nep-hea New Economics Papers
on Health Economics
Issue of 2019‒02‒11
24 papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Meta-Analysis for Medical Decisions By Charles F. Manski
  2. New ways to measure well-being? A first joint analysis of subjective and objective measures By Andrén, Daniela; Clark, Andrew E.; D’Ambrosio, Conchita; Karlsson, Sune; Pettersson, Nicklas
  3. Public Health Efforts and the Decline in Urban Mortality: Reply to Cutler and Miller By Anderson, D. Mark; Charles, Kerwin Kofi; Rees, Daniel I.
  4. Vaccine Hesitancy and Fake News: Quasi-experimental Evidence from Italy By Carrieri, V.;; Madio, L.;; Principe, F.;
  5. Education and life-expectancy and how the relationship is mediated through changes in behaviour: a principal stratification approach for hazard rates By Bijwaard, G.E.;; Jones, A.M.;
  6. Financial Protection Against Medical Expense By Owen (O.A.) O'Donnell
  7. Health Effects of Retirement: Evidence from Survey and Register Data By Weemes Grøtting, Maja; Lillebø, Otto
  8. Impact of private health insurance on a public healthcare system: the case of cesarean deliveries By Carine Milcent; Saad Zbiri
  9. Do Health Shocks Modify Personality Traits? Evidence from Locus Of Control By Antoine Marsaudon
  10. Social interactions in health behaviors and conditions By Ana Balsa; Carlos Díaz
  11. The Costs and Benefits of Caring: Aggregate Burdens of an Aging Population By Finn Kydland; Nick Pretnar
  12. Health, Cognition and Work Capacity Beyond the Age of 50 International Evidence on the Extensive and Intensive Margin of Work By Vincent Vandenberghe
  13. Incorporating Inequality Aversion in Health-Care Priority Setting By Costa-Font, J.;; Cowell, F.;
  14. Spatial Inequality in Mortality in France over the Past Two Centuries By Florian Bonnet; Hippolyte D'Albis
  15. Unravelling Hidden Inequities in a Universal Public Long-Term Care System By Pilar (P.) Garcia-Gomez; Helena M Hernandez-Pizarro; Guillem Lopez-Casasnovas; Joaquim Vidiella-Martin
  16. A Parametric Factor Model of the Term Structure of Mortality By Niels Haldrup; Carsten P. T. Rosenskjold
  17. Superfund Cleanups and Children's Lead Exposure By Heather Klemick; Henry Mason; Karen Sullivan
  18. To Pill or Not to Pill? Access to Emergency Contraception and Contraceptive Behaviour By Nuevo-Chiquero, Ana; Pino, Francisco J.
  19. Different Strokes for Different Folks: Experimental Evidence on the Effectiveness of Input and Output Incentive Contracts for Health Care Providers with Varying Skills By Manoj Mohanan; Katherine Donato; Grant Miller; Yulya Truskinovsky; Marcos Vera-Hernández
  20. Research funding and price negotiation for new drugs By Francesca Barigozzi; Izabela Jelovac
  21. Early Experience with Health Technology Assessment of Gene Therapies in the United States: Pricing and Paying for Cures By Pearson, S.
  22. The Effects of Social Health Insurance Expansion and Increased Choice on Perinatal Health and Health Care Use: Lessons from the Uruguayan Health Care Reform By Ana Inés Balsa; Patricia Triunfo
  23. The Hidden Role of Piped Water in the Prevention of Obesity in Developing Countries. Experimental and Non-Experimental Evidence. By Patricia I. Ritter
  24. Household shocks and utilization of preventive healthcare for children: Evidence from Uganda By Susmita Baulia

  1. By: Charles F. Manski
    Abstract: Statisticians have proposed meta-analysis to combine the findings of multiple studies of health risks or treatment response. The standard practice is to compute a weighted-average of the estimates. Yet it is not clear how to interpret a weighted average of estimates reported in disparate studies. Meta-analyses often answer this question through the lens of a random-effects model, which interprets a weighted average of estimates as an estimate of a mean parameter across a hypothetical population of studies. The relevance to medical decision making is obscure. Decision-centered research should aim to inform risk assessment and treatment for populations of patients, not populations of studies. This paper lays out principles for decision-centered meta-analysis. One first specifies a prediction of interest and next examines what each available study credibly reveals. Such analysis typically yields a set-valued prediction rather than a point prediction. Thus, one uses each study to conclude that a probability of disease, or mean treatment response, lies within a range of possibilities. Finally, one combines the available studies by computing the intersection of the set-valued predictions that they yield. To demonstrate decision-centered meta-analysis, the paper considers assessment of the effect of anti-hypertensive drugs on blood pressure.
