nep-hea New Economics Papers
on Health Economics
Issue of 2020‒04‒13
27 papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. An SEIR Infectious Disease Model with Testing and Conditional Quarantine By David Berger; Kyle Herkenhoff; Simon Mongey
  2. Susceptible-Infected-Recovered (SIR) Dynamics of COVID-19 and Economic Impact By Alexis Akira Toda
  3. What Will Be the Economic Impact of COVID-19 in the US? Rough Estimates of Disease Scenarios By Andrew Atkeson
  4. Are We #StayingHome to Flatten the Curve? By Villas-Boas, Sofia B; Sears, James; Villas-Boas, Miguel; Villas-Boas, Vasco
  5. Urgently Needed for Policy Guidance: An Operational Tool for Monitoring the COVID-19 Pandemic By Stéphane Luchini; Miriam Teschl; Patrick Pintus; Mickael Degoulet; C. Baunez; Jean-Paul Moatti
  6. "Public Charge in the Time of Coronavirus" By Martha Tepepa
  7. Fight the Pandemic, Save the Economy: Lessons from the 1918 Flu By Sergio Correia; Stephan Luck; Emil Verner
  8. Early Childhood Education and Life-cycle Health By García, Jorge Luis; Heckman, James J.
  9. Maternal Investments in Children: The Role of Expected Effort and Returns By Bhalotra, Sonia R.; Delavande, Adeline; Gilabert, Paulino Font; Maselko, Joanna
  10. Early Childhood Care and Cognitive Development By Chaparro, Juan; Sojourner, Aaron J.; Wiswall, Matthew
  11. Long term impact of parents’ smoking on their children’s health: Childhood circumstances and adult outcomes By Yamamura, Eiji
  12. The Effect of Open-Air Waste Burning on Infant Health: Evidence from Government Failure in Lebanon By Mouganie, Pierre; Ajeeb, Ruba; Hoekstra, Mark
  13. Why Do We Procrastinate? Present Bias and Optimism By Breig, Zachary; Gibson, Matthew; Shrader, Jeffrey G.
  14. Machiavelli versus Concave Utility Functions: Should Bads Be Spread out or Concentrated? By Frijters, Paul; Krekel, Christian; Ulker, Aydogan
  15. Chain Restaurant Calorie Posting Laws, Obesity, and Consumer Welfare By Courtemanche, Charles; Frisvold, David E.; Jimenez-Gomez, David; Ouayogodé, Mariétou H.; Price, Michael
  16. Targeting the spatial context of obesity determinants via multiscale geographically weighted regression By Oshan, Taylor M.; Smith, Jordan; Fotheringham, Alexander Stewart
  17. The Impact of BMI on Mental Health: Further Evidence from Genetic Markers By Amin, Vikesh; Flores, Carlos A.; Flores-Lagunes, Alfonso
  18. Do-It-Yourself Medicine? The Impact of Light Cannabis Liberalization on Prescription Drugs By Carrieri, Vincenzo; Madio, Leonardo; Principe, Francesco
  19. Long-Term Health Insurance: Theory Meets Evidence By Juan Pablo Atal; Hanming Fang; Martin Karlsson; Nicolas R. Ziebarth
  20. Out of the Woodwork: Enrollment Spillovers in the Oregon Health Insurance Experiment By Adam Sacarny; Katherine Baicker; Amy Finkelstein
  21. Medical Spending, Bequests, and Asset Dynamics Around the Time of Death By John Bailey Jones; Mariacristina De Nardi; Eric French; Rory McGee; Rachel Rodgers
  22. The Impact of the ACA Medicaid Expansions on the Employment and Academic Progress of College Students By Gicheva, Dora; Anand, Priyanka
  23. Macroeconomic Conditions and Health in Britain: Aggregation, Dynamics and Local Area Heterogeneity By Janke, Katharina; Lee, Kevin; Propper, Carol; Shields, Kalvinder; Shields, Michael A.
