nep-hea New Economics Papers
on Health Economics
Issue of 2022‒05‒23
nineteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Estimating Equilibrium in Health Insurance Exchanges: Price Competition and Subsidy Design under the ACA By Pietro Tebaldi
  2. Pharmacy Benefit Managers and Vertical Relationships in Drug Supply: State of Current Research By Zarek C. Brot-Goldberg; Catherine Che; Benjamin R. Handel
  3. Does Entry Remedy Collusion? Evidence from the Generic Prescription Drug Cartel By Amanda Starc; Thomas G. Wollmann
  4. Behavioral Responses to Supply-Side Drug Policy During the Opioid Epidemic By Balestra, Simone; Liebert, Helge; Maestas, Nicole; Sherry, Tisamarie B.
  5. Health Care Centralization: The Health Impacts of Obstetric Unit Closures in the US By Stefanie Fischer; Heather Royer; Corey White
  6. The Effect of Smoking on Mental Health: Evidence from a Randomized Trial By Katherine Meckel; Katherine P. Rittenhouse
  7. Long-Run Impacts of In-Utero Ramadan Exposure: Evidence from Administrative Tax Records By Timotej Cejka; Mazhar Waseem
  8. Beyond Barker: Infant Mortality at Birth and Ischaemic Heart Disease in Older Age By Samuel Baker; Pietro Biroli; Hans van Kippersluis; Stephanie von Hinke
  9. Caregiving subsidies and spousal early retirement intentions By Costa-Font, Joan; Vilaplana-Prieto, Cristina
  10. The allocation of incentives in multi-layered organizations By Erika Deserranno; Stefano Caria; Philipp Kastrau; Gianmarco León-Ciliotta
  11. Patterns of Time Use among Older People By Ferranna, Maddalena; Sevilla, J.P.; Zucker, Leo; Bloom, David E.
  12. An Efficient Approach for Optimizing the Cost-effective Individualized Treatment Rule Using Conditional Random Forest By Yizhe Xu; Tom H. Greene; Adam P. Bress; Brandon K. Bellows; Yue Zhang; Zugui Zhang; Paul Kolm; William S. Weintraub; Andrew S. Moran; Jincheng Shen
  13. Social Demographics and Health Achievements An Ecological Analysis of Institutional Delivery and Immunization Coverage in India By Saroj Kumar; Abhishek Kumar; Rakesh Kumar; William Joe
  14. Nonlinear and Nonseparable Structural Functions in Fuzzy Regression Discontinuity Designs By Haitian Xie
  15. AI, Ageing and Brain-Work Productivity: Technological Change in Professional Japanese Chess By Eiji Yamamura; Ryohei Hayashi
  16. An Epidemic Model for SARS-CoV-2 with Self-Adaptive Containment Measures By Sabina Marchetti; Alessandro Borin; Francesco Paolo Conteduca; Giuseppe Ilardi; Giorgio Guzzetta; Piero Poletti; Patrizio Pezzotti; Antonino Bella; Paola Stefanelli; Flavia Riccardo; Stefano Merler; Andrea Brandolini; Silvio Brusaferro
  17. Denialism, Politics and the Covid-19 pandemic in Brazil: an empirical analysis on observational data By Marta Castilho; Valéria Pero; François Roubaud; Mireille Razafindrakoto; João Saboia
  18. Impacts of Social Distancing Policy and Vaccination During the COVID-19 Pandemic in the Republic of Korea By Kim, Kijin; Kim, Soyoung; Lee, Donghyun; Park, Cyn-Young
  19. Understanding the Economic Impact of COVID-19 on Women By Claudia Goldin

  1. By: Pietro Tebaldi
    Abstract: In government-sponsored health insurance, subsidy design affects market outcomes. First, holding premiums fixed, subsidies determine insurance uptake and average cost. Insurers then respond to these changes, adjusting premiums. Combining data from the first four years of the California ACA marketplace with a model of insurance demand, cost, and insurers’ competition, I quantify the impact of alternative subsidy designs on premiums, enrollment, costs, public spending, and consumer surplus. Younger individuals are more price sensitive and cheaper to cover. Increasing subsidies to this group would make all buyers better off, increase market participation, and lower average costs and average subsidies.