    JEL: C18 I1
    Date: 2019–01
  2. By: Andrén, Daniela (Örebro University School of Business); Clark, Andrew E. (Paris School of Economics); D’Ambrosio, Conchita (Université du Luxembourg); Karlsson, Sune (Örebro University School of Business); Pettersson, Nicklas (Örebro University School of Business)
    Abstract: Our study is, to our knowledge, the first joint analysis of subjective and objective measures of well-being. Using a rich longitudinal data from the mothers pregnancy until adulthood for a birth cohort of children who attended school in Örebro during the 1960s, we analyse in a first step how subjective (self-assessed) and objective (cortisol-based) measures of well-being are related to each other. In a second step, life-course models for these two measures are estimated and compared with each other. Despite the fact that our analysis is largely exploratory, our results suggest interesting possibilities to use objective measures to measure well-being, even though this may imply a greater degree of complexity.
    Keywords: subjective and objective well-being; general life satisfaction; cortisol; birth-cohort data; adult; child and birth outcomes; multivariate imputation
    JEL: A12 D60 I31
    Date: 2019–01–27
  3. By: Anderson, D. Mark (Montana State University); Charles, Kerwin Kofi (Harris School, University of Chicago); Rees, Daniel I. (University of Colorado Denver)
    Abstract: This is a rejoinder to a comment written by Cutler and Miller on our recent paper, "Public Health Efforts and the Decline in Urban Mortality" (IZA DP No. 11773), which reanalyzes data used by Cutler and Miller to investigate the determinants of the urban mortality decline from 1900 to 1936. Two main results emerge from our reanalysis of their data: (1) correcting infant mortality counts reduces the estimated effect of filtration on infant mortality by two-thirds, from -43 log points to -13 log points; and (2) using a consistent method of the calculating the total mortality rate shrinks the estimated effect of filtration on total mortality by half, from -16 log points to -8 log points. In this rejoinder, we argue that the much-reduced estimate of the effect of water filtration on infant mortality is a dramatic and surprising departure from the consensus view in the literature. In addition, we show that the estimated effect of water filtration on total mortality is extremely fragile. Evidence of this fragility may also be found in recent work by Catillon, Cutler and Getzen (2018).
    Keywords: public health, mortality, chlorination, filtration, pasteurization, sewage
    JEL: I15 I18
    Date: 2019–01
  4. By: Carrieri, V.;; Madio, L.;; Principe, F.;
    Abstract: The spread of fake news and misinformation on social media is blamed to be one of the main causes of vaccine hesitancy, one of the ten threats to global health according to World Health Organization. This paper studies the effect of diffusion of fake news on immunization rates in Italy by exploiting a quasi-experiment occurred in 2012, when the Court of Rimini officially recognized a causal link between MMR vaccine and autism and awarded injury compensation. To this end, we exploit virality of fake news following the 2012 Italian Court’s ruling along with the intensity in the exposure to non-traditional media driven by regional infrastructural differences in Internet broadband coverage. Using a Difference-in-Difference (DiD) regression on regional panel data, we show that the spread of fake news caused a drop in children immunization rates for all types of vaccines.
