At Death's Door
The Risk of Out-of-Pocket Health Care Expenditure at End of Life
Samuel Marshall, Kathleen McGarry & Jonathan Skinner
NBER Working Paper, July 2010
Abstract:
There is conflicting evidence on the importance of out-of-pocket medical expenditures as a risk to financial security, particularly at older ages. We revisit this question, focusing on health care spending near the end of life using data from the Health and Retirement Study for the years 1998-2006. We address difficulties with missing values for various categories of expenditures, outliers, and variations across individuals in the length of the reporting period. Spending in the last year of life is estimated to be $11,618 on average, with the 90th percentile equal to $29,335, the 95th percentile $49,907, and the 99th equal to $94,310. These spending measures represent a substantial fraction of liquid wealth for decedents. Total out-of-pocket expenditures are strongly positively related to wealth and weakly related to income. We find evidence for a mechanism by which wealth could plausibly buy health: large expenditures on home modifications, helpers, home health care, and higher-quality nursing homes, which have been shown elsewhere to improve longevity.
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Genetic Adverse Selection: Evidence from Long-Term Care Insurance and Huntington Disease
Emily Oster, Ira Shoulson, Kimberly Quaid & Ray Dorsey
Journal of Public Economics, forthcoming
Abstract:
Individual, personalized genetic information is increasingly available, leading to the possibility of greater adverse selection over time, particularly in individual-payer insurance markets. We use data on individuals at risk for Huntington disease (HD), a degenerative neurological disorder with significant effects on morbidity, to estimate adverse selection in long-term care insurance. We find strong evidence of adverse selection: individuals who carry the HD genetic mutation are up to 5 times as likely as the general population to own long-term care insurance. This finding is supported both by comparing individuals at risk for HD to those in the general population and by comparing across tested individuals in the HD-risk population with and without the HD mutation.
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David Portnoy
Social Science & Medicine, forthcoming
Abstract:
Waiting for medical test results that signal physical harm can be a stressful and potentially psychologically harmful experience. Despite this, interventionists and physicians often use this wait time to deliver behavior change messages and other important information about the test, possible results and its implications. This study examined how "bracing" for a medical test result impacts cognitive processing, as well as recall of information delivered during this period. Healthy U.S. university students (N = 150) were tested for a deficiency of a fictitious saliva biomarker that was said to be predictive of long-term health problems using a 2 (Test Result) x 2 (Expected immediacy of result: 10 minutes, 1 month) factorial design. Participants expecting to get the test result shortly should have been bracing for the result. While waiting for the test results participants completed measures of cognitive processing. After participants received the test result, recall of information about the biomarker was tested in addition to cognitive measures. One week later, participants who were originally told they did not have the deficiency had their recall assessed again. Results showed that anticipating an imminent test result increased cognitive distraction in the processing of information and lowered recall of information about the test and the biomarker. These results suggest that delivering critical information to patients after administering a test and immediately before giving the results may not be optimal.
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How Do Employers React to A Pay-or-Play Mandate? Early Evidence from San Francisco
Carrie Hoverman Colla, William Dow & Arindrajit Dube
NBER Working Paper, July 2010
Abstract:
In 2006 San Francisco adopted major health reform, becoming the first city to implement a pay-or-play employer health spending mandate. It also created Healthy San Francisco, a "public option" to promote affordable universal access to care. Using the 2008 Bay Area Employer Health Benefits Survey, we find that most employers (75%) had to increase health spending to comply with the law, yet most (64%) are supportive of the law. There is substantial employer demand for the public option, with 21% of firms using Healthy San Francisco for at least some employees, yet there is little evidence of firms dropping existing insurance offerings in the first year after implementation.
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Niche Players In Health Policy: Medical Specialty Societies In Congress 1969-2002
Aaron Rabinowitz & Miriam Laugesen
Social Science & Medicine, forthcoming
Abstract:
Scholars and commentators alike have long used 'organized medicine' as shorthand for the American Medical Association (AMA). However, organized medicine has increasingly shown signs of fragmentation into specialty societies over the last two decades. While the AMA remains the largest association of physicians, and wields a great deal of influence in political circles, its use as a proxy for organized medicine may warrant reevaluation due to the changing political organization of medicine. We developed a unique database of specialty medical society appearances before all Congressional committees by combining records from Lexis-Nexis Congressional and the Policy Agendas database. Descriptive statistics were used to evaluate the participation of specialty societies by committee and by hearing type. The Herfindahl-Hirschman Index (HHI) was used to measure whether specialty societies develop niche roles with specific committees, and the Chi-Square Goodness of Fit test was used to study the distribution of specialty society testimonies in health hearings more formally. We found that although the AMA participates in Congressional hearings at a higher rate than any other individual medical specialty society, it accounts for a decreasing percentage of all specialty society appearances over time. In addition, specialty societies have developed niche and monopoly roles in health policymaking as well as relationships with particular congressional committees over time. We conclude that the increasing participation of specialty medical societies in the policymaking process is important because medical societies do not testify solely to promote the economic self-interest of their members. Specialization in medicine has segmented lobbying roles, such that specialty societies have a different focus than the AMA. Thus, ‘organized medicine' and the AMA are no longer synonymous.