    JEL: I13 I18 L98
    Date: 2022–03
  2. By: Zarek C. Brot-Goldberg; Catherine Che; Benjamin R. Handel
    Abstract: Despite their importance to the supply of prescription drugs, there has been limited research on pharmacy benefit managers (PBMs) and their vertical relationships to insurers and drug manufacturers. This paper provides an overview of the current state of research on this topic, motivates why further research is needed, and discusses promising theoretical and empirical directions for that research.
    JEL: I11 I13 L1 L42
    Date: 2022–04
  3. By: Amanda Starc; Thomas G. Wollmann
    Abstract: Entry represents a fundamental threat to cartels engaged in price fixing. We study the extent and effect of this behavior in the largest price fixing case in US history, which involves generic drugmakers. To do so, we link information on the cartel’s internal operations to regulatory filings and market data. We find that collusion induces significant entry, which in turn reduces prices. However, regulatory approvals delay most entrants by 2-4 years. We then estimate a structural model to assess counterfactual policies. We find that reducing regulatory delays by just 1-2 years equates to consumer compensating variation of $597 million-$1.52 billion.
    JEL: L11 L41 L65
    Date: 2022–03
  4. By: Balestra, Simone (University of St. Gallen); Liebert, Helge (University of Zurich); Maestas, Nicole (Harvard Medical School); Sherry, Tisamarie B. (RAND)
    Abstract: We investigate behavioral responses to a staggered disruption in the supply of prescription opioids across U.S. states: the introduction of electronic Prescription Drug Monitoring Programs (PDMPs). Using administrative datasets, we find PDMPs curtail the proliferation of prescription opioids. Physicians respond to monitoring on the extensive margin, limiting the number of patients to whom they prescribe opioids without adjusting dosage or duration. This decreases supply to long-term opioid users, who evade the restrictions by acquiring prescriptions from out-of-state prescribers and by substituting to heroin. This causes a surge in heroin overdoses, which offsets reductions in hospitalizations and deaths from prescription opioids.
    Keywords: prescription drugs, opioid crisis, heroin, prescription drug monitoring programs
    JEL: H75 I11 I12 I18
    Date: 2022–04
  5. By: Stefanie Fischer (Monash University and IZA); Heather Royer (University of California, Santa Barbara, NBER, IZA); Corey White (Monash University and IZA)
    Abstract: Over the last few decades, health care services in the United States have become more centralized. We study how the loss of hospital-based obstetric units in over 400 rural counties affect maternal and infant health via a difference-in-differences design. We find that closures lead to significant changes in obstetric practices such as inductions and C-sections. In contrast to concerns voiced in the public discourse, the effects on a range of maternal and infant health outcomes are negligible or slightly beneficial. While women travel farther to receive care, closures induce women to receive higher quality care.
    Keywords: obstetrics, closures, infant health, maternal health
    JEL: J13 I18 J08 J18 I38
    Date: 2022–04
  6. By: Katherine Meckel; Katherine P. Rittenhouse
    Abstract: This paper aims to identify the causal effects of smoking on mental health using data from the Lung Health Study, a randomized trial of smoking cessation treatment with five years of follow-up interviews. In the short-run, distress increases, likely reflecting the effects of nicotine withdrawal. Long-run effects on mental health are small overall, but mask heterogeneity by gender. For women, the cessation program leads to improved mental health, driven by decreases in insomnia and nervousness. Men do not experience these improvements, due in part to a small increase in severe disturbances.
