Reflection Paper on these two chapters

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CHAPTER 4
SOCIOECONOMIC DISPARITIES IN HEALTH

Bhattacharya, Hyde and Tu – Health Economics

Intro

  • Previously…
  • Grossman model
  • Individuals make choices about their health based on time constraints, budget constraints, and utility
  • Optimal amount of health (H*) changes based on decisions about tradeoffs
  • How does socioeconomic status (SES) affect health and choices about health?
  • Does health determine SES? Or does SES determine health?
  • Use empirical evidence to explore these questions

The pervasiveness of health disparities

Bhattacharya, Hyde and Tu – Health Economics

Health disparities are everywhere

  • Health Disparity: (def) differences in health --incidence, prevalence, mortality, and burden of disease -- between specific populations
  • ex: death rates for all cancer types for both men and women are highest among African Americans1
  • Ubiquitous worldwide across races, educational attainments, employment grades, and incomes
  • Broadly across all socioeconomic statuses (SES)

Bhattacharya, Hyde and Tu – Health Economics

Health disparities are everywhere

  • By education:
  • College graduates are 25% more likely to survive to age 68 than high school dropouts

  • By race:
  • Hispanics report better health status than black individuals
  • White individuals report better health then both Hispanic and black individuals
  • Health deteriorates with age across all races, but disparities persist

Bhattacharya, Hyde and Tu – Health Economics

Health disparities across income

  • Generally: high-income individuals self-report a higher health status than those of lower incomes
  • For most conditions, the poor exhibit more incidences of disease
  • Some exceptions like
  • Bronchitis -- no difference
  • Hay fever -- the rich appear to be diagnosed with hay fever more often
  • May be explainable if richer children visit the doctor more often and hence, are more likely to be diagnosed

Bhattacharya, Hyde and Tu – Health Economics

Disparities even with universal insurance

  • Even in countries with universal health insurance, health disparities persist

  • Canada:
  • Self-reported health status for children at high SES better than children of low SES (Currie and Stabile 2003)

  • England:
  • We discuss the Whitehall studies later

Theories to explain health disparities

Bhattacharya, Hyde and Tu – Health Economics

Why do health disparities exist?

  • Reasons/theories
  • Early life events
  • Income levels
  • Stress of being poor
  • Work capacity
  • Impatience
  • Adherence to medical advice
  • Policy importance of understanding causes of disparities before addressing them

Bhattacharya, Hyde and Tu – Health Economics

What causes what?

  • Does bad health cause low SES?
  • Does low SES cause bad health?
  • Are there other factors?

Bhattacharya, Hyde and Tu – Health Economics

Hypotheses for health disparities

  • Efficient producer
  • Thrifty phenotype
  • Direct income
  • Allostatic load
  • Income inequality
  • Access to care
  • Productive time
  • Time preference (The Fuchs hypothesis)

Bhattacharya, Hyde and Tu – Health Economics

The Grossman model and health disparities

  • Recall MEC indicates the return on each additional unit of health capital
  • Different SES groups may have different MECs
  • Why?
  • Each hypothesis posits a different reason

Bhattacharya, Hyde and Tu – Health Economics

The efficient producer hypothesis

  • Hypothesis: better-educated individuals are more efficient producers of health than less well-educated individuals
  • Grossman predicts that people who are more efficient health producers will have higher H*

  • Lleras-Muney (2005) find that an additional year of schooling caused ~1.7 year increase in life expectancy in 1920s US
  • Hence, education improves health

The efficient producer hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Possible causal mechanisms

  • Possible reasons for positive correlation between health and education?
  • Lessons in school help students to take better care of themselves
  • Schooling helps students be more patient when it comes to payoffs of investments (like health)
  • Better-educated more likely to adhere to treatment regimens

The efficient producer hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Thrifty phenotype hypothesis

  • Genetic reasons for being inefficient at producing health
  • Deprivation of resources (food) in utero and early childhood leads to activation of “thrifty” genes that are useful for sparse environmental conditions
  • These “thrifty” genes good for scarce environments but bad in conditions of abundance
  • More likely to develop diabetes, obesity, and other disorders later in life
  • Disparities arise because poorer individuals are more likely to have resource deprivation early in life

The thrifty phenotype hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Thrifty phenotype hypothesis

  • Use natural experiments to test this hypothesis
  • A randomized experiment that randomly deprived some children in utero and not others would be pretty unethical!

