Essays in Health Economics

This dissertation consists of two studies, both involving children with chronic conditions or special health care needs.;It is well established that family income is positively associated with children's health. This paper analyzes, both theoretically and empirically, the role of children's chronic conditions in explaining the increasing gradient. Chronic conditions have negative effects on children's health and the ill health of poor children can be interpreted as an increased incidence or a higher morbidity of chronic conditions. By exploiting the panel nature of the Medical Expenditure Panel Survey data, two hypotheses regarding the mechanisms through which family income influences children's health were tested. In addition, various characteristics of chronic illnesses were taken into account in exploring the income-health gradient. The results showed that although low-income children do not experience a higher incidence of chronic conditions, they are more adversely affected by chronic illnesses especially those severe and financial intensive conditions ostensibly because their parents are less able to manage these chronic diseases. These results are consistent with the theoretical predictions and provide additional evidence that the ability to manage chronic diseases varies by family income.;The second study focused on the effects of managed care on the quality of health care services provided to children with special health care needs (CSHCN). Of special interest is whether privately insured CSHCN who joined managed care plans fare worse than those in conventional plans. Data from 2000 to 2007 Medical Expenditure Panel Survey were pooled and an endogenous treatment effects model was employed to control for the potential selection bias linked to plan choice. It was found that CSHCN in managed care plans are less likely to have difficulty in scheduling routine care appointments and getting non-routine care than their counterparts in traditional fee-for-service plans. However, CSHCN in managed care plans are less satisfied with both their access to specialty services and experiences during care. In addition, significant selection bias was found from the jointed estimated models.