Copyright (c) 2009 Berkeley Electronic Press All rights reserved. http://www.bepress.com/fhep Recent documents in Forum for Health Economics & Policy en-us Thu, 05 Nov 2009 23:21:23 PST 3600 http://www.bepress.com/fhep/12/1/5 http://www.bepress.com/fhep/12/1/5 Wed, 04 Nov 2009 12:28:06 PST Critics of me-too innovation often argue that follow-on drugs offer little incremental clinical value over existing pioneer products, while at the same time increasing health care costs. We examine whether consumers view follow-on and pioneer drugs as close substitutes or distinct clinical therapies. For five major classes of drugs, we find that large reductions in the price of pioneer molecules after patent expiration--which would typically lead to decreased consumption of strong substitutes--have no effect on the trend in demand for follow-on drugs. Our findings are likely unaffected by health insurance, competitive pricing of me-toos, marketing, and switching costs. Anupam B. Jena Health Policy http://www.bepress.com/fhep/12/2/8 http://www.bepress.com/fhep/12/2/8 Fri, 25 Sep 2009 15:10:43 PDT There has been growing interest in using specific genetic markers as instrumental variables in attempts to assess causal relationships between health status and socioeconomic outcomes, including human capital accumulation. In this paper, we use a combination of family fixed effects and genetic marker instruments to estimate the causal effects of poor adolescent mental and physical health status on years of completed schooling. By exploiting the genetic variation in inheritance within families, this empirical strategy presents a unique opportunity to isolate the variation in genetic factors from other dynastic and family characteristics. We present evidence that inattentive symptoms in early childhood have large lasting effects in reducing completed schooling. We also find little consistent evidence that adolescent overweight status influences years of schooling completed. Jason M. Fletcher Health and Education http://www.bepress.com/fhep/12/2/7 http://www.bepress.com/fhep/12/2/7 Wed, 23 Sep 2009 07:01:12 PDT Background: Heart disease is among the leading causes of death in the U.S. and Canada. Despite the U.S.'s higher spending on health care, it is unclear whether persons with heart disease fare better in one country or the other. Methods: To evaluate and compare the health of people aged 45 and older in the U.S. and Canada, we drew upon the Joint Canada-U.S. Survey of Health (JCUSH), a random telephone interview conducted from 2002 to 2003. We used self-reported fair or poor health, disability, and functional impairment as dependent variables in logistic regressions, which controlled for demographic variables and other risk factors. Results: Adjusting for covariates, Canadian respondents with heart disease reported better health as measured by disability, but there was no difference for functional impairment or self-reported fair or poor health. The odds ratios (Canada:U.S.) were 1.10 (p=0.69) for fair or poor health, 0.56 (p=0.06) for disability, and 0.78 (p=0.32) for functional impairment. Conclusions: Our results indicate that people with heart disease are in better health in Canada as measured by disability, but there is no difference for overall self-reported health or functional impairment. Further research must be done to determine the cause of outcomes differences among heart disease patients. Alexis J. Pozen http://www.bepress.com/fhep/12/1/4 http://www.bepress.com/fhep/12/1/4 Wed, 26 Aug 2009 07:04:14 PDT Research Objective: This study offers a novel approach to workforce planning in the physician market. Rather than projecting the future demand for physician services, a human capital model is used to estimate the societal cost of producing a physician service. The socially optimal workforce is one at which (at optimal practice scale), the societal cost of producing a physician service is equal to the societal benefit obtained from the service. Study Design: Physician human capital consists of two components: the underlying human capital (productivity) of those who become physicians and the job-specific investments (physician training) added to this underlying capital. The value of physicians' underlying human capital is estimated using a regression analysis of the National Longitudinal Sample of Youth (NLSY). For those in the survey who did not go on to become doctors, income over time is modeled as a function of a rich set of variables measured in youth, including family background, educational attainment and a range of high-school level performance tests. This equation is then used to forecast an age-earnings profile for doctors based on the characteristics in youth of those NLSY cohort participants who subsequently became doctors. Next, published estimates are used to measure the total cost (wherever paid) of investments in physician training. Combining these estimates, the social cost per primary care physician provided visit and Medicare relative value unit (RVU) is determined. Principal Findings: Physicians are drawn from the highest performing group of high school students. The earnings of comparable students who do not become doctors and the predicted earnings of would be doctors are substantially above the population mean. The opportunity cost of physician human capital is thus very high. The estimated societal cost per primary care physician visit is substantially higher than the average co-payment. The societal cost per primary care physician provided RVU is generally higher than the current Medicare compensation rate per RVU. The private return to primary care physician training is relatively low, in the range of 7-9%. Conclusions: At current levels of supply, the marginal social costs of primary care visits appear to be equal to or greater than marginal social benefits of many primary care services. In considering expansions of primary care capacity, it may be efficient to increase the use of complementary, lower-skilled practitioners. Sherry Glied Economics of Health Care Contracting http://www.bepress.com/fhep/12/2/6 http://www.bepress.com/fhep/12/2/6 Fri, 17 Jul 2009 15:57:56 PDT In the contingent valuation literature, anchoring bias poses problems when using an iterative bidding game to infer willingness to pay. This bias occurs when the willingness to pay estimate is sensitive to the initially presented starting value. More generally, whenever a survey format is used and not all of those contacted participate, selection bias raises concerns about