NBER | The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences

July 31, 2009

Bruce D. Meyer, Wallace K. C. Mok, James X. Sullivan. The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences. NBER Working Paper No. 15181, July 2009. [Abstract (html)]

High rates of understatement are found for many government transfer programs and in many datasets. This understatement has major implications for our understanding of economic well-being and the effects of transfer programs. We provide estimates of the extent of under-reporting for ten transfer programs in five major nationally representative surveys by comparing reported weighted totals for these programs with totals obtained from government agencies. We also examine imputation procedures and rates. We find increasing under-reporting and imputation over time and sharp differences across programs and surveys. We explore reasons for under-reporting and how under-reporting biases existing studies and suggest corrections. The programs examined include several related to health care: Workers’ Compensation (WC), Social Security Disability
Insurance (SSDI), Supplemental Security Income (SSI), the Food Stamp Program (FSP), the Special Supplemental Nutrition Program for
Women, Infants and Children (WIC) program and the National School Lunch Program (NSLP).

NBER | A Quality-Adjusted Price Index for Colorectal Cancer Drugs

July 31, 2009

Claudio Lucarelli, Sean Nicholson, A Quality-Adjusted Price Index for Colorectal Cancer Drugs. NBER Working Paper No. 15174, Issued in July 2009. [Abstract (html)]

The average price of treating a colorectal cancer patient with chemotherapy increased from about $100 in 1993 to $36,000 in 2005, due largely to the approval and widespread use of five new drugs between 1996 and 2004. We examine whether the substantial increase in spending has been worth it. Using discrete choice methods to estimate demand, we construct a price index for colorectal cancer drugs for each quarter between 1993 and 2005 that takes into consideration the quality (i.e., the efficacy and side effects in randomized clinical trials) of each drug on the market and the value that oncologists place on drug quality. A naive price index, which makes no adjustments for the changing attributes of drugs on the market, greatly overstates the true price increase. By contrast, a hedonic price index and two quality-adjusted price indices show that prices have actually remained fairly constant over this 13-year period, with slight increases or decreases depending on a model’s assumptions.

Heritage Foundation | A Federal Health Insurance Exchange Combined with a Public Plan: The House and Senate Bills

July 31, 2009

Robert E. Moffit. A Federal Health Insurance Exchange Combined with a Public Plan: The House and Senate Bills. Heritage Foundation Backgrounder #2304, July 30, 2009. [Abstract (html)]

NBER | Does Health Insurance Make You Fat?

July 29, 2009

Jay Bhattacharya, Kate Bundorf, Noemi Pace, Neeraj Sood. Does Health Insurance Make You Fat? NBER Working Paper No. 15163, July 2009. [ Abstract (html)]

The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions: 1) that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and 2) that body weight decisions are responsive to the incidence of medical care costs associated with obesity. In this paper, we test the latter proposition – that body weight is influenced by insurance coverage – using two approaches. First, we use data from the Rand Health Insurance Experiment, in which people were randomly assigned to varying levels of health insurance, to examine the effect of generosity of insurance coverage on body weight along the intensive coverage margin. Second, we use instrumental variables methods to estimate the effect of type of insurance coverage (private, public and none) on body weight along the extensive margin. We explicitly address the discrete nature of the endogenous indicator of health insurance coverage by estimating a nonlinear instrumental variables model. We find weak evidence that more generous insurance coverage increases body mass index. We find stronger evidence that being insured increases body mass index and obesity.


CRS | Health Care Reform: An Introduction

July 29, 2009

Congressional Research ServiceHealth Care Reform: An Introduction. by Bob Lyke. CRS Report R40517. July 29, 2009.  [Full Text (pdf)]

Health care reform has emerged as an issue in the 111th Congress, driven by growing concern about widely discussed problems. Three predominant concerns involve coverage, cost and spending, and quality. Commonly cited figures indicate that more than 45 million people have no insurance, which can limit their access to care and their ability to pay for the care they receive. Costs are rising for nearly everyone, and the country now spends over $2.2 trillion, more than 16% of gross domestic product (GDP), on health care services and products, far more than other industrialized countries. For all this spending, the country scores but average or somewhat worse on many indicators of health care quality. These concerns raise significant challenges. Each of the concerns is more complex than might first appear, which increases the difficulty of finding solutions. For example, by one statistical measure, far more than 45 million people face the risk of being uninsured for short time periods, yet by another, substantially fewer have no insurance for long periods. Insurance coverage and access to health care are not the same, and it is possible to have one without the other. Having coverage does not ensure that one can pay for care, nor does it always shield one from significant financial loss in the case of serious illness. Similarly, high levels of spending may be partly attributable to the country’s wealth, while rising costs, though difficult for many, may primarily mean that less money is available for other things. Solutions to these concerns may conflict with one another. For example, expanding coverage to most of the uninsured would likely drive up costs (as more people seek care) and expand public budgets (since additional public subsidies would be required). Cutting costs may threaten initiatives to improve quality.

