nep-hea New Economics Papers
on Health Economics
Issue of 2019‒02‒18
eighteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Beyond birth weight: the origins of human capital By Gabriella Conti; Mark Hanson; Hazel M. Inskip; Sarah Crozier; Cyrus Cooper; Keith Godfrey
  2. Understanding the Correlation between Alzheimer’s Disease Polygenic Risk, Wealth, and the Composition of Wealth Holdings By Su H. Shin; Dean R. Lillard; Jay Bhattacharya
  3. Inequality in socioemotional skills: a cross-cohort comparison By Orazio Attanasio; Richard Blundell; Gabriella Conti; Giacomo Mason
  4. Effects of Maternal Work Incentives on Adolescent Social Behaviors By Dhaval M. Dave; Hope Corman; Ariel Kalil; Ofira Schwartz-Soicher; Nancy Reichman
  5. Does childcare improve the health of children with unemployed parents? Evidence from Swedish childcare access reform. By Aalto, Aino-Maija; Mörk, Eva; Sjögren, Anna; Svaleryd, Helena
  6. Why are employer-sponsored health insurance premiums higher in the public sector than in the private sector? By Alice M. Zawacki; Jessica P. Vistnes; Thomas C. Buchmueller
  7. Research funding and price negotiation for new drugs By Francesca Barigozzi; Izabela Jelovac
  8. The Impact of a Conditional Cash Transfer Program on Households' Well-Being By Daniela Del Boca; Chiara Pronzato; Giuseppe Sorrenti
  9. Technological Progress and Health Convergence: The Case of Penicillin in Post-War Italy By Marcella Alsan; Vincenzo Atella; Jay Bhattacharya; Valentina Conti; Iván Mejía-Guevara; Grant Miller
  10. Credence Goods Markets with Heterogeneous Experts By Joachim Heinzel
  11. An Equilibrium Model of the African HIV/AIDS Epidemic By Jeremy Greenwood; Philipp Kircher; Cezar Santos; Michèle Tertilt
  12. A nonlinear dynamic factor model of health and medical treatment By Franco Peracchi; Claudio Rossetti
  13. Population structure and the human development index By Carmen Herrero; Ricardo Martínez; Antonio Villar
  14. An Operationalizing Theoretical Framework for the Analysis of Universal Health Coverage Reforms: First Test on an Archetype Developing Economy By Sameera Awawda; Mohammad Abu-Zaineh
  15. Whose Empowerment? National Digital Infrastructure and India’s Healthcare sector By Chandwani, Rajesh; Edacherian, Saneesh; Sud, Mukesh
  16. Community matters: heterogenous impacts of a sanitation intervention By Laura Abramovsky; Britta Augsburg; Melanie Lührmann; Francisco Oteiza; Juan Pablo Rud
  17. The Patient-Centered Medical Homes: Strategies to Put Patients at the Center of Primary Care By Deborah Peikes; Janice Genevro; Sarah Scholle; Phyllis Torda
  18. National health insurance scheme renewal in Ghana: Does waiting time at health insurance registration office matter? By Adu, Kofi Osei

  1. By: Gabriella Conti (Institute for Fiscal Studies and University College London); Mark Hanson (Institute for Fiscal Studies); Hazel M. Inskip (Institute for Fiscal Studies); Sarah Crozier (Institute for Fiscal Studies); Cyrus Cooper (Institute for Fiscal Studies); Keith Godfrey (Institute for Fiscal Studies)
    Abstract: Birth weight is the most widely used indicator of neonatal health. It has been consistently shown to relate to a variety of outcomes throughout the life cycle. Lower birth weight babies have worse health and cognition from childhood, lower educational attainment, wages, and longevity. But what's in birth weight? What are the aspects of the prenatal environment that birth weight actually reflect? In this paper we address this fundamental, yet currently unanswered, question, using unique data with fetal ultrasound measurements from two UK sources. We show that birth weight provides a distinctly limited picture of the uterine environment, capturing both positive and negative aspects of fetal health. Other newborn measures are more informative about different dimensions of the prenatal environment and more predictive of child growth and cognitive development, beyond birth weight. Additionally, patterns of fetal growth are predictive of child physical and mental health conditions, beyond health at birth. Our results are robust to correcting for measurement error, and to accounting for child- and mother-speci c unobserved heterogeneity. Our analysis rationalizes a common finding in the early origins literature, that prenatal events can influence postnatal development without affecting birth outcomes. It further clari es the role of birth weight and height as markers of early health, and suggests caution in adopting birth weight as the main target of prenatal interventions.