the representativeness of the sample. In this paper, we estimate students' willingness to pay for student health care at Stanford University while accounting for both of these biases. As there is no cost sharing for students, we assess willingness to pay by having a random sample of students play an on line iterative bidding game. Our main results are that (1) demand for student health care is elastic by conventional standards; (2) ignoring anchoring bias would lead to a substantially biased measure of the demand elasticity; and (3) standard selection correction methods indicate no bias from selective non-response and newer bounding methods support this conclusion of elastic demand. Jay Bhattacharya Health Economics http://www.bepress.com/fhep/12/1/3 http://www.bepress.com/fhep/12/1/3 Fri, 10 Jul 2009 11:27:55 PDT We use data from California to document and offer possible explanations for the sharp increase in hospital prices charged to private payers after 1999. We find a downward trend in price for private pay patients in the 1990s and a rapid upward trend beginning in 1999, amounting to an annual average increase of 10.6% per year over 1999-2005. Prices in 2006 were almost double prices in 1999. By contrast, there was little discernable trend in prices for Medicare and Medicaid patients, although these prices varied from year-to-year. Surprisingly, the increase in prices is not correlated, geographically, with the change in hospital market concentration. For example, the greatest price rises came from hospitals in monopoly and highly concentrated counties which experienced little or no change over our sample period. Two recent California state hospital regulations, the seismic retrofit mandate and the mandatory nurse staffing ratio affected hospital costs. However, the cost increases due to the nursing staffing regulations are not large enough to account for the price increase, and the price increase is not substantially correlated with the costs of compliance with the seismic retrofit mandate. Therefore, the source of the near-doubling of California hospital prices remains something of a mystery. Yaa Akosa Antwi Health Economics http://www.bepress.com/fhep/12/2/5 http://www.bepress.com/fhep/12/2/5 Tue, 30 Jun 2009 07:05:09 PDT Something about being poor makes people fat. Though there are many possible explanations for the income-body weight gradient, we investigate a promising but little-studied hypothesis: that changes in body weight can--at least in part--be explained as an optimal response to economic insecurity. We use data on working-age men from the 1979 National Longitudinal Survey of Youth (NLSY79) to identify the effects of various measures of economic insecurity on weight gain. We find in particular that over the 12-year period between 1988 and 2000, the average man gained about 21 pounds. A one percentage point (0.01) increase in the probability of becoming unemployed causes weight gain over this period to increase by about 0.6 pounds, and each realized 50% drop in annual income results in an increase of about 5 pounds. The mechanism also appears to work in reverse, with health insurance and intrafamily transfers protecting against weight gain. Trenton G. Smith Obesity http://www.bepress.com/fhep/12/2/4 http://www.bepress.com/fhep/12/2/4 Tue, 09 Jun 2009 15:00:30 PDT An important, unresolved question for health policymakers and consumers is whether cigarette smoking in young adulthood has lasting effects into later adulthood. The Vietnam era draft lottery offers an opportunity to address this question, because it randomly assigned young men to be more likely to experience conditions favoring cigarette consumption, including highly subsidized prices. Using this natural experiment, we find that military service increased the probability of smoking by 35 percentage points as of 1978-80, when men in the relevant cohorts were aged 25-30, but later in adulthood this effect was substantially attenuated and did not lead to large negative health effects. Daniel Eisenberg Smoking http://www.bepress.com/fhep/12/2/3 http://www.bepress.com/fhep/12/2/3 Tue, 09 Jun 2009 14:55:10 PDT This paper explores a central question in health economics: How sensitive is worker demand for health insurance? After controlling for variables omitted in other analyses, such as the generosity of plan coverage and aspects of worker demand that are constant within firms over time, I estimate a price elasticity (between -0.014 and -0.017) which is smaller than previous estimates. The analysis also finds that employees are more likely to take-up policies with greater insurance protection from hospital expenses, but not for increased coverage for prescription drug or provider office visit expenses. Taken together, increases in worker-paid premiums explain about 60 percent of the fall in take-up of employer policies over time, whereas increases in insurance cost-sharing explain about 10 percent of that change. Changes in employer contributions for health insurance had a limited effect on take-up compared with the amounts employees paid out-of-pocket for premiums. An implication of these findings is that policies which attempt to subsidize employee-paid portions of the premium would be an expensive and potentially ineffective strategy for achieving greater coverage, particularly if the quality of that coverage is not perceived as worthwhile. Paul D. Jacobs Health Economics http://www.bepress.com/fhep/12/2/2 http://www.bepress.com/fhep/12/2/2 Tue, 26 May 2009 17:08:05 PDT Additional work hours may lead to weight gain by decreasing exercise, causing substitution from meals prepared at home to fast food and pre-prepared processed food, or reducing sleep. Substitution toward unhealthy convenience foods could also influence the weight of one's spouse and children, while longer work hours for adults may further impact child weight by reducing parental supervision. I examine the effects of adult work hours on the body mass index (BMI) and obesity status of adults as well as the overweight status of children. Longer hours increase one's own BMI and probability of being obese, but have a smaller and statistically insignificant effect on these outcomes for one's spouse. Mothers', but not mother's spouse's, work hours affect children's probability of being overweight. My estimates imply that changes in labor force participation account for only 1.4% of the rise in adult obesity in recent decades, but a more substantial 10.4% of the growth in childhood overweight. Charles Courtemanche Obesity