Does the framing of patient cost-sharing incentives matter? the effects of deductibles vs. no-claim refunds.

Understanding how health care utilization responds to cost-sharing is of central importance for providing high quality care and limiting the growth of costs. We study whether the framing of cost-sharing incentives has an effect on health care utilization. For this we make use of a policy change in the Netherlands. Until 2007, patients received a refund if they consumed little or no health care; the refund was the lower the more care they had consumed. From 2008 onward, there was a deductible. This means that very similar economic incentives were first framed in terms of smaller gains and later as losses. We find that patients react to incentives much more strongly when they are framed in terms of losses. The effect on yearly spending is 8.6 percent. This suggests that discussions on the optimal design of cost-sharing incentives should also revolve around the question how these are presented to patients.

Do hospitals respond to decreasing prices by supplying more services?

Regulated prices are common in markets for medical care. We estimate the effect of changes in regulated reimbursement prices on volume of hospital care 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 directly affecting the relative prices for different groups of patients or types of treatment. Based on administrative data, we find that hospitals react to increasing prices by decreasing the service supply and to decreasing prices by increasing the service supply. Moreover, we find some evidence that volume changes for hospitals with different price changes are nonlinear. We interpret our findings as evidence for a negative income effect of prices on volume of care.

The effect of a ban on gender-based pricing on risk selection in the German health insurance market.

Starting from December 2012, insurers in the European Union were prohibited from charging gender-discriminatory prices. We examine the effect of this unisex mandate on risk segmentation in the German health insurance market. Although gender used to be a pricing factor in Germany's private health insurance (PHI) sector, it was never used as a pricing factor in the social health insurance (SHI) sector. The unisex mandate makes PHI relatively more attractive for women and less attractive for men. Based on data from the German socio-economic panel, we analyze how the unisex mandate affects the difference between women and men in switching rates between SHI and PHI. We find that the unisex mandate increases the probability of switching from SHI to PHI for women relative to men. On the other hand, the unisex mandate has no effect on the gender difference in switching rates from PHI to SHI. Because women have on average higher health care expenditures than men, our results imply a worsening of the PHI risk pool and an improvement of the SHI risk pool. Our results demonstrate that regulatory measures such as the unisex mandate can affect risk selection between public and private health insurance sectors.

Sources of regional variation in healthcare utilization in Germany.

We examine sources of regional variation in ambulatory care utilization in Germany. We exploit patient migration to examine which share of regional variation in ambulatory care utilization can be attributed to demand factors and to supply factors, respectively. Based on administrative claim-level data we find that regional variation can be overwhelmingly explained by patient characteristics. Our results contrast with previous results for other countries, and they suggest that institutional rules in Germany successfully constrain supply-side variation in ambulatory care use between German regions for most patients. Furthermore, we find that both demographics and other patient characteristics substantially contribute to regional variation and that causes of regional variation vary when comparing different regions within Germany.

Causes of regional variation in Dutch healthcare expenditures: Evidence from movers.

We assess the relative importance of demand and supply factors as determinants of regional variation in healthcare expenditures in the Netherlands. Our empirical approach follows individuals who migrate between regions. We use individual data on annual healthcare expenditures for the entire Dutch population between the years 2006 and 2013. Regional variation in healthcare expenditures is mostly driven by demand factors, with an estimated share of around 70%. The relative importance of different causes varies with the groups of regions being compared.

The effect of retirement on healthcare utilization: Evidence from China.

We examine the effect of retirement on healthcare utilization in China using longitudinal data. We use a nonparametric fuzzy regression discontinuity design, exploiting the statutory retirement age in urban China as a source of exogenous variation in retirement. In contrast to previous results for developed countries, we find that in China retirement increases healthcare utilization. This increase can be attributed to deteriorating health and in particular to the reduced opportunity cost of time after retirement. For the sample as a whole, income is not a dominating mechanism. People with low education, however, are more likely to forego recommended inpatient care after retirement.

The longevity gap between Black and White men in the United States at the beginning and end of the 20th century.

