Disability

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Why are more than 35 percent of elderly Swedes on disability?

May 31, 2011 in Health Care Around the World, International Health Care Systems | 1 comment

“The proportion of men collecting disability benefits at older ages varies greatly across countries — for example, more than 35 percent of 64-year-old men in Sweden and more than 25 percent of those in the Netherlands are on DI, versus 10 percent or less in Belgium, Italy, and Spain. Does this reflect differences in the underlying health status of older individuals in these countries? Or do differences in the provisions of the DI systems explain this variation in DI take-up rates?”

This is the question the Milligan and Wise attempt to answer in their Introduction to Social Security and Retirement around the World.  The Healthcare Economist suspects the answer is the latter.  Most people consider a quadriplegic disabled and those who are fully healthy are not disabled.  Many individuals, however, have partial disability. Many workers, for instance, suffer from back pain.  Measure the severity of the back pain is typically very difficult; some workers can continue working in physically strenuous jobs, others could continue to work in less physically strenuous jobs (e.g., blogging?), and for a minority the back pain is so severe that working at all is not feasible.  Because partial disability is not only common but also difficult to verify, public programs leniency regarding disability program eligibility likely affects the number of beneficiaries more than the underlying health status of the country.

Sure enough, Milligan and Wise come to the same conclusion.  Using “natural experiments” in which a country’s disability insurance reforms were not prompted by changes in health status or by changes in the employment circumstances of older workers, the researchers find that reforms have a large effect on the labor force participation of older workers.

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Cash and Counselling

April 28, 2011 in Health Insurance, Optimal Ins (Theory) | 1 comment

Many economists claim that insurance that gives  sick people cash to pay for their medical treatments is more efficient than insurance that provides in-kind medical services directly.  Although providing in-kind services is more likely to decrease the number of false claimants than insurance that provides cash, cash benefits allow beneficiaries to control how they spend their money.  These patients will generally be more frugal since any savings in medical spending goes directly into their pocket.

The Cash and Counselling demonstration is one effort to give beneficiaries cash when they become disabled.  A Health Affairs paper by Foster et al. describes the demonstration.

“About 1.2 million Medicaid beneficiaries receive disability-related supportive services in their homes. Most receive them from government-regulated agencies, whose professional staff arrange services and monitor quality, but a growing number manage their services themselves.As one model of consumer-directed supportive services, Cash and Counseling gives consumers a flexible monthly allowance to purchase disability-related goods and services (including hiring relatives as workers), provides counseling and financial assistance to help them plan and manage their responsibilities, and allows them to designate representatives (such as family members) to make decisions on their behalf.”

Did it work?

“Our survey of 1,739 elderly and nonelderly adults showed that relative to agency-directed services, Cash and Counseling greatly improved satisfaction and reduced most unmet needs. Moreover, contrary to some concerns, it did not adversely affect participants’ health and safety.”

Rather than spending this money on formal care services, almost all beneficiaries used their cash benefit  to hire family members or friends.  Other funds were directed to pay for assistive equipment, personal care supplies, and medications.  Could the Cash and Counselling model be a viable care alternative, especially for high cost patients?

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Why have disability rates decreased?

April 12, 2009 in HC Statistics | 2 comments

“Although the evidence was mixed for the 1980s and it is difficult to pinpoint when in the 1990s the decline began, during the mid- and late 1990s, the panel found consistent declines on the order of  0-2.5% per year for two commonly used measures in the disability literature: difficulty with daily activities and help with daily activities.”

From the quotation above, we see that disability trends have been decreasing over time.  The question is, why is this?  Was the decrease in disability cause by decreasing rates of chronic disease or were decreasing disability rates caused by decreased disability rates among those with chronic diseases?  This is the question Aranovich, Bhattacharya, Garber and MaCurdy attempt to answer in their recent working paper “Coping with Chronic Disease?”

Let us assume an individual has a disability in year t when Dt=1 and the person has a chronic disease when Ct=1. According to the equation below

  • P[Dt]=P[Dt|Ct]*P[Ct=1] + disability from non-chronically ill population.

