Health inequality and health insurance coverage: The United States and China compared.

We study inequality in the distribution of self-assessed health (SAH) in the United States and China, two large countries that have expanded their insurance provisions in recent decades, but that lack universal coverage and differ in other social determinants of health. Using comparable health survey data from China and the United States, we compare health inequality trends throughout the period covering the public health insurance coverage expansions in the two countries. We find that whether SAH inequality is greater in the US or in China depends on the concept of status and the inequality-sensitivity parameter used; however, the regional pattern of SAH inequality is clearly associated with health-insurance coverage expansions in the US but not significant in China.

How does exposure to COVID-19 influence health and income inequality aversion?

We study individual aversion to health and income inequality in three European countries (the United Kingdom, Germany, and Italy), its determinants and especially, the effects of exposure to three types of COVID-19 specific shocks affecting individuals' employment status, their income and health. Next, using evidence of representative samples of the population in the UK, we compare levels of health- and income-inequality aversion in the UK between the years 2016 and 2020. We document evidence of a significant increase in inequality aversion in both income and health domains. However, we show that inequality aversion is higher in the income domain than in the health domain. Furthermore, we find that inequality aversion in both domains increases in age and education and decreases in income and risk appetite. However, people directly exposed to major health shocks during the COVID-19 pandemic generally exhibited lower levels of aversion to both income and health inequality. Finally, we show that inequality aversion was significantly higher among those exposed to higher risk of COVID-19 mortality who experienced major health shocks during the pandemic. Supplementary Information: The online version contains supplementary material available at 10.1007/s00355-023-01460-8.

'Investing' in care for old age? An examination of long-term care expenditure dynamics and its spillovers.

We study the dynamic drivers of expenditure on long-term care (LTC) programmes, and more specifically, the effects of labour market participation of traditional unpaid caregivers (women aged 40 and older) on LTC spending, alongside the spillover effects of a rise in LTC expenditure on health care expenditures (HCE) and the economy (per capita GDP). Our estimates draw from a panel of more than a decade worth of expenditure data from a sample of OECD countries. We use a panel vector auto-regressive (panel-VAR) system that considers the dynamics between the dependent variables. We find that LTC expenditure increases with the rise of the labour market participation of the traditional unpaid caregiver (women over 40 years of age), and that such expenditures rise exerts large spillover effects on health spending and the economy. We find that a 1% increase in female labour participation gives rise to a 1.48% increase in LTC expenditure and a 0.88% reduction in HCE. The effect of LTC spending over HCE is mainly driven by a reduction in inpatient and medicine expenditures, exhibiting large country heterogeneity. Finally, we document significant spillover effects of LTC expenditures on per capita GDP. Supplementary Information: The online version contains supplementary material available at 10.1007/s00181-022-02246-0.

Resilient managed competition during pandemics: lessons from the Italian experience during COVID-19.

In the last decades, several European health systems have abandoned their vertically integrated health care in favour of some form of managed competition (MC), either in a centralised or decentralised format. However, during a pandemic, MC may put health systems under additional strain as they are designed to follow some form of 'organisational self-interest', and hence face reduced incentives for both provider coordination (e.g. temporary hospital close down, change in the case-mix), and information sharing. We illustrate our argument using evidence for the Covid-19 pandemic outbreak in Italy during March and April 2020, which calls for the development of 'coordination mechanisms' at times of a health emergency.

Measuring pure health inequality and mobility during a health insurance expansion: Evidence from Mexico.

The association of insurance expansions and the distribution of health status is still a matter we know little about. This paper draws upon new measures of pure (univariate) inequality and mobility which accommodate categorical data to understand how an expansion of public insurance may be related to both health inequality and mobility. These measures require a definition of individual's status that is either "downward looking" or "upward looking". Using data from the Mexican Family Life Survey, a nationally representative longitudinal survey, we find that the distribution of health has worsened in Mexico between 2002 and 2009, although the change is only consistent for an upward looking definition status. Together with the lack of mobility in self-reported health, we can thus conclude that Mexico has become more rigid over time despite the rapid public health expansion that took place over the 2000s decade. While further research on the potential drivers of health inequalities is needed, our findings suggest that insurance coverage alone may be not enough to reduce health disparities and promote health mobility. Indeed, health inequality and mobility likely depend on a myriad of factors beyond health care.

Fatal Underfunding? Explaining COVID-19 Mortality in Spanish Nursing Homes.

The COVID-19 pandemic has exerted a disproportionate effect on older European populations living in nursing homes. This article discusses the 'fatal underfunding hypothesis', and reports an exploratory empirical analysis of the regional variation in nursing home fatalities during the first wave of the COVID-19 pandemic in Spain, one of the European countries with the highest number of nursing home fatalities. We draw on descriptive and multivariate regression analysis to examine the association between fatalities and measures of nursing home organisation, capacity and coordination plans alongside other characteristics. We document a correlation between regional nursing home fatalities (as a share of excess deaths) and a number of proxies for underfunding including nursing home size, occupancy rate and lower staff to a resident ratio (proxying understaffing). Our preliminary estimates reveal a 0.44 percentual point reduction in the share of nursing home fatalities for each additional staff per place in a nursing home consistent with a fatal underfunding hypothesis.

