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on Insurance Economics |
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Issue of 2015‒12‒20
thirteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Zack Cooper; Stuart Craig; Martin Gaynor; John Van Reenen |
| Abstract: | We use insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US between 2007 and 2011 to examine the variation in health spending and in hospitals' transaction prices. We document the variation in hospital prices within and across geographic areas, examine how hospital prices influence the variation in health spending on the privately insured, and analyze the factors associated with hospital price variation. Four key findings emerge. First, health care spending per privately insured beneficiary varies by a factor of three across the 306 Hospital Referral Regions (HRRs) in the US. Moreover, the correlation between total spending per privately insured beneficiary and total spending per Medicare beneficiary across HRRs is only 0.14. Second, variation in providers' transaction prices across HRRs is the primary driver of spending variation for the privately insured, whereas variation in the quantity of care provided across HRRs is the primary driver of Medicare spending variation. Consequently, extrapolating lessons on health spending from Medicare to the privately insured must be done with caution. Third, we document large dispersion in overall inpatient hospital prices and in prices for seven relatively homogenous procedures. For example, hospital prices for lower-limb MRIs vary by a factor of twelve across the nation and, on average, two-fold within HRRs. Finally, hospital prices are positively associated with indicators of hospital market power. Even after conditioning on many demand and cost factors, hospital prices in monopoly markets are 15.3 percent higher than those in markets with four or more hospitals. |
| Keywords: | healthcare, health spending, hospitals, prices, price dispersion, competition, market structure |
| JEL: | L10 L11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1395&r=ias |
| By: | Bijlsma, M.; Boone, Jan (Tilburg University, TILEC); Zwart, G.T.J. (Tilburg University, TILEC) |
| Abstract: | We analyze the role of community rating in the optimal design of a risk adjustment scheme in competitive health insurance markets when insurers have better information on their customers’ risk profiles than the sponsor of health insurance. The sponsor offers insurers a menu of risk adjustment schemes to elicit this information. The optimal scheme includes a voluntary reinsurance option. Additionally, the scheme should sometimes be complemented by a community rating requirement. The resulting inefficient coverage of low-cost types lowers the sponsor’s cost of separating different insurer types. This allows the sponsor to redistribute more rents from low-cost to high-cost consumers. |
| Keywords: | health insurance; cherry picking; risk adjustment; mechanism design |
| JEL: | D02 I3 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutil:43ea34f9-763a-451a-9f12-5761deb6a710&r=ias |
| By: | Kircher, Philipp; Marzilli Ericson, Keith; Spinnewijn, Johannes; Starc, Amanda |
| Abstract: | Demand for insurance can be driven by high risk aversion or high risk. We show how to separately identify risk preferences and risk types using only choices from menus of insurance plans. Our revealed preference approach does not rely on rational expectations, nor does it require access to claims data. We show what can be learned non-parametrically from variation in insurance plans, offered separately to random cross-sections or offered as part of the same menu to one cross-section. We prove that our approach allows for full identification in the textbook model with binary risks and extend our results to continuous risks. We illustrate our approach using the Massachusetts Health Insurance Exchange, where choices provide informative bounds on the type distributions, especially for risks, but do not allow us to reject homogeneity in preferences. |
| Keywords: | heterogeneity; identification; insurance |
| JEL: | D81 D83 G22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10981&r=ias |
| By: | Marian Jarlenski; Julia Baller; Sonya Borrero; Wendy L. Bennett |
| Abstract: | Some disparities in access to care related to family immigration status have lessened over time among children in low-income families, although large disparities still exist. |
| Keywords: | access to care, disparities, health insurance, immigrant |
| JEL: | I |
| Date: | 2015–08–29 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:66a19f6cc3ad45f49bda518ea783f27b&r=ias |
| By: | Emmanuel CHABERT; Antoine MONS; Bruno PEIRERA; Martine AUDIBERT (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Nadia YAKHELEF |