The authors calculate the probability an individual has a chronic disease P[Ct], using data from the National Health Interview Survey (NHIS).  The authors calculate [Dt|Ct] using Bayes rule as follows:

  • P[Dt|Ct]=P[Ct|Dt]*P[Dt]/P[Ct]

The numerator is calculated using the National Long Term Care Survey (NLTCS) and the denominator we already calculated from the NHIS.  Now we can decompose the changes in disability rates into the following:

  • ΔP[Dt] = ΔP[Dt|Ct=1]P[Ct=1] + P[Dt|Ct]ΔP[Ct=1] + change attributable to non-chronically ill pop.

This says that the change in disability is a mixture of the change in the prevalence of chronic disease and the change in th probability of being disabled given that you have a chronic disease.

Results

Disability can be defined in one of two ways: IADLs or ADLs.  ”IADLs include everyday behaviors such as grocery shopping, managing money, and preparing meals and are considered a measure of moderate disability.  The ADL measure, which encompasses more basic, mechanically-oriented  activities, including dressing, eating, and bathing, is considered a gauge of more severe forms of functional impairment.”

  • Overall Disability.  Between 1982 and 1999, the authors found a decrease in IADL disability of 45% whereas ADL disability decrease by 9%.  
  • Chronic Disease Rates P[Ct].  In general, the authors found increases in the age-adjusted prevalence of chronic diseases.   The prevalence of being overweight increased by 10.4 percentage points, arthritis rates increased 3.0 and diabetes prevalence increased by 1.1.  There were small increases in the prevalence of stroke, chronic obstructive pulmonary disease (COPD).  On the other hand the prevalence hypertension and heart disease decreased by 2.6 percentage points and 3.3 percentage point respectively.
  • Probability of Disability for those with a Chronic disease: P[Dt|Ct]. Between 1982 and 1999, people with arthritis, hypertension, COPD, overweight and heart diseases all experienced about a 50% decline in IADL disability.  Disability of those with diabetes decreased by 25%.  ”Among the seven conditions evaluated, only overweight was associated with a statistically significant decline (p<.05) in ADL disability between 1982 and 1999, a decrease of about 20%.”  However, there were also smaller, non-statistically significant declines in ADL disability among those with heart disease, COPD and arthritis.

Conclusion

Overall, we see a trend of decreasing disability rates and increasing rates of chronic illness.  This means that disability levels have decreased for those who have chronic disease.  It does not seem to be the case that preventive care is decreasing the level of chronic illness.  It could be the case, however, that as more people live longer, observing more chronic illness is an improvement from the counterfactual of death rather than a counterfactual of no disability.  It is also important to note that IADL disability decreased more than ADL disability.  This could be explained by environmental factors.  For instance, “[i]nternet shopping, amplifying devices for phones, and street ramps” all would help to decrease IADL levels, but would have little effect on ADL levels.

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Too fat to work

November 26, 2007 in Current Events, International Health Care Systems, Obesity | Permalink

The incapacity benefit system in the UK is intended to provide an income support for those unable to work.  Like any government program, many of the beneficiaries are in dire need of the money and are truly unable to work, but many other individuals who are able–but not inclined–to work have taken advantage of government largesse.  Liberals will highlight the fact that these programs help the needy while conservatives will generally retort with numerous examples of how individuals are able to take advantage of ‘the system.’

Last week, The Times of London reported (‘Too fat to work‘) that “Almost two thousand people who are too fat to work have been paid a total of £4.4 million in benefit.”  Should obese individuals receive a disability benefit?  If obesity is truly a disease, than one may say yes.  On the other hand, there is a seemingly simple cure for obesity–eat less and exercise more.  For those who are obese, however, accomplishing this physiological feat is not as simple as it sounds.  It is possible that the incapacity benefit may actually make the obese worse off.  Allowing the obese to collect an incapacity benefit may reduce an overweight individual’s incentive to lose weight in order to be able to work.

Any input on this subject would be greatly appreciated.

Thanks to my colleague Mike Ewens for the referral to the Times article.

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