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

  1. An Examination of Circadian Impacts on Judgments By David L. Dickinson; Andrew R. Smith; Robert McClelland
  2. How Do Low-Income Enrollees in the Affordable Care Act Marketplaces Respond to Cost-Sharing? By Kurt J. Lavetti; Thomas DeLeire; Nicolas R. Ziebarth
  3. Does the Provision of Physician Services Respond to Competition? By Philippe CHONÉ; Elise COUDIN; Anne PLA
  4. Competition and Health-Care Spending: Theory and Application to Certificate of Need Laws By Bailey, James; Hamami, Tom
  5. Parental Economic Shocks and Infant Health: The Effect of Import Competition in the U.S. By Patralekha Ukil
  6. Competition on Unobserved Attributes: The Case of the Hospital Industry By Philippe CHONÉ; Lionel WILNER
  7. Born to be Obese and Self-Employed: Evidence of Long-Term Effects from Pre-Natal Exposure to an Acute Diarrheal Disease By Patricia I. Ritter; Ricardo Sanchez
  8. The Effect of Grandchildren on Grandparental Labour Supply: Evidence from Europe By Andreas Backhaus; Mikkel Barslund
  9. Drivers of health care expenditure: Final report By Anne Mason; Idaira Rodriguez Santana; María José Aragón; Nigel Rice; Martin Chalkley; Raphael Wittenberg; Jose-Luis Fernandez
  10. A micro-based approach to evaluate the effect of water supply on health in Uganda By Raymond Frempong; Lucas Kitzmüller; David Stadelman

  1. By: David L. Dickinson; Andrew R. Smith; Robert McClelland
    Abstract: Many people suffer from insufficient sleep and the adverse effects of sleep deprivation or chronic sleep restriction are well documented. Relatedly, recent research has shown that people’s judgments and decisions can be affected by circadian timing. We contributed to this literature by examining time-of-day impact on people’s judgments about hypothetical legal scenarios, hypothesizing that participants responding at a suboptimal time of day (3-5 AM) would give higher guilt ratings and be less sensitive to case information (e.g., evidence strength) than participants responding at a more optimal time of day (2-4 PM). Despite the fact that the time-of-day manipulation successfully influenced participants’ self-reported alertness levels, the time-of-day did not affect guilt judgments or sensitivity to case information. Exploratory analyses found that chronic daytime sleepiness coupled with suboptimal time-of-day impacted participants’ judgments. This adds to the broader literature on how extraneous factors may impact probability assessments, and these results suggest that circadian timing might differentially affect people depending on other contributing factors. Key Words: Sleep deprivation; Circadian mismatch; Judgments; Bayesian choice
    Date: 2019
  2. By: Kurt J. Lavetti; Thomas DeLeire; Nicolas R. Ziebarth
    Abstract: The ACA requires insurers to provide cost-sharing reductions (CSRs) to low-income consumers on the marketplaces. We link 2013-2015 All-Payer Claims Data to 2004-2013 administrative hospital discharge data from Utah and exploit policy-driven differences in the value of CSRs that are solely determined by income. We find that enrollees with lower cost sharing have higher levels of health care spending, controlling for past health care use. We estimate the demand elasticity of total health care spending to be -0.10, but find larger elasticities for emergency room care, lifestyle drugs, and low-value care. We also find positive cross-price elasticities between outpatient and inpatient care.
    JEL: H24 H41 H43 H51 I11 I18 J32 J33 J68
    Date: 2019–11
  3. By: Philippe CHONÉ (Centre for Research in Economics and Statistics (CREST).); Elise COUDIN (Centre for Research in Economics and Statistics and Institut National de la Statistique et des Etudes Economiques (INSEE).); Anne PLA (Ministry for Solidarity and Health, Direction de la Recherche, des Etudes, de l’Evaluation et des Statistiques.)
