Health Care's Poor Prognosis

Kevin Lewis

November 20, 2009

Why the Poor Get Fat: Weight Gain and Economic Insecurity

Trenton Smith, Christiana Stoddard & Michael Barnes
Forum for Health Economics & Policy, 2009

Something about being poor makes people fat. Though there are many possible explanations for the income-body weight gradient, we investigate a promising but little-studied hypothesis: that changes in body weight can - at least in part - be explained as an optimal response to economic insecurity. We use data on working-age men from the 1979 National Longitudinal Survey of Youth (NLSY79) to identify the effects of various measures of economic insecurity on weight gain. We find in particular that over the 12-year period between 1988 and 2000, the average man gained about 21 pounds. A one percentage point (0.01) increase in the probability of becoming unemployed causes weight gain over this period to increase by about 0.6 pounds, and each realized 50% drop in annual income results in an increase of about 5 pounds. The mechanism also appears to work in reverse, with health insurance and intrafamily transfers protecting against weight gain.


Targeting in Medicaid: The Costs and Enrollment Effects of Medicaid's Citizenship Documentation Requirement

Benjamin Sommers
Journal of Public Economics, forthcoming

The Deficit Reduction Act of 2005 imposed a federal requirement that all individuals provide citizenship documentation when applying for or renewing Medicaid coverage. This represented a change in policy for 46 states. Using differences-in-differences to analyze data from the Current Population Survey (2004-2008), this paper shows that the policy reduced Medicaid enrollment among non-citizens, as intended, and did not significantly affect citizens. One-in-four adult non-citizens in Medicaid (390,000 total) and one-in-eight child non-citizens (81,000) were screened out by the policy annually. Child non-citizens were more likely to become uninsured afterwards, while adult non-citizens appeared to shift from Medicaid to other coverage. Overall, the citizenship documentation requirement reduced Medicaid participation among non-citizens in an appropriately targeted way. Nonetheless, a cost-benefit analysis indicates that the policy was a net loss to society of $600 million, through increased state administrative spending and compliance costs imposed on U.S. citizens applying for Medicaid.


Health Insurance and Mortality in US Adults

Andrew Wilper, Steffie Woolhandler, Karen Lasser, Danny McCormick, David Bor & David Himmelstein
American Journal of Public Health, December 2009, Pages 2289-2295

Objectives: A 1993 study found a 25% higher risk of death among uninsured compared with privately insured adults. We analyzed the relationship between uninsurance and death with more recent data.

Methods: We conducted a survival analysis with data from the Third National Health and Nutrition Examination Survey. We analyzed participants aged 17 to 64 years to determine whether uninsurance at the time of interview predicted death.

Results: Among all participants, 3.1% (95% confidence interval [CI] = 2.5%, 3.7%) died. The hazard ratio for mortality among the uninsured compared with the insured, with adjustment for age and gender only, was 1.80 (95% CI = 1.44, 2.26). After additional adjustment for race/ethnicity, income, education, self- and physician-rated health status, body mass index, leisure exercise, smoking, and regular alcohol use, the uninsured were more likely to die (hazard ratio = 1.40; 95% CI = 1.06, 1.84) than those with insurance.

Conclusions: Uninsurance is associated with mortality. The strength of that association appears similar to that from a study that evaluated data from the mid-1980s, despite changes in medical therapeutics and the demography of the uninsured since that time.


Health insurance and ex ante moral hazard: Evidence from Medicare

Dhaval Dave & Robert Kaestner
International Journal of Health Care Finance and Economics, December 2009, Pages 367-390

Basic economic theory suggests that health insurance coverage may cause a reduction in prevention activities, but empirical studies have yet to provide much evidence to support this prediction. However, in other insurance contexts that involve adverse health events, evidence of ex ante moral hazard is more consistent. In this paper, we extend the analysis of the effect of health insurance on health behaviors by allowing for the possibility that health insurance has a direct (ex ante moral hazard) and indirect effect on health behaviors. The indirect effect works through changes in health promotion information and the probability of illness that may be a byproduct of insurance-induced greater contact with medical professionals. We identify these two effects and in doing so identify the pure ex ante moral hazard effect. This study exploits the plausibly exogenous variation in health insurance as a result of obtaining Medicare coverage at age 65. We find evidence that obtaining health insurance reduces prevention and increases unhealthy behaviors among elderly men. We also find evidence that physician counseling is successful in changing health behaviors.


