Chance of Survival
What Changes In Survival Rates Tell Us About US Health Care
Peter Muennig & Sherry Glied
Health Affairs, forthcoming
Abstract:
Many advocates of US health reform point to the nation's relatively low life-expectancy rankings as evidence that the health care system is performing poorly. Others say that poor US health outcomes are largely due not to health care but to high rates of smoking, obesity, traffic fatalities, and homicides. We used cross-national data on the fifteen-year survival of men and women over three decades to examine the validity of these arguments. We found that the risk profiles of Americans generally improved relative to those for citizens of many other nations, but Americans' relative fifteen-year survival has nevertheless been declining. For example, by 2005, fifteen-year survival rates for forty-five-year-old US white women were lower than in twelve comparison countries with populations of at least seven million and per capita gross domestic product (GDP) of at least 60 percent of US per capita GDP in 1975. The findings undercut critics who might argue that the US health care system is not in need of major changes.
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Is Employer-Based Health Insurance a Barrier to Entrepreneurship?
Robert Fairlie, Kanika Kapur & Susan Gates
Journal of Health Economics, forthcoming
Abstract:
The focus on employer-provided health insurance in the United States may restrict business creation. We address the limited research on the topic of "entrepreneurship lock" by using recent panel data from matched Current Population Surveys. We use difference-in-difference models to estimate the interaction between having a spouse with employer-based health insurance and potential demand for health care. We find evidence of a larger negative effect of health insurance demand on business creation for those without spousal coverage than for those with spousal coverage. We also take a new approach in the literature to examine the question of whether employer-based health insurance discourages business creation by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure of identifying age in months from matched monthly CPS data, we compare the probability of business ownership among male workers in the months just before turning age 65 and in the months just after turning age 65. We find that business ownership rates increase from just under age 65 to just over age 65, whereas we find no change in business ownership rates from just before to just after for other ages 55-75. We also do not find evidence from the previous literature and additional estimates that other confounding factors such as retirement, partial retirement, social security and pension eligibility are responsible for the increase in business ownership in the month individuals turn 65. Our estimates provide some evidence that "entrepreneurship lock" exists, which raises concerns that the bundling of health insurance and employment may create an inefficient level of business creation.
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The effect of self-employed health insurance subsidies on self-employment
Bradley Heim & Ithai Lurie
Journal of Public Economics, forthcoming
Abstract:
This paper estimates the effect of an increase in the deductibility of health insurance premiums for self-employed individuals on the probability of being self-employed. Using a panel of tax returns from 1999 to 2004, we estimate fixed effects instrumental variable regressions for the probability of being self-employed, entering into self-employment, and exiting from self-employment. Our results suggest that this policy increased the probability of being self-employed by 1.5 percentage points, and increased the probability that a taxpayer would be primarily or exclusively self-employed by 1.1 and 0.35 percentage points respectively. These effects explain about a third to a half of the total increase in self-employment by these definitions over the sample period. We also find that the probability of entering self-employment increased by 0.8 percentage points and find suggestive evidence that the probability of exit decreased by 2.8 percentage points.
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Health Benefits In 2010: Premiums Rise Modestly, Workers Pay More Toward Coverage
Gary Claxton et al.
Health Affairs, October 2010, Pages 1942-1950
Abstract:
Our annual analysis of health benefits contains findings from interviews of 2,046 public and private employers surveyed during January-May 2010. Average annual premiums in 2010 were $5,049 for single coverage and $13,770 for family coverage-up 5 percent and 3 percent from 2009, respectively. Workers paid more toward premiums in 2010, and more workers are in consumer-directed plans and plans with high deductibles than in 2009. Thirty percent of firms reported that they reduced the scope of benefits or increased cost sharing because of the recession. Surprisingly, the percentage of firms offering health benefits in 2010 increased to 69 percent, up from 60 percent in 2009. The change was largely driven by a thirteen-percentage-point increase in the number of firms with three to nine workers that offered benefits (up from 46 percent in 2009 to 59 percent in 2010). The reason for this increase is unclear.
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Inside the Refrigerator: Immigration Enforcement and Chilling Effects in Medicaid Participation
Tara Watson
NBER Working Paper, August 2010
Abstract:
Economists have puzzled over why eligible individuals fail to enroll in social safety net programs. "Chilling effects" arising from an icy policy climate are a popular explanation for low program take-up rates among immigrants, but such effects are inherently hard to measure. This paper investigates a concrete determinant of chilling, Federal immigration enforcement, and finds robust evidence that heightened enforcement reduces Medicaid participation among children of non-citizens. This is the case even when children are themselves citizens and face no eligibility barriers to Medicaid enrollment. Immigrants from countries with more undocumented U.S. residents, those living in cities with a high fraction of other immigrants, and those with healthy children are most sensitive to enforcement efforts. Up to seventy-five percent of the relative decline in non-citizen Medicaid participation around the time of welfare reform, which has been attributed to the chilling effects of the reform itself, is explained by a contemporaneous spike in immigration enforcement activity. The results imply that safety net participation is influenced not only by program design, but also by a broader set of seemingly unrelated policy choices.