| Abstract: | Purpose: To evaluate the cost-utility of Vertebroplasty versus conservative therapy (Thoracolumbosacral orthosis) for treatment of post-traumatic non-osteoporotic and/or non-neoplastic fractures. Materials and Methods: A prospective, randomized, non-blinded, single-center study was carried out between 2010 and 2013. The study included 99 patients, aged from 18 years to 70 years, suffering from acute non-osteoporotic vertebral fracture. We compared costs and Quality-Adjusted Life Years and assessed the Incremental Cost-Effectiveness Ratio for the two arm groups. Health insurance, patient and societal perspectives are considered. Results: For health insurance perspective, total cost was €7,267 for the brace group versus €7,365 for the vertebroplasty group (mean difference €75.3; p <0.9). For patient perspective, total cost was €5,303 for the brace group and €3,435 for the vertebroplasty group (mean difference €-1,900.7; p<0.02). For societal perspective, total cost was €13,071 for the brace group and €14,289 for the vertebroplasty group (mean difference €1,165, p <0.36). Differences between groups in QALY were non-significant: 0.01 (95% CI -0.01; 0.04 p=0.5). The Incremental Cost-Effectiveness Ratio was €-12,200 for the health insurance perspective, €159,200 for the patient perspective and €119,466 for societal perspective. Conclusion: The difference in QALYs does not differ between the two groups, but the vertebroplasty technique results in significantly lower costs from a patient perspective. From societal and health insurance perspectives, we are unable to conclude if the vertebroplasty was more cost-effective than Thoracolumbosacral orthosis. |
| Keywords: | Health economic assessment ; Cost-utility ; QALY ; SF-36 ; SF-6D ; Vertebroplasty ; TLSO ; Clinical |
| JEL: | O33 I19 I18 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1768&r=ias |
| By: | Richard J. Manski; John F. Moeller; Haiyan Chen; Jody Schimmel Hyde; John V. Pepper; Patricia A. St. Clair |
| Abstract: | The authors analyze correlates of the direction and magnitude of changes in out-of-pocket (OOP) payments for dental care by older Americans over a recent 4-year period. |
| Keywords: | dental insurance, coverage, dental use, self-payments |
| JEL: | I |
| Date: | 2015–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:230eee5ffdd847f48db5688b21ccc413&r=ias |
| By: | Silvia Borzutsky; Mark Hyde |
| Abstract: | Abstract This article addresses a recurring debate in social policy analysis, but with a contemporary twist. Which model of pension provision is most likely to augment the financial well-being of Chilean workers in retirement: social insurance or private savings? The analysis developed here evaluates both models against the requirements of justice and poverty reduction. The neoliberal rationale for pensions privatisation is typically articulated as a synthesis of deontological and consequentialist imperatives, emphasising the centrality of the individual’s inalienable rights, but permitting a degree of intrusive paternalism to diminish the prevalence of economic disadvantage among retirees. Our analysis of empirical evidence regarding pension design and outcomes in Chile suggests that privatisation has failed to meet the objectives that are shaped by this normative repertoire and in fact it has contributed to keeping almost 20 percent of the retirees below the poverty level. While it represents a fundamental departure from the free market model of neoliberalism, we find that a well-designed social insurance arrangement that is universal in scope, and redistributive, would augment the freedom of Chilean workers and also reduce poverty. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:21415&r=ias |
| By: | Ho, Katherine; Hogan, Joseph; Scott Morton, Fiona |
| Abstract: | Medicare Part D presents a novel privatized structure for a government pharmaceutical benefit. Incentives for firms to provide low prices and high quality are generated by consumers who choose among multiple insurance plans in each market. To date the literature has primarily focused on consumers, and has calculated how much could be saved if they chose better plans. In this paper we take the next analytical step and consider how plans will adjust prices as consumer search behavior improves. We use detailed data on enrollees in New Jersey to demonstrate that consumers switch plans infrequently and imperfectly. We estimate a model of consumer plan choice with inattentive consumers. We then turn to the supply side and examine insurer responses to this behavior. We show that high premiums are consistent with insurers profiting from consumer inertia. We use the demand model and a model of firm pricing to calculate how much lower Part D program costs would be if consumer inattention were removed and plans re-priced in response. Our estimates indicate that consumers would save $601 each over three years when firms’ choice of markup is taken into account. Cost growth would also fall: by the last year of our sample government savings would amount to $224 million per year or 4.1% of the cost of subsidizing the relevant enrollees. |
