Int J Health Care Finance Econ
· 2012 Dec · PMID 22983822
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Informal eldercare is an important pillar of modern welfare states and the ongoing demographic transition increases the demand for it while social trends reduce the supply. Substantial opportunity costs of informal elder...Informal eldercare is an important pillar of modern welfare states and the ongoing demographic transition increases the demand for it while social trends reduce the supply. Substantial opportunity costs of informal eldercare in terms of forgone labor opportunities have been identified, yet the effects seem to differ substantially across states and there is a controversy on the effects in the Nordic welfare states. In this study, the effects of informal care on the probability of being employed, the number of hours worked, and wages in Norway are analyzed using data from the Life cOurse, Generation, and Gender survey. New and previously suggested instrumental variables are used to control for the potential endogeneity existing between informal care and employment-related outcomes. In total, being an informal caregiver in Norway is found to entail substantially less costs in terms of forgone formal employment opportunities than in non-Nordic welfare states.
Int J Health Care Finance Econ
· 2012 Dec · PMID 22983813
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Employment-contingent health insurance (ECHI) has been criticized for tying insurance to continued employment. Our research sheds light on two central issues regarding employment-contingent health insurance: whether such...Employment-contingent health insurance (ECHI) has been criticized for tying insurance to continued employment. Our research sheds light on two central issues regarding employment-contingent health insurance: whether such insurance "locks" people who experience a health shock into remaining at work; and whether it puts people at risk for insurance loss upon the onset of illness, because health shocks pose challenges to continued employment. We study how men's dependence on their own employer for health insurance affects labor supply responses and health insurance coverage following a health shock. We use the Health and Retirement Study (HRS) surveys from 1996 through 2008 to observe employment and health insurance status at interviews 2 years apart, and whether a health shock occurred in the intervening period between the interviews. All employed married men with health insurance either through their own employer or their spouse's employer, interviewed in at least two consecutive HRS waves with non-missing data on employment, insurance, health, demographic, and other variables, and under age 64 at the second interview are included in the study sample. We then limited the sample to men who were initially healthy. Our analytical sample consisted of 1,582 men of whom 1,379 had ECHI at the first interview, while 203 were covered by their spouse's employer. Hospitalization affected 209 men with ECHI and 36 men with spouse insurance. A new disease diagnosis was reported by 103 men with ECHI and 22 men with other insurance. There were 171 men with ECHI and 25 men with spouse employer insurance who had a self-reported health decline. Labor supply response differences associated with ECHI-with men with health shocks and ECHI more likely to continue working-appear to be driven by specific types of health shocks associated with future higher health care costs but not with immediate increases in morbidity that limit continued employment. Men with ECHI who have a self-reported health decline are significantly more likely to lose health insurance than men with insurance through a spouse. With the passage of health care reform, the tendency of men with ECHI as opposed to other sources of insurance to remain employed following a health shock may be diminished, along with the likelihood of losing health insurance.
Int J Health Care Finance Econ
· 2012 Sep · PMID 22767078
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In 2007 the state of Andhra Pradesh in southern India began rolling out Aarogyasri health insurance to reduce catastrophic health expenditures in households 'below the poverty line'. We exploit variation in program roll-...In 2007 the state of Andhra Pradesh in southern India began rolling out Aarogyasri health insurance to reduce catastrophic health expenditures in households 'below the poverty line'. We exploit variation in program roll-out over time and districts to evaluate the impacts of the scheme using difference-in-differences. Our results suggest that within the first nine months of implementation Phase I of Aarogyasri significantly reduced out-of-pocket inpatient expenditures and, to a lesser extent, outpatient expenditures. These results are robust to checks using quantile regression and matching methods. No clear effects on catastrophic health expenditures or medical impoverishment are seen. Aarogyasri is not benefiting scheduled caste and scheduled tribe households as much as the rest of the population.
