the entire 20-year period, obesity inequality increases significantly, especially among females, younger age groups, rural residents and individuals with low socioeconomic status.
    Keywords: BMI,Waist circumference,Obesity inequality,Decomposition,China
    JEL: D30 D63 I10 I14
    Date: 2018
  9. By: S. Balia; R. Brau; D. Moro
    Abstract: We investigate long distance hospitalizations in a setting of patients with free mobility by studying the elective admissions of patients for cancers of the digestive system and distinguishing between local (located in the region of residence) and distant hospitals (located at very long distances in non-boundary regions). We used data from hospital discharge records of patients enrolled in the local healthcare systems of two insular Italian regions. We model mobility towards alternative hospitals as a discrete choice process determined by geographical distance, clinic quality and other hospital characteristics through a mixed logit model that controls for patients' heterogeneity. Quality plays a relevant role in the choice of distant hospitals, whereas it does not affect the choice of local hospitals. Patients are willing to travel at least 14 km farther to be cured in a distant hospital with a clinical quality indicator that increases from the 75th to the 25th percentile. The willingness to travel is greater for younger and higher educated patients. Important differences emerge vis-à-vis the role of hospital pull factors. Our findings support the idea that long-distance mobility is a distinctive phenomenon that requires further study.
    Keywords: hospital choice;healthcare demand;quality of care;discrete choice models
    Date: 2018
  10. By: Christina DePasquale
    Abstract: This paper examines the heterogeneity between two types of hospital consolidations — mergers and system-joinings. I examine changes in admissions, employment outcomes, beds in different medical units, surgeries, costs, case mix, and discharges. I find that hospital mergers and system-joiners are fundamentally different among almost all outcomes examined. Additionally, I extend my analysis by examining those hospitals that, at the time of consolidation, are closer to either their fellow merging hospital or a fellow system-member hospital. I find no meaningful correlation between distance and outcomes.
    Date: 2018–10
  11. By: John F. Helliwell; Max B. Norton; Haifang Huang; Shun Wang
    Abstract: This paper uses a variety of individual-level survey data from several countries to test for interactions between subjective well-being at different ages and variables measuring the nature and quality of the social context at work, at home, and in the community. While earlier studies have found important age patterns (often U-shaped) and social context effects, these two sets of variables have generally been treated as mutually independent. We test for and find several large and highly significant interactions. Results are presented for life evaluations and (in some surveys) for happiness yesterday, in models with and without other control variables. The U-shape in age is found to be significantly flatter, and well-being in the middle of the age range higher, for those who are in workplaces with partner-like superiors, for those living as couples, and for those who have lived for longer in their communities. A strong sense of community belonging is associated with greater life satisfaction at all ages, but especially so at ages 60 and above, in some samples deepening the U-shape in age by increasing the size of the life satisfaction gains following the mid-life low.
    JEL: I31 J12 J32 R13
    Date: 2018–10
  12. By: John Voorheis
    Abstract: A growing body of literature suggests that pollution exposure early in life can have substantial long term effects on an individual’s economic well-being as an adult, however the mechanisms for these effects remain unclear. I contribute to this literature by examining the effect of pollution exposure on several intermediate determinants of adult wages using a unique linked dataset for a large sample of individuals from two cohorts: an older cohort born around the 1970, and a younger cohort born around 1990. This dataset links responses to the American Community Survey to SSA administrative data, the universe of IRS Form 1040 tax returns, pollution concentration data from EPA air quality monitors and satellite remote sensing observations. In both OLS and IV specifications, I find that pollution exposure at birth has a large and economically significant effect on college attendance among 19-22 year olds. Using conventional estimates of the college wage premium, these effects imply that a 10 µg/m3 decrease in particulate matter exposure at birth is associated with a $190 per year increase in annual wages. This effect is smaller than the wage effects in the previous literature, which suggests that human capital acquisition associated with cognitive skills cannot fully explain the long term wage effects of pollution exposure. Indeed, I find evidence for an additional channel working through non-cognitive skill -pollution exposure at birth increases high school non-completion and incarceration among 16-24 year olds, and that these effects are concentrated within disadvantaged communities, with larger effects for non-whites and children of poor parents. I also find that pollution exposure during adolescence has statistically significant effects on high school non-completion and incarceration, but no effect on college attendance. These results suggest that the long term effects of pollution exposure on economic well-being may run through multiple channels, of which both non-cognitive skills and cognitive skills may play a role.