| Keywords: | consumer inattention; firm pricing; health insurance |
| JEL: | I11 L1 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10976&r=ias |
| By: | Kristin L. Reiter; Kristin Andrews Lemos; Charlotte E. Williams; Dominick Esposito; Sandra B. Greene |
| Abstract: | To measure the return on investment (ROI) for a pediatric asthma pay-for-reporting intervention initiated by a Medicaid managed care plan in New York State. |
| Keywords: | Medicaid, asthma, pay-for-reporting, audit and feedback, business case, return on investment |
| JEL: | I |
| Date: | 2015–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:4b890380251a415ab7ed76666cf91dc4&r=ias |
| By: | Awaworyi Churchill, Sefa; Ocloo, Janet Exornam; Siawor-Robertson, Diana |
| Abstract: | This study hypothesizes a relationship between ethnic diversity and health outcomes. We explore the effects of ethnic and linguistic heterogeneity (measured by indices of ethnic and linguistic fractionalization) on 30 health outcome variables in a cross-section of 87 countries. We explore outcomes related to four major categories of health: 1) immunization rates, 2) prevalence of diseases, 3) life expectancy and mortality rates, and 4) health related infrastructure and staff. Across all dimensions examined, evidence suggests that higher heterogeneity is bad for health. We explore several potential mechanisms which could explain the observed negative effects of ethnic and linguistic diversity on health. |
| Keywords: | health,Fractionalization,linguistic diversity,ethnic diversity |
| Date: | 2015–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:123721&r=ias |
| By: | Mullen, Kathleen J.; Staubli, Stefan |
| Abstract: | A key component for estimating the optimal size and structure of disability insurance (DI) programs is the elasticity of DI claiming with respect to benefit generosity. Yet, in many countries, including the United States, all workers face identical benefit schedules, which are a function of one’s labor market history, making it difficult to separate the effect of the benefit level from the effect of unobserved preferences for work on individuals’ claiming decisions. To circumvent this problem, we exploit exogenous variation in DI benefits in Austria arising from several reforms to its DI and old age pension system in the 1990s and 2000s. We use comprehensive administrative social security records data on the universe of Austrian workers to compute benefit levels under six different regimes, allowing us to identify and precisely estimate the elasticity of DI claiming with respect to benefit generosity. We find that, over this time period, a one percent increase in potential DI benefits was associated with a 1.2 percent increase in DI claiming. |
| Keywords: | Benefit Generosity; Claiming Elasticity; Disability Insurance; Labor Force Withdrawal |
| JEL: | H55 J14 J22 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10987&r=ias |
| By: | Anna L. Kratz; Edmund Chadd; Mark P. Jensen; Matthew Kehn; Thilo Kroll |
| Abstract: | The authors examined the psychometric properties of the Community Integration Questionnaire (CIQ) in large samples of individuals with spinal cord injury (SCI). |
| Keywords: | Spinal cord injury, Community Integration Questionnaire, Factor analysis, Validity, Reliability |
| JEL: | I |
| Date: | 2015–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:928cc1df1cf84a65827bfca0f5a940ad&r=ias |
| By: | Islahi, Abdul Azim |
| Abstract: | Mufti Muhammad Abduh (1849-1905), a graduate of Jāmiʿ al-Azhar, was harbinger and precursor of Islamic modernism. He attracted attention of maximum number of researchers on modernism in the Muslim world. His contributions to fiqh, tafsīr, tawḥīd, literature, educational reform and politics are well known. He also thought and wrote on economic problem. He is one of the pioneer ʿulamā in the modern period who paid attention to this aspect of human life. He had deep concern for the poor; he opposed bonded labor and stressed upon the obligations of the rich towards the poor. He pointed out that the concentration of wealth caused the lack of effective demand. He gave wide meaning to the term fi sabīl-Allāh and al-afwā. He permitted insurance on the basis of muḍārabah. However, this aspect of his biography remained neglected. Ironically, the only thing reported about his economic views is ‘his permission of interest earned from the deposits in post offices’ for which no evidence is available in his writings. The present paper discusses all these points. |
| Keywords: | Jamal al-Din Afghani, Economic History of Egypt, Muslim Economic Thinking in the Nineteenth Century, Abduh on Insurance, Post office interest. |
| JEL: | B3 B31 N0 Z1 Z12 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68363&r=ias |