The Evolution of Medical Spending Risk

Jonathan Gruber & Helen Levy
Journal of Economic Perspectives, Fall 2009, Pages 25-48

How has the economic risk of health spending changed over time for U.S. households? We describe trends in aggregate health spending in the United States and how private insurance markets and public insurance programs have changed over time. We then present evidence from Consumer Expenditure Survey microdata on how the distribution of household spending on health -- that is, out-of-pocket payments for medical care plus the household's share of health insurance premiums -- has changed over time. This distribution has shifted up over time -- households spend more on medical care and insurance than they used to -- but for the purposes of measuring change in risk, it is not the mean but the dispersion of this distribution that is of interest. We consider two measures of dispersion that serve as proxies for household risk: the standard deviation of the distribution of household health spending and the ratio of the 90th percentile of spending to the median (the so-called "90/50 gap"). We find, surprisingly, that neither has increased despite the rapid rise in aggregate health spending. This conclusion holds true for broad subgroups of the population (for example, the nonelderly as a group) but not for some narrowly-defined subgroups (for example, low-income families with children). We next consider how much risk households should face, from the perspective of economic efficiency. Household risk may not have changed much over the past several decades, but do we have any evidence that this level represents either too much or too little risk? Finally, we discuss implications for public policy -- in particular, for current debates over expanding health insurance coverage to the uninsured.


Inheritances, Health and Death

Beomsoo Kim & Christopher Ruhm
NBER Working Paper, September 2009

We examine how wealth shocks, in the form of inheritances, affect the mortality rates, health status and health behaviors of older adults, using data from eight waves of the Health and Retirement Survey (HRS). Our main finding is that bequests do not have substantial effects on health, although some improvements in quality-of-life are possible. This absence occurs despite increases in out-of-pocket (OOP) spending on health care and in the utilization of medical services, especially discretionary and non-lifesaving types such as dental care. Nor can we find a convincing indication of changes in lifestyles that offset the benefits of increased medical care. Inheritances are associated with higher alcohol consumption, but with no change in smoking or exercise and a possible decrease in obesity.


Education reduces the effects of genetic susceptibilities to poor physical health

Wendy Johnson, Kirsten Ohm Kyvik, Erik Mortensen, Axel Skytthe, David Batty & Ian Deary
International Journal of Epidemiology, forthcoming

Background: Greater education is associated with better physical health. This has been of great concern to public health officials. Most demonstrations show that education influences mean levels of health. Little is known about the influence of education on variance in health status, or about how this influence may impact the underlying genetic and environmental sources of health problems. This study explored these influences.

Methods: In a 2002 postal questionnaire, 21 522 members of same-sex pairs in the Danish Twin Registry born between 1931 and 1982 reported physical health in the 12-item Short Form Health Survey. We used quantitative genetic models to examine how genetic and environmental variance in physical health differed with level of education, adjusting for birth-year effects.

Results and Conclusions: As expected, greater education was associated with better physical health. Greater education was also associated with smaller variance in health status. In both sexes, 2 standard deviations (SDs) above mean educational level, variance in physical health was only about half that among those 2 SDs below. This was because fewer highly educated people reported poor health. There was less total variance in health primarily because there was less genetic variance. Education apparently reduced expression of genetic susceptibilities to poor health. The patterns of genetic and environmental correlations suggested that this might take place because more educated people manage their environments to protect their health. If so, fostering the personal charactieristics associated with educational attainment could be important in reducing the education-health gradient.


