Three Essays on Health Care

This dissertation has been motivated by the question of how countries should optimally structure health care. Especially, there are two important economic and policy questions asked that extend beyond the area of health economics. The first is how the expansion of health insurance coverage affects the utilization and health of its beneficiaries (extensive margin); the second is how generous should health insurance be (intensive margin) to balance the provision of care and financial protection against risk while containing medical expenditures. The three chapters in this dissertation aim to make empirical contributions to these ongoing research questions. First chapter, "The Effect of Patient Cost-Sharing on Utilization, Health and Risk Protection: Evidence from Japan" addresses the second question. It investigates how cost-sharing, requiring patients to pay a share of the cost of care, affects the demand for care, health itself, and risk protection among the elderly, the largest consumers of health service. Previous studies of cost-sharing have had difficulty separating the effect of cost-sharing on patients from the influence of medical providers and insurers. This paper overcomes that limitation by examining a sharp reduction in cost-sharing at age 70 in Japan in a regression discontinuity design. I find that price elasticities of demand for both inpatient admissions and outpatient visits among the elderly are comparable to prior estimates for the non-elderly. I also find that the welfare gain from risk protection is relatively small compared to the deadweight loss of program financing, suggesting that the social cost of lower cost-sharing may outweigh social benefit. Taken together, this study shows that an increase in cost-sharing may be achieved without decreasing total welfare. Third chapter, "Effects of Universal Health Insurance on Health Care Utilization, Supply-Side Responses and Mortality Rates: Evidence from Japan" (with Ayako Kondo) address the first question. Even though most developed countries have implemented some form of universal public health insurance, most studies on the impact of the health insurance coverage have been limited to specific subpopulations, such as infants and children, the elderly or the poor. We investigate the effects of a massive expansion in health insurance coverage on utilization and health by examining the introduction of universal health insurance in Japan in 1961. We find that health care utilization increases more than would be expected from previous estimates of the elasticities of individual-level changes in health insurance status such as RAND Health Insurance Experiment in the US. The two chapters addressed above focus on consumers' incentives. Second chapter, "Supply-Induced Demand in Newborn Treatment: Evidence from Japan" (with Kiyohide Fushimi) examines the incentives faced by medical providers. Since medical providers exert a strong influence over the quantity and types of medical care demanded, measuring the size of supply-induced demand (SID) has been a long-standing controversy in health economics. However, past studies may underestimate the size of SID since it is empirically difficult to isolate SID from other confounding hospital behaviors, such as changes in the selection of patients. We overcome these empirical challenges by focusing on a specific population: at-risk newborns, and we measure the degree of SID by exploiting changes in reimbursement caused by the introduction of the partial prospective payment system (PPS) in Japan, which makes some procedures relatively more profitable than other procedures. We find that hospitals respond to PPS adoption by increasing utilization and increasing their manipulation of infant's reported birth weight, which determines infants reimbursement and maximum length of stay. We also find that this induced demand substantially increases hospital reimbursements without improving infant health, implying that the additional money spent has no commensurate health gains

Can we steer income comparison attitudes by information provision? Evidence from randomized survey experiments in the US and the UK

Economists have long been concerned that negative attitudes about relative income reduce social welfare. This paper investigates whether such attitudes can be mitigated by a simple information treatment. Toward this end, we conducted an original randomized online survey experiment in the US and the UK. As a baseline result, we find that UK respondents compare their incomes with others' at a much higher rate than US subjects do. Additionally, we find that our information treatment - suggesting that comparing income with others may diminish their welfare even when income levels are actually increasing - made respondents compare incomes more, rather than less. Interestingly, we find such effects only among UK respondents. The mechanism for this among UK respondents seems to be driven by those who are initially less comparison-conscious becoming more comparison-conscious, indicating that our information treatment gives moral "license" to make comparisons by informing that others actually do

Expression of aspartyl protease and C3HC4-type RING zinc finger genes are responsive to ascorbic acid in Arabidopsis thaliana

Ascorbate (AsA) is a redox buffer and enzyme cofactor with various proposed functions in stress responses and growth. The aim was to identify genes whose transcript levels respond to changes in leaf AsA. The AsA-deficient Arabidopsis mutant vtc2-1 was incubated with the AsA precursor L-galactono-1,4-lactone (L-GalL) to increase leaf AsA concentration. Differentially expressed genes screened by DNA microarray were further characterized for AsA responsiveness in wild-type plants. The analysis of 14 candidates by real-time PCR identified an aspartyl protease gene (ASP, At1g66180) and a C3HC4-type RING zinc finger gene (AtATL15, At1g22500) whose transcripts were rapidly responsive to increases in AsA pool size caused by L-GalL and AsA supplementation and light. Transgenic Arabidopsis plants expressing an AtATL15 promoter::luciferase reporter confirmed that the promoter is L-GalL, AsA, and light responsive. The expression patterns of ASP and AtATL15 suggest they have roles in growth regulation. The promoter of AtATL15 is responsive to AsA status and will provide a tool to investigate the functions of AsA in plants further

Do Hospitals Respond to Increasing Prices by Supplying Fewer Services?