  24. Coping with the consequences of short-term illness shocks: The Role of intra-household labour substitution By Abhishek Dureja; Digvijay S. Negi
  25. The 'Netflix plus model': Can subscription financing improve access to medicines in low- And middle-income countries? By Cherla, Avi; Howard, Natasha; Mossialos, Elias
  26. Understanding Cross-country Differences in Health Status and Expenditures By Raquel Fonseca; François Langot; Pierre-Carl Michaud; Thepthida Sopraseuth
  27. Digital Health Divide in South Asia: Ethical Concerns, Challenges, and Recommendations By Hossain, Md Mahbub; Weng, Wenting; Bhattacharya, Sudip; Mazumder, Hoimonty; Faizah, Farah

  1. By: David Berger (Duke University); Kyle Herkenhoff (University of Minnesota); Simon Mongey (The University of Chicago)
    Abstract: We extend the baseline Susceptible-Exposed-Infectious-Recovered (SEIR) infectious disease epidemiology model to understand the role of testing and case-dependent quarantine. Our model nests the SEIR model. During a period of asymptomatic infection, testing can reveal infection that otherwise would only be revealed later when symptoms develop. Along with those displaying symptoms, such individuals are deemed known positive cases. Quarantine policy is case-dependent in that it can depend on whether a case is unknown, known positive, known negative, or recovered. Testing therefore makes possible the identification and quarantine of infected individuals and release of non-infected individuals. We fix a quarantine technology—a parameter determining the differential rate of transmission in quarantine—and compare simple testing and quarantine policies. We start with a baseline quarantine-only policy that replicates the rate at which individuals are entering quarantine in the US in March, 2020. We show that the total deaths that occur under this policy can be achieved under looser quarantine measures and a substantial increase in random testing of asymptomatic individuals. Testing at a higher rate in conjunction with targeted quarantine policies can (i) dampen the economic impact of the coronavirus and (ii) reduce peak symptomatic infections—relevant for hospital capacity constraints. Our model can be plugged into richer quantitative extensions of the SEIR model of the kind currently being used to forecast the effects of public health and economic policies.
    Keywords: symptoms, quarantine policy, economic impact of disease
    JEL: I10 E17 D80
    Date: 2020–03
  2. By: Alexis Akira Toda
    Abstract: I estimate the Susceptible-Infected-Recovered (SIR) epidemic model for Coronavirus Disease 2019 (COVID-19). The transmission rate is heterogeneous across countries and far exceeds the recovery rate, which enables a fast spread. In the benchmark model, 28% of the population may be simultaneously infected at the peak, potentially overwhelming the healthcare system. The peak reduces to 6.2% under the optimal mitigation policy that controls the timing and intensity of social distancing. A stylized asset pricing model suggests that the stock price temporarily decreases by 50% in the benchmark case but shows a W-shaped, moderate but longer bear market under the optimal policy.
    Date: 2020–03
  3. By: Andrew Atkeson
    Abstract: This note is intended to introduce economists to a simple SIR model of the progression of COVID-19 in the United States over the next 12-18 months. An SIR model is a Markov model of the spread of an epidemic in a population in which the total population is divided into categories of being susceptible to the disease (S), actively infected with the disease (I), and recovered (or dead) and no longer contagious (R). How an epidemic plays out over time is determined by the transition rates between these three states. This model allows for quantitative statements regarding the tradeoff between the severity and timing of suppression of the disease through social distancing and the progression of the disease in the population. Example applications of the model are provided. Special attention is given to the question of if and when the fraction of active infections in the population exceeds 1% (at which point the health system is forecast to be severely challenged) and 10% (which may result in severe staffing shortages for key financial and economic infrastructure) as well as the cumulative burden of the disease over an 18 month horizon.