    Date: 2017–05
  13. By: Renuka Bhaskar; James Noon; Brett O'Hara; Victoria Velkoff
    Abstract: Medicare coverage of the older population in the United States is widely recognized as being nearly universal. Recent statistics from the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) indicate that 93 percent of individuals aged 65 and older were covered by Medicare in 2013. Those without Medicare include those who are not eligible for the public health program, though the CPS ASEC estimate may also be impacted by misreporting. Using linked data from the CPS ASEC and Medicare Enrollment Database (i.e., the Medicare administrative data), we estimate the extent to which individuals misreport their Medicare coverage. We focus on those who report having Medicare but are not enrolled (false positives) and those who do not report having Medicare but are enrolled (false negatives). We use regression analyses to evaluate factors associated with both types of misreporting including socioeconomic, demographic, and household characteristics. We then provide estimates of the implied Medicare-covered, insured, and uninsured older population, taking into account misreporting in the CPS ASEC. We find an undercount in the CPS ASEC estimates of the Medicare covered population of 4.5 percent. This misreporting is not random - characteristics associated with misreporting include citizenship status, year of entry, labor force participation, Medicare coverage of others in the household, disability status, and imputation of Medicare responses. When we adjust the CPS ASEC estimates to account for misreporting, Medicare coverage of the population aged 65 and older increases from 93.4 percent to 95.6 percent while the uninsured rate decreases from 1.4 percent to 1.3 percent.
    Date: 2016–12
  14. By: James M. Noon; Leticia E. Fernandez; Sonya R. Porter
    Abstract: The Current Population Survey Annual Social and Economic Supplement (CPS ASEC) is an important source for estimates of the uninsured population. Previous research has shown that survey estimates produce an undercount of beneficiaries compared to Medicaid enrollment records. We extend past work by examining the Medicaid undercount in the 2007-2011 CPS ASEC compared to enrollment data from the Medicaid Statistical Information System for calendar years 2006-2010. By linking individuals across datasets, we analyze two types of response error regarding Medicaid enrollment - false negative error and false positive error. We use regression analysis to identify factors associated with these two types of response error in the 2011 CPS ASEC. We find that the Medicaid undercount was between 22 and 31 percent from 2007 to 2011. In 2011, the false negative rate was 40 percent, and 27 percent of Medicaid reports in CPS ASEC were false positives. False negative error is associated with the duration of enrollment in Medicaid, enrollment in Medicare and private insurance, and Medicaid enrollment in the survey year. False positive error is associated with enrollment in Medicare and shared Medicaid coverage in the household. We discuss implications for survey reports of health insurance coverage and for estimating the uninsured population.
    Date: 2016–12
  15. By: Renuka Bhaskar; Rachel M. Shattuck; James Noon
    Abstract: Response error in surveys affects the quality of data which are relied on for numerous research and policy purposes. We use linked survey and administrative records data to examine reporting of a particular item in the American Community Survey (ACS) - health coverage among American Indians and Alaska Natives (AIANs) through the Indian Health Service (IHS). We compare responses to the IHS portion of the 2014 ACS health insurance question to whether or not individuals are in the 2014 IHS Patient Registration data. We evaluate the extent to which individuals misreport their IHS coverage in the ACS as well as the characteristics associated with misreporting. We also assess whether the ACS estimates of AIANs with IHS coverage represent an undercount. Our results will be of interest to researchers who rely on survey responses in general and specifically the ACS health insurance question. Moreover, our analysis contributes to the literature on using administrative records to measure components of survey error.
    Date: 2018–05
  16. By: Mohajan, Haradhan
    Abstract: After the Institute for Medicine’s landmark 1999 report, medical errors are considered serious problems in healthcare, and attempts are taken globally to reduce them. Medical error is believed as the second victim to the healthcare providers. At present the medical errors become great challenges for healthcare professionals, and health policy makers. These are responsible to delay in recovery of patients’ diseases, and sometimes impossible to recover. Although it is true that deaths from medical errors are the grievous for the bereaved families, some of these errors are unavoidable due to the complex healthcare systems. But most of them are avoidable and happen due to the negligence of the healthcare providers. Unfortunately, many of these errors are not disclosed to patients and their families. Reduction of these errors are necessary to maintain safe, and quality patient care for the welfare both patients and healthcare providers. Objectives of this study are to create consciousness among the patients about avoidable medical errors and to reduce the medical errors for the better treatment to the patients. If medical errors are reduced, the sufferings of the patients will be relieved and medical costs will be decreased. This article discusses aspects of medical errors and their effects on the patients and society. In this study an attempt has been taken to reduce medical errors in healthcare for the welfare of the global humanity.
    Keywords: Medical Errors, Healthcare, Diagnostic Errors, Medication Errors, Nosocomial Infection, Prevention, Nursing
    JEL: I1 I12 I15
    Date: 2018–08–14

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