    Keywords: fake news; vaccine hesitancy; children immunization rates, social media, internet;
    JEL: I12 I18 L82 L86
    Date: 2019–02
  5. By: Bijwaard, G.E.;; Jones, A.M.;
    Abstract: We investigate the causal impact of education on life-expectancy using data for England and Wales from the Health and Lifestyles Survey and how that impact is mediated through changes in health behaviour (smoking, exercise, having breakfast). For identification of the educational gain in mortality we employ a Regression Discontinuity Design implied by an increase in the minimum school leaving age in 1947 (from 14 to 15) together with a principal stratification method for the mortality hazard rate. This method allows us to derive the direct and indirect (through one or more mediators) effect of education on the implied life-expectancy. Basic maximum likelihood estimation of a standard Gompertz hazard model for the mortality rate suggests that staying in school beyond age 15 years significantly increases life-expectancy by more than 14 years, with large indirect effects running through smoking and exercise. In contrast, estimates from the principal strata method indicate that the educational gain is much smaller (and statistically insignificant) for those who were induced to remain in school beyond age 15. The direct effect of education is even negative for females (but statistically insignificant). Neither, do we find statistically significant indirect effects of education on mortality running through health behaviour.
    Keywords: regression discontinuity design; education; mortality; principal strata;
    JEL: C41 I14 I24
    Date: 2019–02
  6. By: Owen (O.A.) O'Donnell (Erasmus University Rotterdam, University of Lausanne)
    Abstract: Financial protection is claimed to be an important objective of health policy. Yet there is a lack of clarity about what it is and no consensus on how to measure it. I address the ambiguity of meaning by considering three questions: Protection of what? Protection against what? Protection with what? The proposed answers lead to the suggestion that financial protection is about shielding nonmedical consumption from the cost of healthcare using formal health insurance and public finances, as well as informal and self insurance mechanisms that do not impair earnings potential. Given this definition, I evaluate four approaches to the measurement of financial protection: a) consumption smoothing over health shocks; b) the risk premium; c) catastrophic healthcare payments; and, d) impoverishing healthcare payments. The first of these does not restrict attention to medical expenses, which limits its relevance to health financing policy. The second rests on assumptions about risk preferences. No measure is entirely satisfactory in its treatment of medical expenses that are financed through informal and self insurance instruments. By ignoring these sources of imperfect insurance, the catastrophic payments measure overstates the impact of out-of-pocket medical expenses on living standards, while the impoverishment measure does not credibly identify poverty caused by them. It is better thought of as a correction to the measurement of poverty.
    Keywords: health policy; financial protection; medical expenses; catastrophic payments; poverty
    JEL: D12 D31 D80 I13 I15
    Date: 2019–02–05
  7. By: Weemes Grøtting, Maja (Norwegian Social Research, Oslo Metropolitan University); Lillebø, Otto (University of Bergen, Department of Economics)
    Abstract: Using a local randomized experiment that arises from the statutory retirement age in Norway, we study the effect of retirement on health across gender and socioeconomic status. We apply data from administrative registers covering the entire population and from survey data of a random sample to investigate the effects of retirement on acute hospital admissions, mortality, and a composite physical health score. Our results show that retirement has a positive effect on physical health, especially for individuals with low socioeconomic status. We find no retirement effects on acute hospitalizations or mortality in general. However, our results suggest that retirement leads to reduced likelihood of hospitalizations for individuals with low socioeconomic status. Finally, we show that the positive health effects are driven by reduced pain and reduced health limitations in conducting daily activities. Our findings highlight heterogeneity in the health effects across socioeconomic status and across subjective and objective measures of health.
    Keywords: Retirement; Health; Socioeconomic Status; Gender; Regression Discontinuity Design
    JEL: H75 I14 I18 J26
    Date: 2017–04–07
  8. By: Carine Milcent (CEPREMAP - Centre pour la recherche économique et ses applications, 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); Saad Zbiri (RISCQ - Risques cliniques et sécurité en santé des femmes et en santé périnatale - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines)
    Keywords: Private health insurance,Public healthcare system,Activity-based payment,Cesarean delivery
    Date: 2018–11
  9. By: Antoine Marsaudon (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - EHESS - École des hautes études en sciences sociales - INRA - Institut National de la Recherche Agronomique - ENS Paris - École normale supérieure - Paris)
    Abstract: This paper analyzes whether a personality trait, that is, locus of control, is stable after the occurrence of a health shock, namely a hospital stay. To do so, we use the German Socio-Economics Panel dataset. To identify the causal effect of such a shock on locus of control, we rely on a fixed-effects model. Results suggest that individuals facing health shocks are more likely to decrease their locus of control. That is, they tend to believe that their future outcomes are more determined by external factors than their own will. This decrease is attributable to individuals that had, prior to the shock, lower values of locus of control. Further, individuals facing severe hospital stays (i.e., measured by the number overnights) and those with chronic diseases (i.e., measured by the number of hospital stays within a year), have a higher LOC decline than others. This provides evidence that perception of control is not constant over time and could change after experiencing a traumatic health event.