    JEL: C0 E0
    Date: 2020–03
  4. By: Villas-Boas, Sofia B; Sears, James; Villas-Boas, Miguel; Villas-Boas, Vasco
    Abstract: The spread of COVID-19 across the U.S. in the months since January 2020 and the worry of an impending strain on the medical system led to concerted efforts to “flatten the curve" by encouraging individuals to stay at home and maintain social distance. Since then, many individual U.S. counties and entire states have implemented stay-at-home mandates in order to reduce the speed of contagion and delay or ultimately reduce the influx of patients seeking medical treatment for COVID-19 symptoms. This study uses variation in statewide adoption of stay-at-home mandates and observed reductions in activity away from home, measured by changes in average distance traveled per day, to investigate the linkage between reduced travel and COVID-19 health outcomes. We use data on changes in mobility patterns across the U.S. since the onset of COVID-19 to discuss evidence of overall reductions in daily travel; characterize the direct impact of stay-at-home mandates on daily travel; and link travel reductions to health outcomes. We find that once mandates go into effect, residents of states with mandates reduced average distances traveled by an additional 8.1 percentage points in comparison to non-mandate states – a decline of 77% relative to the mean change during the sample period. On the day a mandate is implemented, we observe a reduction in activity levels 50% greater in magnitude than the average change. We find evidence that the observed reductions in travel ultimately improve health outcomes, as reductions in distance traveled in the three weeks prior to implementation of statewide stay-at-home are associated with 1.78 fewer daily hospitalizations and 0.22 fewer daily deaths per million due to COVID-19. Our findings provide evidence that states’ stay-at-home ordinances are having the intended effect of reducing travel, will ultimately mitigate some of the negative health consequences of COVID-19, and reflect an important policy tool in the fight against the pandemic.
    Keywords: Social and Behavioral Sciences, coronavirus | covid-19, stay-at-home, flatten the curve, policy impacts
    Date: 2020–04–05
  5. By: Stéphane Luchini (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Miriam Teschl (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Patrick Pintus (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Mickael Degoulet (INT - Institut de Neurosciences de la Timone - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); C. Baunez (INT - Institut de Neurosciences de la Timone - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université); Jean-Paul Moatti (IMéRA - Institute for Advanced Studies - Aix-Marseille University)
    Abstract: The radical uncertainty around the current COVID19 pandemics requires that governments around the world should be able to track in real time not only how the virus spreads but, most importantly, what policies are effective in keeping the spread of the disease under check. To improve the quality of health decision-making, we argue that it is necessary to monitor and compare acceleration/deceleration of confirmed cases over health policy responses, across countries. To do so, we provide a simple mathematical tool to estimate the convexity/concavity of trends in epidemiological surveillance data. Had it been applied at the onset of the crisis, it would have offered more opportunities to measure the impact of the policies undertaken in different Asian countries, and to allow European and North-American governments to draw quicker lessons from these Asian experiences when making policy decisions. Our tool can be especially useful as the epidemic is currently extending to lower-income African and South American countries, some of which have weaker health systems.
    Keywords: Acceleration,Convexity,COVID-19,Data Dashboard,Detection of Infectious Diseases,Public Health Policy,Sensitivity
    Date: 2020–03
  6. By: Martha Tepepa
    Abstract: The United States government recently passed legislation and stabilization packages to respond to the COVID-19 (i.e., coronavirus disease 2019) outbreak by providing paid sick leave, tax credits, and free virus testing; expanding food assistance and unemployment benefits; and increasing Medicaid funding. However, the response to the global pandemic might be hindered by the lassitude of the state and the administration's conception of social policy that leaves the most vulnerable unprotected. The administration's "zero tolerance" immigration campaign poses public health challenges, especially in the prevention of communicable diseases. In addition to the systemic obstacles noncitizens face in their access to healthcare, recent changes to immigration law that penalize recipients of some social services on grounds that they are a public charge will further restrict their access to treatment and hinder the fight against the pandemic.
    Keywords: Public Charge; Public Services; Coronavirus; COVID-19; Social Policy; State; Means Testing; Public Assistance; Welfare Policy; Free Rider
    JEL: H4 H55 H57 H75 H84 I38 O15 O51 Z18
  7. By: Sergio Correia; Stephan Luck; Emil Verner
    Abstract: The COVID-19 outbreak has sparked urgent questions about the impact of pandemics, and associated countermeasures, on the real economy. Policymakers are in uncharted territory, with little guidance on what the expected economic fallout will be and how the crisis should be managed. In this blog post, we use insights from a recent research paper to discuss two sets of questions. First, what are the real economic effects of a pandemic—and are these effects temporary or persistent? Second, how does the local public health response affect the economic severity of the pandemic? In particular, do non-pharmaceutical interventions (NPIs) such as social distancing have economic costs, or do policies that slow the spread of the pandemic also reduce its economic severity?