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Urban Institute | Achieving Quality, Affordable Health Insurance for All New Yorkers: An Analysis of Reform Options

July 29, 2009

Linda J. Blumberg, Bowen Garrett, Matthew Buettgens, Lisa Clemans-Cope, John Holahan, Aaron Lucas, Paul Masi, Baoping Shang. Achieving Quality, Affordable Health Insurance for All New Yorkers: An Analysis of Reform Options. Urban Institute, July 17, 2009. [Summary (html)][Full Text (pdf)]

Under contract to the State of New York, researchers conducted in-depth micro-simulation analyses of four types of health care reforms being considered for state implementation: a single payer public health insurance option, Assembly Member Gottfried’s New York Health Plus proposal that provides an option for all New Yorkers to enroll in Family Health plus, public-private hybrid options that simplify and expand existing public programs and reform private health insurance, and a market-based option that relies on regulatory flexibility and tax credits. The cost and coverage implications of state reform options falling into these four categories are presented in this report.

Urban Institute | Reducing Obesity: Policy Strategies from the Tobacco Wars

July 29, 2009

Carolyn L. Engelhard, Arthur Garson, Jr., Stan Dorn. Reducing Obesity: Policy Strategies from the Tobacco Wars. Urban Institute, July 24, 2009. [Abstract (html)][Full Text (pdf)]

To combat the epidemic of obesity, lawmakers can adapt policy approaches that have substantially cut tobacco use. A 10 percent tax on fattening food, identified based on a model used by the British government to determine the foods that may not be advertised to children, would reduce consumption while raising more than $500 billion over 10 years. Adding simple, “traffic light” nutrition labels to the front of each food package would change consumers’ buying habits, as would listing calories on menus at chain restaurants. Consumption of fattening food would be further reduced by banning its advertisement in the mass media.

NBER | Using Genetic Lotteries within Families to Examine the Causal Impact of Poor Health on Academic Achievement

July 29, 2009

Jason M. Fletcher, Steven F. Lehrer. Using Genetic Lotteries within Families to Examine the Causal Impact of Poor Health on Academic Achievement. NBER Working Paper No. 15148, July 2009. [Abstract (html)]

While there is a well-established, large positive correlation between mental and physical health and education outcomes, establishing a causal link remains a substantial challenge. Building on findings from the biomedical literature, we exploit specific differences in the genetic code between siblings within the same family to estimate the causal impact of several poor health conditions on academic outcomes. We present evidence of large impacts of poor mental health on academic achievement. Further, our estimates suggest that family fixed effects estimators by themselves cannot fully account for the endogeneity of poor health. Finally, our sensitivity analysis suggests that these differences in specific portions of the genetic code have good statistical properties and that our results are robust to reasonable violations of the exclusion restriction assumption.

CBO | Additional Information Cost Analysis of House Ways & Means Bill

July 28, 2009

CBO. Additional Information Regarding the Effects of Specifications in the America’s Affordable Health Choices Act Pertaining to Health Insurance Coverage. Congressional Budget Office, July 26, 2009. [Full Text (pdf)]. Provides an explanation for why CBO estimates of coverage under public plan differ by a factor of 8 from the estimates from Lewin Group regarding the impact of the House bill.

Health Affairs | Annual Medical Spending Attributable To Obesity: Payer- And Service-Specific Estimates — Finkelstein et al., 10.1377/hlthaff.28.5.w822 — Health Affairs

July 28, 2009

Eric A. Finkelstein, Justin G. Trogdon, Joel W. Cohen, and William Dietz. Annual Medical Spending Attributable To Obesity: Payer- And Service-Specific Estimates. Health Affairs 28, no. 5 (2009): w822-w831 (published online 27 July 2009) [Abstract (html)] 

In 1998 the medical costs of obesity were estimated to be as high as $78.5 billion, with roughly half financed by Medicare and Medicaid. This analysis presents updated estimates of the costs of obesity for the United States across payers (Medicare, Medicaid, and private insurers), in separate categories for inpatient, non-inpatient, and prescription drug spending. We found that the increased prevalence of obesity is responsible for almost $40 billion of increased medical spending through 2006, including $7 billion in Medicare prescription drug costs. We estimate that the medical costs of obesity could have risen to $147 billion per year by 2008.