OBJECTIVES: We sought to assess whether the disparity in mortality rates between Black and White men decreased from the beginning to the end of the 20th century. METHODS: We used Cox proportional hazard models for mortality to estimate differences in longevity between Black and White Civil War veterans from 1900 to 1914 (using data from a pension program) and a later cohort of male participants (using data from the 1992 to 2006 Health and Retirement Study). In sensitivity analysis, we compared relative survival of veterans for alternative baseline years through 1914. RESULTS: In our survival analysis, the Black-White male difference in mortality, both unadjusted and adjusted for other influences, did not decrease from the beginning to the end of the 20th century. A 17% difference in Black-White mortality remained for the later cohort even after we controlled for other influences. Although we could control for fewer other influences on longevity, the Black-White differences in mortality for the earlier cohort was 18%. CONCLUSIONS: In spite of overall improvements in longevity, a major difference in Black-White male mortality persists.

Does job loss cause ill health?

This study estimates the effect of job loss on health for near elderly employees based on longitudinal data from the Health and Retirement Study. Previous studies find a strong negative correlation between unemployment and health. To control for possible reverse causality, this study focuses on people who were laid off for an exogenous reason - the closure of their previous employers' business. I find no causal effect of exogenous job loss on various measures of physical and mental health. This suggests that the inferior health of the unemployed compared to the employed could be explained by reverse causality.

Child health disparities, socio-economic status, and school enrollment decisions: evidence from German elementary school entrance exams.

PURPOSE: This chapter examines the role of child health for the intergenerational transmission of human capital. METHODOLOGY/APPROACH: The chapter uses unique administrative data from German elementary school entrance examinations. The chapter considers child health conditions such as obesity, low birth weight, ear problems, eye problems, behavioral problems, asthma, and allergies. We control for socio-economic and demographic characteristics of children and their parents as well as for institutional factors such as duration of pre-school attendance. FINDINGS: We find that health conditions are more common among children of less-educated parents. We also find that health conditions have a substantially negative impact on school readiness, and the negative impact is considerably stronger for children of less-educated parents. In total, 55% of the school readiness gap can be attributed to health factors. Specifically, 19% of the gap can be attributed to differences in the prevalence of health conditions, and 36% of the gap can be attributed to differences in the severity of the impact. Thus, policies aimed at reducing disparities in child achievement should also focus on improving the health of disadvantaged children. ORIGINALITY: First, our study quantifies the extent to which the school readiness gap between parental education groups can be attributed to child health. Second, our data are of extraordinary quality, since they consist of a full sample of all children in one city and since they are collected during detailed examinations that were administered by government pediatricians.

Effects of diagnosed dementia on Medicare and Medicaid program costs.

This study examines the impacts of physician-diagnosed Alzheimer's disease and related dementias (ADRD) on Medicare and Medicaid program costs in 1994 and 1999. An innovative method is employed to estimate program payments over the life cycle starting at age 65. Using data from the 1994 and 1999 National Long-Term Care Surveys, merged Medicare claims, and national program data for Medicaid, we find that the share of total Medicare and Medicaid payments attributable to diagnosed ADRD was 5.46% in 1999. Total annual program payments attributable to ADRD decreased between 1994 and 1999, in contrast to an increase implied by a cross-sectional approach.

Trends in cost of major eye diseases to Medicare, 1991 to 2000.

PURPOSE: To estimate impacts of physician-diagnosed eye diseases (age-related macular degeneration (AMD), cataract, diabetic retinopathy, and glaucoma) on Medicare payments in the periods 1991 to 1995 and 1996 to 2000. DESIGN: A retrospective cohort study to estimate program payments per capita and in total for each of the major eye diseases and the four eye diseases in total. METHODS: Data from the 1994 and 1999 National Long-Term Care Survey (NLTCS) and medical claims to Medicare from 1991 to 2000 were merged with the NLTCS. Medicare payments for eye-related procedures on persons with and without major eye diseases as reported on Medicare claims and self-reported data from NLTCS. RESULTS: Overall, the burden of major eye diseases was to increase Medicare spending by 4.8 billion dollars (1999 USD) in 1991 to 1995 and by 4.5 billion dollars in 1996 to 2000. The most expensive eye disease was cataract, costing Medicare 3.8 billion dollars in 1991 to 1995 and 3 billion dollars in 1996 to 2000. CONCLUSIONS: Prevalence of major eye diseases increased over time, but the effect of major eye diseases on Medicare payments decreased, mainly as a result of lower payments for cataract surgery in the later years.