    Keywords: non-pharmaceutical interventions; real effects; Pandemic
    JEL: N32 E0 N12 E32
    Date: 2020–03–27
  8. By: García, Jorge Luis (Clemson University); Heckman, James J. (University of Chicago)
    Abstract: This paper forecasts the life-cycle treatment effects on health of a high-quality early childhood program. Our predictions combine microsimulation using non-experimental data with experimental data from a midlife long-term follow-up. The follow-up incorporated a full epidemiological exam. The program mainly benefits males and significantly reduces the prevalence of heart disease, stroke, cancer, and mortality across the life-cycle. For men, we estimate an average reduction of 3.8 disability-adjusted years (DALYs). The reduction in DALYs is relatively small for women. The gain in quality-adjusted life years (QALYs) is almost enough to offset all of the costs associated with program implementation for males and half of program costs for women.
    Keywords: early childhood education, life-cycle health, long-term forecasts, program evaluation, randomized trials
    JEL: I10 J13 I28 C93
    Date: 2020–03
  9. By: Bhalotra, Sonia R. (University of Essex); Delavande, Adeline (University of Technology, Sydney); Gilabert, Paulino Font (University of Essex); Maselko, Joanna (University of North Carolina, Chapel Hill)
    Abstract: We investigate the importance of subjective expectations of returns to and effort costs of the two main investments that mothers make in newborns: breastfeeding and stimulation. We find heterogeneity across mothers in expected effort costs and expected returns for outcomes in the cognitive, socio-emotional and health domains, and we show that this contributes to explaining heterogeneity in investments. We find no significant heterogeneity in preferences for child developmental outcomes. We simulate the impact of various policies on investments. Our findings highlight the relevance of interventions designed to reduce perinatal fatigue alongside interventions that increase perceived returns to investments.
    Keywords: beliefs, subjective expectations, maternal investment, child development, early life, maternal depression, effort costs, psychic costs
    JEL: I12 I15 J24
    Date: 2020–03
  10. By: Chaparro, Juan (Universidad EAFIT); Sojourner, Aaron J. (University of Minnesota); Wiswall, Matthew (University of Wisconsin-Madison)
    Abstract: This paper combines multiple sources of information on early childhood development in a unified model for analysis of a wide range of early childhood policy interventions. We develop a model of child care in which households decide both the quantities and qualities of maternal and non-maternal care along with maternal labor supply. The model introduces a novel parenting-effort channel, whereby child care subsidies that permit less parenting may enable better parenting. To estimate the model, we combine observational data with experimental data from the Infant Health and Development Program (IHDP) which randomly assigned free child care when the child was 1 and 2 years old. We estimate a cognitive skill production function and household preferences, giving insight into mechanisms driving the ex post heterogeneous effects of the IHDP intervention, accounting for alternative care substitutes available to the control group and spillovers of the child care offer across the household's decisions. We also estimate ex ante effects of counterfactual policies such as an offer of lower-quality care, requiring a co-pay for subsidized care, raising the maternal wage offer, or a cash transfer. Finally, we use the model to rationalize existing evidence from outside the US on the effects of universal child care programs.
    Keywords: human capital, skill formation, child care, maternal labor supply
    JEL: J13 D1
    Date: 2020–03
  11. By: Yamamura, Eiji
    Abstract: I examined how childhood circumstances of parents’ smoking and drinking behaviors influenced their children’s health status in later life. During the initial survey, I asked the respondents about their parents’ unhealthy behaviors when they were in primary school. Using this data, I conducted estimations to find out whether even after controlling respondents’ drinking and smoking behaviors, their health status was lower, if during their childhood, their mothers had smoked. On the other hand, similar detrimental effects were not observed for mothers’ drinking as well as fathers' smoking and drinking behaviors.
    Keywords: Smoking behavior; Drinking behavior, Parents’ effect; Childhood circumstance; Adult outcome; Externality.
