Do Hispanic immigrants spend less on medical care? Implications of the Hispanic health paradox

ABSTRACT

The literature of the Hispanic heath paradox has found that in the U.S. Hispanic immigrants have better health than U.S. natives, even though they tend to have lower socioeconomic status. The main objective of the current study is to investigate whether Hispanic immigrants also use less medical care goods and services. Main contributions of the article include using a data set of older Americans from the Health and Retirement Study covering the period from 1992 to 2012 as well as using three new measures of health, rather than the more common use of morbidity or mortality. We estimate the impact of relevant factors including health, race, and immigrant status upon five different measures of healthcare usage. Even though Hispanic immigrants do have lower mean levels of most measures of healthcare usage, when controlling for other factors in our regressions we find some evidence of increased healthcare usage for Hispanic immigrants. Increased health care utilization may be one explanation for the Hispanic health paradox.

KEYWORDS:

• Demand for medical care
• Hispanic health paradox
• latent health stock
• healthcare utilization

JEL CLASSIFICATION:

• I10
• J14
• J15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Numerous studies have examined the marginal contribution of environmental, socioeconomic, behavioural, and medical inputs to health. For example, Auster, Leveson, and Sarachek (1969), Grossman (1972), Newhouse and Friedlander (1980), Rosen and Taubman (1982), Leigh (1983), Berger and Leigh (1989), Kenkel (1991),Thornton (2002, 2011) and Tseng and Olsen (2016).

² See Table 16.1 – Selected Studies on Hispanic Health outcomes in Franzini, Ribble, and Keddi (2001).

³ To estimate the impact of health on medical care expenditures of the U.S. population, Olsen and Tseng (2016) used aggregate state-level data from 2001 to 2009 and found that poor health (measured by higher death rates) consistently has a positive and statistically significant impact on health expenditures.

⁴ The HRS (Health and Retirement Study) is sponsored by the National Institute on Ageing (grant number NIA U01AG009740) and is conducted by the University of Michigan. More information is available at http://hrsonline.isr.umich.edu/.

⁵ An explanation of the Latent Health Stock variable is provided in the Appendix.

⁶ Studies like Currie and Madrian (1999), Dwyer and Mitchell (1999), Baker, Stabile, and Deri (2001), Hamaaki and Noguchi (2009) discuss these issues related to self-reported health.

⁷ Individuals who are economically inactive are inclined to under-report their health status retrospectively to rationalize their status.

⁸ This approach has been used in studies like Disney, Emmerson, and Wakefield (2006) that uses objective health indicators as well as other personal characteristics and Jones, Rice, and Roberts (2010) which uses only the objective health indicators, in creating the latent health stock.