nep-hea New Economics Papers
on Health Economics
Issue of 2019‒08‒12
seventeen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Mortality and Socioeconomic Consequences of Prescription Opioids: Evidence from State Policies By Robert Kaestner; Engy Ziedan
  2. Peer and network effects in medical innovation: the case of laproscopic surgery in the English NHS By Barrenho, E.;; Miraldo, M.;; Propper, C;; Rose, C.;
  3. When Particulate Matter Strikes Cities. Social Disparities and Health Costs of Air Pollution By Matilde Giaccherini; Joanna Kopinska; Alessandro Palma
  4. Does the framing of patient cost-sharing incentives matter? The effects of deductibles vs. no-claim refunds By Hayen, A.P.;; Klein, T.J.;; Salm, M.;
  5. Heterogeneous spillover effects of children's education on parental mental health By Everding, Jakob
  6. Abortion and mental health: The role of selection By Janys, L.;; Siflinger, B.;
  7. Competition Between Public and Private Maternity Care Providers in France: Evidence on Market Segmentation By Herrera-Araujo, D.;; Rochaix, L.;
  8. The Role of Locus of Control in Education, Occupation, Income and Healthy Habits: Evidence from Australian Twins By Xue, Sen; Kidd, Michael P.; Le, Anh T.; Kirk, Kathy; Martin, Nicholas G.
  9. Patents, Data Exclusivity, and the Development of New Drugs By Gaessler, Fabian; Wagner, Stefan
  10. Employee Disputes and Innovation Performance: Evidence from Pharmaceutical Industry By Blake Rayfield; Omer Unsal
  11. Stillbirths: How should its rate be reported, its disability-adjusted-life-years (DALY), and stillbirths adjusted life expectancy By Kant, Chander
  12. Technological Progress and Health Convergence: The Case of Penicillin in Post-War Italy By Marcella Alsan; Vincenzo Atella; Jay Bhattacharya; Valentina Conti; Ivàn Mejìa-Guevara; Grant Miller
  13. Incentivized Peer Referrals for Tuberculosis Screening: Evidence from India By J. Goldberg; M. Macis; P. Chintagunta
  14. Social Networks and Mental Health Outcomes: Chinese Rural-Urban Migrant Experience By Meng, Xin; Xue, Sen
  15. The Economics of Tobacco Control in Nigeria: Modelling the Fiscal and Health Effects of a Tobacco Excise Tax Change By Akanonu, Precious C.; Ishaku, Joseph; Onyekwena, Chukwuka
  16. The effect of government contracting with faith-based health care providers in Malawi By Wiktoria Tafesse; Gerald Manthalu; Martin Chalkley
  17. Does Social Health Insurance Help Owners of Micro- and Small Firms Cope with Family Hardships? Evidence from Indonesia By Lau, Siew Yee; Parinduri, Rasyad; Lee, Yoong Hon

  1. By: Robert Kaestner; Engy Ziedan
    Abstract: This article presents estimates of the effects of state prescription opioid policies on prescription opioid sales, mortality and socioeconomic outcomes of adults. Our analysis highlights that most prescription opioid use is medically prescribed and that curtailing such use may have adverse effects on wellbeing. We also emphasize that there are significant differences in prescription opioid use and mis-use across demographic groups that may cause state policies to have heterogeneous effects. Results indicate that state policies reduced prescription opioid sales by between 5% and 20% depending on the policy and type of prescription opioid. State “pill mill” laws have been particularly effective at reducing prescription opioid sales. The reductions in prescription opioid sales associated with state policies, however, were not associated with significant changes in mortality or socioeconomic outcomes.
    JEL: I12 I18
    Date: 2019–08
  2. By: Barrenho, E.;; Miraldo, M.;; Propper, C;; Rose, C.;
    Abstract: This paper examines the effect of peers and networks on the uptake of innovation in surgery.Using a rich matched patient-surgeon data set covering all relevant surgeons, we construct a wide set of time varying measures of peer behaviour and network effects. Our estimates allow for simultaneity bias and treatment of the network as partially unknown. The findings show the importance of multiple channels in affecting the diffusion of innovative behaviour across individual surgeons.