    JEL: J1 J12 J13 J16
    Date: 2020–03–10
  12. By: Mouganie, Pierre (American University of Beirut); Ajeeb, Ruba (American University of Beirut); Hoekstra, Mark (Texas A&M University)
    Abstract: An estimated 40 percent of the world's garbage is burned in open-air fires, which are responsible for as much as half of the global emissions of some pollutants. However, there is little evidence on the health consequences of open-air waste burning. In this paper, we estimate the effect of in utero exposure to open-air waste burning on birth outcomes. We do so by examining the consequences of the Lebanese garbage crisis of 2015, which led to an abrupt, unanticipated increase in waste burning in residential neighborhoods in Beirut and Mount Lebanon. To identify effects, we exploit variation in exposure across neighborhoods before and after the crisis. Results indicate exposure had large impacts on birth outcomes; in utero exposure to at least one open-air waste burn increased premature births by 4 percentage points (50%) and low birth weight by 5 to 8 percentage points (80 - 120%). Given previous research documenting the long-run effects of prenatal shocks on adult health, human capital, and labor market outcomes, this suggests open-air waste burning imposes significant costs on populations worldwide.
    Keywords: prenatal health, in utero pollution exposure, open-air waste burning
    JEL: I18 H41
    Date: 2020–03
  13. By: Breig, Zachary (University of Queensland); Gibson, Matthew (Williams College); Shrader, Jeffrey G. (Columbia University)
    Abstract: Research has shown that procrastination has signicant adverse effects on individuals, including lower savings and poorer health. Procrastination is typically modeled as resulting from present bias. In this paper we study an alternative: excessively optimistic beliefs about future demands on an individual's time. The models can be distinguished by how individuals respond to information on their past choices. Experimental results refute the hypothesis that present bias is the sole source of dynamic inconsistency, but they are consistent with optimism. These findings offer an explanation for low takeup of commitment and suggest that personalized information on past choices can mitigate procrastination.
    Keywords: discounting, beliefs, dynamic inconsistency, real effort
    JEL: D90 D84 J22
    Date: 2020–03
  14. By: Frijters, Paul (London School of Economics); Krekel, Christian (London School of Economics); Ulker, Aydogan (Deakin University)
    Abstract: Is wellbeing higher if the same number of negative events is spread out rather than bunched in time? Should positive events be spread out or bunched? We answer these questions exploiting quarterly data on six positive and twelve negative life events in the Household, Income and Labour Dynamics in Australia panel. Accounting for selection, anticipation, and adaptation, we find a tipping point when it comes to negative events: once people experience about two negative events, their wellbeing depreciates disproportionally as more and more events occur in a given period. For positive events, effects are weakly decreasing in size. So both the good and the bad should be spread out rather than bunched in time, corresponding to the classic economic presumption of concave utility rather than Machiavelli's prescript of inflicting all injuries at once. Yet, differences are small, with complete smoothing of all negative events over all people and periods calculated to yield no more than a 12% reduction in the total negative welbeing impact of negative events.
    Keywords: wellbeing, mental health, life events, non-linearities, hedonic adaptation, welfare analysis
    JEL: D1 I31 K0
    Date: 2020–02
  15. By: Courtemanche, Charles (Georgia State University); Frisvold, David E. (University of Iowa); Jimenez-Gomez, David (Universidad de Alicante); Ouayogodé, Mariétou H. (University of Wisconsin-Madison); Price, Michael (University of Alabama)
    Abstract: The 2010 Patient Protection and Affordable Care Act (ACA) introduced a mandate requiring chain restaurants to post calorie counts on menus and menu boards. This paper investigates whether and why calorie posting laws work. To do so, we develop a model of calories consumed that highlights two potential channels through which mandates influence choice and outlines an empirical strategy to disentangle these alternatives. We test the predictions of our model using data from the Behavioral Risk Factor Surveillance System to compare changes in body mass index (BMI), obesity, and consumer well-being in locations that implemented calorie-posting laws between 2008 and 2011 to those in neighboring locations without such laws. We find that calorie mandates lead to a small but statistically significant reduction in average BMI of 0.2 kg/m2 (1.5 pounds) and reductions in self-reported measures of life satisfaction. Quantile regressions provide evidence that reductions in BMI and life satisfaction are concentrated among those with healthy weight. Viewed in its totality, the pattern of results is consistent with an economic model in which calorie labels influence consumers both by providing information and by imposing a welfare-reducing moral cost on unhealthy eating.