Innovation, aging, and health care: Unraveling "silver" from "red" herrings?

This perspective paper argues that a sustainable health system design encompasses identifying opportunities and incentives for innovation, alongside an analysis of its effect on expenditure. Although aging alone is not a powerful cost driver, the combined effect of costly innovation, personalized care, and the rise of chronic conditions is. We identify an increasing role of prevention, the reduction of the prevalence of chronic conditions, re-organisation of incentives in health care markerts, including a closer scrutiny of the appropriateness of new treatments.

The cultural origin of saving behavior.

Traditional economic interpretations have not been successful in explaining differences in saving rates across countries. One hypothesis is that savings respond to cultural specific social norms. The accepted view in economics so far is that culture does not have any effect on savings. We revisit this evidence using a novel dataset, which allows us to study the saving behavior of up to three generations of immigrants in the United Kingdom. Against the backdrop of existing evidence, we find that cultural preferences are an important explanation for cross-country differences in saving behavior, and their relevance persists up to three generations.

A Health 'Kuznets' Curve'? Cross-Sectional and Longitudinal Evidence on Concentration Indices'.

The distribution of income related health inequalities appears to exhibit changing patterns when both developing countries and developed countries are examined. This paper tests for the existence of a health Kuznets' curve; that is, an inverse U-shape pattern between economic developments (as measured by GDP per capita) and income-related health inequalities (as measured by concentration indices). We draw upon both cross sectional (the World Health Survey) and a long longitudinal (the European Community Household Panel survey) dataset. Our results suggest evidence of a health Kuznets' curve on per capita income. We find a polynomial association where inequalities decline when GDP per capita reaches a magnitude ranging between $26,000 and $38,700. That is, income-related health inequalities rise with GDP per capita, but tail off once a threshold level of economic development has been attained.

Does long-term care subsidization reduce hospital admissions and utilization?

We use quasi-experimental evidence on the expansion of the public subsidization of long-term care to examine the causal effect of a change in caregiving affordability on the delivery of hospital care. More specifically, we examine a reform that both introduced a new caregiving allowance and expanded the availability of publicly funded home care services, on both hospital admissions (both on the internal and external margin) and length of stay. We find robust evidence of a reduction in both hospital admissions and utilization among both those receiving a caregiving allowance and, albeit less intensely, among beneficiaries of publicly funded home care, which amounts to 11% of total healthcare costs. These effects were stronger when regions had an operative regional health and social care coordination plan in place. Consistently, a subsequent reduction in the subsidy, five years after its implementation, is found to significantly attenuate such effects. We investigate a number of potential mechanisms, and show a number of falsification and robustness checks.

The 'healthy worker effect': Do healthy people climb the occupational ladder?

The association between occupational status and health has been taken to reveal the presence of occupational health inequalities. However, that interpretation assumes no influence of health status in climbing the occupational ladder. This paper documents evidence of non-negligible returns to occupation status on health (which we refer as 'healthy worker effect'). We use a unique empirical strategy that addresses the problem of reverse causality. That is, an instrumental variable strategy using the variation in average health in the migrant's country of origin, a health measure plausibly not determined by the migrant's occupational status. Our findings suggest that health status exerts significant effects on occupational status in several dimensions; including having a supervising role, worker autonomy, and worker influence. The effect size of health is larger than that of an upper secondary education.

Identifying health system value dimensions: more than health gain?

Publicly funded health system reforms increasingly require the evaluation of competing programmes. However, programmes are made of multi-dimensional attributes of value (where value refers to latent expectations of health system improvement). This paper identifies the design, implementation and validation of a methodology to elicit health system values to guide health care priority setting. The exercise suggests that the proposed methodology is suitable for eliciting and validating health system values, and its findings show that pursuing health gain alone does not fully capture the dimensions of health system value. More specifically, we identify a list of health system values (elicited by both potential and actual users) and classify them in terms of process-related values (e.g., shorter waiting lists, greater choice, etc.) and improvements in health system equity in addition to value derived from health gain.

Is medicines parallel trade 'regulatory arbitrage'?

Parallel trade (PT) is a phenomenon that takes place at the distribution level, when a patented product is diverted from the official distribution chain to another one where it competes as a parallel distributor. Although some research regards PT in Europe as a 'common' form of arbitrage, there are reasons to believe that it is a type of 'regulatory arbitrage' that does not necessarily produce equivalent welfare effects. We draw upon a unique dataset that contains source country records of parallel imported medicine sales to the Netherlands for one therapeutic group (statins), that accounts for 5 % of the market at the time of study and it faced no generic competition. We estimate precise differences in prices and statutory distribution margins for each source country/product and, examine whether they drive parallel import flows using a gravity specification and an instrumental variable strategy. Our findings reveal that parallel imports are driven by cross-country differences in statutory distribution margins in addition to price differences, consistently with the hypothesis of PT being a type of 'regulatory arbitrage'.