    JEL: I1 I12 I18
    Date: 2022–03
  7. By: Timotej Cejka; Mazhar Waseem
    Abstract: Using Ramadan fasting as a natural experiment, we estimate the long-run impacts of in-utero health and nutrition shocks on adult outcomes. We exploit administrative tax return data comprising the universe of income tax returns filed in Pakistan during 2007–2009. The data allow us to link in-utero Ramadan exposure of individuals with their later life labor market outcomes. We find a robust negative effect of Ramadan exposure on earnings (a lower-bound estimate of around 2–3 percent). The exposed individuals are less likely to be in high-skilled occupations and less likely to be in the top of the income distribution. Using nationally representative survey data we show that our results are unlikely to be driven by selective timing of conception.
    Keywords: nutrition shock, human capital, labor market outcomes
    JEL: I15 J13 J24
    Date: 2022
  8. By: Samuel Baker (University of Bristol); Pietro Biroli (University of Zurich); Hans van Kippersluis (Erasmus University); Stephanie von Hinke (University of Bristol, Erasmus University, and Institute for Fiscal Studies)
    Abstract: Adverse conditions in early life can have consequential impacts on individuals' health in older age. In one of the first papers on this topic, Barker and Osmond (1986) show a strong positive relationship between infant mortality rates in the 1920s and ischaemic heart disease in the 1970s. We go `beyond Barker,' first by showing that this relationship is robust to the inclusion of local geographic area fixed effects, but not family fixed effects. Second, we explore whether the average effects conceal underlying heterogeneity: we examine if the infant mortality effect offsets or reinforces one's genetic predisposition for heart disease. We find considerable heterogeneity that is robust to within-area as well as within-family analyses. Our findings show that the effects of one's early life environments mainly affect individuals with the highest genetic risk for developing heart disease. Put differently, in areas with the lowest infant mortality rates, the effect of one's genetic predisposition effectively vanishes. These findings suggests that advantageous environments can cushion one's genetic risk of developing heart disease.
    Keywords: Barker hypothesis, developmental origins, gene-by-environment interplay
    JEL: I10 I14 I19
    Date: 2022–05
  9. By: Costa-Font, Joan; Vilaplana-Prieto, Cristina
    Abstract: Balancing caregiving duties and work can be both financially and emotionally burdensome, especially when care is provided to a spouse at home. This paper documents that financial respite for caregivers can influence individuals’ early retirement decisions. We examine the effect of a reform extending long-term care (LTC) benefits (in the form of subsidies and supports) in Spain after 2007 on caregiving spouse’s early retirement intention. We subsequently examine the effect of austerity spending cuts in 2012 reducing such publicly funded benefits, and we compare the estimates to the effects of an early retirement reform among private sector workers in 2013. We document evidence of a 10pp reduction in the early retirement intentions after the LTC reform even though the effect is heterogeneous by type of benefit. Consistently, austerity spending cuts in benefits are found to weaken retirement intentions. Our estimates suggest that cuts in caregiving subsidies exert a much stronger effect on early retirement intentions than actual early retirement reforms.
    Keywords: long-term care; employment; retirement; informal care; caregiving subsidies; home care
    JEL: I18 J14
    Date: 2022–04–20
  10. By: Erika Deserranno; Stefano Caria; Philipp Kastrau; Gianmarco León-Ciliotta
    Abstract: A classic problem faced by organizations is to decide how to distribute incentives among their different layers. By means of a field experiment with a large public-health organization in Sierra Leone, we show that financial incentives maximize output when they are equally shared between frontline health workers and their supervisor. The impact of this intervention on completed health visits is 61% larger than the impact of incentive schemes that target exclusively the worker or the supervisor. Also, the shared incentives uniquely improve overall health-service provision and health outcomes. We use these experimental results to structurally estimate a model of service provision and find that shared incentives are effective because worker and supervisor effort are strong strategic complements, and because side payments across layers are limited. Through the use of counterfactual model experiments, we highlight the importance of effort complementarities across the different layers of an organization for optimal policy design.