    Keywords: Health shocks,Locus of control,Hospital stays,Panel data,Fixed-effect model
    Date: 2019–02
  10. By: Ana Balsa; Carlos Díaz
    Abstract: We review the economic literature of the past 20 years on peer effects in health behaviors and conditions. We find consistent evidence of peer effects across a wide range of behaviors and outcomes (alcohol, body weight, food and nutrition, physical fitness, sexual behaviors, fertility, and mental health use) and across a diverse set of identification techniques (instrumental variables, network analysis, reduced form models, random assignment of peers, and discrete choice models of endogenous interactions). Despite the thorough evidence on the existence of peer effects, we still know little about the underlying mechanisms. Understanding these mechanisms is critical for the design of effective policies and constitutes the new stage in the research agenda.
    Keywords: Peer effects, social interactions, peer influence, health behaviors, health conditions, systematic review, substance use, obesity, sexual behavior, mental health
    Date: 2018
  11. By: Finn Kydland; Nick Pretnar
    Abstract: Throughout the 21st century, population aging in the United States will lead to increases in the number of elderly people requiring some form of living assistance which, as some argue, is to be seen as a burden on society, straining old-age insurance systems and requiring younger agents to devote an increasing fraction of their time toward caring for infirm elders. Given this concern, it is natural to ask how aggregate GDP growth is affected by such a phenomenon. We develop an overlapping generations model where young agents face idiosyncratic risk of contracting an old-age disease, like for example Alzheimer's or dementia, which adversely affects their ability to fully enjoy consumption. Young agents care about their infirm elders and can choose to supplement elder welfare by spending time taking care of them. Through this channel, aggregate GDP growth endogenously depends on young agents' degree of altruism. We calibrate the model and show that projected population aging will lead to future reductions in output of 17% by 2056 and 39% by 2096 relative to an economy with a constant population distribution. Curing diseases like Alzheimer's and dementia can lead to a compounded output increase of 5.4% while improving welfare for all agents.
    JEL: J14 J22 O40
    Date: 2019–01
  12. By: Vincent Vandenberghe (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: The rising cost of old-age dependency in Europe and elsewhere invariably leads to reforms aimed at raising the effective age or retirement. But do older individuals have the health/cognitive capacity to work longer? Following Cutler et al. (2012), this paper asks how much older individuals could work if they worked as much as their younger (50-54) counterparts in similar health/with equal cognitive performance. Contrary to existing papers, this one uses international, European, comparable panel evidence available in the Survey of Health, Ageing and Retirement in Europe (SHARE). It considers both physical health and cognition; and health consists of subjective and objective measures. Also, it examines the extensive and intensive margins of work (employment and hours): existing papers only consider the former. Results are essentially fivefold. First, declines in health significantly affect employment. Second, the impact on hours is statistical significant but of much smaller magnitude. People suffering from ill health rarely adjust hours; they rather stop working altogether. Third, cognition is not fundamentally affected by ageing, and it adds little to our capacity to predict how work capacity evolves with age. Fourth, identification issues exist and must be addressed. They comprise unobserved heterogeneity across respondents, justification bias or proxying/measurement errors regarding health. Finally, declining health/cognition explain at most 31% of the actual labour supply reduction between 50 and 70. This confirms the existence of a, currently largely underused, work capacity among older individuals.
