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A Theory of Health Disparities and Medical Technology

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  • Goldman Dana P

    ()
    (RAND Corporation and NBER)

  • Lakdawalla Darius N.

    ()
    (RAND Corporation and NBER)

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    Abstract

    Better-educated people are healthier, although the sources of this relationship remain unclear. Starting with basic principles of consumer theory, we develop a model of how health disparities are determined that does not depend on the precise causal mechanism. Improvements in the productivity of health care disproportionately benefit the heaviest health care users. Since richer patients tend to use the most health care, this suggests that new technologies—by making more diseases treatable, reducing the price of health care, or improving health care productivity—could widen socioeconomic disparities in health. An exception to this rule, however, is a simplifying technology, which can contract health disparities, since richer patients are more likely to invest effort in adhering to complex treatment regimens. We present a few empirical case studies to help illustrate the theoretical results. First, we show that a complicated treatment regimen (antiretroviral therapy for HIV) benefited well-educated patients disproportionately. In contrast, simplifying drugs for hypertension coincided with a contraction in cardiovascular disparities not seen in other diseases. Finally, nationally representative data suggest that there are wider disparities by education among the chronically ill populations—precisely the population one would expect to be the heaviest health care users.

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    Bibliographic Info

    Article provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.

    Volume (Year): 4 (2005)
    Issue (Month): 1 (September)
    Pages: 1-32

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    Handle: RePEc:bpj:bejeap:v:contributions.4:y:2005:i:1:n:8

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    Web page: http://www.degruyter.com

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    Web: http://www.degruyter.com/view/j/bejeap

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    Cited by:
    1. Dan Anderberg & Arnaud Chevalier & Jonathan Wadsworth, 2009. "Anatomy of a health scare: education, income and the MMR controversy in the UK," LSE Research Online Documents on Economics 28600, London School of Economics and Political Science, LSE Library.
    2. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding differences in health behaviors by education," Journal of Health Economics, Elsevier, vol. 29(1), pages 1-28, January.
    3. Cutler, David M. & Lleras-Muney, Adriana, 2010. "Understanding Differences in Health Behaviors by Education," Scholarly Articles 5344195, Harvard University Department of Economics.
    4. Pinka Chatterji & Heesoo Joo & Kajal Lahiri, 2010. "Beware of Unawareness: Racial/Ethnic Disparities in Awareness of Chronic Diseases," NBER Working Papers 16578, National Bureau of Economic Research, Inc.
    5. Lange, Fabian, 2011. "The role of education in complex health decisions: Evidence from cancer screening," Journal of Health Economics, Elsevier, vol. 30(1), pages 43-54, January.
    6. Hernandez, Elaine M., 2013. "Provider and patient influences on the formation of socioeconomic health behavior disparities among pregnant women," Social Science & Medicine, Elsevier, vol. 82(C), pages 35-42.

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