    Keywords: Birth Weight, Fetal Development, Prenatal Investments, Developmental Origins of Health.
    Date: 2018–11–19
  2. By: Su H. Shin; Dean R. Lillard; Jay Bhattacharya
    Abstract: We investigate how the genetic risk of developing Alzheimer's Disease (AD) relates to saving behavior. Using nationally representative data from the 1992-2014 Health and Retirement Study (HRS), we find that genetic predisposition for AD correlates with, but is not causally related to older individuals’ wealth holdings. People with higher Alzheimer’s Disease polygenic risk score (PGS) hold roughly 9 percent more wealth in CDs (hands-off assets) and around 11 percent, 15 percent, and 7 percent less wealth in stocks, IRAs, and other financial assets (hands-on assets) respectively. We explore three hypotheses that could explain these correlations. We hypothesize that people with high risk of AD choose different portfolios because: (i) they know their polygenic risk of developing Alzheimer’s Disease and related dementia, (ii) they have lower cognitive capacity, and (iii) the genome-wide association studies (GWAS) process that generated the Alzheimer’s Disease PGS failed to fully account for the aging process. Our extended model results do not support the first two hypotheses. Consistent with the third hypothesis, the interaction between age and the Alzheimer’s Disease PGS explains the correlation between genetic traits and asset holdings.
    JEL: D1 D8 I12
    Date: 2019–02
  3. By: Orazio Attanasio (Institute for Fiscal Studies and Institute for Fiscal Studies and University College London); Richard Blundell (Institute for Fiscal Studies and Institute for Fiscal Studies and University College London); Gabriella Conti (Institute for Fiscal Studies and University College London); Giacomo Mason (Institute for Fiscal Studies)
    Abstract: We examine changes in inequality in socio-emotional skills very early in life in two British cohorts born 30 years apart. We construct socio-emotional scales comparable across cohorts for both boys and girls, using two validated instruments for the measurement of child behaviour. We identify two dimensions of socio-emotional skills for each cohort: ‘internalising’ and ‘externalising’, related to the ability of children to focus their concentration and to engage in interpersonal activities, respectively. Using recent methodological advances in factor analysis, we establish comparability in the inequality of these early skills across cohorts, but not in their average level. We document for the first time that inequality in these early skills has increased across cohorts, especially for boys and at the bottom of the distribution. We also document changes in conditional skills gaps across cohorts. We find an increase in the socio-emotional skills gap in the younger cohort for children born to mothers with higher socio-economic status (education and employment), and to mothers who smoked during pregnancy. The increase in inequality in early socio-emotional skills is particularly pronounced for boys. On the other hand, we find a decline in the skills gradient for children without a father figure in the household. Lastly, we document that socio-emotional skills measured at a much earlier age than in most of the existing literature are significant predictors of outcomes both in adolescence and adulthood, in particular health and health behaviours. Our results show the importance of formally testing comparability of measurements to study skills di?erences across groups, and in general point to the role of inequalities in the early years for the accumulation of health and human capital across the life course.
    Keywords: Inequality, Socio-emotional skills, Cohort studies, Measurement invariance
    JEL: J13 J24 I14 I24 C38
    Date: 2018–10–08
  4. By: Dhaval M. Dave; Hope Corman; Ariel Kalil; Ofira Schwartz-Soicher; Nancy Reichman
    Abstract: This study exploits variations in the timing of welfare reform implementation in the U.S. in the 1990s to identify plausibly causal effects of welfare reform on a range of social behaviors of the next generation as they transition to adulthood. We focus on behaviors that are important for socioeconomic and health trajectories, estimate effects by gender, and explore potentially mediating factors. Welfare reform had no favorable effects on any of the youth behaviors examined and led to decreased volunteering among girls, increases in skipping school, damaging property, and fighting among boys, and increases in smoking and drug use among both boys and girls, with larger effects for boys (e.g., ~6% for boys compared to 4% for girls for any substance use). Maternal employment, supervision, and child’s employment explain little of the effects. Overall, the intergenerational effects of welfare reform on adolescent behaviors were unfavorable, particularly for boys, and do not support longstanding arguments that limiting cash assistance leads to responsible behavior in the next generation. As such, the favorable effects of welfare reform for women may have come at a cost to the next generation, particularly to boys who have been falling behind girls in high school completion for decades.
