nep-hea New Economics Papers
on Health Economics
Issue of 2020‒02‒03
eleven papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Does competition from private surgical centres improve public hospitals’ performance? Evidence from the English National Health Service By Cooper, Zack; Gibbons, Stephen; Skellern, Matthew
  2. Socioeconomic Decline and Death: Midlife Impacts of Graduating in a Recession By Hannes Schwandt; Till M. von Wachter
  3. Is Happiness U-shaped Everywhere? Age and Subjective Well-being in 132 Countries By David G. Blanchflower
  4. Effect of a Health Shock on Working Hours and Health Care Usage: The role of Financial Inclusion By Paul Owusu Takyi; Roberto Leon-Gonzalez
  5. Health Shocks and the Evolution of Earnings over the Life-Cycle By Michael Keane; Elena Capatina; Shiko Maruyama
  6. Health subsidies, prevention and welfare By Luca Marchiori; Olivier Pierrard
  7. More to Live for: Health Investment Responses to Expected Retirement Wealth in Chile By Miller, Grant; Valdés, Nieves; Vera-Hernández, Marcos
  8. Sick of my parents? Consequences of parental ill health on adult children By Norén, Anna
  9. The Effect of the National Kidney Registry on the Kidney-Exchange Market By Roksana Ghanbariamin; Bobby W. Chung
  10. The Value of Free Health Insurance Schemes in Developing Countries By Conti, Gabriella; Ginja, Rita; Narita, Renata
  11. The role of doctors in Kuwait’s healthcare costs By Abdulsalam, Yousef

  1. By: Cooper, Zack; Gibbons, Stephen; Skellern, Matthew
    Abstract: This paper examines the impact of a government programme which facilitated the entry of for-profit surgical centres to compete against incumbent National Health Service hospitals in England. We examine the impact of competition from these surgical centres on the efficiency – measured by pre-surgery length of stay for hip and knee replacement patients – and case mix of incumbent public hospitals. We exploit the fact that the government chose the broad locations where these surgical centres (Independent Sector Treatment Centres or ISTCs) would be built based on local patient waiting times – not length of stay or clinical quality – to construct treatment and control groups that are comparable with respect to key outcome variables of interest. Using a difference-in-difference estimation strategy, we find that the entry of surgical centres led to shorter pre-surgery length of stay at nearby public hospitals. However, these new entrants took on healthier patients and left incumbent hospitals treating patients who were sicker. This paper highlights a potential trade-off that policymakers face when they promote competition from private, for-profit firms in markets for the provision of public services.
    Keywords: hospital competition; public-private competition; market entry; market structure; outsourcing; hospital efficiency; risk selection; cream skimming; public services; ES/M010341/1
    JEL: C23 H57 I11 L1 L32 L33 R12
    Date: 2018–10–01
  2. By: Hannes Schwandt; Till M. von Wachter
    Abstract: This paper uses several large cross-sectional data sources and a new approach to estimate midlife effects of entering the labor market in a recession on mortality by cause and various measures of socioeconomic status. We find that cohorts coming of age during the deep recession of the early 1980s suffer increases in mortality that appear in their late 30s and further strengthen through age 50. We show these mortality impacts are driven by disease-related causes such as heart disease, lung cancer, and liver disease, as well as drug overdoses. At the same time, unlucky middle-aged labor market entrants earn less and work more while receiving less welfare support. They are also less likely to be married, more likely to be divorced, and experience higher rates of childlessness. Our findings demonstrate that tempo- rary disadvantages in the labor market during young adulthood can have substantial impacts on lifetime outcomes, can affect life and death in middle age, and go beyond the transitory initial career effects typically studied.
    JEL: E32 I10 J10
    Date: 2020–01
  3. By: David G. Blanchflower
    Abstract: I draw systematic comparisons across 109 data files and 132 countries of the relationship between well-being, variously defined, and age. I produce 444 significant country estimates with controls, so these are ceteris paribus effects, and find evidence of a well-being U-shape in age in one hundred and thirty-two countries, including ninety-five developing countries, controlling for education, marital and labor force status. I also frequently find it without any controls at all. There is additional evidence from an array of attitudinal questions that were worded slightly differently than standard happiness or life satisfaction questions such as satisfaction with an individual's financial situation. Averaging across the 257 individual country estimates from developing countries gives an age minimum of 48.2 for well-being and doing the same across the 187 country estimates for advanced countries gives a similar minimum of 47.2. The happiness curve is everywhere.