Medical providers often have a significant influence on treatment decisions which they can use in their own financial interest. Classical models of supplier-induced demand predict that medical providers will supply fewer services if they face increasing prices. We test this prediction based on a reform of hospital financing in Germany. Uniquely, this reform changed the overall level of reimbursement - with increasing prices for some hospitals and decreasing prices for others - without affecting the relative prices for different types of patients. Based on administrative data, we find that hospitals do indeed react to increasing prices by reducing service supply.Anbieter von medizinischen Leistungen treffen häufig Behandlungsentscheidungen für ihre Patienten und haben die Möglichkeit, bei diesen Entscheidungen ihre eigenen finanziellen Interessen zu berücksichtigen. Klassische Modelle der Theorie der 'angebotsinduzierten Nachfrage' prognostizieren, dass medizinische Anbieter auf höhere Preise reagieren, indem sie weniger Leistungen erbringen. Wir testen diese Vorhersage auf Grundlage einer Reform der Krankenhausfinanzierung in Deutschland. Das Besondere an der Finanzierungsreform in Deutschland ist, dass die Reform die Preise für Krankenhäuser verändert hat - mit steigenden Preisen für einige Krankenhäuser und sinkenden Preisen für andere - ohne dabei die relativen Preise für die Behandlung unterschiedlicher Patientengruppen oder unterschiedlicher Krankheiten zu beeinflussen. Unter Nutzung administrativer Daten finden wir, dass Krankenhäuser tatsächlich weniger Leistungen erbringen, wenn die Preise steigen

"Invisible Killer": Seasonal Allergies and Accidents

Although at least 400 million people suffer from seasonal allergies worldwide, the adverse effects of pollen on "non-health" outcomes, such as cognition and productivity, are relatively understudied. Using ambulance archives from Japan, we demonstrate that high pollen days are associated with increased accidents and injuries— one of the most extreme consequences of cognitive impairment. We find some evidence of avoidance behavior in buying allergy products but limited evidence in curtailing outdoor activity, implying that the cognitive risk of pollen exposure is discounted. Our results call for governmental efforts to raise public awareness of the risks and promote widespread behavioral change

Policy Diffusion through Elections

Staggered difference-in-differences designs are pervasive in policy evaluations but little is known about the mechanisms of policy diffusion: How and why do such policies spread across jurisdictions? In this study, we highlight the role of elections in policy diffusion in settings where municipal elections are asynchronous due to historical reasons. First, we empirically show the presence of policy diffusion using neighbors' election cycles as instruments for neighbors' policy adoption. Second, we further demonstrate interactions of municipalities' election cycles with neighbors' adoption and show that they follow neighbors' policy only during their own election timing, indicating that policy diffuses through elections

Free for Children? Patient Cost-sharing and Healthcare Utilization

This version: August 6, 2019We examine how children's healthcare utilization responds to prices by exploiting over 10,000 variations in the levels and forms of patient cost-sharing across Japanese municipalities over time. Free care significantly increases outpatient spending, with price elasticities considerably smaller for children than adults. Small copayments alongside free care reduce utilization of healthier—rather than sicker—children, suggesting that moral hazard can be reduced without increasing financial and health risks. We find that cost-sharing is a "blunt tool," affecting utilization regardless of service type. Increased outpatient spending from free care neither improves short- and medium-term health outcomes nor reduces future healthcare spendingShigeoka gratefully acknowledges financial support from the Abe fellowship.68 p

Education and later-life mortality: Evidence from a school reform in Japan

We examine the mortality effects of a 1947 school reform in Japan, which extended compulsory schooling from primary to secondary school by as much as 3 years. The abolition of secondary school fees also indicates that those affected by the reform likely came from disadvantaged families who could have benefited the most from schooling. Even in this relatively favorable setting, we fail to find that the reform improved later-life mortality up to the age of 87 years, although it significantly increased years of schooling. This finding suggests limited health returns to schooling at the lower level of educational attainment