    JEL: H53 I12 I31 I38
    Date: 2019–02
  5. By: Aalto, Aino-Maija (UCLS, Uppsala Universitet); Mörk, Eva (Uppsala universitet); Sjögren, Anna (IFAU - Institute for Evaluation of Labour Market and Education Policy); Svaleryd, Helena (Uppsala universitet)
    Abstract: We analyze how access to childcare affects the health outcomes of children with unemployed parents using a reform that increased childcare access in some Swedish municipalities. While we find no effects of childcare access on hospitalization for 2- to 3-year-olds, our results suggest that 4- to 5-year-olds were more likely to be hospitalized due to infections when they first gained access to childcare. Children aged 10 to 11 years who had access to childcare earlier in their childhood, while their parents were unemployed, were less likely to be prescribed medication for respiratory conditions and allergies. Taken together, our results suggest that the immediate health consequences of childcare access for children of unemployed parents are limited. Our findings support previous evidence that the greater exposure to microorganisms induced by childcare attendance may reduce the risk of developing allergies and asthma.
    Keywords: Childcare; Child health; Unemployment; Quasi-experiment
    JEL: I14 J13
    Date: 2019–02–08
  6. By: Alice M. Zawacki; Jessica P. Vistnes; Thomas C. Buchmueller
    Abstract: In this article, we examine the factors explaining differences in public and private sector health insurance premiums for enrollees with single coverage. We use data from the 2000 and 2014 Medical Expenditure Panel Survey-Insurance Component, along with decomposition methods, to explore the relative explanatory importance of plan features and benefit generosity, such as deductibles and other forms of cost sharing, basic employee characteristics (e.g., age, gender, and education), and unionization. While there was little difference in public and private sector premiums in 2000, by 2014, public premiums had exceeded private premiums by 14 to 19 percent. We find that differences in plan characteristics played a substantial role in explaining premium differences in 2014, but they were not the only, or even the most important, factor. Differences in worker age, gender, marital status, and educational attainment were also important factors, as was workforce unionization.
    Date: 2019–02
  7. By: Francesca Barigozzi (University of Bologna, Italy); Izabela Jelovac (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69131 Ecully, France)
    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
    JEL: D8
    Date: 2019
  8. By: Daniela Del Boca; Chiara Pronzato; Giuseppe Sorrenti
    Abstract: We evaluate the impact of a conditional cash transfer (CCT) program that we designed on family well-being among low-income families with young chil- dren. Although most CCTs have been implemented in low-income countries, our research is in the context of a high-income country, Italy, where the recent economic crises have worsened the conditions of families with children, especially among immigrants. Our objective is to evaluate the introduction of conditionality (attendance of courses) into a pre-existing unconditional cash transfer program. Using a randomized controlled trial, we find that CCT families search more ac- tively for work, and they work more hours and more regularity than the cash transfer and control groups. CCT families also are able to save more money and eat healthier foods. The CCT intervention appears to be more effective than cash transfer alone in changing households' behavior in several dimensions of well-being. Our findings add to the accumulating evidence on the impact of con- ditional cash transfers versus unconditional ones and to the literature concerning multidimensional incentive programs.
    Keywords: cash transfers, poverty, use of money, labor supply, parenting
    JEL: I10 I20 J24 I31
    Date: 2018
  9. By: Marcella Alsan; Vincenzo Atella; Jay Bhattacharya; Valentina Conti; Iván Mejía-Guevara; Grant Miller
    Abstract: Throughout history, technological progress has transformed population health, but the distributional effects of these gains are unclear. New substitutes for older, more expensive health technologies can produce convergence in population health outcomes, but may also be prone to “elite capture” leading to divergence. This paper studies the case of penicillin using detailed mortality statistics and exploiting its sharply-timed introduction in Italy after World War II. We find penicillin reduced both the mean and standard deviation of infectious diseases mortality, leading to substantial convergence across disparate regions of Italy. Our results do not appear to be confounded by competing risks or mortality patterns associated with World War II.
    JEL: I10 J10 N00
    Date: 2019–02
  10. By: Joachim Heinzel (Paderborn University)
    Abstract: In this paper, we analyze a credence goods model adjusted to the health care market with regulated prices and heterogeneous experts. Experts are physicians and are assumed to differ in their cost of treating a small problem. We investigate the effects of this heterogeneity on the physicians’ level of fraud and on the patients’ search for second opinions. We find that introducing a fraction of more efficient low-cost physicians always increases social welfare, but in some cases only because of the raised physicians’ surplus. When the low-cost physicians’ cost advantage is small, imposing a share of low-cost physicians does not change the equilibrium fraud level. When the cost advantage is large, however, different changes in the fraud level occur depending on the share of generated low-cost physicians, the search rate and the initial level of fraud.