    Keywords: Ageing, Health, Cognition, Labour Supply, Work Capacity
    JEL: J22 I10 J26
    Date: 2019–01
  13. By: Costa-Font, J.;; Cowell, F.;
    Abstract: Although measures of sensitivity to inequality are important in judging the welfare effects of health-care programmes, it is far from straightforward how to elicit them and apply them in health-care decision making. This paper provides an overview of the literature on the measurement of inequality aversion, examines some of the features specific of the health domain that depart from the income domain, and discusses its implementation in health system priority-setting decisions. We find evidence that individuals exhibit a preference for more equitable health distribution, but inequality aversion estimates from the literature are unclear. Unlike the income-inequality literature, standard approaches in the health-economics do not follow a ‘veil-of-ignorance’ approach and elicit mostly bivariate (income-related health) inequality aversion estimates. We suggest some ideas to reduce the disconnect between the income-inequality and health-economics literatures.
    Keywords: attitudes to inequality; inequality aversion; health; income; survey data; priority setting;
    JEL: I19
    Date: 2019–02
  14. By: Florian Bonnet (UP1 UFR02 - Université Panthéon-Sorbonne - UFR d'Économie - UP1 - Université Panthéon-Sorbonne, PSE - Paris School of Economics); Hippolyte D'Albis (PSE - Paris School of Economics, 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)
    Abstract: This article analyzes the evolution of spatial inequalities in mortality across 90 French territorial units since 1806. Using a new database, we identify a period from 1881 to 1980 when inequalities rapidly shrank while life expectancy rose. This century of convergence across territories was mainly due to the fall in infant mortality. Since 1980, spatial inequalities have levelled out or occasionally widened, due mainly to differences in life expectancy among the elderly. The geography of mortality also changed radically during the century of convergence. Whereas in the 19th century high mortality occurred mainly in larger cities and along a line from North-west to South-east France, it is now concentrated in the North, and Paris and Lyon currently enjoy an urban advantage.
    Date: 2018–11
  15. By: Pilar (P.) Garcia-Gomez (Erasmus University Rotterdam); Helena M Hernandez-Pizarro (Universitat Pompeu Fabra); Guillem Lopez-Casasnovas (Universitat Pompeu Fabra); Joaquim Vidiella-Martin (Erasmus University Rotterdam)
    Abstract: We investigate whether publicly subsidized long-term care (LTC) is allocated according to needs, independently from income, using administrative data from all applicants for public LTC in Catalonia, from 2011 to 2014. We measure the level of horizontal inequity in subsidies to compensate informal care costs, formal home care, and institutional care using objective detailed information on needs. Our findings suggest that the system is inequitable; cash transfers are distributed among the financially better-off, while the use of nursing homes is concentrated among the worse-off. Additionally, we assess the inequity in the form of provision (voucher versus in- kind) and its implications for the equity in the time to access. Our results show that while in-kind provision is concentrated among the worse-off, the better-off are more likely to receive a voucher to (partly) subsidize LTC expenses. However, this duality does not imply inequity in the time to access a nursing home.
    Keywords: long-term care; equity; public provision; voucher; in-kind
    JEL: I14 I38 J14
    Date: 2019–02–05
  16. By: Niels Haldrup (Aarhus University and CREATES); Carsten P. T. Rosenskjold (Aarhus University and CREATES)
    Abstract: The prototypical Lee-Carter mortality model is characterized by a single common time factor that loads differently across age groups. In this paper we propose a factor model for the term structure of mortality where multiple factors are designed to influence the age groups differently via parametric loading functions. We identify four different factors: a factor common for all age groups, factors for infant and adult mortality, and a factor for the "accident hump" that primarily affects mortality of relatively young adults and late teenagers. Since the factors are identified via restrictions on the loading functions, the factors are not designed to be orthogonal but can be dependent and can possibly cointegrate when the factors have unit roots. We suggest two estimation procedures similar to the estimation of the dynamic Nelson-Siegel term structure model. First, a two-step nonlinear least squares procedure based on cross-section regressions together with a separate model to estimate the dynamics of the factors. Second, we suggest a fully specified model estimated by maximum likelihood via the Kalman filter recursions after the model is put on state space form. We demonstrate the methodology for US and French mortality data. We find that the model provides a good fitt of the relevant factors and in a forecast comparison with a range of benchmark models it is found that, especially for longer horizons, variants of the parametric factor model have excellent forecast performance.