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Influence of Names on Career Choices in Medicine
Ernest Abel
Names: A Journal of Onomastics, June 2010, Pages 65-74
Abstract:
Three studies showed that medical doctors and lawyers were disproportionately more likely to have surnames that resembled their professions. A fourth study showed that, for doctors, this influence extended to the type of medicine they practiced. Study 1 found that people with the surname "Doctor" were more likely to be doctors than lawyers, whereas those with the surname "Lawyer" were more likely to be lawyers. Studies 2 and 3 broadened this finding by comparing doctors and lawyers whose first or last names began with three-letter combinations representative of their professions, for example, "doc," "law," and likewise found a significant relationship between name and profession. Study 4 found that the initial letters of physicians' last names were significantly related to their subspecialty, for example, Raymonds were more likely to be radiologists than dermatologists. These results provide further evidence names influence medical career choices.
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Mohamad Al-Ississ & Nolan Miller
NBER Working Paper, July 2010
Abstract:
President Obama's health insurance reform efforts, as embodied in the bills passed by the House and Senate in late 2009 and signed into law in March of 2010, have been described both as a boon and a death blow for private insurance industries. Using stock-price data on health care firms in the S&P health index, we exploit Republican Scott Brown's surprise victory in the Massachusetts Special Senate election to fill the seat of the late Ted Kennedy, which stripped Democrats of the 60-vote majority needed to pass the bill in the Senate, to evaluate the market's assessment of health reform on the health care industry. We find that the reduced likelihood of Health Reform's passage after the Brown election led to a significant increase in health industry stocks and average cumulative abnormal returns of 1.2 percent, corresponding to an increase in total market value of approximately $14.5 billion. Focusing on managed care (insurance) firms, we find an average cumulative abnormal return of 6.5 percent (a $6.7 billion increase in market value), with individual firms' cumulative abnormal returns ranging from around 5 to 9 percent.
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SCHIP premiums, enrollment, and expenditures: A two state, competing risk analysis
James Marton, Patricia Ketsche & Mei Zhou
Health Economics, July 2010, Pages 772-791
Abstract:
Faced with state budget troubles, policymakers may introduce or increase State Children's Health Insurance Program (SCHIP) premiums for children in the highest program income eligibility categories. In this paper we compare the responses of SCHIP recipients in a state (Kentucky) that introduced SCHIP premiums for the first time at the end of 2003 with the responses of recipients in a state (Georgia) that increased existing SCHIP premiums in mid-2004. We start with a theoretical examination of how these different policies create different changes to family budget constraints and produce somewhat different financial incentives for recipients. Next we empirically model the impact of these policies using a competing risk approach to differentiate exits due to transfers to other eligibility categories of public coverage from exiting the public health insurance system. In both states we find a short-run increase in the likelihood that children transfer to lower- income eligibility/lower-premium categories of SCHIP. We also find a short-run increase in the rate at which children transfer from SCHIP to Medicaid in Kentucky, which is consistent with our theoretical model. These findings have important financial implications for state budgets, as the matching rates and premium levels are different for different eligibility categories of public coverage.
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Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service
Martin Gaynor, Rodrigo Moreno-Serra & Carol Propper
NBER Working Paper, July 2010
Abstract:
The effect of competition on the quality of health care remains a contested issue. Most empirical estimates rely on inference from non experimental data. In contrast, this paper exploits a pro-competitive policy reform to provide estimates of the impact of competition on hospital outcomes. The English government introduced a policy in 2006 to promote competition between hospitals. Patients were given choice of location for hospital care and provided information on the quality and timeliness of care. Prices, previously negotiated between buyer and seller, were set centrally under a DRG type system. Using this policy to implement a difference-in-differences research design we estimate the impact of the introduction of competition on not only clinical outcomes but also productivity and expenditure. Our data set is large, containing information on approximately 68,000 discharges per year per hospital from 162 hospitals. We find that the effect of competition is to save lives without raising costs. Patients discharged from hospitals located in markets where competition was more feasible were less likely to die, had shorter length of stay and were treated at the same cost.
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Is Newer Always Better? Re-evaluating the benefits of newer pharmaceuticals
Michael Law & Karen Grépin
Journal of Health Economics, forthcoming
Abstract:
Whether newer pharmaceuticals justify their higher costs by reducing other health expenditures has generated significant debate. We replicate a frequently cited paper by Lichtenberg on drug "offsets" and find his results disappear using a more appropriate model or updated dataset. Further, we test the suitability of similar methods using newer hypertension drugs. We find our observational results run counter to well-established clinical evidence on comparative efficacy and conclude that our model, as well as other studies that do not adequately control for unobserved characteristics that jointly determine drug choice and health expenditures, are likely subject to significant bias.