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Health insurance and job creation by the self-employed
Aparna Mathur
Small Business Economics, October 2010, Pages 299-317
Abstract:
Health insurance is regulated at the state level by the use of state-mandated health benefits. These are regulations issued by the state that mandate minimum levels of certain benefits as part of policies offered, e.g., drug abuse and alcohol treatment services, treatment for mental illnesses, etc. In this paper, we evaluate the impact of state health insurance mandates on job creation by small firms using data from the Survey of Income and Program Participation (SIPP) dataset for the period 1993-1995. Results from an ordered probit regression indicate that, the larger the number of mandates in a state, the lower the probability that a self-employed person will be a significant employment generator. These results hold when we consider both the sum of mandates as well as a cost-weighted measure of the most expensive mandates.
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State Abortion Policies, Targeted Regulation of Abortion Provider Laws, and Abortion Demand
Marshall Medoff
Review of Policy Research, September 2010, Pages 577-594
Abstract:
Targeted Regulation of Abortion Provider laws (or TRAP laws) are state laws that apply only to abortion providers and impose on them licensing fees, physical plant/personnel regulations, and requirements that exceed those imposed on other comparable health-care providers or medical facilities. According to prochoice supporters, the explicit or implicit goal of TRAP laws is to drive abortion providers from the market and reduce the supply of abortion services. This paper examines whether a state TRAP licensing fee or a TRAP plant/personnel law also has an independent impact on women's demand for abortion over the period 1982-2005. The empirical results find that neither state TRAP law has a statistically significant independent effect on women's abortion demand. The empirical results remain robust even after controlling for time-varying factors or the time period after the Supreme Court's landmark 1992 Planned Parenthood of Southeastern Pennsylvania v. Casey decision.
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A Progress Report On Electronic Health Records In U.S. Hospitals
Ashish Jha, Catherine DesRoches, Peter Kralovec & Maulik Joshi
Health Affairs, October 2010, Pages 1951-1957
Abstract:
Given the substantial federal financial incentives soon to be available to providers who make "meaningful use" of electronic health records, tracking the progress of this health care technology conversion is a policy priority. Using a recent survey of U.S. hospitals, we found that the share of hospitals that had adopted either basic or comprehensive electronic records has risen modestly, from 8.7 percent in 2008 to 11.9 percent in 2009. Small, public, and rural hospitals were less likely to embrace electronic records than their larger, private, and urban counterparts. Only 2 percent of U.S. hospitals reported having electronic health records that would allow them to meet the federal government's "meaningful use" criteria. These findings underscore the fact that the transition to a digital health care system is likely to be a long one.
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Gopi Shah Goda
NBER Working Paper, September 2010
Abstract:
In spite of the large expected costs of needing long-term care, only 10-12 percent of the elderly population has private insurance coverage. Medicaid, which provides means-tested public assistance and pays for almost half of long-term care costs, spends more than $100 billion annually on long-term care. In this paper, I exploit variation in the adoption and generosity of state tax subsidies for private long-term care insurance to determine whether tax subsidies increase private coverage and reduce Medicaid's costs for long-term care. The results indicate that the average tax subsidy raises coverage rates by 2.7 percentage points, or 28 percent. However, the response is concentrated among high income and asset-rich individuals, populations with low probabilities of relying on Medicaid. Simulations suggest each dollar of state tax expenditure produces approximately $0.84 in Medicaid savings, over half of which funnels to the federal government.
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Unhealthy Competition: Consequences of Health Plan Choice in California Medicaid
Christopher Millett, Arpita Chattopadhyay & Andrew Bindman
American Journal of Public Health, November 2010, Pages 2235-2240
Objectives: We compared the quality of care received by managed care Medicaid beneficiaries in counties with a choice of health plans and counties with no choice.
Methods: This cross-sectional study among California Medicaid beneficiaries was conducted during 2002. We used a multivariate Poisson model to calculate adjusted rates of hospital admissions for ambulatory care-sensitive conditions by duration of plan enrollment.
Results: Among beneficiaries with continuous Medicaid coverage, the percentage with 12 months of continuous enrollment in a health plan was significantly lower in counties with a choice of plans than in counties with no choice (79.2% vs 95.2%; P<.001). Annual ambulatory care-sensitive admission rates adjusted for age, gender, and race/ethnicity were significantly higher among beneficiaries living in counties with a choice of plans (6.58 admissions per 1000 beneficiaries; 95% confidence interval [CI]=6.57, 6.58) than among those in counties with no choice (6.27 per 1000; 95% CI=6.27, 6.28).