    Abstract: We assess the extent to which specialist physicians respond to local competition when deciding how much services to provide under a fee-for-service payment system. We use an exhaustive administrative panel data set of French physicians, and account for the dual nature of the regulatory environment, with part of the physicians being subject to price regulation. The activity of fee-regulated physicians depends only on their individual preferences, and is not affected by changes in their demand or competitive environment. By contrast, the prices charged by free-billing physicians decrease and their activity increases with physician density. Reaction functions are upward-slopping, with the quantities of services provided being strategic complements. Our findings are consistent with a static oligopoly model where the consumption-leisure preferences of doctors exhibit strong income effects.
    Keywords: Fee-for-service payment, physician labor supply, income effects, spatial competition.
    JEL: I11 L13
    Date: 2019–10–17
  4. By: Bailey, James (Providence College); Hamami, Tom (Ripon College)
    Abstract: Hospitals and other health-care providers in 34 states must obtain a Certificate of Need (CON) from a state board before opening or expanding, leading to reduced competition. We develop a theoretical model of how market concentration affects health-care spending. Our theoretical model shows that increases in concentration, such as those brought about by CON, can either increase or decrease spending. Our model predicts that CON is more likely to increase spending in markets in which costs are low and patients are sicker. We test our model using spending data from the Household Component of the Medical Expenditure Panel Survey (MEPS).
    Keywords: competition; health-care spending; Certificate of Need; Medical Expenditure; Panel Survey
    JEL: I11 I18 L10
    Date: 2019–10–03
  5. By: Patralekha Ukil (University of Connecticut)
    Abstract: Much of the literature providing causal evidence of parental economic conditions on infant health has focused on the impact of positive economic or income shocks, as opposed to negative ones. The concept of loss aversion makes it clear that individuals react differently when facing potential losses compared to potential gains, and that losses tend to be twice as psychologically powerful as gains. Moreover, long-term and persistent negative shocks such as those arising through increasing import competition could have different effects on health compared to reasonably temporary shocks such as lay-offs, recessions or business cycle fluctuations. This paper examines the effect of parental or household economic shocks on infant health by exploiting the increasing import competition from China between 1990 and 2000 on U.S. local labor markets as a plausibly exogenous source of variation in economic conditions. It also utilizes additional variation stemming from parental age within the local labor markets, thereby controlling for local labor market trends and allowing the analysis of heterogeneous impacts. Results indicate that commuting zones in the U.S. which experienced increased import penetration over time also experienced an increased incidence of low birthweight and a decrease in average birthweight. Further analyses show that the above results are driven by relatively younger parents as opposed to older parents.
    Keywords: Infant health; Birthweight; Parental Income; International Trade; Income Inequality; Import Competition; Manufacturing Decline
    JEL: F14 F16 F61 I14 J13
    Date: 2019–09
  6. By: Philippe CHONÉ (Centre for Research in Economics and Statistics (CREST).); Lionel WILNER (INSEE-CREST.)
    Abstract: To assess strategic interactions in industries where endogenous product characteristics are unobserved to the researcher, we propose an empirical method that brings a competition-in-utility-space framework to the data. We apply the method to the French hospital industry. The utilities offered to patients are inferred from local market shares under AKM exclusion restrictions. The hospitals' objective functions are identified thanks to the gradual introduction of stronger financial incentives over the period of study. Offering more utility to each patient entails incurring higher costs per patient, implying that utilities are mostly strategic complements. Counterfactual simulations show that stronger incentives affect market shares but have little impact on the total number of patient admissions. We quantify the resulting gains for patients and losses for hospitals.
    Keywords: Competition in utility space; financial incentives; payment reform; hospital choice.
    JEL: D22 I11 L13
    Date: 2019–07–19
  7. By: Patricia I. Ritter (University of Connecticut); Ricardo Sanchez (Ministerio de Educacion del Peru)
    Abstract: This paper finds that women exposed to Cholera while in-utero are more likely to be obese, more likely to be self-employed and less likely to be employed in the service sector, providing evidence that these women may be suffering from discrimination in the labor market. This study suggests that, given the widespread incidencen of diarrheal diseases in the developing world, individ-uals in poor countries are born more vulnerable to becoming obese and self-employed, and, therefore, interventions that reduce these diseases will have important additional benefits as the obesity epidemic continue to expand in these countries.