Understanding Differences in Health Behaviors by Education

David Cutler & Adriana Lleras-Muney
Journal of Health Economics, forthcoming

Using a variety of data sets from two countries, we examine possible explanations for the relationship between education and health behaviors, known as the education gradient. We show that income, health insurance, and family background can account for about 30 percent of the gradient. Knowledge and measures of cognitive ability explain an additional 30 percent. Social networks account for another 10 percent. Our proxies for discounting, risk aversion, or the value of future do not account for any of the education gradient, and neither do personality factors such as a sense of control of oneself or over one's life.


Socioeconomic Differentials in Immune Response

Jennifer Dowd & Allison Aiello
Epidemiology, November 2009, Pages 902-908

Background: Lower socioeconomic status (SES) is strongly linked to health outcomes, though the mechanisms are poorly understood. Little is known about the role of the immune system in creating and sustaining health disparities. Here we test whether SES is related to cell-mediated immunity, as measured by the host's ability to keep persistent cytomegalovirus (CMV) antibody levels in a quiescent state.

Methods: Censored regression models were used to test the cross-sectional relationship of education, income, and race/ethnicity with antibody response to CMV, using a nationally representative sample of 9721 respondents aged 25 years and older in the Third National Health and Nutrition Examination Survey (NHANES III, 1988-1994).

Results: Among CMV-seropositive respondents, those with less education, lower income, and nonwhite race/ethnicity had higher levels of CMV antibodies at all ages. On average, each additional year of age was associated with CMV antibody levels that were 0.03 units higher (95% confidence interval = 0.03 to 0.04), whereas each additional year of education was associated with antibody levels that were 0.05 units lower (0.02 to 0.09). A doubling of family income was associated with antibody levels that were 0.25 units lower (0.11 to 0.39), the equivalent of 8 fewer years of age-related CMV antibody response. These relationships remained strong after controlling for baseline health conditions, smoking status, and BMI.

Conclusions: SES is associated with an indirect marker of cell-mediated immunity in a nationally representative sample. SES differences in immune control over CMV may have fundamental implications for health disparities over the life course.


Blood Lead (Pb) Levels: Further Evidence for an Environmental Mechanism Explaining the Association Between Socioeconomic Status and Psychophysiological Dysregulation in Children

Brooks Gump, Jacki Reihman, Paul Stewart, Ed Lonky, Douglas Granger & Karen Matthews
Health Psychology, September 2009, Pages 614-620

Objective: The authors recently reported that blood lead (Pb) was a significant mediator for the positive association between socioeconomic status (SES) and peripheral vascular responses to acute stress in children (B. B. Gump et al., 2007). The present study considers the possibility that Pb may also mediate an association between SES and cortisol responses to acute stress.

Design: Early childhood Pb exposure was tested as a mediator for cross-sectional associations between SES and cortisol responses.

Main Outcome Measures: The primary outcome was cortisol responses to acute stress in 9.5-year-old children (N = 108).

Results: Lower family income was associated with significantly greater cortisol levels following an acute stress task. A mediational analysis confirmed that Pb was a significant mediator for this association.

Conclusion: These results reaffirm the importance of considering the chemical environment as well as social and psychological environment when evaluating psychophysiological effects of low SES.


Socioeconomic differences in health over the life cycle in an Egalitarian country

Hans van Kippersluis, Owen O'Donnell, Eddy van Doorslaer & Tom Van Ourti
Social Science & Medicine, forthcoming

A strong cross-sectional relationship between health and socioeconomic status is firmly established. This paper adopts a life cycle perspective to investigate whether the socioeconomically disadvantaged, on top of a lower health level, experience a sharper deterioration of health over time. Data are drawn from the Dutch Central Bureau of Statistics (CBS) Health Interview Surveys covering the period 1983-2000. The analysis focuses on the self-rated health and disability of persons aged 16-80. We show that in the Netherlands, as in the US, the socioeconomic gradient in health widens until late-middle age and narrows thereafter. The analysis and the available evidence suggests that the widening gradient is attributable both to health-related withdrawal from the labor force, resulting in lower incomes, and the cumulative protective effect of education on health outcomes. The less educated appear to suffer a double health penalty in that they begin adult life with a slightly lower health level, which subsequently declines at a faster rate.