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Justin Wang, Jason Hockenberry, Shin-Yi Chou & Muzhe Yang
NBER Working Paper, July 2010
Abstract:
Since 1992, the Pennsylvania Health Care Cost Containment Council (PHC4) has published cardiac care report cards for coronary artery bypass graft (CABG) surgery providers. We examine the impact of CABG report cards on a provider's aggregate volume and volume by patient severity and then employ a mixed logit model to investigate the matching between patients and providers. We find a reduction in volume of poor performing and unrated surgeons' volume but no effect on more highly rated surgeons or hospitals of any rating. We also find that the probability that patients, regardless of severity of illness, receive CABG surgery from low-performing surgeons is significantly lower.
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On the Morality of Guinea-Pig Recruitment
Mikhail Valdman
Bioethics, July 2010, Pages 287-294
Abstract:
Can it be wrong to conduct medical research on human subjects even with their informed consent and even when the transaction between the subjects and researchers is expected to be mutually beneficial? This question is especially pressing today in light of the rise of a semi-professional class of 'guinea pigs'- human research subjects that sell researchers a right of access to their bodies in exchange for money. Can these exchanges be morally problematic even when they are consensual and mutually beneficial? I argue that there are two general kinds of concern one can have about such transactions - concerns about the nature of what is sold and concerns about the conditions in which the selling occurs. The former involves worries about degradation and the possible wrongness of selling a right of access to one's body. These worries, I argue, are not very serious. The latter involves worries about coercion, exploitation, and undue influence - about how, by virtue of their ignorance, impulsiveness, or desperation, guinea pigs can be taken advantage of by medical researchers. These worries are quite serious but I argue that, at least in cases where the exchange between guinea pigs and researchers is consensual and mutually beneficial, they do not raise insurmountable moral problems.
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Larry Howard
Public Finance Review, May 2010, Pages 346-377
Abstract:
This article estimates an economic model of the determinants of state government spending on health care benefits provided through the Medicaid program for the old, disabled, and young populations, respectively. Spending on the mutually exclusive recipient groups, rather than the aggregate, is examined to ascertain the extent to which one population's costs supplant spending on the alternative populations. Endogeneity bias arising from the incentive effects of health care benefit guarantees on program take-up is addressed using an identification strategy that relies on measures of time-varying state resident participation in federally administered welfare programs to control for unobservable economic and noneconomic opportunities simultaneously determining Medicaid recipiency. It finds that state demand for health care generosity for each population is interrelated with the specific costs of the alternative populations. Simulations of eligibility expansions targeting each of the recipient populations illustrate the substitution effects evident in state Medicaid spending.
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Maarten Lindeboom, France Portrait & Gerard van den Berg
Journal of Health Economics, forthcoming
Abstract:
Nutritional conditions in utero and during infancy may causally affect health and mortality during childhood, adulthood, and at old ages. This paper investigates whether exposure to a nutritional shock in early life negatively affects survival at older ages, using individual data. Nutritional conditions are captured by exposure to the Potato famine in the Netherlands in 1846-47, and by regional and temporal variation in market prices of potato and rye. The data cover the lifetimes of a random sample of Dutch individuals born between 1812 and 1902 and provide individual information on life events and demographic and socioeconomic characteristics. First we non-parametrically compare the total and residual lifetimes of individuals exposed and not exposed to the famine in utero and/or until age 1. Next, we estimate survival models in which we control for individual characteristics and additional (early life) determinants of mortality. We find strong evidence for long-run effects of exposure to the Potato famine. The results are stronger for boys than for girls. Boys and girls lose on average 4, respectively 2.5 years of life after age 50 after exposure at birth to the Potato famine. Lower social classes appear to be more affected by early life exposure to the Potato famine than higher social classes. These results confirm the mechanism linking early-life (nutritional) conditions to old-age mortality. Finally, higher food prices at birth appear to reduce later life mortality of children of farmers from higher social classes. We interpret this as an income effect.
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Shige Song
Social Science & Medicine, August 2010, Pages 551-558
Abstract:
Using retrospective mortality records for three cohorts of newborns (1956-1958, 1959-1961, and 1962-1964) drawn from a large Chinese national fertility survey conducted in 1988, this article examines cohort mortality differences up to age 22, with the aim of identifying debilitating and selection effects of the 1959-1961 Great Leap Forward Famine. The results showed that the mortality level of the non-famine cohort caught up to and exceeded the level of the famine cohort between ages 11 and 12, suggesting both debilitating and selection effects. Multilevel multiprocess models further established a more direct connection between frailties in infancy and frailties at subsequent ages, revealing the underlying dynamics of mortality convergence between the famine and the non-famine cohorts caused by differential excess infant mortality. These results provide important new insights into the human mortality process.