Conclusions: Potential benefits of health plan choice may be undermined by transaction costs of delayed enrollment, which may increase the probability of hospitalization for ambulatory care-sensitive conditions.
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Takeshi Hamamura & Justin Park
Evolutionary Psychology, September 2010, Pages 506-515
Abstract:
Research has found that contagion-minimizing behavioral tendencies are amplified in pathogen-prevalent regions. We investigated whether reactions to the "swine flu" outbreak of 2009 were stronger among East Asians than Westerners, populations residing in regions that now enjoy comparable advances in healthcare but that are characterized by relatively high and low historical pathogen prevalence, respectively. In a survey, East Asians reported greater concerns about infection, especially from foreigners. Analyses of international air travel data around the time of the outbreak provided corroborating evidence: Immediately following the outbreak, airports in the Asia-Pacific region lost more international traffic relative to their Western counterparts, and East Asian airlines reported greater declines in international traffic compared to Western airlines. These differences are unlikely to reflect objective threat posed by swine flu (whose casualties were concentrated in the Americas); rather, they appear to reflect culturally adapted behavioral patterns forged and sustained by regionally variable levels of pathogen prevalence.
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Ernst Berndt & Murray Aitken
NBER Working Paper, October 2010
Abstract:
The landmark Waxman-Hatch Act of 1984 represented a "grand compromise" legislation that sought to balance incentives for innovation by establishing finite periods of market exclusivity yet simultaneously providing access to lower cost generics expeditiously following patent expiration. Here we examine trends in the first quarter century since passage of the legislation, building on earlier work by Grabowski and Vernon [1992,1996] and Cook [1998]. The generic share of retail prescriptions in the U.S. has grown from 18.6% in 1984 to 74.5% in 2009, with a notable acceleration in recent years. This increase reflects increases in both the share of the total market potentially accessible by generics, and the generic efficiency rate - the latter frequently approaching 100%. Whereas in 1994, the generic price index fell from 100 to 80 in the 12 months following initial generic entry and by 24 months to 65, in 2009 the comparable generic price indexes are 68 and 27, respectively. Recent studies sponsored by the American Association of Retired Persons focus only on brand prices and ignore substitution to lower priced options following loss of patent protection. For the prescription drugs most commonly used by beneficiaries in Medicare Part D, the average price per prescription declined by 21.3% from 2006 to 2009, rather than increasing by 25-28% as reported by the AARP. Finally, we quantify changes over time in the average daily cost of pharmaceutical treatment in nine major therapy areas, encompassing the entire set of molecules within each therapy class, not simply the molecule whose patent has expired. Across all nine therapeutic areas, at 24 months post-generic entry, the weighted mean reduction in pharmaceutical treatment cost per patient is 35.1%.
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Health Risk, Income, and Employment-Based Health Insurance
Kate Bundorf, Bradley Herring & Mark Pauly
Forum for Health Economics & Policy, 2010
Abstract:
While many believe that an individual's health plays an important role in both their willingness and ability to obtain health insurance in the employment-based setting, relatively little agreement exists on the extent to which health status affects coverage rates, particularly for those with lower incomes. In this paper, we examine the relationship between health risk and the purchase of group health insurance and whether that relationship differs by a person's income and whether they obtain coverage in the small, medium, or large group market. Using the panel component of the 1996-2002 Medical Expenditure Panel Survey (MEPS), we find that health risk is positively associated with private health insurance across the different markets, and that this positive relationship is stronger for low and middle income people, particularly in the large group market. Our results are consistent with the existence of adverse selection in the group market in the form of low rates of coverage among low risks due to an absence of risk rating of premiums. We conclude that pooled premiums for low risks, particularly those with low incomes, may represent a more important financial barrier to coverage in voluntary group insurance than high premiums for high risks.
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Mandatory Sick Pay Provision: A Labor Market Experiment
Stefan Bauernschuster, Peter Duersch, Jörg Oechssler & Radovan Vadovic
Journal of Public Economics, forthcoming
Abstract:
The question whether a minimum rate of sick pay should be mandated is much debated. We study the effects of this kind of intervention with student subjects in an experimental laboratory setting rich enough to allow for moral hazard, adverse selection, and crowding out of good intentions. Both wages and replacement rates offered by competing employers are reciprocated by workers. However, replacement rates are only reciprocated as long as no minimum level is mandated. Although we observe adverse selection when workers have different exogenous probabilities for being absent from work, this does not lead to a market breakdown. In our experiment, mandating replacement rates actually leads to a higher voluntary provision of replacement rates by employers.