Careful in the Crisis? Determinants of Older People's Informal Care Receipt in Crisis-Struck European Countries.

Macroeconomic downturns can have an important impact on the receipt of informal and formal long-term care, because recessions increase the number of unemployed and affect net wealth. This paper investigates how the market for informal care changed during and after the Great Recession in Europe, with particular focus on the determinants of care receipt. We use data from the Survey of Health, Ageing and Retirement in Europe, which includes a rich set of variables covering waves before and after the Great Recession. We find evidence of an increase in the availability of informal care after the economic downturn when controlling for year and country fixed effects. This trend is mainly driven by changes in care provision of individuals not cohabiting with the care recipient. We also find evidence of several determinants of informal care receipt changing during the crisis - such as physical needs, personal wealth, and household structures. Copyright © 2016 John Wiley & Sons, Ltd.

Participatory health system priority setting: Evidence from a budget experiment.

Budget experiments can provide additional guidance to health system reform requiring the identification of a subset of programs and services that accrue the highest social value to 'communities'. Such experiments simulate a realistic budget resource allocation assessment among competitive programs, and position citizens as decision makers responsible for making 'collective sacrifices'. This paper explores the use of a participatory budget experiment (with 88 participants clustered in social groups) to model public health care reform, drawing from a set of realistic scenarios for potential health care users. We measure preferences by employing a contingent ranking alongside a budget allocation exercise (termed 'willingness to assign') before and after program cost information is revealed. Evidence suggests that the budget experiment method tested is cognitively feasible and incentive compatible. The main downside is the existence of ex-ante "cost estimation" bias. Additionally, we find that participants appeared to underestimate the net social gain of redistributive programs. Relative social value estimates can serve as a guide to aid priority setting at a health system level.

What is the impact of policy differences on nursing home utilization? The cases of Germany and the Netherlands.

Though need factors would predict a higher rate of institutional use in Germany, in 2004 the percentage of people over 65 in institutions in the Netherlands was almost double the percentage in Germany. The lower nursing home utilization in Germany coincided with lower out-of-pocket costs, de facto means-testing of social assistance for such care, a lower perceived quality of nursing home, and less acceptance of the nursing home as a main care modality for adults experiencing functional impairments. These factors have developed over time and are consistent with a--relatively--large government responsibility toward care for the elderly and a preference for institutional care over home care in the Netherlands. The policy to encourage older adults to move to elderly homes to decrease the housing shortage after WWII might have had long-lasting effects. This paper points out that a key in the success of a reform is a behavioral change in the system. As there seems to be no single factor to decrease the percentage of older adults in nursing homes, a sequence of policies might be a more promising route.

Financing long-term care: ex ante, ex post or both?

This paper attempts to examine the heterogeneity in the public financing of long-term care (LTC) and the wide-ranging instruments in place to finance LTC services. We distinguish and classify the institutional responses to the need for LTC financing as ex ante (occurring prior to when the need arises, such as insurance) and ex post (occurring after the need arises, such as public sector and family financing). Then, we examine country-specific data to ascertain whether the two types of financing are complements or substitutes. Finally, we examine exploratory cross-national data on public expenditure determinants, specifically economic, demographic and social determinants. We show that although both ex ante and ex post mechanisms exist in all countries with advanced industrial economies and despite the fact that instruments are different across countries, ex ante and ex post instruments are largely substitutes for each other. Expenditure estimates to date indicate that the public financing of LTC is highly sensitive to a country's income, ageing of the population and the availability of informal caregiving.

Crowding out of long-term care insurance: evidence from European expectations data.

Long-term care (LTC) is the largest insurable risk that old-age individuals face in most western societies. However, the demand for LTC insurance is still ostensibly small in comparison with the financial risk. One explanation that has received limited support is that expectations of either 'public sector funding' and 'family support' crowd out individual incentives to seek insurance. This paper aims to investigate further the aforementioned motivational crowding-out hypothesis by developing a theoretical model and by drawing on an innovative empirical analysis of representative European survey data containing records on individual expectations of LTC funding sources (including private insurance, social insurance, and the family). The theoretical model predicts that, when informal care is treated as exogenously determined, expectations of both state support and informal care can potentially crowd out LTC insurance expectations, while this is not necessarily the case when informal care is endogenous to insurance, as happens when intra-family moral hazard is integrated in the insurance decision. We find evidence consistent with the presence of family crowding out but no robust evidence of public sector crowding out.

Price regulation and relative delays in generic drug adoption.

Increasing the adoption of generic drugs has the potential to improve static efficiency in a health system without harming pharmaceutical innovation. However, very little is known about the timing of generic adoption and diffusion. No prior study has empirically examined the differential launch times of generics across a comprehensive set of markets, or more specifically the delays in country specific adoption of generics relative to the first country of (generic) adoption. Drawing on data containing significant country and product variation across a lengthy time period (1999-2008), we use duration analysis to examine relative delays, across countries, in the adoption of generic drugs. Our results suggest that price regulation has a significant effect on reducing the time to launch of generics, with faster adoption in higher priced markets. The latter result is dependent on the degree of competition and the expected market size.