    Keywords: Incentives, multi-layered organizations, effort complementarities, side payments, output
    JEL: O15 O55 I15 J31 M52
    Date: 2022–04
  11. By: Ferranna, Maddalena (Harvard School of Public Health); Sevilla, J.P. (Harvard School of Public Health); Zucker, Leo (Harvard School of Public Health); Bloom, David E. (Harvard University)
    Abstract: We analyze time use studies to describe how people allocate their time as they age, especially among paid work, unpaid work, leisure, and personal care. We emphasize differences in time allocation between older (i.e., those aged 65+) and younger people; between developed and developing countries; and by other demographic characteristics such as gender, marital status, health status, and educational attainment. We summarize related economic literature and crystallize a framework for thinking about key conceptual issues involving time allocation over the life cycle. We conclude by assessing the adequacy of global data resources in this area and by discussing some promising opportunities to fill salient gaps in the literature.
    Keywords: time use, aging, demographics, paid work, unpaid work, leisure, personal care
    JEL: D13 D15 J14 J22
    Date: 2022–04
  12. By: Yizhe Xu; Tom H. Greene; Adam P. Bress; Brandon K. Bellows; Yue Zhang; Zugui Zhang; Paul Kolm; William S. Weintraub; Andrew S. Moran; Jincheng Shen
    Abstract: Evidence from observational studies has become increasingly important for supporting healthcare policy making via cost-effectiveness (CE) analyses. Similar as in comparative effectiveness studies, health economic evaluations that consider subject-level heterogeneity produce individualized treatment rules (ITRs) that are often more cost-effective than one-size-fits-all treatment. Thus, it is of great interest to develop statistical tools for learning such a cost-effective ITR (CE-ITR) under the causal inference framework that allows proper handling of potential confounding and can be applied to both trials and observational studies. In this paper, we use the concept of net-monetary-benefit (NMB) to assess the trade-off between health benefits and related costs. We estimate CE-ITR as a function of patients' characteristics that, when implemented, optimizes the allocation of limited healthcare resources by maximizing health gains while minimizing treatment-related costs. We employ the conditional random forest approach and identify the optimal CE-ITR using NMB-based classification algorithms, where two partitioned estimators are proposed for the subject-specific weights to effectively incorporate information from censored individuals. We conduct simulation studies to evaluate the performance of our proposals. We apply our top-performing algorithm to the NIH-funded Systolic Blood Pressure Intervention Trial (SPRINT) to illustrate the CE gains of assigning customized intensive blood pressure therapy.
    Date: 2022–04
  13. By: Saroj Kumar; Abhishek Kumar; Rakesh Kumar; William Joe (Institute of Economic Growth, Delhi)
    Abstract: The National Rural Health Mission of India was expected to have two broad kinds of impacts on institutional delivery and immunization coverage. First, to significantly increase institutional delivery and immunization coverage levels across all districts and, second, to enhance equity by reducing utilization gaps between districts with higher and lower share of marginalised population. This paper adopts a lens of social demography and presents an ecological analysis of poor performing districts in nine high focus States of India. We find that between year 2007-08 and 2012-13 there has been considerable progress in institutional delivery across all the districts but improvements in full immunization coverage has been slow and many districts are failing to sustain progress in immunization coverage. Econometric analysis reveals that districts with higher shares of Muslims display slowest progress. The association is robust even in models adjusted for district-level clustering. Districts with greater availability of specialists in public health facilities have a favorable impact on institutional births whereas female literacy levels have significant influence on immunization. In concluding, we discuss the need for policy debiasing as more than a uniform approach is necessary to facilitate rapid progress in immunization across districts.