    JEL: I31 J01
    Date: 2020–01
  4. By: Paul Owusu Takyi (National Graduate Institute for Policy Studies, Tokyo, Japan); Roberto Leon-Gonzalez (National Graduate Institute for Policy Studies, Tokyo, Japan)
    Abstract: This study explores the role of financial inclusion in the mitigation of the effects of a health shock at the household level. To that end, we examine empirically the effect of financial inclusion on household working hours and health care utilization, using round six of the Ghana Living Standard Survey data. We find that a health shock does decrease household working hours and increase the likelihood of health care utilization. This suggests that households in Ghana are not able to fully insure themselves against a health shock. However, we find that, faced with a health shock, households who are financially excluded see their working hours reduce more than those who enjoy full financial inclusion. Also, financial inclusion increases the likelihood of health care utilization when households experience a health shock. We find evidence that loan acquisition (borrowing) is one of the main mechanisms by which households can insure themselves against a health shock. Generally, our findings support the financial inclusion agenda of policymakers in Ghana and many other countries. Thus, efforts to ensure full financial inclusion will increase the probability of households using the financial sector as a means of insulating themselves against the effects of health shocks.
    Date: 2020–01
  5. By: Michael Keane (School of Economics, UNSW Business School, UNSW Sydney); Elena Capatina (Research School of Economics, Australian National University); Shiko Maruyama (Economics Discipline Group, UTS Business School, University of Technology Sydney)
    Abstract: We study the contribution of health shocks to earnings inequality and uncertainty in labor market outcomes. We calibrate a life-cycle model with idiosyncratic health, earnings, employment and survival risk, where individuals make labor supply and savings decisions, adding two novel features. First, we model health as a complex multidimensional concept. We differentiate between functional health and latent health risk, and between temporary/persistent and predictable/unpredictable health shocks. Second, we model interactions between health and human capital accumulation. We find that, in an environment with both costly health shocks and means-tested transfers, low-skill workers find it optimal to reduce their labor supply in order to maintain eligibility for transfers that protect them from potentially high health care costs. Thus, means-tested transfers generate a moral hazard effect that causes agents (especially those with low productivity) to invest less in human capital. Provision of public insurance can alleviate this problem and enhance labor supply.
    Keywords: Health, Health Shocks, Human Capital, Income Risk, Precautionary Saving, Earnings Inequality, Health Insurance, Welfare
    JEL: D91 E21 I14 I31
    Date: 2019–12
  6. By: Luca Marchiori; Olivier Pierrard
    Abstract: Health subsidies involve public budgetary costs. However, they generate a positive externality by encouraging participation in health-improving initiatives, which help reduce future health care costs. We build an overlapping generations model with a government subsidizing investment in health by the young generation and paying the health care costs of the old generation. We find that the welfare-maximizing subsidy rate depends positively on health externality and the size of health care costs, and negatively on the discount factor. The subsidy rate should therefore be high when prevention more effective at cost saving and when the population is myopic about the future. Moreover, the welfare-maximizing subsidy rate is lower than the health-maximizing rate but higher than the capital-maximizing rate.
    Keywords: Overlapping generations model, health subsidy, welfare
    JEL: H23 I18 O41
    Date: 2020–01
  7. By: Miller, Grant; Valdés, Nieves; Vera-Hernández, Marcos
    Abstract: A poorly understood but important way that economic conditions influence health is through the incentives that they create for health investments. In this paper, we study how individuals’ current health investments respond to changes in expected future wealth, focusing on Chile’s 1981 public pension. We compile detailed administrative pension data linked to a rich household panel survey, and we then exploit discrete breaks in the reform’s impact on expected pension wealth across cohorts of Chileans using a fuzzy regression kink design to estimate how health behavior, preventive health care use, and chronic disease diagnoses respond to changes in expected pension wealth. Consistent with theoretical predictions, we find that greater expected pension wealth increases the use of medical services –and in turn, the detection of chronic diseases. More generally, our results provide new empirical evidence of forward-looking behavior consistent with the life-cycle and permanent income hypotheses.
