NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

2018, No. 2

Abstracts of Selected Recent NBER Working Papers

w24229
What Do Workplace Wellness Programs Do? Evidence from the Illinois Workplace Wellness Study
Damon Jones, David Molitor, and Julian Reif

Workplace wellness programs cover over 50 million workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet, limited evidence exists to support these claims. We designed and implemented a comprehensive workplace wellness program for a large employer with over 12,000 employees, and randomly assigned program eligibility and financial incentives at the individual level. Over 56 percent of eligible (treatment group) employees participated in the program. We find strong patterns of selection: during the year prior to the intervention, program participants had lower medical expenditures and healthier behaviors than non-participants. However, we do not find significant causal effects of treatment on total medical expenditures, health behaviors, employee productivity, or self-reported health status in the first year. Our 95% confidence intervals rule out 78 percent of previous estimates on medical spending and absenteeism. Our selection results suggest these programs may act as a screening mechanism: even in the absence of any direct savings, differential recruitment or retention of lower-cost participants could result in net savings for employers.

w24231
The Impact of Health on Labor Market Outcomes: Experimental Evidence from MRFIT
Melvin Stephens, Jr. and Desmond J. Toohey

While economists have posited that health investments increase earnings, isolating the causal effect of health is challenging due both to reverse causality and unobserved heterogeneity. We examine the labor market effects of a randomized controlled trial, the Multiple Risk Factor Intervention Trial (MRFIT), which monitored nearly 13,000 men for over six years. We find that this intervention, which provided a bundle of treatments to reduce coronary heart disease mortality, increased earnings and family income. We find few differences in estimated gains by baseline health and occupation characteristics. Reductions in serious illnesses and work-limiting disabilities likely contributed to the observed gains.

w24267
Targeting with In-kind Transfers: Evidence from Medicaid Home Care
Ethan M.J. Lieber and Lee M. Lockwood

Many of the most important government programs make transfers in kind as opposed to in cash. Making transfers in kind has the obvious cost that recipients would often prefer cost-equivalent cash transfers. But making transfers in kind can have benefits as well, including better targeting transfers to desired recipients or states of the world. In this paper, we develop a framework for evaluating this tradeoff and apply it to home care. Exploiting large-scale randomized experiments run by three state Medicaid programs, we find that in-kind provision of formal home care significantly reduces the value of benefits to recipients while targeting benefits to a small fraction of the eligible population that has greater demand for formal home care, is sicker, and has worse informal care options than the average eligible. Under a wide range of assumptions within a standard model, the targeting benefit of in-kind provision exceeds the distortion cost. This highlights an important cost of recent reforms that move toward more flexible, cash-like benefits.

w24277
Does E-Cigarette Advertising Encourage Adult Smokers to Quit?
Dhaval M. Dave, Daniel Dench, Michael Grossman, Donald S. Kenkel, and Henry Saffer

Only recently introduced into the U.S. market, e-cigarettes have been aggressively promoted, and use is increasing rapidly among both adults and youths. At the heart of the regulatory debate are fundamental questions regarding whether e-cigarettes will draw cigarette smokers away from a dangerous habit or lure new initiates into tobacco use. We provide some of the first causal evidence on whether e-cigarette advertising on television and in magazines (which comprise about 90 percent of total media spending on e-cigarettes) encourage adult smokers to quit. We find that the answer to this question is a yes for TV advertising but no for magazine advertising. Our results indicate that a policy to ban TV advertising of e-cigarettes would have reduced the number of smokers who quit in the recent past by approximately 3 percent, resulting in roughly 105,000 fewer quitters in that period. On the other hand, if the FDA were not considering regulations and mandates that would likely eliminate many e-cigarette producers during our sample period, e-cigarette ads might have reached the number of nicotine replacement therapy TV ads during that period. That would have increased the number of smokers who quit by around 10 percent, resulting in an additional 350,000 quitters.

w24304
Hospital Pricing and Public Payments
Michael Darden, Ian McCarthy, and Eric Barrette

A longstanding debate in health economics and health policy concerns how hospitals adjust prices with private insurers following reductions in public funding. A common argument is that hospitals engage in some degree of "cost-shifting," wherein hospitals increase prices with private insurers in response to a reduction in public payments; however, evidence of significant cost-shifting is mixed, and the rationale for such behavior is unclear. We enter this debate by examining plausibly exogenous variation in Medicare payment rates generated by two policies under the Affordable Care Act: the Hospital Readmission Reduction Program (HRRP) and the Hospital Value Based Purchasing (HVBP) program. We merge rich hospital-level information to actual private-payer payment data from a large, multi-payer database. Our data include roughly 50 percent of inpatient prospective payment hospitals in the United States from 2010 to 2015. We find that hospitals that faced net payment reductions from HRRP and HVBP were able to negotiate 1.5 percent higher average private payments — approximately $155 extra for the average acute care claim, or $82,000 per hospital, based on an average hospital penalty of nearly $146,000. We find the largest increases in payments for circulatory system (2.7 percent) and nervous system (3.2 percent) claims. We also find significant heterogeneity by payer mix, where cost-shifting is largest for hospitals with higher shares of private insurance patients.

