Health Economics

To what extent do economic preferences and institutional trust predict compliance with physical distancing rules during the COVID-19 pandemic? We reexamine this question by introducing the theoretical and empirical distinction between individual health behaviors in the public and in the private domain (e.g., keeping a distance from strangers vs. abstaining from private gatherings with friends). Using structural equation modeling to analyze survey data from Germany's second wave of the pandemic (N = 3350), we reveal the following major differences between compliance in both domains: Social preferences, especially (positive) reciprocity, play an essential role in predicting compliance in the public domain but are barely relevant in the private domain...

We examine the causal effects of PM2.5 exposure on the burden of long-term care (LTC) by matching a satellite-based PM2.5 (particulate matter smaller than 2.5 micrometers (μm) in diameter) dataset with a nationally representative longitudinal study in China from 2011 to 2018. We find significant adverse effects of PM2.5 exposure-instrumented by thermal inversions-on the LTC burden. A 10 μg/m3 increase in annual PM2.5 exposure increases average monthly hours of LTC and the associated financial costs by 28 h and CNY 452, respectively...

Economists originally developed methods to assess financial catastrophe using total or aggregate out-of-pocket health spending. Aggregate out-of-pocket health spending is financially catastrophic when it exceeds a fixed proportion (i.e., threshold) of a household's total income or expenditure in a given period. However, these methods are now applied to assess financial catastrophe in disease- or service-specific rather than aggregate out-of-pocket health spending without using disease- or service-specific thresholds...

Despite the growing need for surrogate decision-making for older adults, little is known about how surrogates make decisions and whether advance directives would change decision-making. We conducted a nationally representative experimental survey that cross-randomized cognitive impairment, gender, and characteristics of advance care planning among hospitalized older adults through a series of vignettes. Our study yielded three main findings: first, respondents were much less likely to recommend life-sustaining treatments for patients with dementia, especially after personal exposure...

The Australian government pays $6.7 billion per year in rebates to encourage Australians to purchase private health insurance (PHI) and an additional $6.1 billion to cover services provided in private hospitals. What is the justification for large government subsidies to a private industry when all Australians already have free coverage under Medicare? The government argues that more people buying PHI will relieve the burden on the public system and may reduce waiting times. However, the evidence supporting this is sparse...

We study the effects of women's school starting age on the infant health of their offspring. In Spain, children born in December start school a year earlier than those born the following January, despite being essentially the same age. We follow a regression discontinuity design to compare the health at birth of the children of women born in January versus the previous December, using administrative, population-level data. We find small and insignificant effects on average weight at birth, but, compared to the children of December-born mothers, the children of January-born mothers are more likely to have very low birthweight...

This article studies the impact of primary care providers (PCPs) exit from the local health care system on patients' health care utilization. I compare patients with each other whose physicians have left the local health care system at different points in time due to retirement, relocation, or other reasons. Estimation results indicate that the imminent exit leads soon-leaving physicians to changing their treatment behavior, which has a significant impact on patients' health care spending. In addition, successors and new PCPs provide significantly more preventive services in the post-exit-period and refer patients more often to specialists for further examinations than the physicians who exit later...

After some initial controversy, an inverted U-shape relationship between the consumption of alcohol and earnings seems to be an established result, at least in North America. It has been dubbed a "drinking premium", at least in the lower portion of the consumption curve. It is still unclear, perhaps even counter-intuitive, why such a drinking premium exists and the literature suggests it is not causal but results rather from selection effects. We suggest here that part of the premium is linked to occupation: some occupations pay better, controlling for the usual human capital determinants, and also attract drinkers or induce workers to drink more...

We study the effects of a health insurance subsidy in Ghana, where mandates are not enforceable. We randomly provide different levels of subsidy (1/3, 2/3, and full) and evaluate the impact at 7 months and 3 years after the intervention. We find that a one-time subsidy increased insurance enrollment for all groups in both the short and long runs, but health care utilization in the long run increased only for the partial subsidy group. We find supportive evidence that ex-post behavioral responses rather than ex-ante selective enrollment explain the long-run health care utilization results...

This paper exploits the discontinuity around a welfare index of eligibility to assess the impact of Peru's social pension program Pension 65 on nutrition-related health outcomes among elderly poor individuals. Overall, we find evidence of how a relatively inexpensive program can produce improvements in anemia and nutrition-related mortality risk markers. The effects appear to be driven by plausible underlying mechanisms, including via improved nutritional quality as well as greater food expenditures and healthcare utilization...

