Health Policy

2016
Hanna, Rema, Eva Arceo, and Paulina Oliva. 2016. “Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City.” The Economic Journal 126 (591): 257-280. Publisher's VersionAbstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

does_the_effect_of_pollution.pdf
Hanna, Rema, Esther Duflo, and Michael Greenstone. 2016. “Up in Smoke: The Influence of Household Behavior on the Long-Run Impact of Improved Cooking Stoves.” American Economic Journal: Economic Policy 8 (1): 80-114. Publisher's VersionAbstract

It is conventional wisdom that it is possible to reduce exposure to indoor air pollution, improve health outcomes, and decrease greenhouse gas emissions in rural areas of developing countries through the adoption of improved cooking stoves. This is largely supported by observational field studies and engineering or laboratory experiments. However, we provide new evidence, from a randomized control trial conducted in rural Orissa, India (one of the poorest places in India) on the benefits of a commonly used improved stove that laboratory tests showed to reduce indoor air pollution and require less fuel. We track households for up to four years after they received the stove. While we find a meaningful reduction in smoke inhalation in the first year, there is no effect over longer time horizons. We find no evidence of improvements in lung functioning or health and there is no change in fuel consumption (and presumably greenhouse gas emissions). The difference between the laboratory and field findings appears to result from households’ revealed low valuation of the stoves. Households failed to use the stoves regularly or appropriately, did not make the necessary investments to maintain them properly, and usage rates ultimately declined further over time. More broadly, this study underscores the need to test environmental and health technologies in real-world settings where behavior may temper impacts, and to test them over a long enough horizon to understand how this behavioral effect evolves over time.

hanna_upinsmoke_aej.pdf
2015
Hanna, Rema, and Paulina Oliva. 2015. “The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico.” The Journal of Public Economics 122 (February 2015): 68-79. Publisher's VersionAbstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

R. Hanna in JPE on Effect of Pollution in Mexico, CID WP #225 (2011)
2013
Pande, Rohini, and Seema Jayachandran. 2013. “Choice Not Genes: Probable Cause for the India-Africa Child Height Gap.” Economic and Political Weekly, 48, 34, 77-79. Publisher's Version pande_r_-_choice_not_genes.pdf
Chandra, Amitabh, Maurice Dalton, and Jonathan Holmes. 2013. “Large Increases in Spending on Postacute Care in Medicare to the Potential for Cost Savings in These Settings.” Health Affairs 32 (5): 864-872. Publisher's VersionAbstract

Identifying policies that will cut or constrain US health care spending and spending growth dominates reform efforts, yet little is known about whether the drivers of spending levels and of spending growth are the same. Policies that produce a one-time reduction in the level of spending, for example by making hospitals more efficient, may do little to reduce subsequent annual spending growth. To identify factors causing health care spending to grow the fastest, we focused on three conditions in the Medicare population: heart attacks, congestive heart failure, and hip fractures. We found that spending on postacute care—long-term hospital care, rehabilitation care, and skilled nursing facility care—was the fastest growing major spending category and accounted for a large portion of spending growth in 1994–2009. During that period average spending for postacute care doubled for patients with hip fractures, more than doubled for those with congestive heart failure, and more than tripled for those with heart attacks. We conclude that policies aimed at controlling acute care spending, such as bundled payments for short-term hospital spending and physician services, are likely to be more effective if they include postacute care, as is currently being tested under Medicare’s Bundled Payment for Care Improvement Initiative.

Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin A Olken, Ririn Purnamasari, and Matthew Wai-Poi. 2013. “Does Elite Capture Matter? Local Elites and Targeted Welfare Programs in Indonesia”.Abstract

This paper investigates the impact of elite capture on the allocation of targeted government welfare programs in Indonesia, using both a high-stakes field experiment that varied the extent of elite influence and non-experimental data on a variety of existing government transfer programs. Conditional on their consumption level, there is little evidence that village elites and their relatives are more likely to receive aid programs than non-elites. Looking more closely, however, we find that this overall result masks a difference between different types of elites: those holding formal leadership positions are more likely to receive benefits, while informal leaders are actually less likely to. We show that capture by formal elites occurs during the distribution of benefits under the programs, and not during the processes when the beneficiary lists are determined by the central government. However, while elite capture exists, the welfare losses it creates appear quite small: since formal elites and their relatives are only 9 percent richer than non-elites, are at most about 8 percentage points more likely to receive benefits than non-elites, and represent at most 15 percent of the population, eliminating elite capture entirely would improve the welfare gains from these programs by less than one percent.