    Keywords: credence goods, treatment efficiency, heterogeneous experts, overcharging
    JEL: D82 I11 L15
    Date: 2019–01
  11. By: Jeremy Greenwood; Philipp Kircher; Cezar Santos; Michèle Tertilt
    Abstract: Twelve percent of the Malawian population is HIV infected. Eighteen percent of sexual encounters are casual. A condom is used a third of the time. To analyze the Malawian epidemic, a choice-theoretic general equilibrium search model is constructed. In the developed framework, people select between different sexual practices while knowing the inherent risk. The calibrated model is used to study several policy interventions; namely, ART, circumcision, better condoms, and the treatment of other STDs. The efficacy of public policy depends upon the induced behavioral changes and equilibrium effects. The framework complements the insights from epidemiological studies and small-scale field experiments.
    Keywords: ART, circumcision, condoms, disease transmission, epidemiological studies, HIV/AIDS, knowledge about HIV, Malawi, marriage, policy intervention, search, small field experiments, STDs, sex markets
    JEL: I18 J12 O11 O55
    Date: 2018–02
  12. By: Franco Peracchi (Georgetown University and EIEF); Claudio Rossetti (University of Naples Federico II and CSEF)
    Abstract: Quantitative assessments of the relationship between health and medical treatment are of great importance to policy makers.However, simply looking at the raw correlation between health and medical care is unlikely to give the right answer because of endogeneity problems. We overcome these problems by formulating and estimating a tractable dynamic factor model of health and medical treatment where individual observed health outcomes are driven by the individual’s latent health stock. The dynamics of latent health reflects both exogenous health depreciation and endogenous health investments. Our model allows us to investigate the effect of medical treatment on current health, as well as on future medical treatment and health outcomes. We estimate the model by maximum simulated likelihood and minimum distance methods using a rich longitudinal data set from Italy obtained by merging a number of administrative archives. These data contain detailed information on medical drug use, hospitalization, and mortality for a representative sample of elderly hypertensive patients. Our findings show that medical care consumption is highly correlated over time, and this relationship depends on both permanent and time-varying observed and unobserved heterogeneity. They also show that medical drug use significantly maintains future health levels and prevents transitions to worse health. These results suggest that policies aimed at increasing the awareness and the compliance of of hypertensive patients help reduce cardiovascular risks and consequent hospitalization and mortality.
    Date: 2019
  13. By: Carmen Herrero (Departamento de Fundamentos del Análisis Económico. Universidad de Alicante.); Ricardo Martínez (Department of Economic Theory and Economic History, University of Granada.); Antonio Villar (Department of Economics, Universidad Pablo de Olvide.)
    Abstract: This paper provides an alternative way of measuring human development that takes explicitly into account the differences in the countries’ population structures. The interest of this proposal stems from two complementary elements. First, that there is an enormous diversity in the population structures of those countries analysed in the Human Development Reports, particularly the shares of old people in the population. Second, that demographic characteristics are relevant in the evaluation of development possibilities. We propose to change the way of measuring health, education and material wellbeing, in order to take into account those differences in the population structures. Regarding the health component, we substitute Life Expectancy at Birth by Life Potential (the average life expectancy of the current population); concerning education, we change the average between Mean Years of Schooling and Expected Years of Schooling by the Education Potential (a variable that mimics life potential in this context). As for the material well-being, we propose using the Gross National Income per adult, instead of per capita, while keeping logs in the evaluation. The resulting indicator, called Demographically Adjusted Human Development Index, is the geometric mean of the three new variables suitably normalised. We analyse empirically the effect induced by these changes in the evaluation of human development by comparing this way of measurement with the conventional Human Development Index (HDI) for 168 countries.
    Keywords: Human development, health, education, income, life potential, education potential.
    JEL: O15 I31
    Date: 2019–02–05
  14. By: Sameera Awawda (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Mohammad Abu-Zaineh (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper presents an operationalizing theoretical framework to analyze the potential effects of universal health coverage (UHC) using dynamic stochastic general equilibrium (DSGE) model. The DSGE encapsulates a set of heterogeneous households that optimize their intertemporal utility of consumption, health capital, and leisure. The model is calibrated to capture the salient features of an archetype developing economy. The model is, then, used to simulate alternative UHC-financing policies. The theoretical framework we propose can be easily adapted to assess the implementation of UHC in a particular developing country setting. When applied to a hypothetical country, results show that the implementation of UHC can indeed improve access to healthcare for the population while offering households financial protection against future uncertainty. However, the degree of financial risk protection appears to vary across heterogeneous households and UHC-financing policies, depending on the associated benefits and the additional burden borne by each group.