    Keywords: Mortality Forecasting, Term Structure of Mortality, Factor Modelling, Cointegration
    JEL: C1 C22 J10 J11 G22
    Date: 2018–01–12
  17. By: Heather Klemick; Henry Mason; Karen Sullivan
    Abstract: This study evaluates the effect of EPA’s Superfund cleanup program on children’s lead exposure. We linked two decades of blood lead level (BLL) measurements from children in six states with data on Superfund sites and other lead risk factors. We used quasi-experimental methods to identify the causal effect of proximity to Superfund cleanups on rates of elevated BLL. We estimated a difference-in-difference model comparing the change in elevated BLL of children closer to versus farther from lead-contaminated sites before, during, and after cleanup. We also estimated a triple difference model including children near hazardous sites with minimal to no lead contamination as a comparison group. We used spatial fixed effects and matching to minimize potential bias from unobserved differences between the treatment and comparison groups. Results indicate that Superfund cleanups lowered the risk of elevated BLL for children living within 2 kilometers of lead-contaminated sites 8 to 18 percent.
    Keywords: Blood lead levels, child health, lead exposure, Superfund, contaminated land
    JEL: I14 I18 Q51 Q53
    Date: 2019–01
  18. By: Nuevo-Chiquero, Ana (University of Edinburgh); Pino, Francisco J. (University of Chile)
    Abstract: We examine the effects of free-of-charge availability of emergency contraception on contraceptive behaviour in Chile. Using a survey of individuals 15 to 29, we exploit variation in availability at the municipality level as a consequence of legal and judicial decisions in the late 2000s. We find an increase in the use of emergency contraception in municipalities in which it was available through the public health system, but also an increase in the use of other methods of hormonal, pre-coital contraception, and a decrease of more traditional contraceptive methods. This effect is concentrated among groups with a low starting use of contraceptives, who may benefit from the contact with the health services. Unlike previous results for developed countries, our results indicate that there is scope for an effect of emergency contraception in settings with low starting levels of contraceptive use, and a significant potential for policies to increase adoption of regular contraception.
    Keywords: emergency contraception, youth, contraceptive behaviour, risky behaviour
    JEL: I15 I18 J13
    Date: 2019–01
  19. By: Manoj Mohanan; Katherine Donato; Grant Miller; Yulya Truskinovsky; Marcos Vera-Hernández
    Abstract: A central issue in designing performance incentive contracts is whether to reward the production of outputs versus use of inputs: the former rewards efficiency and innovation in production, while the latter imposes less risk on agents. Agents with varying levels of skill may perform better under different contracts as well – more skilled workers may be better able to innovate, for example. We study these issues empirically through an experiment enabling us to observe and verify outputs (health outcomes) and inputs (adherence to recommended medical treatment) in Indian maternity care. We find that both output and input incentive contracts achieved comparable reductions in post-partum hemorrhage rates, the dimension of maternity care most sensitive to provider behavior and the largest cause of maternal mortality. Interestingly, and in line with theory, providers with advanced qualifications performed better and used new strategies under output incentives, while under input incentives, providers with and without advanced qualifications performed equally.
    JEL: D86 J41 O15
    Date: 2019–01
  20. By: Francesca Barigozzi (UNIBO - Università di Bologna [Bologna]); Izabela Jelovac (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Pharmaceutical innovations result from the successful achievement of basic research, produced by an upstream lab, and applied research, produced by a downstream lab. We focus on the negotiation process to finance basic research by setting public and private grants and to agree on the final price of a new drug. We show that exclusive funding of basic research is desirable. To increase consumers' surplus and reduce negotiated prices for new drugs, basic and applied research should be integrated if the lab producing applied research has a relatively large bargaining power. When instead the health authority has the larger bargaining power, integration with the producer of basic research increases negotiated prices for new drugs and should be avoided, unless the gain in bargaining power after the integration is extremely high. Abstract. Pharmaceutical innovations result from the successful achievement of basic research, produced by an upstream lab, and applied research, produced by a downstream lab. We focus on the negotiation process to finance basic research by setting public and private grants and to agree on the final price of a new drug. We show that exclusive funding of basic research is desirable. To increase consumers' surplus and reduce negotiated prices for new drugs, basic and applied research should be integrated if the lab producing applied research has a relatively large bargaining power. When instead the health authority has the larger bargaining power, integration with the producer of basic research increases negotiated prices for new drugs and should be avoided, unless the gain in bargaining power after the integration is extremely high.