    Keywords: innovation; peer effects; unknown networks;
    Date: 2019–07
  3. By: Matilde Giaccherini (CEIS, University of Rome "Tor Vergata"); Joanna Kopinska (CEIS, University of Rome "Tor Vergata"); Alessandro Palma (University of Naples Parthenope & CEIS University of Rome "Tor Vergata")
    Abstract: We investigate unequal effects of daily particulate matter (PM) concentrations on Italian hospitalizations by exploiting daily episodes of public transportation strikes as an instrumental variable for pollution exposure. We find that higher PM concentrations increase the number of urgent respiratory admissions, with a larger penalty for the young, the elderly, the less educated and migrants from low income countries. Moreover, we show that hospitalizations resulting from higher PM concentrations are not only more likely to occur, but in the case of asthma and COPD, they are also more complex. In order to appreciate the heterogeneity of our results, we show how municipalities with different age structures and PM exposure levels face a similar hospitalization burden. Our study suggests that effective mitigation policies should account for the socio-economic gradient in the health effects of air pollution.
    Keywords: health effects of air pollution, environmental inequality, public transportation strikes, hospitalization costs
    JEL: I14 I18 J45 J52 L91 Q53 R41
    Date: 2019–08–01
  4. By: Hayen, A.P.;; Klein, T.J.;; Salm, M.;
    Abstract: Understanding how health care utilization responds to cost-sharing incentives is of central importance for providing high quality care and limiting the growth of costs. While there is compelling evidence that patients react to financial incentives, it is less well understood how and why specific aspects of the design of contracts shape the size of this reaction. In this paper, we focus on the question whether the framing of cost-sharing incentives has an effect on health care utilization. To study this we make use of a policy change that occurred in the Netherlands. Until 2007, patients received a a no-claim refund if they consumed little or no health care; from 2008 onward there was a deductible. This means that very similar economic incentives were first framed in terms of smaller gains and later as losses. We use claims-level data for a broad sample from the Dutch population to estimate whether the reaction to economic incentives was affected by this. Our empirical approach is to exploit within-year variation using an instrumental variables approach while controlling for differences across years. Our central finding is that patients react to incentives much more strongly when they are framed in terms of losses. Simulations based on our estimates show that the effect on yearly spending is 8.6 percent. This suggests that discussions on the optimal design of cost-sharing incentives should not only involve coinsurance rates and cost-sharing limits, but also how these are presented to patients.
    Keywords: patient cost-sharing; health insurance; framing;
    JEL: I13 D91 H51
    Date: 2019–07
  5. By: Everding, Jakob
    Abstract: Despite extensive research on nonmarket returns to education, direct and spillover effects on mental health are widely unstudied. This study is the first to analyze heterogeneous intergenerational effects of children's education on parents' mental health. Given ambiguous theoretical implications, I explore potential mechanisms empirically. Using Survey on Health, Ageing and Retirement in Europe (SHARE) data, I estimate IV regressions, exploiting countrylevel variation in compulsory schooling reforms. Increasing children's education reduces parents' long-term probability of developing depression. Fathers and more educated sons drive this beneficial effect. Since mental illness is frequently undiagnosed, the findings may help improve elderly-specific health care provision.
    Keywords: compulsory schooling reforms,depression,old age,instrumental variable regression,intergenerational spillover
    JEL: I12 J14 J24 C36
    Date: 2019
  6. By: Janys, L.;; Siflinger, B.;
    Abstract: Mental health consequences of abortions have recently been the subject of public discussions surrounding abortion legislation in several countries. Yet, it is unclear whether the positive association commonly found in the literature reflects a causal effect or whether the main driver is selection. Using administrative records from both in- and outpatient data among a population of Swedish women aged 16-35 in the region of Skane, we illustrate that there are substantial differences in the rate of diagnoses of mental health disorders and risky health behavior between women who experienced an abortion and those who did not. We show that there is a positive association between abortion and different mental health outcomes (as diagnosed by a medical provider), even when including various controls and individual fixed effects. To examine possible causality, we then use quasi-experimental control group- and event study methods and find no causal effect of abortion. We interpret the remaining association from the OLS specification as a selection effect and consequently are interested in characterizing what drives observed differences in mental health status between women with and without abortions. Recognizing that even small differences in innate mental health might drive risky health behaviors leading to abortions, we hypothesize that earlier abortions indicate different future mental health profiles. Our preliminary results suggest that there are slope differences depending on the age of abortion for future mental health curves. To formalize this notion we are planning on implementing an estimator using group-fixed effects first proposed by Bonhomme and Manresa (2015).