Int J Health Care Finance Econ
· 2012 Jun · PMID 22527254
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This research compares the behavior of non-profit organizations and private for-profit firms in the hospice industry, where there are financial incentives created by the Medicare benefit. Medicare reimburses hospices on...This research compares the behavior of non-profit organizations and private for-profit firms in the hospice industry, where there are financial incentives created by the Medicare benefit. Medicare reimburses hospices on a fixed per diem basis, regardless of patient diagnosis. Because under this system patients with lower expected costs are more profitable, hospices can selectively enroll patients with longer lengths of stay. While it is illegal for hospices to reject potential patients explicitly, they can influence their patient mix through referral networks. A fixed per diem rate also creates an incentive shirk on quality and to substitute lower skilled for higher skilled labor, which has implications for quality of care. By using within-market variation in hospice characteristics, the empirical evidence suggests that for-profit hospices differentially take advantage of these incentives. The results show that for-profit hospices engage in patient selection through significantly different referral networks than non-profits. They receive more patients from long-term care facilities and fewer patients through more traditional paths, such as physician referrals. This mechanism of patient selection is supported by the result that for-profits have fewer cancer patients and more patients with longer lengths of stay. While non-profit and for-profit hospices report similar numbers of staff visits per patient, for-profit firms make significantly less use of skilled nursing providers. We also find some weak evidence of lower levels of quality in for-profit hospices.
Farag M, NandaKumar AK, Wallack S
… +3 more, Hodgkin D, Gaumer G, Erbil C
Int J Health Care Finance Econ
· 2012 Jun · PMID 22419347
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To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries' data. This study expands this wo...To date, international analyses on the strength of the relationship between country-level per capita income and per capita health expenditures have predominantly used developed countries' data. This study expands this work using a panel data set for 173 countries for the 1995-2006 period. We found that health care has an income elasticity that qualifies it as a necessity good, which is consistent with results of the most recent studies. Furthermore, we found that health care spending is least responsive to changes in income in low-income countries and most responsive to in middle-income countries with high-income countries falling in the middle. Finally, we found that 'Voice and Accountability' as an indicator of good governance seems to play a role in mobilizing more funds for health.
Int J Health Care Finance Econ
· 2012 Jun · PMID 22407513
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This paper presents an empirical analysis of public health expenditure on individuals in Denmark. The analysis separates out the individual effects of age and proximity to death (reflecting terminal costs of dying) and e...This paper presents an empirical analysis of public health expenditure on individuals in Denmark. The analysis separates out the individual effects of age and proximity to death (reflecting terminal costs of dying) and employs unique micro data from the period 2000 to 2009, covering a random sample of 10% of the Danish population. Health expenditure includes treatment in hospitals, subsidies to prescribed medication and health care provided by general practitioners and specialists and covers about 80% of public health care expenditure on individuals. The results confirm findings from previous studies showing that proximity to death has a significant impact on health care expenditure. However, it is also found that cohort effects (the baby boom generation) as well as improvements in life expectancy have a substantial effect on future health care expenditure even when proximity to death is controlled for. These results are obtained by combining the empirical estimates with a long term population forecast. When life expectancy increases, terminal costs are postponed but the increases in health expenditure that follow from longer life expectancy are not as large as the increase in the number of elderly persons would suggest (due to "healthy ageing"). Based on the empirical estimates, healthy ageing is expected to reduce the impact of increased life expectancy on real health expenditure by 50% compared to a situation without healthy ageing.
Int J Health Care Finance Econ
· 2012 Mar · PMID 22399369
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We applied instrumental variable analysis to a sample of 388,690 Medicare beneficiaries predicted to be high-cost cases to estimate the effects of medical care use on the relative odds of death or experiencing an avoidab...We applied instrumental variable analysis to a sample of 388,690 Medicare beneficiaries predicted to be high-cost cases to estimate the effects of medical care use on the relative odds of death or experiencing an avoidable hospitalization in 2006. Contrary to conclusions from the observational geographic variations literature, the results suggest that greater medical care use is associated with statistically significant and quantitatively meaningful health improvements: a 10% increase in medical care use is associated with a 8.4% decrease in the mortality rate and a 3.8% decrease in the rate of avoidable hospitalizations.
