Health Insurance and Life Style Choices: Identifying the Ex Ante Moral Hazard

There is extensive debate in the literature about the practical significance of the concept of ex-ante moral hazard. This paper uses data from the 1999-2003 PSID waves to estimate a structural model of individual choice of insurance coverage and four life style related decisions: heavy smoking, heavy drinking, sedentarism and obesity. The results show that health insurance has significant incentive effects on life style choices, increasing the propensity to heavy smoking, sedentarism and obesity. Somewhat surprisingly, however, health insurance decreases the propensity to heavy drinking. There is also significant correlation among the errors of each equation. The results might also have implications for the design of health financing policies.Ex ante moral hazard ; Insurance ; Life Style ; Max Simulated Likelihood

Do waiting times reduce hospital costs?

Using a sample of 137 hospitals over the period 1998-2002 in the English National Health Service, we estimate the elasticity of hospital costs with respect to waiting times. Our cross-sectional and panel-data results suggest that at the sample mean (103 days), waiting times have no significant effect on hospital, costs or, at most, a positive one. If significant, the elasticity of cost with respect to waiting time from our cross-sectional estimates is in the range 0.4-1. The elasticity is still positive but lower in our fixed-effects specifications (0.2-0.4). In all specifications, the effect of waiting time on cost is non-linear, suggesting a U-shaped relationship between hospital costs and waiting times: the level of waiting time which minimises total costs is always below ten days.

Essays on the regulation of health care provision and the economics of chronic diseases

This thesis comprises two main topics. The first part of the thesis focuses on the regulation of health care provision, while the second part provides empirical evidence ofthe economic consequences ofchronic diseases in developing countries. The first part examines the incentives that condition the relationship between hospitals and health care purchasers (Chapters 1 and 2) and the provision .ofpreventive care in a competitive health insurance market (Chapter 3). There are three main areas ofconsideration. Chapter 1 presents an axiomatic bargaining model of prices and activity, examining the negotiation between hospitals and purchasers in situations where, as usually occurs, none of the parties hold all of the bargaining power. Chapter 2 estimates the effect of waiting times on hospital costs using a sample of 283 hospitals over the period 1995-2002 in the NHS. This analysis seeks to clarifY the efficiency effects ofimposing waiting times for elective surgeries. Chapter 3 extends Rothschild and Stiglitz's (1976) model of adverse selection in a competitive health insurance market by considering the incentives for prevention. The second part of the thesis consists of two. empirical investigations regarding the economic effects of chronic diseases in Brazil, India and Russia. Chapter 4 provides an analysis of the relationship between socio-economic inequality . and chronic diseases, whilst Chapter 5 estimates the effect of chronic diseases on household economic performance, as measured by health expenditures, nonhealth expenditures and labour productivity. The results emphasise the relevance of chronic diseases for developing countries, challenging the view that this problem is restricted to more developed societies

Rentabilidad de las estrategias para combatir la enfermedad pulmonar obstructiva crónica y el asma en el África subsahariana y el sudeste asiático: estudio de modelos matemáticos

Objectives To determine the population level costs, effects, and cost effectiveness of selected, individual based interventions to combat chronic obstructive pulmonary disease (COPD) and asthma in the context of low and middle income countries. Design Sectoral cost effectiveness analysis using a lifetime population model. Setting Two World Health Organization sub-regions of the world: countries in sub-Saharan Africa with very high adult and high child mortality (AfrE); and countries in South East Asia with high adult and high child mortality (SearD). Data sources Disease rates and profiles were taken from the WHO Global Burden of Disease study; estimates of intervention effects and resource needs were drawn from clinical trials, observational studies, and treatment guidelines. Unit costs were taken from a WHO price database. Main outcome measures Cost per disability adjusted life year (DALY) averted, expressed in international dollars ($Int) for the year 2005. Results In both regions low dose inhaled corticosteroids for mild persistent asthma was considered the most cost effective intervention, with average cost per DALY averted about$Int2500. The next best value strategies were influenza vaccine for COPD in Sear-D (incremental cost $Int4950 per DALY averted) and low dose inhaled corticosteroids plus long acting ? agonists for moderate persistent asthma in Afr-E (incremental cost$Int9112 per DALY averted). Conclusions COPD is irreversible and progressive, and current treatment options produce relatively little gains relative to the cost. The treatment options available for asthma, however, generally decrease chronic respiratory disease burden at a relatively low cost

Cost effectiveness of strategies to combat chronic obstructive pulmonary disease and asthma in sub-Saharan Africa and South East Asia: mathematical modelling study

Objectives To determine the population level costs, effects, and cost effectiveness of selected, individual based interventions to combat chronic obstructive pulmonary disease (COPD) and asthma in the context of low and middle income countries

The Economic Impact of Non-Communicable Disease in China and India: Estimates, Projections, and Comparisons

The views expressed in this paper are those of the author(s) and not necessarily those of the Harvard Initiative for Global Health. The Program on the Global Demography of Aging receives funding from the National Institute on Aging, Grant No. 1 P30 AG024409-08

Do waiting times reduce hospital costs?

Using a sample of 137 hospitals over the period 1998-2002 in the English National Health Service, we estimate the elasticity of hospital costs with respect to waiting times. Our cross-sectional and panel-data results suggest that at the sample mean (103 days), waiting times have no significant effect on hospitals' costs or, at most, a positive one. If significant, the elasticity of cost with respect to waiting time from our cross-sectional estimates is in the range 0.4-1. The elasticity is still positive but lower in our fixed-effects specifications (0.2-0.4). In all specifications, the effect of waiting time on cost is non-linear, suggesting a U-shaped relationship between hospital costs and waiting times. However, the level of waiting time which minimises total costs is always below ten days.Waiting times Costs Hospitals

The economic impact of chronic diseases: How do households respond to shocks? Evidence from Russia

The epidemiological burden of chronic diseases is increasing worldwide and there is very little empirical evidence regarding the economic impact of chronic diseases on individuals and households. The primary objective of this paper is to explore the evidence on how chronic diseases affect household healthcare expenditure, non-health consumption, labour (earned) income, and to demonstrate how transfers may provide some insurance against shocks from chronic diseases. We have explicated a two-part Heckit model on household level data obtained from the Living Standard Measurement Surveys (LSMS) from Russia to control for nontrivial proportion of zeros in the dependent variables, skewed distribution of expenditure data and endogeneity. The results indicate that chronic diseases are significantly associated with higher levels of household healthcare expenditure in Russia and productivity losses reflected by reduced labour supply and reduced household labour income. Non-healthcare expenditure also increased. Results suggest that households are able to insure non-health consumption against chronic diseases, possibly from transfers, which also increased. In addition, socioeconomic status indicators significantly explained the impact of chronic diseases on households. Insurance and higher average education in households were associated with higher healthcare expenditure. Household transfers were significant in Russia despite an appreciable level of insurance cover. We conclude that households depend on informal coping mechanisms in the face of chronic diseases, irrespective of insurance cover. These results have implications for policies regarding the financing of treatment and control of chronic diseases in the country studied.Russia Chronic diseases Coping mechanisms Household economic impact