nep-hea New Economics Papers
on Health Economics
Issue of 2019‒12‒16
ten papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Does One Medicare Fit All? The Economics of Uniform Health Insurance Benefits By Shepard, Mark; Baicker, Katherine; Skinner, Jonathan
  2. Prescription Drug Monitoring Programs and Neonatal Outcomes By Gihleb, Rania; Giuntella, Osea; Zhang, Ning
  3. The Mental Health Effects of Retirement By Picchio, Matteo; van Ours, Jan C.
  4. Hospital Competition Under Patient Inertia: Do Switching Costs Stimulate Quality Provision? By Luís Sá
  5. Water Purification Efforts and the Black-White Infant Mortality Gap, 1906-1938 By D. Mark Anderson; Kerwin Kofi Charles; Daniel I. Rees; Tianyi Wang
  6. Children of War: In-Utero Stress and Child Health in Iraq By Sulin Sardoschau
  7. Detecting the Effects of Early-Life Exposures: Why Fecundity Matters By Nobles, Jenna; Hamoudi, Amar
  8. Methodological development of international measurement of acute myocardial infarction 30-day mortality rates at the hospital level By Michael Padget; Nelly Biondi; Ian Brownwood
  9. The Water of Life and Death: A Brief Economic History of Spirits By Lara Cockx, Giulia Meloni, Johan Swinnen
  10. The Global Tobacco Epidemic, the Plain Packaging of Tobacco Products, and the World Trade Organization By Rimmer, Matthew

  1. By: Shepard, Mark (Harvard Kennedy School); Baicker, Katherine (University of Chicago); Skinner, Jonathan (Dartmouth College)
    Abstract: There is increasing interest in expanding Medicare health insurance coverage in the U.S., but it is not clear whether the current program is the right foundation on which to build. Traditional Medicare covers a uniform set of benefits for all income groups and provides more generous access to providers and new treatments than public programs in other developed countries. We develop an economic framework to assess the efficiency and equity tradeoffs involved with reforming this generous, uniform structure. We argue that three major shifts make a uniform design less efficient today than when Medicare began in 1965. First, rising income inequality makes it more difficult to design a single plan that serves the needs of both higher- and lower-income people. Second, the dramatic expansion of expensive medical technology means that a generous program increasingly crowds out other public programs valued by the poor and middle class. Finally, as medical spending rises, the tax-financing of the system creates mounting economic costs and increasingly untenable policy constraints. These forces motivate reforms that shift towards a more basic public benefit that individuals can “top-up†with private spending. If combined with an increase in other progressive transfers, such a reform could improve efficiency and reduce public spending while benefiting low income populations.
    Date: 2019–11
  2. By: Gihleb, Rania (University of Pittsburgh); Giuntella, Osea (University of Pittsburgh); Zhang, Ning (University of Pittsburgh)
    Abstract: Over the last two decades, the number of delivering mothers using or dependent on opiates has increased dramatically, giving rise to a five-fold increase in the proportion of babies born with neonatal abstinence syndrome (NAS). First, the current study documents NAS trends in the United States and their substantial variation across states. Second, it explores the relationship, if any, between the adoption of prescription drug monitoring programs (PDMPs) and reductions in NAS incidence across the United States. We find that the introduction of operational PDMPs reduced NAS incidence in the United States by 10%. We also examined the effects on birth outcomes, infant mortality, and other pregnancy complications and find little evidence of any effect of PDMPs on birth weight, premature births, and infant mortality.
    Keywords: opioid crisis, infant outcomes, health policy, United States
    JEL: I10
    Date: 2019–11
  3. By: Picchio, Matteo (Università Politecnica delle Marche, Ancona); van Ours, Jan C. (Erasmus University Rotterdam)
    Abstract: We study the retirement effects on mental health using a fuzzy regression discontinuity design based on the eligibility age to the state pension in the Netherlands. We find that the mental effects are heterogeneous by gender and marital status. Retirement of partnered men positively affects mental health of both themselves and their partners. Single men retiring experience a drop in mental health. Female retirement has hardly any effect on their own mental health or the mental health of their partners. Part of the effects seem to be driven by loneliness after retirement.