Int J Health Care Finance Econ
· 2012 Mar · PMID 22374192
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This paper models health insurance choice in Chile (public versus private) as a dynamic, stochastic process, where individuals consider premiums, expected out-of pocket costs, personal characteristics and preferences. In...This paper models health insurance choice in Chile (public versus private) as a dynamic, stochastic process, where individuals consider premiums, expected out-of pocket costs, personal characteristics and preferences. Insurance amenities and restrictions against pre-existing conditions among private insurers introduce asymmetry to the model. We confirm that the public system services a less healthy and wealthy population (adverse selection for public insurance). Simulation of choices over time predicts a slight crowding out of private insurance only for the most pessimistic scenario in terms of population aging and the evolution of education. Eliminating the restrictions on pre-existing conditions would slightly ameliorate the level (but not the trend) of the disproportionate accumulation of less healthy individuals in the public insurance program over time.
Int J Health Care Finance Econ
· 2012 Mar · PMID 22367625
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This study estimates the effect of employment-based private health insurance (EPHI) on the use of covered health care services based on Danish survey data collected in 2009. The paper provides some of the first estimates...This study estimates the effect of employment-based private health insurance (EPHI) on the use of covered health care services based on Danish survey data collected in 2009. The paper provides some of the first estimates of how EPHI affects the use of health care services in a Scandinavian context. The effect of EPHI is estimated using propensity score matching. This method is shown to provide plausible estimates given the institutional setting of EPHI in Denmark and a wide set of relevant covariates. Considering the full sample of occupationally active, it is found that EPHI does not significantly affect the probability of having had any hospitalisations, physiotherapist, chiropractor, psychologist, specialist, or ambulatory contacts within a 12 month period. Restricting the analysis to the subsample of privately employed, the estimated effects for ambulatory contacts and hospitalisation are somewhat higher and statistically significant. More precisely, it is found that EPHI increases the probability of hospitalisation from 5.1 to 8.5% and the probability of having had any ambulatory contacts from 17.9 to 23.3% among the privately employed.
Int J Health Care Finance Econ
· 2012 Mar · PMID 22351126
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The present paper attempts to provide a new measure of catastrophic out-of-pocket health expenditure based on consumption of necessities. In literature, catastrophic expenditure is measured as out-of-pocket health expend...The present paper attempts to provide a new measure of catastrophic out-of-pocket health expenditure based on consumption of necessities. In literature, catastrophic expenditure is measured as out-of-pocket health expenditure that exceeds some fixed proportion of household income or household's capacity to pay. According the new measure proposed in this paper, OOP health expenditure is catastrophic if it reduces the non-health expenditure to a level where household is unable to maintain consumption of necessities. Based on this measure of catastrophic health expenditure, the paper examines determinants of catastrophic out-of-pocket health expenditure in India. The results show that, incidence of catastrophic OOP health expenditure increases with income, when we use the earlier measures. However, results based on the revised measure show that, the incidence of catastrophic payments goes down as income increases. Therefore, the analysis suggests that the findings are sensitive to the method used. The findings from multivariate analysis show economic and social status of Indian households are important determinants of incidence of catastrophic health expenditure. Education reduces the probability of incurring catastrophic health expenditure. Moreover, these findings are sensitive to measure of catastrophic OOP health expenditure and therefore, it is important to consider appropriate measure of catastrophic OOP health expenditure.
Int J Health Care Finance Econ
· 2012 Jun · PMID 22198417
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Using two-period panel data from the Nippon Life Insurance Research Institute, this paper tests the hypothesis that an increase in the self-pay ratio of medical expenditures associated with the Japanese health insurance...Using two-period panel data from the Nippon Life Insurance Research Institute, this paper tests the hypothesis that an increase in the self-pay ratio of medical expenditures associated with the Japanese health insurance reforms of April 2003 reduced household medical expenditures. We find that the increase in the self-pay ratio had a positive but insignificant effect on the share of medical expenses in household expenditure. However, when we employ the data as repeated cross-sectional observations to increase the sample size, the increase in the self-pay ratio has a significantly positive effect on the share of medical expenditures. This provides corroborating evidence that middle- and old-aged persons were unable to reduce their demand for medical services with the increase in the self-pay ratio. An additional finding is that medical services are a necessary good, particularly for those aged 61 years or older and those with medical expenditures accounting for a relatively high share of medical expenditures in high household expenditure.
