Does the Impact of Managed Care on Substance Abuse Treatment Services Vary By Profit Status?

We extend our previous research by determining whether, and how, the impact of managed care on substance abuse treatment (SAT) services differs by facility ownership. We use the 2000 National Survey of Substance Abuse Treatment Services that contains data on service offerings and other characteristics of 10,513 SAT facilities. For each group of for-profit, not-for-profit, and public facilities, we estimate the impact of managed care (MC) on the number and types of SAT services offered (i.e., indicators of the quality of care). We use IVs to account for possible endogeneity between facilities' involvement in MC and service offerings. We find substantial differences in the magnitude and direction of the impact of MC by facility ownership. On average, MC causes for-profits to offer approximately four (out of 26) additional services, causes publics to offer approximately four fewer services, and has no impact on the number of services offered by not-for-profits. Our findings raise concerns that managed care may reduce the quality of care provided by public SAT facilities by limiting the range of services offered. On the other hand, for-profit clinics are found to increase their range of services; the societal impact of this is unclear for several reasons.

Willingness to Pay for Drug Rehabilitation: Implications for Cost Recovery

Objectives: This study estimates the value that clients place on drug rehabilitation services at the time of intake and how this value varies with the probability of success and availability of social services. Methods: We interviewed 241 heroin users who had been referred to, but had not yet entered, methadone maintenance treatment in Baltimore, Maryland. We asked each subject to state a preference among three hypothetical treatment programs that varied across 3 domains: weekly fee paid by the client out of pocket ($5 to$100), presence/absence of case management, and time spent heroin-free (3 to 24 months). Each subject was asked to complete 18 orthogonal comparisons. Subsequently each subject was asked if they likely would enroll in their preferred choice among the set of three. We computed the expected willingness to pay (WTP) as the probability of enrollment times the fee considered in each choice considered from a multivariate logistic model that controlled for product attributes. We also estimated the price elasticity of demand. Results: We found that 21% of clients preferred programs that were logically dominated by other options. The median expected fee subjects were willing to pay for a program that offered 3 months of heroin-free time was $7.30 per week, rising to$17.11 per week for programs that offered 24 months of heroin-free time. The availability of case management increased median WTP by $5.64 per week. The fee was the most important predictor of the self-reported probability of enrollment with a price elasticity of -0.39 (SE 0.042). Conclusions: Clients' median willingness to pay for drug rehabilitation fell short of the average program costs of$82 per week, which reinforces the need for continued subsidization as drug treatment has high positive externalities. Clients will pay more for higher rates of treatment success and for the presence of case management.

Employment, Unemployment, and Problem Drinking

The misuse of alcoholic beverages ('problem drinking') has been demonstrated to result in enormous economic costs; most of these costs have been shown to be reduced productivity in the labor market. The purpose of this paper is to present sound structural estimates of the relationship between various measures of problem drinking and of employment and unemployment. The sample of approximately 15,000 observations is drawn from the 1988 Alcohol Survey of the National Health Interview Survey, the first dataset that enables nationally- representative estimates of alcohol abuse and dependence consistent with generally accepted medical criteria. The structural estimates of the effects of problem drinking on employment and labor market participation are obtained using methods proposed by Amemiya and by Heckman and MaCurdy. For our sample of males ages 25 to 59, we find that using the instrumental variable approach suggests that the negative impact of problem drinking on employment is even greater than that estimated using the OLS approach. Interestingly, the IV estimates on the samples of females change the sign from a positive impact of problem drinking on employment to a negative impact. Thus although the conclusions drawn from raw data comparisons and OLS regressions differ by gender, the IV estimates are very similar for men and women. For women, the unobserved heterogeneity masks the negative impact of problem drinking on employment when using OLS estimation methods.

Health, Income, and Risk Aversion: Assessing Some Welfare Costs of Alcoholism and Poor Health

The economic costs of adverse health outcomes have typically been evaluated in a context of risk neutrality, an approach that ignores the potential welfare importance of individuals' risk preferences. This paper presents a framework that unifies the research in health capital and earnings with that on risk preferences in the presence of stochastic outcomes. The model is implemented to obtain estimates of the economic damages due both to general health problems as well as to one specific health problem that is of considerable interest from society's perspective: alcoholism. Our empirical findings, based on data from the Epidemiologic Catchment Area survey, indicate that failure to recognize the possibility of risk averse preferences leads to a potentially serious underestimation of the magnitudes of the 'costs' of alcoholism and poor health. In particular, it is shown that while alcoholism problems have negative impacts on the conditional mean of income (consistent with most of the existing literature), they also have positive impacts on the conditional variance of income. Our conclusions are to some degree provisional because our estimates of conditional variances are necessarily biased to the extent that unobserved heterogeneity is an important determinant of the moment structure of income in our sample.