    Keywords: retirement, health, well-being, happiness, regression discontinuity design
    JEL: H55 J14 J26
    Date: 2019–11
  4. By: Luís Sá (NIPE and Department of Economics, University of Minho)
    Abstract: Recent empirical evidence establishes previous use as a strong predictor of patient choice of hospital and indicates that switching costs explain a significant share of inertia in the hospital industry. In a model of competition between two semi-altruistic and horizontally differentiated hospitals with inherited demand, I investigate the effect of lower switching costs on quality provision and show that it depends on the hospitals' production technology and degree of altruism. If cost substitutability (complementarity) between quality and output is sufficiently weak (strong) relative to altruism, lower switching costs reduce quality at the high-volume hospital, average quality, and patient welfare. While milder patient preferences increase the scope for an increase in quality at both hospitals, it can only occur if hospitals are semi-altruistic. Finally, I show that the distribution of patients between hospitals matters. Even if hospital-level quality and patient welfare increase, lower switching costs may lead to lower average quality.
    Keywords: Hospital competition; quality; switching costs; patient choice; volume-outcome effects; altruism.
    JEL: I11 I18 L13 L51
    Date: 2019
  5. By: D. Mark Anderson; Kerwin Kofi Charles; Daniel I. Rees; Tianyi Wang
    Abstract: According to Troesken (2004), efforts to purify municipal water supplies at the turn of the 20th century dramatically improved the relative health of blacks. There is, however, little empirical evidence to support the Troesken hypothesis. Using city-level data published by the U.S. Bureau of the Census for the period 1906-1938, we explore the relationship between water purification efforts and the black-white infant mortality gap. Our results suggest that, while water filtration was effective across the board, adding chlorine to the water supply reduced mortality only among black infants. Specifically, chlorination is associated with an 11 percent reduction in black infant mortality and a 13 percent reduction in the black-white infant mortality gap. We also find that chlorination led to a substantial reduction in the black-white diarrhea mortality gap among children under the age of 2, although this estimate is measured with less precision.
    JEL: I18 J11 J15 N3
    Date: 2019–11
  6. By: Sulin Sardoschau (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: This paper combines detailed household-level data on child health with geo-coded incidences of vi- olence in Iraq to estimate the impact of in-utero exposure to violence on biometric, behavioral and cognitive outcomes of children. Rich data on severity (duration and casualties), type (bombings, ex- plosions, gun_re etc.), and perpetrators of violence (coalition, insurgent, or sectarian) on the district level allow me to discriminate between two possible mechanisms: damages to the infrastructure versus violence-induced pre-natal stress for mothers. Comparing siblings within the same household, I find that one single violent incidence during pregnancy significantly increases the risk of stuntedness, malnutrition and weakens major cognitive and behavioral skills. While the type of violence does not seem to play a major role, the perpetrator of violence seems to matter. Violent acts that explicitly target the civilian population, even if they have little e_ect on the general infrastructure, appear to be the driver behind the effect.
    Keywords: stress,violence,health,Iraq
    Date: 2019–11
  7. By: Nobles, Jenna; Hamoudi, Amar
    Abstract: Prenatal exposures have meaningful effects on health across the lifecourse. Innovations in causal inference have shed new light on these effects. Here, we motivate the importance of innovation in the characterization of fecundity, and prenatal selection in particular. We argue that such innovation is crucial for expanding knowledge of the fetal origins of later life health. Pregnancy loss is common, responsive to environmental factors, and closely related to maternal and fetal health outcomes. As a result, selection into live birth is driven by many of the same exposures that shape the health trajectories of survivors. Lifecourse effects that are inferred without accounting for these dynamics may be significantly distorted by survival bias. We use a set of Monte Carlo simulations with realistic parameters to examine the implications of prenatal survival bias. We find that even in conservatively specified scenarios, true fetal origin effects can be underestimated by 50% or more. In contrast, effects of exposures that reduce the probability of prenatal survival but improve the health of survivors will be overestimated. The absolute magnitude of survival bias can even exceed small effect sizes, resulting in inferences that beneficial exposures are harmful or vice-versa. We also find reason for concern that moderately sized true effects, underestimated due to failure to account for selective survival, are missing from scientific knowledge because they do not clear statistical significance filters. This bias has potential real-world costs; policy decisions about interventions to improve maternal and infant health will be affected by underestimated program impact.