Int J Health Care Finance Econ
· 2011 Dec · PMID 22009482
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We study how market conditions influence referrals of patients by general practitioners (GPs). We set up a model of GP referral for the Norwegian health care system, where a GP receives capitation payment based on the nu...We study how market conditions influence referrals of patients by general practitioners (GPs). We set up a model of GP referral for the Norwegian health care system, where a GP receives capitation payment based on the number of patients in his practice, as well as fee-for-service reimbursements. A GP may accept new patients or close the practice to new patients. We model GPs as partially altruistic, and compete for patients. We show that a GP operating in a more competitive market has a higher referral rate. To compete for patients and to retain them, a GP satisfies patients' requests for referrals. Furthermore, a GP who faces a patient shortage will refer more often than a GP who does not. Tests with Norwegian GP radiology referral data support our theory.
Int J Health Care Finance Econ
· 2011 Dec · PMID 21984119
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This paper explores price differences in the European Union (EU) pharmaceutical market, the EU's fifth largest industry. With the aim of enhancing quality of life along with industry competitiveness and R&D capability, m...This paper explores price differences in the European Union (EU) pharmaceutical market, the EU's fifth largest industry. With the aim of enhancing quality of life along with industry competitiveness and R&D capability, many EU directives have been adopted to achieve a single EU-wide pharmaceutical market. Using annual 1994-2003 data on prices of molecules that treat cardiovascular disease, we examine whether drug price dispersion has indeed decreased across five EU countries. Hedonic regressions show that over time, cross-country price differences between Germany and three of the four other EU sample countries, France, Italy and Spain, have declined, with relative prices in all three as well as the fourth country, UK, rising during the period. We interpret this as evidence that the EU has come closer to achieving a single pharmaceutical market in response to increasing European Commission coordination efforts.
Int J Health Care Finance Econ
· 2011 Dec · PMID 21915728
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In countries where local governments are heavily involved in financing health care for the indigent, regional disparities in local revenues may adversely affect the access of the poor to medical care. It is thus importan...In countries where local governments are heavily involved in financing health care for the indigent, regional disparities in local revenues may adversely affect the access of the poor to medical care. It is thus important to examine how central governments provide funds for such local medical needs. In Japan, local governments finance all medical costs for the poor through their Public Assistance (PA) programs. Using the unique mechanism of the Japanese system of central grants, I construct a measure of "transfer deficit" which shows the portion of the PA expenditures that fails to be secured by the central grants. The distribution of such a measure provides important information to assess the regional equity in financing local programs. The results suggest a compromise on the regional equity in financing medical care for the indigent. Then, I explore the determinants of the deficit measure by performing a quantile regression analysis. Since no effects of potential determinants imply that the central grants well accommodate changes in local needs, finding such effects helps evaluate the performance of the transfer system. The results shows that, among others, the number of PA households and the factors related to mental illness of PA recipients have positive impacts that attenuate toward the top of the conditional quantile of the transfer deficit. I elaborate on plausible causes of such attenuating responses.
Int J Health Care Finance Econ
· 2011 Dec · PMID 21915727
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Since the beginning of 1980s, the Iranian health care system has undergone several reforms designed to increase accessibility of health services. Notwithstanding these reforms, out-of-pocket payments which create a barri...Since the beginning of 1980s, the Iranian health care system has undergone several reforms designed to increase accessibility of health services. Notwithstanding these reforms, out-of-pocket payments which create a barrier to access health services contribute almost half of total health are financing in Iran. This study aimed to provide a greater understanding about the inequality and determinants of the out-of-pocket expenditure (OOPE) and the related catastrophic expenditure (CE) for hospital services in Iran using a nationwide survey data, the 2003 Utilisation of Health Services Survey (UHSS). The concentration index and the Heckman selection model were used to assess inequality and factors associated with these expenditures. Inequality analysis suggests that the CE is concentrated among households in lower socioeconomic levels. The results of the Heckman selection model indicate that factors such as length of stay, admission to a hospital owned by private sector or Ministry of Health and Medical Education, and living in remote areas are positively associated with higher OOPE. Results of the ordered-probit selection model demonstrate that length of stay, lower household wealth index, and admission to a private hospital are major factors contributing to the increase in the probability of CE. Also, we find that households living in East Azarbaijan, Kordestan and Sistan and Balochestan face a higher level of CE. Based on our findings, the current employer-sponsored health insurance system does not offer equal protection against hospital expenditure in Iran. It seems that a single universal health insurance scheme that covers health services for all Iranian-regardless of their employment status-can better protect households from catastrophic health spending.