cid_working_paper_no._255_hanna_2013.pdf
2012
Bjorkman-Nyqvist, Martina, Jakob Svensson, and David Yanagizawa-Drott. 2012. “The market for (fake) antimalarial medicine: evidence from Uganda”.Abstract

Counterfeit and sub-standard antimalarial drugs present a growing threat to public health. This paper investigates the mechanisms that determine the prevalence of fake antimalarial drugs in local markets, their effects, and potential interventions to combat the problem. We collect drug samples from a large set of local markets in Uganda using covert shoppers and employ Raman spectroscopy to test for drug quality. We find that 37 percent of the local outlets sell fake antimalarial drugs. Motivated by a simple model, we conduct a market-level experiment to test whether authentic drugs can drive out fake drugs from the local market. We find evidence of such externalities: the intervention reduced prevalence of substandard and counterfeit drugs in incumbent outlets by half. We also provide suggestive evidence that misconceptions about malaria lead consumers to overestimate antimalarial drug quality, and that opportunistic drug shops exploit these misconceptions by selling substandard and counterfeit drugs. Together, our results indicate that high quality products can drive out low quality ones, but the opposite is true when consumers are less able to infer product quality.

cid_working_paper_no._242_drott_2012.pdf
Chandra, Amitabh, Jinkook Lee, P Arokiasamy, Peifeng Hu, Jenny Liu, and Kevin Feeney. 2012. “Markers and drivers: cardiovascular health of middle-aged and older indians.” Aging in Asia: findings from new and emerging data initiatives. The National Academies Press, 387-414. Publisher's VersionAbstract

Using the 2010 pilot study of the Longitudinal Aging Study in India (LASI), the authors examine the socioeconomic and behavioral risk factors for poor cardiovascular health among middle-aged and older Indians, focusing on self-reported and directly measured hypertension. The LASI pilot survey (N=1,683) was fielded in four states: Karnataka, Kerala, Punjab, and Rajasthan. These four states were chosen to capture regional variations and socioeconomic and cultural differences. They find significant inter-state differences across multiple measures of cardiac health and risk factors for hypertension, including body mass index, waist-to-hip ratio, and health behaviors. In contrast to the findings from developed countries, they find education and other markers of higher socioeconomic status (SES) to be positively associated with hypertension. Among the hypertensive, however, they find that those at higher SES are less likely to be undiagnosed and more likely to be in better control of their blood pressure than respondents with low SES. They also find significant inter-state variations in hypertension prevalence, diagnosis, and management that remain even after accounting for socio economic differences, obesity, and health behaviors. They conclude by discussing these findings and their implications for public health and economic development in India and the developing country context more generally.

Chandra, Amitabh, Katherine Baicker, and Jonathan S. Skinner. 2012. “Saving money or just saving lives? Improving the productivity of US health care spending.” Annual Review of Economics 4: 33-56. Publisher's VersionAbstract

There is growing concern over the rising share of the US economy devoted to health care spending. Fueled in part by demographic transitions, unchecked increases in entitlement spending will necessitate some combination of substantial tax increases, elimination of other public spending, or unsustainable public debt. This massive increase in health spending might be warranted if each dollar devoted to the health care sector yielded real health benefits, but this does not seem to be the case. Although we have seen remarkable gains in life expectancy and functioning over the past several decades, there is substantial variation in the health benefits associated with different types of spending. Some treatments, such as aspirin, beta blockers, and flu shots, produce a large health benefit per dollar spent. Other more expensive treatments, such as stents for cardiovascular disease, are high value for some patients but poor value for others. Finally, a large and expanding set of treatments, such as proton-beam therapy or robotic surgery, contributes to rapid increases in spending despite questionable health benefits. Moving resources toward more productive uses requires encouraging providers to deliver and patients to consume high-value care, a daunting task in the current political landscape. But widespread inefficiency also offers hope: Given the current distribution of resources in the US health care system, there is tremendous potential to improve the productivity of health care spending and the fiscal health of the United States.