Hospital Closure and Economic Efficiency

Cory Capps, David Dranove & Richard Lindrooth
Journal of Health Economics, forthcoming

We present a new framework for assessing the effects of hospital closures on social welfare and the local economy. While patient welfare necessarily declines when patients lose access to a hospital, closures also tend to reduce costs. We study five hospital closures in two states and find that urban hospital bailouts reduce aggregate social welfare: on balance, the cost savings from closures more than offset the reduction in patient welfare. However, because some of the cost savings are shared nationally, total surplus in the local community may decline following a hospital closure.


Hospital Competition and Charity Care

Chris Garmon
Forum for Health Economics & Policy, 2009

This paper explores the relationship between competition and hospital charity care by analyzing changes in charity care associated with changes in a hospital's competitive environment (due to mergers and divestitures), using hospital financial and discharge data from Florida and Texas. Despite the pervasive belief that competition impedes a hospital's ability to offer services to the uninsured and under-insured, I find no statistically significant evidence that increased competition leads to reductions in charity care. In fact, I find some evidence that reduced competition leads to higher prices for uninsured patients.


Accounting for Differences Among Patients in the FDA Approval Process

Anup Malani, Oliver Bembom & Mark Van der Laan
University of Chicago Working Paper, October 2009

The FDA employs an average-patient standard when reviewing drugs: it approves a drug only if the average patient (in clinical trials) does better on the drug than on control. It is common, however, for different patients to respond differently to a drug. Therefore, the average-patient standard can result in approval of a drug with significant negative effects for certain patient subgroups (false positives) and disapproval of drugs with significant positive effects for other patient subgroups (false negatives). Drug companies have a financial incentive to avoid false negatives. After their clinical trials reveal that their drug does not benefit the average patient, they conduct what is called post hoc subgroup analysis to highlight patients that benefit from the drug. The FDA rejects such analysis due to the risk of spurious results. With enough data dredging, a drug company can always find some patients that benefit from their drug. This paper asks whether there workable compromise between the FDA and drug companies. Specifically, we seek a drug approval process that can use post hoc subgroup analysis to eliminate false negatives but does not risk opportunistic behavior and spurious correlation. We recommend that the FDA or some other independent agent conduct subgroup analysis to identify patient subgroups that may benefit from a drug. Moreover, we suggest a number of statistical algorithms that operate as veil of ignorance rules to ensure that the independent agent is not indirectly captured by drug companies. We illustrate our proposal by applying it to the results of a recent clinical trial of a cancer drug (motexafin gadolinium) that was recently rejected by the FDA.


Hastening death in end-of-life care: A survey of doctors

Clive Seale
Social Science & Medicine, December 2009, Pages 1659-1666

The application of medical technology to prolong life at the expense of quality of life is widely debated in end-of-life care. A national survey of 3733 UK doctors reporting on the care of 2923 people who had died under their care is reported here. Results show that there was no time to make an 'end-of-life decision' (deciding to provide, withdraw or withhold treatment) for 8.5% of those reporting deaths. A further 55.2% reported decisions which they estimated would not hasten death and 28.9% reported decisions they had expected to hasten death. A further 7.4% reported deaths where they had to some degree intended to hasten death. Where patients or someone else had made a request for a hastened death, doctors were more likely to report expecting or at least partly intending to hasten death. Doctors usually made these decisions in consultation with colleagues, relatives and, where feasible, with patients. Intensive care specialists were particularly likely to report a degree of intention to hasten the end of life and to have treated patients lacking the capacity to discuss these decisions. Palliative medicine specialists were the least likely to report decisions they expected or at least partly intended to end life, in spite of reporting a high incidence of requests from their patients for a hastened death. Doctors with strong religious beliefs or who opposed the legalisation of assisted dying were unlikely to report such decisions. Elderly women and those with dementia are groups considered vulnerable in societies where a permissive approach is taken to hastening death in end-of-life care, but doctors describing these deaths were no more likely to report decisions which they expected or at least partly intended to end life. The survey suggests that concerns about the sanctity of life, as well as estimates of the quality of life, enter clinical decision-making.


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