Using blood sample data we exploit an arbitrary cut-off of diabetes risk and through a fuzzy regression kink design we estimate the effect of a diabetes diagnosis on own and partner health-related behaviours. Diabetes diagnosis increases the probability of exercising, both for those diagnosed with diabetes and their partner. We also conduct mediation analysis which suggests that joint household participation is the channel behind this effect. Our results have significant implications for the understanding of the channels that induce behavioural change, and household decision making, as well as, for the evaluation of diabetes related policies...

Using a representative survey with 1317 individuals and 12,815 moral decisions, we elicit Swedish citizens' preferences on how algorithms for self-driving cars should be programmed in cases of unavoidable harm to humans. Participants' choices in different dilemma situations (treatments) show that, at the margin, the average respondent values the lives of passengers and pedestrians equally when both groups are homogeneous and no group is to blame for the dilemma. In comparison, the respondent values the lives of passengers more when the pedestrians violate a social norm, and less when the pedestrians are children...

This study examines the impact of social insurance benefit restrictions on physician behaviour, using ophthalmologists as a case study. We examine whether ophthalmologists use their market power to alter their fees and rebates across services to compensate for potential policy-induced income losses. The results show that ophthalmologists substantially reduced their fees and rebates for services directly targeted by the benefit restriction compared to other medical specialists' fees and rebates. There is also some evidence that they increased their fees for services that were not targeted...

A new method has recently been developed for valuing health states, called 'Online elicitation of Personal Utility Functions' (OPUF). In contrast to established methods, such as time trade-off or discrete choice experiments, OPUF does not require hundreds of respondents, but allows estimating utility functions for small groups and even at the individual level. In this study, we used OPUF to elicit EQ-5D-5L health state preferences from a (not representative) sample of the UK general population, and then compared utility functions on the societal-, group-, and individual level...

Although studies have demonstrated important effects of poor health in childhood on stocks of human and health capital, little research has tested economic theories to investigate the effect of child health on social capital in adulthood. Studies on the influence of child health on adult social capital are mixed and have not used sibling fixed effects models to account for unmeasured family and genetic characteristics, that are likely to be important. Using the Add-Health sample, health in childhood was assessed as self-rated health, the occurrence of a physical health condition or mental health condition, while social capital in adulthood was measured as volunteering, religious service attendance, team sports participation, number of friends, social isolation, and social support...

Although less than a third of the population in developing countries is covered by health insurance, the number has been on the rise. Many countries have implemented national insurance policies in the past decade. However, there is limited evidence on their impact on child mortality in low- and middle-income contexts. Here we document the child mortality reducing effects of an at-scale national level health insurance policy in India. The Rashtriya Swasthya Bima Yojana (RSBY), was rolled out across India between 2008 and 2013...

Payments for some diagnostic scans undertaken in outpatient settings were unbundled from Diagnosis Related Group based payments in England in April 2013 to address under-provision. Unbundled scans attracted additional payments of between £45 and £748 directly following the reform. We examined the effect on utilization of these scans for patients with suspected cancer. We also explored whether any detected effects represented real increases in use of scans or better coding of activity. We applied difference-in-differences regression to patient-level data from Hospital Episodes Statistics for 180 NHS hospital Trusts in England, between April 2010 and March 2018...

It has been argued that cost-effectiveness analysis of branded pharmaceuticals only considers static efficiency, neglects dynamic effects and undermines incentives for socially valuable innovation. We present a framework for designing pharmaceutical pricing policy to achieve dynamic efficiency. We develop a coherent framework that identifies the long-term static and dynamic benefits and costs of offering manufacturers different levels of reward. The share of value that would maximise long-term population health depends on how the quantity and quality of innovation responds to payment...

Norway's extended free choice (EFC) reform extends the patient's choice of publicly funded hospitals for treatment to authorized private institutions (EFC providers). We study the effects of the reform on waiting times, number of visits, and patients' Charlson Comorbidity Index scores in public hospitals. We use a difference-in-differences model to compare changes over time for public hospitals with and without EFC providers in the catchment area. Focusing on five prevalent somatic services, we find that the EFC reform did not exert pressure on public hospitals to stimulate shorter waiting times and more visits...

Health spillovers arise when an individual's serious illness affects those close to them emotionally, psychologically, and/or physically. As a result, healthcare interventions that improve the lives of patients may also confer wider health benefits. However, contrary to widespread calls for health spillovers to be included in health economic evaluation, others have argued this could have adverse distributional consequences and equity implications. This paper presents a novel approach to spillover inclusion in health economic evaluation using a 'prioritarian transformation' of health gains that allows these equity concerns to be addressed...