Hanna, Rema, Eva Arceo, and Paulina Oliva. 2012. “Does the Effect of Pollution on Infant Mortality Differ Between Developing and Developed Countries? Evidence from Mexico City”.Abstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

cid_working_paper_no._244_hanna_2012.pdf
2011
Chandra, Amitabh, Anupam B Jena, and Jonathan S Skinner. 2011. “The pragmatist's guide to comparative effectiveness research.” Journal of Economic Perspectives 25 (2): 27-46. Publisher's VersionAbstract

All developed countries have been struggling with a trend toward health care absorbing an ever-larger fraction of government and private budgets. Adopting any treatment that improves health outcomes, no matter what the cost, can worsen allocative inefficiency by paying dearly for small health gains. One potential solution is to rely more heavily on studies of the costs and effectiveness of new technologies in an effort to ensure that new spending is justified by a commensurate gain in consumer benefits. But not everyone is a fan of such studies and we discuss the merits of comparative effectiveness studies and its cousin, cost-effectiveness analysis. We argue that effectiveness research can generate some moderating effects on cost growth in healthcare if such research can be used to nudge patients away from less-effective therapies, whether through improved decision making or by encouraging beefed-up copayments for cost-ineffective procedures. More promising still for reducing growth is the use of a cost-effectiveness framework to better understand where the real savings lie—and the real savings may well lie in figuring out the complex interaction and fragmentation of healthcare systems.

Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. 2011. “Patient Cost-Sharing and Hospitalization Offsets in the Elderly.” American Economic Review 100 (1): 193-213. Publisher's VersionAbstract

In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial “offset” effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare.

Hanna, Rema, and Michael Greenstone. 2011. “Environmental Regulations, Air and Water Pollution, and Infant Mortality in India”.Abstract

Using the most comprehensive data file ever compiled on air pollution, water pollution, environmental regulations, and infant mortality from a developing country, the paper examines the effectiveness of India’s environmental regulations. The air pollution regulations were effective at reducing ambient concentrations of particulate matter, sulfur dioxide, and nitrogen dioxide. The most successful air pollution regulation is associated with a modest and statistically insignificant decline in infant mortality. However, the water pollution regulations had no observable effect. Overall, these results contradict the conventional wisdom that environmental quality is a deterministic function of income and underscore the role of institutions and politics.

cid_working_paper_no._224_hanna_2011.pdf
Chandra, Amitabh, and Jonathan S Skinner. 2011. “Technology growth and expenditure growth in health care”. Publisher's VersionAbstract

In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country. We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth. We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs. The model implies a typology of medical technology productivity: (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g. stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients. Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.

2010
Hanna, Rema, and Paulina Olivia. 2010. “The Impact of Inspections on Plant-Level Air Emissions.” The B.E. Journal of Economic Analysis & Policy 10 (1): 1-33. Publisher's VersionAbstract

Each year, the United States conducts approximately 20,000 inspections of manufacturing plants under the Clean Air Act. This paper compiles a panel dataset on plant-level inspections, fines, and emissions to understand whether these inspections actually reduce air emissions. We find plants reduce air emissions by fifteen percent, on average, following an inspection under the Clean Air Act. Plants that belong to industries that typically have low abatement costs respond more strongly to an inspection than those who belong to industries with high abatement costs.

Chandra, Amitabh, Jonathan Gruber, and Robin McKnight. 2010. “Patient Cost Sharing in Low Income Populations.” American Economic Review 100 (2): 303-308. Publisher's VersionAbstract