Donfouet HP, Makaudze E, Mahieu PA
… +1 more, Malin E
Int J Health Care Finance Econ
· 2011 Sep · PMID 21874541
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In rural Cameroon, many people have no access to quality healthcare services. This is largely attributed to lack of private out-of-pocket payment to finance healthcare services. A community-based prepayment health insura...In rural Cameroon, many people have no access to quality healthcare services. This is largely attributed to lack of private out-of-pocket payment to finance healthcare services. A community-based prepayment health insurance scheme may be implemented to improve healthcare access in rural areas. This study examines the determinants of willingness-to-pay for a community-based prepayment healthcare system using a contingent valuation method conducted in rural Cameroon. To mitigate potential hypothetical bias, a consequential script is introduced in the questionnaire. The results indicate age, religion, profession, knowledge of community-based health insurance, awareness of usual practice in rural areas, involvement in association and disposable income are the key determinants of willingness to pay for a prepayment health scheme. On average, willingness to pay for the scheme by rural households is 1011 CFA francs/person/month (2.15 US dollars). The results underlie two important implications: first, there is substantial demand for a community healthcare prepayment scheme by rural poor households in Cameroon; second, rural households are averse to health shocks and hence they are willing to sacrifice monthly premium payments to protect themselves (and their households) from unforeseen health-related risks. If government could engage in social marketing strategies such as mass media campaigns and awareness, this could prove vital for encouraging participation by the rural poor in healthcare prepayment scheme in Cameroon.
Int J Health Care Finance Econ
· 2011 Sep · PMID 21858490
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The health insurance loading fee represents the portion of the premium above the expected amount of medical care expenditures paid by the insurance company. The size of the loading fees and how they vary by employer grou...The health insurance loading fee represents the portion of the premium above the expected amount of medical care expenditures paid by the insurance company. The size of the loading fees and how they vary by employer group size have important implications for health policy given the recent passage of the Patient Protection and Affordable Care Act. Despite their policy relevance, there is surprisingly little empirical evidence on the magnitude and the determinants of health insurance loading fees. This paper provides estimates of the loading fees by firm size using data from the confidential Medical Expenditure Panel Survey Household Component-Insurance Component Linked File. Overall, we find an inverse relationship between employer group size and loading fees. Firms of up to 100 employees face similar loading fees of approximately 34%. Loads decline with firm size and are estimated to be on average 15% for firms with more than 100 employees, but less than 10,000 employees, and 4% for firms with more than 10,000 workers.
Int J Health Care Finance Econ
· 2011 Sep · PMID 21850551
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Health care providers may vertically integrate not only to facilitate coordination of care, but also for strategic reasons that may not be in patients' best interests. Optimal Medicare reimbursement policy depends upon t...Health care providers may vertically integrate not only to facilitate coordination of care, but also for strategic reasons that may not be in patients' best interests. Optimal Medicare reimbursement policy depends upon the extent to which each of these explanations is correct. To investigate, we compare the consequences of the 1997 adoption of prospective payment for skilled nursing facilities (SNF PPS) in geographic areas with high versus low levels of hospital/SNF integration. We find that SNF PPS decreased spending more in high integration areas, with no measurable consequences for patient health outcomes. Our findings suggest that integrated providers should face higher-powered reimbursement incentives, i.e., less cost-sharing. More generally, we conclude that purchasers of health services (and other services subject to agency problems) should consider the organizational form of their suppliers when choosing a reimbursement mechanism.