    Date: 2019–07
  7. By: Herrera-Araujo, D.;; Rochaix, L.;
    Abstract: The French market for hospital care is shared by public and private providers. In addition to covering a number of mandates usually not undertaken by the private sector such as training, research, and disease prevention, public hospitals are required to provide basic care across the French territory. To investigate the existence of market segmentation between public and private care providers, we focus on maternity care and first examine to what extent public and private maternity units substitute each other on an extensive margin, to then analyze how competition plays out on an intensive margin. Consistent with the public mandate, our findings indicate that, after a private unit closure, public maternity units are less likely to exit a low-populated area than a high-populated area. In addition, we find evidence of an asymmetric intensive margin substitution between private and public maternity units. Maternity users tend to substitute private units (non for-profit and for-profit) for public units more often than the reverse.
    Keywords: maternity units; substitution; demand estimation; public-private;
    JEL: D03 D12 L13 L22 L81
    Date: 2019–07
  8. By: Xue, Sen; Kidd, Michael P.; Le, Anh T.; Kirk, Kathy; Martin, Nicholas G.
    Abstract: The role of non-cognitive skills in socio-economic behavior is a burgeoning research area in economics. Much interest is focused on the personality trait, locus of control, a measure of the extent to which individuals believe their fate is self-determined. The existing empirical literature generally estimates the role of locus of control via OLS. The legitimacy of the approach relies upon stability of locus of control as well as the correct specification of the model, i.e. no omitted variable bias. Recent evidence is supportive of treating locus of control as predetermined, particularly for working age individuals. However, the behavioural genetics consensus is that personality traits including locus of control have a significant heritability component. This suggests the potential for omitted variable problems associated with the prior literature’s attempt to identify the impact of locus of control using cross-sectional methods. We address the issue of omitted shared family background and genetic factors using data on both monozygotic and dizygotic twins to examine the role of locus of control. Comparison of results across OLS and twins fixed effect estimators is consistent with substantial upward bias in previous estimates of the locus of the control due to omitted variable problems.
    Keywords: Locus of control,twin studies,socioeconomic outcomes
    JEL: J24 J21 J31
    Date: 2019
  9. By: Gaessler, Fabian (MPI-IC Munich); Wagner, Stefan (ESMT Berlin)
    Abstract: Pharmaceutical firms typically enjoy market exclusivity for new drugs from concurrent protection of the underlying invention (through patents) and the clinical trials data submitted for market approval (through data exclusivity). Patent invalidation during drug development renders data exclusivity the sole source of protection and shifts the period of market exclusivity at the project level. In instrumental variables regressions we quantify the effect of a one-year reduction in expected market exclusivity on the likelihood of drug commercialization. The effect is largely driven by patent invalidations early in the drug development process and by the responses of large originators. We hereby provide first estimates of the responsiveness of R&D investments to market exclusivity expectations.
    Keywords: patents; drugs; data exclusivity; clinical trials;
    JEL: K41 L24 L65 O31 O32 O34
    Date: 2019–08–05
  10. By: Blake Rayfield; Omer Unsal
    Abstract: In this study, we use a hand-collected dataset of employee lawsuits to understand the effect of employee allegations on firms’ innovation in a human capital-intensive industry. We gather more than 2,293 employee disputes between 2000 and 2015 and test the relationship between employee lawsuits and Food and Drug Administration (FDA) product approvals in the pharmaceutical industry. We find that employee disputes lower the total number of FDA-approved products. We document that firms with frequent employee allegations maintain low innovation outcomes. Additional results show that case characteristics are an important determinant of FDA approvals; labor unions and case duration delay time-to-approval of submitted products, which may explain the deteriorated innovation outcomes. Overall, our findings highlight the importance of employee treatment in the workplace environment, which is ultimately related to firms’ innovation performance.