Economic theory suggests that a natural tool to control medical costs is increased consumer cost sharing for medical care. While such cost sharing reduces “full insurance” (wherein patients are indifferent between falling sick or remaining healthy), a greater reliance on coinsurance and copayments can, in theory, stem patient and provider incentives to engage in moral hazard. These issues are particularly salient for low income populations who are at the center of current efforts to expand coverage (among the uninsured in 2008, 38 percent had incomes below the federal poverty line (FPL), and 52 percent had incomes between 100 and 299 percent of the FPL (Kaiser Commission on Medicaid and the Uninsured 2009)). As insurance is expanded to these groups, it is important to understand how they respond to greater levels of patient cost sharing. On the one hand, smarter plan design could help reduce the fiscal pressures associated with insurance expansion. But on the other, it is also possible that low income recipients are unable to cut back on utilization wisely and, consequently, experience hospitalization “offsets” as a result of greater levels of patient cost sharing. In particular, there remains a concern among many that higher cost sharing on primary care will lead to less effective use of primary care, worse health, and, consequently, higher downstream costs at hospitals (the so-called “offset effects”).

Cutler, David, Winnie Fung, Michael Kremer, Monica Singhal, and Tom Vogl. 2010. “Early-life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India.” American Economic Journal: Applied Economics 2 (2): 72-94. Publisher's VersionAbstract

We examine the effects of exposure to malaria in early childhood on educational attainment and economic status in adulthood by exploiting geographic variation in malaria prevalence in India prior to a nationwide eradication program in the 1950s. We find that the program led to modest increases in household per capita consumption for prime age men, and the effects for men are larger than those for women in most specifications. We find no evidence of increased educational attainment for men and mixed evidence for women.

2008
Hanna, Rema, Esther Duflo, and Michael Greenstone. 2008. “Cooking Stoves, Indoor Air Pollution and Respiratory Health in Rural Orissa.” Economic and Political Weekly (Aug. 9-15, 2008), 43, 32, 71-76. Publisher's VersionAbstract

Indoor air pollution emitted from traditional fuels and cooking stoves is a potentially large health threat in rural regions. This paper reports the results of a survey of tradftional stove ownership and health among 2,400 households in rural Orissa. We find a very high incidence of respiratory illness. About one-third of the adults and half of the children in the survey had experienced symptoms of respiratory illness in the 30 days preceding the survey, with 10 per cent of adults and 20 per cent of children experiencing a serious cough. We find a high correlation between using a traditional stove and having symptoms of respiratory illness. We cannot, however, rule out the possibility that the high level of observed respiratory illness is due to other factors that also contribute to a household's decision to use a traditional stove, such as poverty, health preferences and the bargaining power of women in the household.

Hanna, Rema, Esther Duflo, and Michael Greenstone. 2008. “Indoor Air Pollution, Health, and Economic Well-being.” Surveys and Perspectives Integrating Environment and Society, 1, 1, 7-16. Publisher's VersionAbstract

Indoor air pollution (IAP) caused by solid fuel use and or traditional cooking stoves is a global health threat, particularly for women and young children. The WHO World Health Report 2002 estimates that IAP is responsible for 2.7% of the loss of disability adjusted life years (DALYs) worldwide and 3.7% in high mortality developing countries. Despite the magnitude of this problem, social scientists have only recently begun to pay closer attention to this issue and to test strategies for reducing IAP. In this paper, we provide a survey of the current literature on the relationship between indoor air pollution, respiratory health and economic well-being. We then discuss the available evidence on the effectiveness of popular policy prescriptions to reduce IAP within the household.

indoor_air_pollution.sapiens_2008.pdf
2007
Chandra, Amitabh, and Douglas Staiger. 2007. “Productivity Spillovers in Health Care: Evidence from the Treatment of Heart Attacks.” Journal of Political Economy 115 (1): 103-140. Publisher's VersionAbstract

A large literature in medicine documents variation across areas in the use of surgical treatments that is unrelated to outcomes. Observers of this phenomenon have invoked “flat of the curve medicine” to explain it and have advocated for reductions in spending in high‐use areas. In contrast, we develop a simple Roy model of patient treatment choice with productivity spillovers that can generate the empirical facts. Our model predicts that high‐use areas will have higher returns to surgery, better outcomes among patients most appropriate for surgery, and worse outcomes among patients least appropriate for surgery, while displaying no relationship between treatment intensity and overall outcomes. Using data on treatments for heart attacks, we find strong empirical support for these and other predictions of our model and reject alternative explanations such as “flat of the curve medicine” or supplier‐induced demand for geographic variation in medical care.