    Keywords: Obesity; acute diarrheal diseases; Cholera ; clean water; in-utero
    JEL: I15 I18 O10
    Date: 2019–09
  8. By: Andreas Backhaus; Mikkel Barslund
    Abstract: Grandparents at working-age spend a considerable amount of time taking care of their grandchildren. These time transfers might imply economic trade-offs regarding the participation in the labour market. Using an instrumental variable strategy and multiple waves of the Survey of Health, Ageing and Retirement in Europe (SHARE), we estimate the causal effect of grandparenthood on the labour supply of working-age grandparents in ten European countries. In our preferred specification, we find a large negative impact of grandparenthood on the labour supply of women aged 55 to 64. This effect is particularly pronounced following the arrival of the first grandchild and for grandmothers who live in close distance to their offspring. It further operates at the extensive margin of labour supply, resulting in grandmothers leaving the labour market entirely. By contrast, male labour supply does not significantly adjust in response to grandparenthood. Our results imply a relevant trade-off between labour supply and grandchild care for European women of later working age.
    Date: 2019
  9. By: Anne Mason (Centre for Health Economics, University of York, York, UK); Idaira Rodriguez Santana (Centre for Health Economics, University of York, York, UK); María José Aragón (Centre for Health Economics, University of York, York, UK); Nigel Rice (Centre for Health Economics, University of York, York, UK); Martin Chalkley (Centre for Health Economics, University of York, York, UK); Raphael Wittenberg (London School of Economics and Political Science, UK); Jose-Luis Fernandez (London School of Economics and Political Science, UK)
    Abstract: Since the NHS was established in 1948, growth in health care expenditure (HCE) has outpaced the rise in both GDP and in total public expenditure. Known drivers of HCE growth include demographic factors, income and wealth effects, technology and cost pressures. To identify the challenges and opportunities for developing a model of healthcare demand, this report addressed two research questions: 1. What are the drivers of past trends in health care expenditure and how much has each of the drivers contributed to past increases in expenditure? 2. How much has each type of service contributed to past trends in health care expenditure and why have there been different trends for different types of care? We set out a conceptual framework for understanding drivers of HCE, placing it in the broader context of underlying drivers of demand and macroeconomic trends. We reviewed studies from higher-income countries published over the last decade, and analysed datasets compiled in-house of cost and volume of care by different settings. We linked data on HCE trends to relevant, settingspecific evidence from the literature review. We identified 52 studies using aggregate data and 54 individual-level studies. The relative contribution of different drivers could not be quantified due to heterogeneity in study methodologies. Aggregate studies using longer panels of data show that the relationship between HCE and its drivers is non-linear, varies over time and varies cross countries. These studies mostly find a strong, positive relationship between HCE and technological progress. Individual-level studies usually rely on observational, non-experimental data from administrative databases, such as claims data or registers, or on survey data or cohort studies. Trends in HCE from 2008/9 to 2016/17 reveal that the largest rises were in high cost drugs (231%), chemotherapy (113%) and attendances at A&E (59%) or outpatient departments (57%). Most evidence on the drivers of HCE related to hospital care, but we found no studies explaining the factors behind the rise in expenditure on chemotherapy or high cost drugs. We conclude by presenting four lessons that could inform decisions on building a projections model of health care expenditure.
    Date: 2019–08
  10. By: Raymond Frempong; Lucas Kitzmüller; David Stadelman
    Abstract: This paper investigates the impact of improved water provision on individual health outcomes in rural Uganda. We merge household and individual panel datasets with sub-county level administrative data on water supply projects. Our approach allows us to estimate fixed-effect panel data models which use temporal and spatial variation at the sub-county level as identifying variation. We find evidence of small effects from more installations of improved water supply on its water usage, health outcomes of household members, and water collection times. Increasing the sub-county rate of improved water sources per capita leads to a reduction in the likelihood of individuals suffering from symptoms of illness associated with inadequate water supply. We argue that our micro-based approach provides a more externally-valid and highly cost-effective means of evaluating scalable development projects.
    Keywords: Evaluation; development projects; drinking water; sanitation; child mortality
    JEL: O12 I15 I31
    Date: 2019–11

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