    Keywords: Pharmaceutical innovation,drug prices,negotiation,basic research,applied research
    Date: 2019–01–21
  21. By: Pearson, S.
    Abstract: The Institute for Clinical and Economic Review (ICER)1 is an independent organisation founded in the US in 2006. Its remit is to evaluate the clinical and economic value of health care interventions − prescription drugs, diagnostic tests, and a range of others − and innovations in the delivery of care. ICER involves key stakeholders including patients, doctors, life science companies, private insurers, and the government to help ensure its research informs important policy decisions. Regional independent appraisal committees hold public hearings on each report. All reports are publicly available without charge. One of ICER's core areas of activity is drug assessment reports that incorporate data on efficacy, economic value, and other elements of value important to patients and their families. The reports provide a "value-based price benchmark" meant to indicate drug pricing that encourages improved patient outcomes not just today, but over the longer term. Our reports also evaluate the potential short-term budget impact of new drugs to alert payers and policy makes in situations where short-term costs may strain health system budgets or threaten patient access. To avoid conflicts of interest, all ICER reports are produced with funding exclusively from non-profit foundations and other independent sources. Gene therapies, which can provide cures for diseases, are a new area of research for ICER. Some are within two to three years of becoming available publicly. This is exciting, but also offers serious and critical challenges in valuation. The focus of this seminar briefing is on those challenges.
    Keywords: Other
    JEL: I1
    Date: 2019–01–01
  22. By: Ana Inés Balsa; Patricia Triunfo
    Abstract: In 2007 the Uruguayan government launched a reform aimed at expanding social health insurance to family-members of formal workers and to retirees. The policy increased insurance generosity -relative to the safety net alternative- and increased competition by allowing new beneficiaries to choose care from a set of private providers. Exploiting the phased-in implementation and the geographic variation in the intensity of the reform, we find that the expansion of social health insurance had a negligible effect on perinatal health and health care among adolescent mothers and their newborns. Our results do not support prior research showing health care quality improvements in settings with increased choice. We hypothesize that health care rationing by private providers due to rising wages, a smaller primary care infrastructure of private providers in low-income neighborhoods, and cultural and financial barriers may have accounted for the lack of positive effects.
    Keywords: social health insurance, provider choice, competition, birthweight, prenatal care, health reform, Latin America
    JEL: D12 H51 I11 I12 I13 I14 I18 J13
    Date: 2018
  23. By: Patricia I. Ritter (University of Connecticut)
    Abstract: Child obesity in developing countries is growing at an alarming pace. This study investigates whether expanding access to piped water at home can contribute to stopping this epidemic. It exploits experimental data from Morocco and longitudinal data from the Philippines and finds that access to piped water at home reduces childhood obesity rates. This study further shows that the effect seems to be generated by a re-duction in the consumption of food prepared outside the home. Finally, the study shows that the effect of access to piped water on healthy nu-tritional status is hidden, when access to piped water at home reduces diarrhea prevalence, since this in turn increases BMI.
    Keywords: Obesity, diarrhea, piped water, soft drinks, food prepared outside the home
    JEL: I12 I18 H41 O12
    Date: 2019–01
  24. By: Susmita Baulia (University of Turku)
    Abstract: With four waves of panel data from the Uganda National Panel Survey, this paper investigates how households trade off investment in their children's preventive healthcare in times of income and health shocks. By using decrease in market price of agricultural output as proxy for negative income shock, and by measuring negative health shocks by illness of household members, I find evidence that probability of taking the child to get Vitamin A supplementation, as a part of immunization schedule, increases significantly if the household is hit by an income shock; similar evidence is obtained in case of health shock too. For health shock, the channel through which the effect takes place is the reduced opportunity cost of out-of-labour-market time; for income shock, buffer stock mechanism is instrumental in smoothing out of the shock and thus facilitating time investment in health-promoting activities for children. The main findings remain consistent under several robustness checks.
    Keywords: household shocks, preventive healthcare, child immunization, Uganda
    JEL: I12 I30 J13 O15
    Date: 2018–10

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