    Keywords: regulation, obesity, menu labeling laws, calorie, information provision, moral costs
    JEL: I12 I18 I31 D91
    Date: 2020–03
  16. By: Oshan, Taylor M.; Smith, Jordan; Fotheringham, Alexander Stewart
    Abstract: Background: Obesity rates are recognized to be at epidemic levels throughout much of the world, posing significant threats to both the health and financial security of many nations. The causes of obesity can vary but are often complex and multifactorial, and while many contributing factors can be targeted for intervention, an understanding of where these interventions are needed is necessary in order to implement effective policy. This has prompted an interest in incorporating spatial context into the analysis and modeling of obesity determinants, especially through the use of geographically weighted regression (GWR). Method: This paper provides a critical review of previous GWR models of obesogenic processes and then presents a novel application of multiscale (M)GWR using the Phoenix metropolitan area as a case study. Results: Though the MGWR model consumes more degrees of freedom than OLS, it consumes far fewer degrees of freedom than GWR, ultimately resulting in a more nuanced analysis that can incorporate spatial context but does not force every relationship to become local a priori. In addition, MGWR yields a lower AIC and AICc value than GWR and is also less prone to issues of multicollinearity. Consequently, MGWR is able to improve our understanding of the factors that influence obesity rates by providing determinant-specific spatial contexts. Conclusion: The results show that a mix of global and local processes are able to best model obesity rates and that MGWR provides a richer yet more parsimonious quantitative representation of obesity rate determinants compared to both GWR and ordinary least squares.
    Date: 2020–03–09
  17. By: Amin, Vikesh (Central Michigan University); Flores, Carlos A. (California Polytechnic State University); Flores-Lagunes, Alfonso (Syracuse University)
    Abstract: We estimate the effect of BMI on mental health for young adults and elderly individuals using data from the National Longitudinal Study of Adolescent Health and the Health & Retirement Study. To tackle confounding due to unobserved factors, we exploit variation in a polygenic score (PGS) for BMI within two complementary econometric methods that differ in the assumptions they employ. First, we use the BMI PGS as an IV and adjust for PGSs for other factors (depression and educational attainment) that may invalidate this IV. We find a large statistically significant effect of BMI on mental health for the elderly: a 5 kg/m2 increase in BMI (a difference equivalent to moving from overweight to obese) increases the probability of depression by 29%. In contrast, for young adults the IV estimates are statistically and economically insignificant. We show that IV estimates likely have to be interpreted as identifying a weighted average of effects of BMI on mental health mostly for compliers on the upper quantiles of the BMI distribution. Second, we use the BMI PGS as an "imperfect" IV and estimate an upper bound on the average treatment effect for the population. The estimated upper bounds reinforce the conclusions from the IV estimates.
    Keywords: BMI, depression, genetics, instrumental variables
    JEL: I10 I12
    Date: 2020–03
  18. By: Carrieri, Vincenzo (Magna Graecia University); Madio, Leonardo (Toulouse School of Economics); Principe, Francesco (Erasmus School of Economics)
    Abstract: Governments worldwide are increasingly concerned about the booming CBD (cannabidiol) products. However, little is known about the impact of their liberalization. We study a unique case of unintended liberalization of a CBD-based product (light cannabis) that occurred in Italy in 2017. Using unique and high-frequency data on prescription drug sales and by exploiting the staggered local availability of the new product in each Italian province, we document a significant substitution effect between light cannabis and anxiolytics, sedatives, opioids, anti-depressants, and antipsychotics. Such medical non-adherence is consistent with a self-medication interpretation. Results are informative for regulators and suggest that policies contrasting this "green oil" boom risk to disregard the effective need of patients to seek effective reliefs of their symptoms.
    Keywords: light cannabis, self-medication, marijuana, difference-in-difference, prescription drugs, CBD
    JEL: H51 H75 I18 K32 K42
    Date: 2020–03
  19. By: Juan Pablo Atal; Hanming Fang; Martin Karlsson; Nicolas R. Ziebarth
    Abstract: To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community-rated short-term contracts with an individual mandate. Relying on unique claims panel data from a large private insurer in Germany, we study a real-world long-term health insurance application with a life-cycle perspective. We show that German long-term health insurance (GLTHI) achieves substantial welfare gains compared to a series of risk-rated short-term contracts. Although, by its simple design, the premium setting of GLTHI contract departs significantly from the optimal dynamic contract, surprisingly we only find modest welfare differences between the two. Finally, we conduct counterfactual policy experiments to illustrate the welfare consequences of integrating GLTHI into a system with a “Medicare-like” public insurance that covers people above 65.