w24316
The Effect of Organized Breast Cancer Screening on Mammography Use: Evidence from France
Thomas C. Buchmueller and LĂ©ontine Goldzahl

In 2004, France introduced a national program of organized breast cancer screening. The national program built on pre-existing local programs in some, but not all, départements. Using data from multiple waves of a nationally representative biennial survey of the French population, we estimate the effect of organized screening on the percentage of women obtaining a mammogram. The analysis uses difference-in-differences methods to exploit the fact that the program was targeted at women in a specific age group: 50 to 74 years old. We find that organized screening significantly raised mammography rates among women in the target age range. Just above the lower age threshold, the percentage of women reporting that they had a mammogram in the past two years increased by over 10 percentage points after the national program went into effect. Mammography rates increased even more among women in their sixties. Estimated effects are particularly large for women with less education and lower incomes, suggesting that France's organized screening program has reduced socioeconomic disparities in access to mammography.

w24347
Effects of Expanding Health Screening on Treatment — What Should We Expect? What Can We Learn?
Rebecca Mary Myerson, Darius Lakdawalla, Lisandro D. Colantonio, Monika Safford, and David Meltzer

Screening interventions can produce very different treatment outcomes, depending on the reasons why patients had been unscreened in the first place. Economists have paid scant attention to these complexities and their implications for evaluating screening programs. In this paper, we propose a simple economic framework to guide policy-makers and analysts in designing and evaluating the impact of screening on treatment uptake. We apply these insights to several salient empirical examples that illustrate the different kinds of effects screening programs might produce. Our empirical examples focus on contexts relevant to the top cause of death in the United States, heart disease. We find that currently undiagnosed patients differ from currently diagnosed patients in important ways, leading to lower predicted uptake of recommended treatment if these patients were diagnosed. Additionally, changes in the composition of diagnosed patients can produce misleading conclusions during policy analysis, such as spurious reductions in measured health system performance as screening expands.

w24392
Dominated Options in Health-Insurance Plans
Chenyuan Liu and Justin R. Sydnor

Recent studies have found that many people select into health plans with higher coverage (e.g., lower deductibles) even when those plans are financially dominated by other options. We explore whether having dominated options is common by analyzing data on plan designs from the Kaiser Family Foundation Employer Health Benefits Survey for firms that offered employees both a high-deductible (HD) health plan and a lower-deductible (LD) option. In 65 percent of firms the high-deductible option would result in lower maximum possible health spending for the employee for the year. We estimate that the HD plan financially dominates the LD plan at roughly half of firms across a wide range of possible health spending needs employees might anticipate. The expected savings from selecting the HD plan are typically over $500 per year, often with no increase in financial risk. We present evidence that these patterns may arise naturally from employers passing through large average-cost differences between HD and LD plans to their employees. We discuss the implications of those dynamics for the nature of transfers between employees and the efficiency of health spending.

w24405
The Retirement-Consumption Puzzle: New Evidence from Personal Finances
Arna Olafsson and Michaela Pagel

This paper uses a detailed panel of individual spending, income, account balances, and credit limits from a personal finance management software provider to investigate how expenditures, liquid savings, and consumer debt change around retirement. The longitudinal nature of our data allows us to estimate individual fixed-effects regressions and thereby control for all selection on time-invariant (un)observables. We provide new evidence on the retirement-consumption puzzle and on whether individuals save adequately for retirement. We find that, upon retirement, individuals reduce their spending in both work-related and leisure categories. However, we feel that it is difficult to tell conclusively whether expenses are work related or not, even with the best data. We thus look at household finances and find that individuals delever upon retirement by reducing consumer debt and increasing liquid savings. We argue that these findings are difficult to rationalize via, for example, work-related expenses. A rational agent would save before retirement because of the expected fall in income, and dissave after retirement, rather than the exact opposite.

w24429
The Return to Work and Women's Employment Decisions
Nicole Maestas

It is well documented that individuals in couples tend to retire around the same time. But because women tend to marry older men, this means many married women retire at younger ages than their husbands. This fact is somewhat at odds with lifecycle theory that suggests women might otherwise retire at later ages than men because they have longer life expectancies, and often have had shorter careers on account of childrearing. As a result, the opportunity cost of retirement — in terms of foregone potential earnings and accruals to Social Security wealth — may be larger for married women than for their husbands. Using the Health and Retirement Study (HRS), I find evidence that the returns to additional work beyond mid-life are greater for married women than for married men. The potential gain in Social Security wealth alone is enough to place married women on nearly equal footing with married men in terms of Social Security wealth at age 70.

NBER Working Papers on Health and Aging
A complete list of all NBER Working Papers, with searchable abstracts is available at http://www.nber.org/papers.html

 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us