Income and Health Spending: Evidence from Oil Price Shocks
Daron Acemoglu, Amy Finkelstein & Matthew Notowidigdo
NBER Working Paper, February 2009
Health expenditures as a share of GDP have more than tripled over the last half century. A common conjecture is that this is primarily a consequence of rising real per capita income, which more than doubled over the same period. We investigate this hypothesis empirically by instrumenting for local area income with time-series variation in global oil prices between 1970 and 1990 interacted with cross-sectional variation in the oil reserves across different areas of the Southern United States. This strategy enables us to capture both the partial equilibrium and the local general equilibrium effects of an increase in income on health expenditures. Our central estimate is an income elasticity of 0.7, with an elasticity of 1.1 as the upper end of the 95 percent confidence interval. Point estimates from alternative specifications fall on both sides of our central estimate, but are almost always less than 1. We also present evidence suggesting that there are unlikely to be substantial national or global general equilibrium effects of rising income on health spending, for example through induced innovation. Our overall reading of the evidence is that rising income is unlikely to be a major driver of the rising health share of GDP.
Take Two Aspirin And Tweet Me In The Morning: How Twitter, Facebook, And
Other Social Media Are Reshaping Health Care
Health Affairs, March/April 2009, Pages 361-368
If you want a glimpse of what health care could look like a few years from now, consider "Hello Health," the Brooklyn-based primary care practice that is fast becoming an emblem of modern medicine. A paperless, concierge practice that eschews the limitations of insurance-based medicine, Hello Health is popular and successful, largely because of the powerful and cost-effective communication tools it employs: Web-based social media. Indeed, across the health care industry, from large hospital networks to patient support groups, new media tools like weblogs, instant messaging platforms, video chat, and social networks are reengineering the way doctors and patients interact.