    JEL: G22 I11 I18
    Date: 2020–03
  20. By: Adam Sacarny; Katherine Baicker; Amy Finkelstein
    Abstract: We analyze the impact of expanded adult Medicaid eligibility on the Medicaid enrollment of already-eligible children. To do so, we exploit the 2008 Oregon Medicaid lottery, in which some low-income uninsured adults were randomly selected for the chance to apply for Medicaid. Children in these households were eligible for Medicaid irrespective of whether the household won the lottery. We estimate statistically significant but transitory impacts of adult lottery selection on children’s Medicaid enrollment: for every 9 adults who enroll in Medicaid due to the lottery, one additional child also enrolls at the same time. Our results shed light on the existence, magnitude, and nature of so-called “woodwork effects”.
    JEL: H53 I13 I38
    Date: 2020–03
  21. By: John Bailey Jones; Mariacristina De Nardi; Eric French; Rory McGee; Rachel Rodgers
    Abstract: Using data from the Health and Retirement Survey, we document the changes in assets that occur before a person's death. Applying an event study approach, we find that during the 6 years preceding their deaths, the assets of single decedents decline, relative to those of similar single survivors, by an additional $20,000 on average. Over the same time span, the assets of couples who lose a spouse fall, relative to those of similar surviving couples, by an additional $90,000 on average. Households experiencing a death also incur higher out-of-pocket medical spending and other end-of-life expenses. This elevated spending is sufficient to explain (in accounting terms) the asset declines observed for singles but falls short of explaining the declines observed for couples. Bequests from the dying spouse to non-spousal heirs such as children are more than sufficient to explain the remainder.
    JEL: D1 D12 D14
    Date: 2020–03
  22. By: Gicheva, Dora (University of North Carolina at Greensboro, Department of Economics); Anand, Priyanka (George Mason University, Department of Health Administration and Policy)
    Abstract: This paper examines whether expanding Medicaid eligibility affects the employment patterns and academic progress of college students. To estimate causal relationships, we use the variation in eligibility due to the Affordable Care Act Medicaid expansions that occurred in a subset of U.S. states. We use data from the National Postsecondary Student Aid Study to show that expanding Medicaid resulted in a decrease in employment intensity by students at community colleges, an increase in the number of transfers to four-year colleges, and higher graduation rates in four-year institutions, suggesting that expanding Medicaid led to an improvement in academic progress.
    Keywords: postsecondary persistence; enrollment intensity; labor supply in college; health insurance; Medicaid expansion;
    JEL: I13 I21 I22 I24
    Date: 2020–04–07
  23. By: Janke, Katharina (Lancaster University); Lee, Kevin (University of Nottingham); Propper, Carol (Imperial College London); Shields, Kalvinder (University of Melbourne); Shields, Michael A. (Monash University)
    Abstract: We estimate a model that allows for dynamic and interdependent responses of morbidity in different local areas to economic conditions at the local and national level, with statistical selection of optimal local area. We apply this approach to quarterly British data on chronic health conditions for those of working age over the period 2002-2016. We find strong and robust counter-cyclical relationships for overall chronic health, and for five broad types of health conditions. Chronic health conditions therefore increase in poor economic times. There is considerable spatial heterogeneity across local areas, with the counter-cyclical relationship being strongest in poorer local areas with more traditional industrial structures. We find that feedback effects are quantitatively important across local areas, and dynamic effects that differ by health condition. Consequently, the standard panel data model commonly used in the literature considerably under-estimates the extent of the countercyclical relationship in our context.