    Keywords: Social demography, Immunization, Institutional births, District Level Household Survey (DLHS), National Health Mission (NHM)
    Date: 2021–04
  14. By: Haitian Xie
    Abstract: This paper examines the identification and estimation of the structural function in fuzzy regression discontinuity (RD) designs with a continuous treatment variable. Under a dual monotonicity condition, we show that the nonlinear and nonseparable structural function can be nonparametrically identified at the RD cutoff. The dual monotonicity condition requires that the structural function and the treatment choice be strictly increasing in the unobserved causal factor. This condition is satisfied by standard parametric models used in practice. The identification result contrasts with the local average treatment effect literature, where only a certain weighted average of the structural function is identified. We propose a three-step semiparametric estimation procedure and derive the asymptotic distribution of the estimator. The semiparametric estimator achieves the same convergence rate as in the case of a binary treatment variable. As an application of the method, we estimate the causal effect of sleep time on health status by the discontinuity in natural light timing at time-zone boundaries.
    Date: 2022–04
  15. By: Eiji Yamamura; Ryohei Hayashi
    Abstract: Using Japanese professional chess (Shogi) players records in the novel setting, this paper examines how and the extent to which the emergence of technological changes influences the ageing and innate ability of players winning probability. We gathered games of professional Shogi players from 1968 to 2019. The major findings are: (1) diffusion of artificial intelligence (AI) reduces innate ability, which reduces the performance gap among same-age players; (2) players winning rates declined consistently from 20 years and as they get older; (3) AI accelerated the ageing declination of the probability of winning, which increased the performance gap among different aged players; (4) the effects of AI on the ageing declination and the probability of winning are observed for high innate skill players but not for low innate skill ones. This implies that the diffusion of AI hastens players retirement from active play, especially for those with high innate abilities. Thus, AI is a substitute for innate ability in brain-work productivity.
    Date: 2022–04
  16. By: Sabina Marchetti (Bank of Italy); Alessandro Borin (Bank of Italy); Francesco Paolo Conteduca (Bank of Italy); Giuseppe Ilardi (Bank of Italy); Giorgio Guzzetta (Bruno Kessler Foundation); Piero Poletti (Bruno Kessler Foundation); Patrizio Pezzotti (Italian National Health Institute); Antonino Bella (Italian National Health Institute); Paola Stefanelli (Italian National Health Institute); Flavia Riccardo (Italian National Health Institute); Stefano Merler (Bruno Kessler Foundation); Andrea Brandolini (Bank of Italy); Silvio Brusaferro (Italian National Health Institute)
    Abstract: During the COVID-19 pandemic, several countries have resorted to self-adaptive mechanisms that allow non-pharmaceutical interventions to be tailored to local epidemiological and health care indicators. These mechanisms reinforce the interdependence between containment measures and the evolution of the epidemic, mostly overlooked by existing epidemiological models. In our innovative approach, we instead develop a model that embeds an algorithm mimicking the self-adaptive policy mechanism, effective in Italy since November 2020, and allows us to track the historical evolution of both health outcomes and restrictions in the country. By focusing on the epidemic wave triggered by the onset of the Delta variant, we compare the functioning of alternative mechanisms to show how the policy framework may affect the trade-off between health outcomes and the restrictiveness of mitigation measures. This trade-off varies considerably depending on specific conditions (e.g. vaccination coverage), with less reactive mechanisms (e.g. those based on occupancy rates) becoming more advantageous in favourable contexts.