    Keywords: Institutional Investors, Labor Relations, Innovation
    JEL: G30 G39 G23 O32
    Date: 2019–07
  11. By: Kant, Chander
    Abstract: Background A 2016 study standardized the definition of stillbirths. It estimated the rate as a proportion of total births. A 2015 paper addressed the problem of disability-adjusted life-years (DALY) for stillbirths. There has been no adjustment of life expectancy at birth to account for stillbirths. Methods and Results We follow mathematical and computational methods, use algebra to derive relationships, and large databases. We express the rate as a proportion of live births and use this rate to adjust life expectancy at birth for stillbirths. We then use the difference between the traditional life expectancy and stillbirths adjusted life expectancy (SALE) to obtain DALY for stillbirths for 194 countries, the Millennium Development Goal regions, and income groups. We show defining stillbirths’ rate as a proportion of live births enhances stillbirths’ importance, especially in poorer countries; negates some of its under-statement vis-a-vis neonatal mortality rate, accentuates its decrease; and permits inference about relative magnitudes of stillbirths and neonatal mortality from the two rates. Using it, we derive stillbirths adjusted life expectancy, and suggest it reflects a more complete and accurate measure of comparative life expectancies of different countries. Its difference from the traditional life expectancy is used to measure DALY for stillbirths that totals 165.3 million years worldwide. Conclusion Stillbirths almost equals neonatal mortality yet have not received almost equal attention. We hope highlighting them and adjusting life expectancy for it will spur health interventions so that grand convergence of health outcomes in different countries can be more rapidly achieved. We also believe SALE is a more complete and accurate measure of comparative life expectancies.
    Keywords: Different measures of stillbirth rates; Years of life lost due to stillbirths; A more complete measure of life expectancy; Importance of stillbirths in poorer countries
    JEL: E01 I14 I19 Y8
    Date: 2019–03–26
  12. By: Marcella Alsan (Stanford University); Vincenzo Atella (CEIS & DEF University of Rome "Tor Vergata"); Jay Bhattacharya (Stanford University); Valentina Conti (Food and Agriculture Organization (FAO) of the United Nations); Ivàn Mejìa-Guevara (Stanford University); Grant Miller (Stanford University)
    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.
    Keywords: Penicillin, Technology, Public health, Health outcomes, Mortality, Italy
    JEL: I10 J10 N00
    Date: 2019–07–30
  13. By: J. Goldberg; M. Macis; P. Chintagunta
    Abstract: We use a field experiment with 3,176 patients at 122 tuberculosis treatment clinics in India to test whether peer referrals increase screening and identification of patients with an infectious disease. Low-cost financial incentives considerably raise the probability that current patients refer prospective patients for screening and testing, resulting in the cost-effective identification of new tuberculosis cases. Incentivized referrals operate through two mechanisms - peers have private information about individuals in their social networks (beyond their immediate families) to target for outreach, and peers are more effective than traditional contact tracing by paid health workers in inducing these individuals to get tested.
    Keywords: tuberculosis;referrals;social networks;case finding;incentives;India;health
    Date: 2019
  14. By: Meng, Xin; Xue, Sen
    Abstract: Over the past two decades, more than 160 million Chinese rural workers have migrated to cities to work. They are separated from their familiar rural networks to work in an unfamiliar, and often hostile environment. Many of them thus face significant mental health challenges. This paper is the first to investigate the extent to which migrant social networks in host cities can mitigate these adverse mental health effects. Using a unique longitudinal survey data of Rural-to-Urban Migration in China (RUMiC), we find that network size matters significantly for migrant workers. Our preferred IV estimates suggest that one standard deviation increase in migrant city networks, on average, reduces the measure of mental health problem by 0.47 to 0.66 of a standard deviation. Similar effects are found among less educated, those working longer hours, and those without access to social insurance. The main channel of the network effect is through boosting confidence and reducing anxiety of migrants.