Helping People help themselves:Insights from behavioral economics for policies to counter addiction

Les apports de l'économie comportementale permettent de concevoir de nouvelles formes d'action publique et d'augmenter l'efficacité des recommandations habituelles. Nous discutons ici de l'utilité de ces approches pour traiter la toxicomanie. Ces modèles reposent sur les biais cognitifs intervenant dans la prise de décision pour aider les gens à éviter de commettre des erreurs. Des exemples de ces stratégies consistent à modifier la présentation de l'information, à transformer les incitations, et à offrir des possibilités de pré-engagement. Il est essentiel de tester rigoureusement ces différentes stratégies avant de les mettre en pratique et les gouvernements devraient envisager une utilisation systématique de l'économie comportementale dans l'élaboration des politiques publiques.Insights from behavioral economics have the potential to generate novel interventions and policies as well as inscrease the effectiveness of standard prescriptions. Here we discuss approaches to address addictions. These insights hinge on leveraging devision-making biases to help people overcome mistakes. Examples of these strategies include changing the presentation of information, restructuring incentives, and providing opportunities for precommitment. Rigorously testing different policy ideas is key to putting them into practice. Governments should consider a systematic approach to policy development using behavioral economics

Cumulative Effects of Job Characteristics on Health

We present what we believe are the best estimates of how job characteristics of physical demands and environmental conditions affect individual’s health. Five-year cumulative measures of these job characteristics are used to reflect findings in the physiologic literature that cumulative exposure is most relevant for the impact of hazards and stresses on health. Using data from the Panel Study of Income Dynamics we find that individuals who work in jobs with the ‘worst’ conditions experience declines in their health, although this effect varies by demographic group. For example, for non-white men, a one standard deviation increase in cumulative physical demands decreases health by an amount that offsets an increase of two years of schooling or four years of aging. Job characteristics are found more detrimental to the health of females and older workers. These results are robust to inclusion of occupation fixed effects, health early in life and lagged health.Health, occupational characteristic

The Impact of Job Stress on Smoking and Quitting: Evidence from the HRS

This paper examines the impact of job-related stress on smoking behavior. We use data from the Health and Retirement Study to examine how high job stress affects the probability that smokers quit and the number of cigarettes smoked for current smokers. We include individual fixed effects, which control for time-invariant factors. Occupational fixed effects are also included to control for occupational characteristics other than stress; time dummies control for the secular decline in smoking rates. Using a sample of people who smoked in the previous wave, we find that job stress is positively related to continuing to smoke and to the number of cigarettes smoked for current smokers. The FE results are of greater magnitude and significance than the OLS results suggesting an important omitted variable bias in OLS estimates. It may be that individuals who are able to handle stress or have better self-control are more likely to have high stress jobs and less likely to smoke. We also find that the smoking/stress relationship is neither explained by heterogeneity across individuals in cognitive ability, risk taking preferences or planning horizons nor is it explained by time varying measures that we observe.

Do JUUL and e-cigarette flavours change risk perceptions of adolescents? Evidence from a national survey

Introduction: Use of JUULs and e-cigarettes is growing rapidly, particularly among adolescents. Research suggests that flavours may increase the appeal of these products, but little is known about how flavours influence perception. We examined whether youth perceptions about the health risks of JUULs and e-cigarettes vary with flavours. Methods: We conducted a national survey in 2018 of 1610 high-school students aged 14–18 who had ever heard of either JUULs or e-cigarettes. Respondents were asked to rate the lung cancer risk, the harm of second-hand vapour, potential for addiction and healthiness of differently flavoured JUUL and e-cigarette products. We investigated the relationship among flavour, risk perception and socio-demographic information. Results: We found that risk perceptions for both JUULs and e-cigarettes differ significantly by flavour type. Youths perceive fruit flavours to be less likely to lead to lung cancer (−0.909 (0.065)), have harmful second-hand vapour (−0.933 (0.060)) and be more addictive (1.104 (0.094)) relative to tobacco flavours. Candy, menthol/mint and alcohol flavours show similar patterns of risk association, although the magnitude is slightly smaller than for fruit flavours. Conclusions: Youths believe that flavours are related to the health risks of both JUULs and e-cigarettes despite the fact that these differences in risk by flavour have not been scientifically or systematically established. A policy concern is that misperceptions based on flavour may result in increased vaping by youths. The findings from this study support the assertion that banning fruit, menthol or mint and sweet flavours could reduce the appeal of JUULs and e-cigarettes to youth, with concomitant health protections