    Keywords: macroeconomic conditions, health, morbidity, dynamics, heterogeneity, aggregation
    JEL: J10 J21 C33 E32
    Date: 2020–03
  24. By: Abhishek Dureja (Indira Gandhi Institute of Development Research); Digvijay S. Negi (Indira Gandhi Institute of Development Research)
    Abstract: In developing countries where medical infrastructure and service delivery system, and the market for health insurance are underdeveloped, one important mechanism to cope with the consequences of health shocks is the intra-household substitution of labour. Most of the available studies have evaluated intra-household labour substitution in response to a health shock using low frequency data. This paper, using a panel of high frequency monthly data from the rural households in the semi-arid tropics of India, investigates the impacts of short-term illness shocks on individuals labour supply and wage earnings. It also evaluates compensating intra-household labour supply responses to short-term illness shocks of other non-ill members of the household. We find that an illness shock reduces an individuals monthly wage earnings by 4.3 via the decline in the individuals days of employment in the labour market. Further, an illness shock to the household-head causes a compensating increase in the spouses labour supply in wage labour market and livestock activities. Similarly, an illness shock to the spouse induces the household-head to devote more time to domestic and livestock activities.
    Keywords: Illness shocks, Labour supply, Intra-household allocation, India
    JEL: I15 J22 J43 O12
    Date: 2020–03
  25. By: Cherla, Avi; Howard, Natasha; Mossialos, Elias
    Abstract: At present, pay for prescription models are insufficient at containing costs and improving access to medicines. Subscription financing through tenders, licensing fees and unrestricted or fixed volumes can benefit stakeholders across the supply chain. Pharmaceutical manufacturers can reduce the need for marketing expenses and gain certainty in revenue. This will decrease costs, improve predictability in budget expenditure for payers and remove price as a barrier of access from patients. Inherently, low- and middle-income countries lack the purchasing power to leverage price discounts through typical price arrangements. These markets can realise substantial savings for branded and generic medicines through subscription financing. Procuring of on-patent and off-patent drugs requires separate analysis for competition effects, the length of contract and encouraging innovation in the medicine pipeline. Prices of competitive on-patent medicines and orphan drugs can be reduced through increased competition and volume. Furthermore, pooling expertise and resources through joint procurement has the potential for greater savings. Incentivising research and development within the pharmaceutical industry is essential for sustaining a competitive market, preventing monopolies and improving access to expensive treatments. However, technical capacity, forecasting demand and the quality of generic medicines present limitations which necessitate government support and international partnerships. Ultimately, improving access requires progressive financing mechanisms with patients and cost containment in mind.
    Keywords: Financing; health policy; low- and middle-income countries; pharmaceuticals
    JEL: N0 F3 G3
    Date: 2020–03–03
  26. By: Raquel Fonseca; François Langot; Pierre-Carl Michaud; Thepthida Sopraseuth
    Abstract: Using a general equilibrium heterogeneous agent model featuring health production, we quantify the relative contribution of price distortions in the health market, TFP and other health risks in explaining cross-country differences in health expenditure (as a share of GDP) and health status. Estimated parameters reveal a substantial price wedge that explains at most 20% of the difference in health spending (as a share of GDP) and 30% of the difference in health status between Europe and the U.S. We estimate a one percentage point negative impact on the life-time cost-of-living of Americans from higher prices due to inefficiencies.
    JEL: E21 H51 I10
    Date: 2020–03
  27. By: Hossain, Md Mahbub; Weng, Wenting; Bhattacharya, Sudip; Mazumder, Hoimonty; Faizah, Farah
    Abstract: The continued development of digital health technologies is reforming health systems and services globally; however, the South Asian countries are experiencing a sub-optimal growth and use of such technologies. Thus, a digital divide in healthcare is affecting the potential transformations in health services and outcomes in this region. This implies inadequate access to the best possible health technologies for a majority of the population, raising ethical concerns for healthcare practice. We discuss such concerns and the underlying socio-ecological challenges at individual, community, society, and systems levels pertinent to the digital divide in healthcare and highlight the strategic recommendations to bridge the existing gaps. These challenges should be addressed through engaging key stakeholders in healthcare including patients, informal caregivers, healthcare providers, health services organizations, technological providers, local and regional regulatory organizations, and other entities who may inform the development and implementation of digital platforms for equitable health across populations in South Asia.
    Date: 2020–04–01

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