    Keywords: Evaluación de impacto, Políticas públicas, Salud,
    Date: 2019
  8. By: Norén, Anna (Uppsala University)
    Abstract: I study the consequences for labor market outcomes and sick leave of having an elderly parent in need of care. Using Swedish register data I compare the labor market outcome trajectories of adult children before and after their parent suffers a health shock. I find that employment and income of adult children are slightly reduced in the years leading up to the demise of their parent, but that the size of the impact is largest in the year, and the year after, parental demise. I also find that daughter’s sick leave absence increases in the year that the parent dies. No effects on labor market outcomes are found from having a parent suffering stroke. Furthermore, I find no clear gender differences between sons and daugh-ters in the impact of having a parent with increased care demand. Taken together, the results suggest that the opportunity costs of parental care need in the form of adverse labor market impacts are small.
    Keywords: Formal and Informal care; Elderly; Labor supply
    JEL: J14 J22
    Date: 2020–01–24
  9. By: Roksana Ghanbariamin; Bobby W. Chung
    Abstract: We assess the causal effect of the National Kidney Registry (NKR), the largest national kidney-exchange network in the U.S., on kidney-exchange outcomes. Analyzing a unique database hosted by the Scientific Registry of Transplant Recipients (SRTR) that contains information on all kidney donors, wait-listed candidates, and transplant recipients in the U.S., we find that patients in an NKR hospital are 2.5 to 3 times more likely than their counterparts in a non-NKR hospital to receive a transplant from a living donor, conditional on wait-time. At the same time, NKR participation does not have a significant effect on the desirability of donors and the health status of recipients. We employ various approaches to ensure our finding is robust in addressing the non-random sorting of patients and donors. As far as the outcomes we study, the expansion of the NKR brings about an overall positive impact on the kidney exchange market.
    Keywords: kidney-exchange networks, National Kidney Registry, NKR
    JEL: I11 L14
    Date: 2020–01
  10. By: Conti, Gabriella; Ginja, Rita; Narita, Renata
    Abstract: Brazil began the implementation of SUS (Universal Health Insurance) in 1988. To the extent that SUS broke the link between employment contract and health insurance, it may have changed the incentives for individuals to participate in the labor market and in which sector to work (formal or informal). Our goal is to study the labor market impacts of SUS. We do so by structurally estimating a labor market model that allows us to address three main questions (i) How much of the increase in informality in Brazil is due to the introduction of non-contributory health insurance? (ii) How much do individuals value health insurance? And (iii) What are the welfare impacts of increases in the value of non-contributory health insurance? The model is fitted to Brazilian employment data and used to simulate changes in welfare, employment, informality and wages of different noncontributory health insurance policies.
    Keywords: Innovación social, Políticas públicas, Salud,
    Date: 2019
  11. By: Abdulsalam, Yousef
    Abstract: In healthcare supply management, the physician’s role in supply selection, driven largely by their clinical expertise, directly impacts hospital cost performance. Previous research suggests physicians have limited regard to the cost implications of supplies they use or prescribe, even when it does not adversely impact clinical quality. The purpose of this study is to assess the perceived importance and attention that physicians give to the costs of medical supplies in a public healthcare system and compares between physician cost perceptions of pharmaceutical products and medical devices. Physicians working in Kuwait’s public health sector were asked to estimate the cost of 18 common pharmaceutical products and medical devices. Estimates within 25 percent of the actual cost were considered accurate. One-hundred and four responses were gathered from physicians working in Kuwait’s public health sector. On average, physicians accurately estimated only 22 percent of pharmaceutical products and 14 percent of medical devices. Physicians indicated cost should be an important supply selection criterion but generally indicated limited accessibility to cost information. Hospital administrators should consider increasing accessibility to cost information and involving physician leaders in procurement and supply rationalization initiatives. Education about supply management and cost containment may hold value for both physicians and the healthcare system.
    JEL: N0
    Date: 2019–12–01

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