  • Natural experiments use environmental shocks that naturally create control and treatment groups
  • Ex: earthquakes, famine, snowstorms

  • Good natural experiment eliminates selection bias

The thrifty phenotype hypothesis

Bhattacharya, Hyde and Tu – Health Economics

The Dutch famine study

  • Natural experiment: Dutch famine in WWII (Rosebloom et al. 2001)

  • Holland suffered a famine due to a German blockade of food

  • Created two baby groups:
  • Those in utero during famine
  • Those conceived after famine

  • Two groups are similar, except for in utero deprivation
  • So hopefully no selection bias!

  • Findings:
  • Babies in utero during famine had higher rates of diabetes and obesity in adulthood

The thrifty phenotype hypothesis

Bhattacharya, Hyde and Tu – Health Economics

The direct income hypothesis

  • Hypothesis: disparities exist because rich people have more resources to devote to health
  • Rich individuals have an expanded PPF because of extra financial resources
  • Expanded PPF = higher H* that can be obtained

The direct income hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Allostatic load hypothesis

  • Hypothesis: Prolonged or repeated stress is unhealthy and can cause an increased rate of aging

  • In the Grossman model, aging is represented by rate of depreciation of health capital δ

  • High stress load leads to a higher δ

The allostatic load hypothesis

Bhattacharya, Hyde and Tu – Health Economics

The Whitehall study

  • Whitehall study by Marmot at al. (1978, 1991)
  • Compares health status of British civil servants
  • British civil servants relatively homogenous in background and share workplace environments
  • All British citizens have the same access to health care through the National Health Service
  • Findings:
  • Disease morbidity and mortality rates highest for low-grade civil servants
  • Low-grade civil servants reported more stressful work and home environments

The Allostatic Load Hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Income inequality hypothesis

  • Hypothesis: Health disparities are caused by an unequal distribution of income
  • Related to the allostatic load hypothesis
  • More equal societies are less stressful and therefore healthier

  • Policy implications?
  • If theory is true then policy makers should aim at reducing inequality within a community
  • The health status of a society may decline even if average income rises if income becomes more concentrated

The Direct Income Hypothesis

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Bhattacharya, Hyde and Tu – Health Economics

Access to care hypothesis

  • Hypothesis: Those with high incomes can afford more generous health insurance compared to those of low income

  • But health disparities persist in countries with universal health insurance
  • Canadian youth (Currie and Stabile 2003)
  • British civil servants (Marmot et al. 1978, 1991)
  • both countries have equal access to health care!

The access to care hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Productive time hypothesis

  • SES differences are caused by disparities in health
  • Bad health leads to lower productive time and therefore less time to produce income

  • Oreopoulos et al. (2008) and Black et al. (2007) study siblings growing up in same household
  • Those with worse health during infancy have higher mortality rates, lower educational achievement, and lower adult earnings

The productive time hypothesis

Bhattacharya, Hyde and Tu – Health Economics

The Fuchs hypothesis

  • Bad health does not cause low SES, and low SES does not cause bad health
  • A third factor – time preference -- causes both!

  • Health and SES both determined by willingness to delay gratification
  • People who are willing to delay gratification are more willing to invest in things like education and health

  • People willing to delay gratification have high discount factors δ

The Fuchs hypothesis

Bhattacharya, Hyde and Tu – Health Economics

Conclusion

  • Each theory has supporting evidence and each can explain some socioeconomic health disparities
  • Key takeaways:
  • Better-educated people generally have better health even with the same resources
  • Health events early in life affect health into adulthood
  • Stress plays an important role in creating health disparities
  • Equalizing access to care does not eliminate health disparities
  • There is a two-way relationship between health and SES

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