    Date: 2019–11–11
  8. By: Michael Padget (OECD); Nelly Biondi; Ian Brownwood (OECD)
    Abstract: International quality measurement work is moving beyond the consideration of health system or national level variations to understand variations within countries and enable more meaningful cross-country comparison. Hospital performance is one key area where policy makers are increasing their focus on reducing variation, lifting the overall standards of care while minimizing the widespread differences in access and quality of care that are evident within health systems.In 2014 the OECD launched the Hospital Performance Project to better understand performance across countries and strengthen international comparisons. From 2015-2018 the OECD developed a method for measuring hospital level acute myocardial infarction 30-day mortality for international comparison. The methodological development and pilot data collections undertaken over this time have resulted in robust and feasible approach to ongoing routine international hospital level data collections on AMI 30-day mortality rates with potential applications to other subnational level indicators. This paper discusses the development of this measurement including technical as well as practical aspects of collecting, displaying, and analysing such data.
    JEL: C18 C13 I14
    Date: 2019–12–13
  9. By: Lara Cockx, Giulia Meloni, Johan Swinnen
    Abstract: Spirits represent around 50% of global alcohol consumption. This sector is much less studied than other alcohol beverages such as wine or beer. This paper reviews the economic history of spirits and analyses recent trends in the spirits markets. The technology to produce spirits is more complex than for wine or beer. Distillation was known in ancient Chinese, Indian, Greek and Egyptian societies, but it took innovations by the Arabs to distil alcohol. Initially this alcohol was used for medicinal purposes. Only in the middle ages did spirits become a widespread drink and did commercial production and markets. The Industrial Revolution created a large consumer market and reduced the cost of spirits, contributing to excess consumption and alcoholism. Governments have intervened extensively in spirits markets to reduce excessive consumption and to raise taxes. There have been significant changes in spirits consumption and trade over time. Over the past 50 years, the share of spirits in global alcohol consumption increased from around 30% to around 50%. In the past decades there was strong growth in emerging markets, including in China and India. The spirits industry has concentrated, but less so than e.g. the brewery industry. Recent developments in the spirits industry include premiumization, the growth of craft spirits and the introduction of terroir for spirits.
    Keywords: spirits, distillation technology, globalization and convergence of alcohol preferences, alcohol and health, alcohol regulations, craft and industry concentration
    Date: 2019
  10. By: Rimmer, Matthew (Queensland University of Technology)
    Abstract: In response to complaints by Ukraine, Honduras, the Dominican Republic, Cuba, and Indonesia, the Government of Australia has defended the introduction of plain packaging of tobacco products in the World Trade Organization. This article focuses upon the legal defence of Australia before the WTO Panel. A key part of its defence has been the strong empirical evidence for the efficacy of plain packaging of tobacco products as a legitimate health measure designed to combat the global tobacco epidemic. Australia has provided a convincing case that plain packaging of tobacco products is compatible with the TRIPS Agreement 1994 – particularly the clauses relating to the aims and objectives of the agreement; the requirements in respect of trade mark law; and the parallel measures in relation to access to essential medicines. Australia has also defended the consistency of plain packaging of tobacco products with the TBT Agreement 1994. Moreover, Australia has provided clear reasons for why the plain packaging of tobacco products is compatible with GATT. The position of Australia has been reinforced by a number of third parties – such as New Zealand, the United Kingdom, Ireland, Norway, Canada, and others - which have also been pioneers in tobacco control and public health. Australia’s leadership in respect of tobacco control and plain packaging of tobacco products is further supported by larger considerations in respect of international public health law, human rights, and sustainable development.
    Date: 2017–12–29

This nep-hea issue is ©2019 by Nicolas R. Ziebarth. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.