Emergency care usage and longevity have opposite effects on health insurance rates

Purpose: To study the price of health insurance for individuals aged 65 years and over. Methodology: A sample of private health policyholders in Spain is analysed. Joint models are estimated for men and women, separately. A log-linear model of the transformed cumulated number of claims associated with emergency room occupation, ambulance use and hospitalization is estimated, together with a proportional hazard survival model. Findings: The association between the longitudinal process of severe medical care and the survival time process is positive and highly significant for both men and women. An increase in the price of health insurance due to the effect of a larger number of emergency care demand events is slightly offset by the decrease in expected longevity. Practical implications: The effect of an increase in the number of claims is small compared to the reduction in survival, so age still plays a central role in rate making. Originality: The proposed methodology allows dynamic rates to be designed, so that the price of health insurance can change as new usage information becomes available

Improvements in medical care and technology and reductions in traffic-related fatalities in Great Britain

Traffic-related fatalities in the UK have fallen dramatically over the last 30 years by about 50%. This decline has been observed in many other developed countries with similar rates of reduction. Many factors have been associated with this decline, including safer vehicle design, increased seat-belt use, changing demographics, and improved infrastructure. One factor not normally considered is the role that improved medical technology may have in reducing total traffic-related fatalities. This study analyzed cross-sectional time-series data in the UK to examine this relationship. Various proxies for medical technology improvement were included in a fixed effects negative binomial model to assess whether they are associated with reductions in traffic-related fatalities. Various demographic variables, such as age cohorts, GDP and changes in per-capita income are also included. The statistical methods employed control for heterogeneity in the data and therefore other factors that may affect the dependent variable for which data are not available do not need to be considered. Results suggest a strong relationship between improved medical technology and reductions in traffic-related fatalities as well as expected relationships with demographic factors. These results could imply that continued reductions in UK fatalities may be more difficult to achieve if medical technology improvements are diminishing, however, demographic changes will likely contribute to a further downward trend.

Are the dimensions of private information more multiple than expected? Information asymmetries in the market of supplementary private health insurance in England

Our study reexamines standard econometric approaches for the detection of information asymmetries on insurance markets. We claim that evidence based on a standard framework with 2 equations, which uses potential sources of information asymmetries, should stress the importance of heterogeneity in the parameters. We argue that conclusions derived from this methodology can be misleading if the estimated coefficients in such an `unused characteristics' framework are driven by different parts of the population. We show formally that an individual's expected risk from the perspective of insurance, conditioned on certain characteristics (which are not used for calculating the risk premium), can equal the population's expectation in risk { although such characteristics are both related to risk and insurance probability, which is usually interpreted as an indicator of information asymmetries. We provide empirical evidence on the existence of information asymmetries in the market for supplementary private health insurance in the UK. Overall, we found evidence for advantageous selection into the private risk pool; ie people with lower health risk tend to insure more. The main drivers of this phenomenon seem to be characteristics such as income and wealth. Nevertheless, we also found parameter heterogeneity to be relevant, leading to possible misinterpretation if the standard `unused characteristics' approach is applied

Obesity and health expenditures: Evidence from Australia

© 2015 Elsevier B.V. Rising rates of obesity are a public health concern in every industrialized country. This study investigates the relationship between obesity and health care expenditure in Australia, where the rate of obesity has tripled in the last three decades. Now one in four Australians is considered obese, defined as having a body mass index (BMI, kg/m2) of 30 or over. The analysis is based on a random sample survey of over 240,000 adults aged 45 and over that is linked at the individual-level to comprehensive administrative health care claims for the period 2006-2009. This sub-population group has an obesity rate that is nearly 30% and is a major consumer of health services. Relative to the average annual health expenditures of those with normal weight, we find that the health expenditures of those with a BMI between 30 and 35 (obese type I) are 19% higher and expenditures of those with BMI greater than 35 (obese type II/III) are 51% higher. We find large and significant differences in all types of care: inpatient, emergency department, outpatient and prescription drugs. The obesity-related health expenditures are higher for obese type I women than men, but in the obese type II/III state, obesity-related expenditures are higher for men. When we stratify further by age groups, we find that obesity has the largest impact among men over age 75 and women aged 60-74 years old. In addition, we find that obesity impacts health expenditures not only through its link to chronic diseases, but also because it increases the cost of recovery from acute health shocks

THE IMPACT OF MEDICARE PART D ON MORTALITY AND FINANCIAL STABILITY

Using the Health and Retirement Study Panel core files from 1996 to 2014, I analyze how Medicare Part D impacted access to prescription drug coverage by various demographic factors such as race, gender, and income. In Chapter 1, I find the highest take-up rates for those who were white, female, and with higher incomes. However, increases in coverage were high across the board, such that Medicare Part D also improved drug insurance coverage for those who were black, male, and with lower income. Thus, although Medicare Part D did increase prescription drug insurance coverage for seniors across the board, I also find potential for improvement in enrollment for difficult-to-reach groups. Next, Chapter 2 examines the impact of Medicare Part D on mortality. Although I do not find an impact on the life expectancy of respondents as a whole, I do find a significant positive effect for black respondents, indicating that Medicare Part D may have mattered more for disadvantaged groups. The largest impact is for black men, who have an additional 9 percentage point chance of living to age 73 for an additional 8 years of coverage (significant at the 5% level). When looking only at cardiovascular mortality, which is more likely to be influenced by drug coverage, I find improvements in life expectancy for the total population, with stronger effects for minorities and men. Overall, my findings suggest that Medicare Part D did move the needle on its goal: to improve the health of those who, without government intervention, had the most difficulty paying for prescription drugs. Chapter 3 looks at the impact of Medicare Part D prescription drug coverage on cost-related medication adherence, food insecurity, and finances among seniors. It would be reasonable to assume that Medicare Part D, which led to near-universal drug coverage among senior citizens, could allow seniors to shift money previously spent on drug expenditures to other areas. The strongest effect of Medicare Part D is on cost-related medication nonadherence, leading to a 21% decrease for an additional 8 years of Medicare Part D coverage. The impact is even stronger for the black male population (30%). I fail to reject the null hypothesis that Medicare Part D did not reduce food insecurity or household debt. Overall, Medicare Part D appears to have improved the financial stability of seniors

Precautionary saving and old-age provisions: Do subjective saving motive measures work?

literature on precautionary saving provides contradictory views on the importance of precautionary saving. The SAVE data offer the possibility to generate some of the frequently used instruments known from the literature in order to measure the extent of precautionary savings. This paper compares the influence of these instruments on long-run and short-run saving measures. In addition, SAVE contains information on a broad range of saving motives. This paper uses these short-run and long-run savings motives to describe differences in savings, saving rates and wealth accumulation.

The Effects of the Assimilation and Use of IT Applications on Financial Performance in Healthcare Organizations

This research examines the impacts of the assimilation and use of IT on the financial performance of hospitals. We identify two dimensions of IT assimilation and use. They are the IT applications architecture spread, which is the adoption of a broad array of IT solutions, and IT applications architecture longevity, which is the length of experience with use of specific IT solutions. We examine the extent to which these dimensions of assimilation within the business and clinical work processes impact hospital performance. Compared with the effects of IT applications architecture spread, we find that the IT applications architecture longevity has a more significant effect on financial performance. In addition, the effects of assimilation manifest differently across the business and clinical process domains. Our results enhance understanding about the manner in which the assimilation and use of IT contributes to the financial performance of hospitals