    Keywords: universal health coverage,financial risk protection,dynamic stochastic general equilibrium model,developing countries
    Date: 2019–02
  15. By: Chandwani, Rajesh; Edacherian, Saneesh; Sud, Mukesh
    Abstract: Patient-centric digital infrastructure can potentially enhance the efficiency of the healthcare systems. Even in developed nations evidence suggests low adoption rates for such infrastructure. The Indian government, piggybacking off biometric identity, is setting up digital infrastructure to enable the provision of universal healthcare. Invoking an information ecology perspective, we investigate the physician’s perception to this initiative. We find that, equipped with a unique patient identifier and stakeholders’ registry, this initiative is perceived to be a game changer and could significantly impact the power dynamics in the healthcare sector. Physicians, who are the key stakeholders in this initiative, are skeptical about the change in the locus of the power, with power residing in ‘data’ rather than ‘professional expertise’. The changes are expected to manifest through monitoring, controlling and managing the data rather than the provision of knowledge-based services. We present recommendations for the design and implementation of this large-scale patient-centric digital infrastructure.
    Date: 2019–02–11
  16. By: Laura Abramovsky (Institute for Fiscal Studies and Institute for Fiscal Studies); Britta Augsburg (Institute for Fiscal Studies and Institute for Fiscal Studies); Melanie Lührmann (Institute for Fiscal Studies and Royal Holloway, University of London); Francisco Oteiza (Institute for Fiscal Studies and EDePo @ Institute for Fiscal Studies); Juan Pablo Rud (Institute for Fiscal Studies and Royal Holloway)
    Abstract: We study the effectiveness of a community-level information and mobilization intervention to reduce open defecation (OD) and increase sanitation investments in Nigeria. The results of a cluster-randomized control trial in 246 communities, conducted between 2014 and 2018, suggest that average impacts are exiguous. However, these results hide important community heterogeneity, as the intervention has strong and lasting effects on OD habits in poorer communities. This result is robust across several measures of community socio-economic characteristics, and is not driven by baseline differences in toilet coverage. In poor communities, OD rates decreased by 9pp from a baseline level of 75%, while we find no effect in richer communities. The reduction in OD is achieved mainly through increased toilet ownership (+8pp from a baseline level of 24%). In terms of channels, the intervention appears to have raised the social status attached to toilet ownership among the poorer treated communities, and not in rich communities. Finally, we use data from our study and five other trials of similar interventions and show that estimated impacts on OD are stronger in poorer contexts, rationalizing the wide range of estimates in the literature and providing plausible external validity.
    Keywords: External validity, Heterogeneous Treatment Effects, Sanitation, Information, Cluster- Randomized Control Trial.
    Date: 2018–11–06
  17. By: Deborah Peikes; Janice Genevro; Sarah Scholle; Phyllis Torda
    Abstract: This brief offers strategies for decision makers for the patient-centered medical home to respond to and reflect the goals, preferences, and needs of patients and their families.
    Keywords: Patient-Centered Medical Home, PCMH , Primary Care, Health
    JEL: I
  18. By: Adu, Kofi Osei
    Abstract: The study examined effect of waiting time at national health insurance registration office on national health insurance renewal in Ghana and also, estimated acceptable waiting time at national health insurance registration office. A secondary data collected from 1009 individuals by PhD candidate at University of Cape Coast, Ghana was used for this study. The sample size used for this study was 636 and binary logit model was used to examine the effect of waiting time at national health insurance scheme office on renewal of national health insurance policy. The study found that waiting time at national health insurance scheme registration office/centre has a negative influence on individual’s decision to renew NHIS policy. The desired (acceptable) waiting time at NHIS registration centre is 2 hours 45 minutes (147 minutes). This means that individuals who spend less than 2 hours 45 minutes are more likely to renew their NHIS policy when the policy expires. This study recommends that National Health Insurance Authority should develop software (an App) that an individual can use to renew his/her NHIS membership when his/her membership expires without visiting NHIS registration office.
    Keywords: National health insurance scheme, waiting time and health insurance renewal
    JEL: I1 I13 I15
    Date: 2019–01–01

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