    Keywords: Mental Health,Social Networks,Migration,China
    JEL: I12 I15 J61
    Date: 2019
  15. By: Akanonu, Precious C.; Ishaku, Joseph; Onyekwena, Chukwuka
    Abstract: This paper examines the potential for changes in the tobacco tax to contribute to raising government revenues, reducing tobacco use, and improving public health in Nigeria. Specifically, it estimates the impact of a change in the excise tax structure and level on cigarette consumption, government revenue, smoking prevalence, net-of-tax (NOT) revenue, and the excise tax burden. To this end, we ran the Tobacco Excise Tax Simulation Model (TETSiM), adapted by the researchers to calibrate for the Nigerian context. We modelled four different policy interventions or changes to the tobacco tax structure and level, under 12 scenarios of economic/income growth (slow, medium, and high growth) and industry price response to an increase in excise taxes (either a full pass-through, or an under-shift or over-shift of the tax onto the retail price). We find that (1) cigarette consumption and smoking prevalence decrease in all 12 scenarios of possible economic/income growth and industry price changes under the policy interventions that impose higher tax levels and specific tax systems; (2) under all policy interventions and in all scenarios considered, government excise tax revenues from cigarette sales increase significantly but are most significant under the specific tax system, relative to the ad valorem tax system; (3) under all policy interventions, the best response to maximise NOT revenue for the tobacco industry is to increase the industry price; (4) under all policy interventions and in all scenarios considered, the excise tax burden to the consumer will at least double; however, since current excise tax burden is very low (at 4 per cent), the policy impact witnessed in the model remains minimal; and (5) we performed a three-year projection of the proposed policy change, which shows a consistent trend of increasing government revenues, decreasing consumption, and decreasing smoking prevalence rates if policy interventions are sustained each year over the three-year period. Based on the findings, we recommend that changes in tax policy need to be significant to have the desired effect on smoking prevalence. In particular, an effective tobacco control tax policy will require that: the tax system is changed from ad valorem to specific tax system; and the excise tax burden on tobacco products is continuously increased at least until it reaches 75 per cent.
    Keywords: Development Policy, Economic Development, Finance, Governance, Health,
    Date: 2019
  16. By: Wiktoria Tafesse (Centre for Health Economics, University of York, York, UK); Gerald Manthalu (Ministry of Health, Government of Malawi); Martin Chalkley (Centre for Health Economics, University of York, York, UK)
    Abstract: We study the impact of contracting-out of maternal health care by the government of Malawi to providers from the Christian Health Association of Malawi (CHAM) in the form of Service Level Agreements (SLAs). Under a SLA, a CHAM facility provides agreed maternal and newborn services free-of-charge to patients, and is reimbursed on a fixed price per service. We merge data on health facilities in Malawi with pregnancy histories from the 2010 Malawi Demographic and Health Survey, and exploit the staggered implementation of SLAs across facilities. Using difference-in-differences, we estimate the differential effects on pregnancy- related health care utilisation to mothers residing near and far from facilities with a SLA over time. Our findings show that SLAs reduced home births and increased skilled deliveries at CHAM hospitals. We observe greater provision of prenatal care services at CHAM health centres but no overall increase in the number of prenatal care visits. We find evidence of a reduction in certain components of prenatal care.
    Keywords: Healthcare, Least Developed Country, Contracting Out, Nonprofit.
    JEL: I11 I12 I15 I18 L24 L30 L33
    Date: 2019–07
  17. By: Lau, Siew Yee; Parinduri, Rasyad; Lee, Yoong Hon
    Abstract: Micro- and small firms lack access to external finance and the labour market so that they are vulnerable to family hardships experienced by the owners such as deaths or sickness of family members. The literature is thin on how these firms cope with family hardships, in particular on whether owners’ access to social health insurance helps. We examine whether a social health insurance in Indonesia, Askeskin, protects owners of micro- and small firms against family hardships. We find some evidence Askeskin reduces the adverse effects of recent deaths in the family, outpatient care, and traffic accidents on net profits; Askeskin also protects the firms’ assets against owners’ outpatient care need. Social health insurance may, therefore, improve micro- and small firms’ survival, which (because most people in developing countries’ labour markets work in micro- and small firms) helps governments’ efforts to eradicate poverty.
    Keywords: social health insurance, Askeskin, family hardships, micro- and small firms, firm performance, Indonesia
    JEL: I13 I18 L25 O12
    Date: 2019–07–22

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