    Keywords: covid-19, epidemiological model, restrictions, Italy
    JEL: H51 I12 I18
    Date: 2022–04
  17. By: Marta Castilho (Instituto de Economia da Universidade Federal do Rio de Janeiro - Brazil); Valéria Pero (Instituto de Economia da Universidade Federal do Rio de Janeiro - Brazil); François Roubaud (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université); Mireille Razafindrakoto (DIAL-LEDa, IRD, Université Paris-Dauphine, PSL Université); João Saboia (Instituto de Economia da Universidade Federal do Rio de Janeiro - Brazil)
    Abstract: Brazil is among the countries most affected by Covid-19 in terms of number of confirmed cases and deaths. This happens in a national context marked by a denialist positioning of the federal government in combating the pandemic. This study examines, along with other socioeconomic, health and demographic factors, how the political orientation of municipalities is related to the Covid-19 mortality rate. Using several sources of municipal data, a negative binomial model is applied, contemplating the two waves of the pandemic. Subsequently, two other econometric models were estimated in order to analyse two different transmission channels through which political factors impact on the Covid19 mortality rate: one associated with non-pharmacological measures to combat Covid-19 (the mobility of people) and another associated with pharmacological measures (the vaccination). Among the factors analysed, the most striking result concerns the ‘Bolsonaro effect’: the estimations show that mortality rates are higher in the municipalities where the president had the most expressive vote in the 2018 elections. This relationship persists over time in the most recent period. The results regarding population mobility confirm that this is one of the main transmission mechanisms of Covid-19 fatalities. Indeed, the Bolsonaro’ score in the 2018 election is also shown to be significantly and positively correlated with the population mobility in particular when the pandemic reached its most critical levels. Finally, the denialist position at the top of the Federal Government does not seem to compromise the complete vaccination rate of the population beyond the first months after the beginning of the campaign. This result suggests to some extent the increasing awareness of the president's supporters of the risks involved and the effectiveness of vaccines against Covid19. But above all, it reflects apparently the success of the National Immunization Program in Brazil, based on a long tradition, recognized at the international level.
    Keywords: Brazil; Bolsonaro effect; Covid-19; Social distancing; Political Factors; Mobility; Mortality; Public Policies; Socioeconomic Inequalities; Vaccination
    JEL: I14 I18 I38 P16 O54
    Date: 2022–05
  18. By: Kim, Kijin (Asian Development Bank); Kim, Soyoung (Seoul National University); Lee, Donghyun (Seoul National University); Park, Cyn-Young (Asian Development Bank)
    Abstract: This paper investigates the dynamic impact of social distancing policy on coronavirus disease (COVID-19) infection control, mobility of people, and consumption expenditures in the Republic of Korea. We employ structural and threshold vector autoregressive (VAR) models using big-data-driven mobility data, credit card expenditure, and a social distancing index. We find that the social distancing policy significantly reduces the spread of COVID-19, but there exists a significant, growing trade-off between infection control and economic activity over time. When the level of stringency in social distancing is already high, its marginal effect on mobility is estimated to be smaller than when social distancing stringency is low. Increased vaccination is found to significantly reduce the critical rate while it increases visitors and consumption expenditures. The results also show that the effect of social distancing policy on mobility reduction is strongest among the population of age under 20 and the weakest among the population of age over 60.
    Keywords: COVID-19; social distancing policy; mobility; vaccination; Republic of Korea; structural VAR; threshold VAR
    JEL: C32 I18 J68
    Date: 2022–05–19
  19. By: Claudia Goldin
    Abstract: The impact of the pandemic on the employment, labor supply, and caregiving of women is assessed. Compared with previous recessions, that induced by COVID-19 impacted women’s employment and labor force participation more relative to men. But the big divide was less between men and women than it was between the more- and the less-educated. Contrary to many accounts, women did not exit the labor force in large numbers, and they did not greatly decrease their hours of work. The aggregate female labor force participation rate did not plummet. The ability to balance caregiving and work differed greatly by education, occupation, and race. The more educated could work from home. Those who began the period employed in various in-person “service” occupations and establishments experienced large reductions in employment. Black women were more negatively impacted beyond other factors considered and the health impact of COVID-19 is a probable reason. The estimation of the pandemic’s impact depends on the counterfactual used. The real story of women during the pandemic concerns the fact that employed women who were educating their children, and working adult daughters who were caring for their parents, were stressed because they were in the labor force, not because they left.
    JEL: J0 J20 J21 J22
    Date: 2022–04

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