Betting on health care
The Impact of Medicaid Expansion on Voter Participation: Evidence from the Oregon Health Insurance Experiment
Katherine Baicker & Amy Finkelstein
NBER Working Paper, November 2018
Abstract:
In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and state administrative data on voter behavior, we analyze how a Medicaid expansion affected voter turnout and registration. We find that Medicaid increased voter turnout in the November 2008 Presidential election by about 7 percent overall, with the effects concentrated in men (18 percent increase) and in residents of democratic counties (10 percent increase); there is suggestive evidence that the increase in voting reflected new voter registrations, rather than increased turnout among pre-existing registrants. There is no evidence of an increase in voter turnout in subsequent elections, up to and including the November 2010 midterm election.
Baby Boomlets and Baby Health: Hospital Crowdedness, Hospital Spending, and Infant Health
Mindy Marks & Moonkyung Kate Choi
American Journal of Health Economics, forthcoming
Abstract:
To identify the causal relationship between health care spending and infant health, we employ the following source of identifying variation: hospital crowdedness measured in its simplest form by the number of infants born on a given day in a given hospital. The thought experiment is during a crowded time infants receive less medical care because resource constraints are binding. Using detailed information on every birth in California from 2002 to 2006, we find that hospital crowdedness reduces spending for at-risk infants. Our main finding is that at-risk infants who had more intensive hospital stays because they were born on slow days fared no better than their busy day counterparts. Specifically, the mortality gains from additional spending are negligible, and additional spending increases unscheduled hospital readmission rates in the first year of life. Our findings are robust to alternative measures of crowdedness that account for hospital crowdedness on the days surrounding the birth. When we use alternative measures of treatment intensity (length of stay and delivery spending), we find similar results. Our results suggest that when forced to reduce the intensity of treatment, the health care system does so in a way that does not harm health.
Does Health Insurance Make People Happier? Evidence from Massachusetts' Healthcare Reform
Seonghoon Kim & Kanghyock Koh
Brown University Working Paper, October 2018
Abstract:
We study the effects of Massachusetts' healthcare reform on individuals' subjective well-being. Using data from the Behavioral Risk Factor Surveillance System, we find that the reform significantly improved Massachusetts residents' overall life-satisfaction. This result is robust to various sensitivity checks and a falsification test. We also find that the reform improved mental health. An additional analysis on the Tennessee healthcare reform supports our findings' external validity. Using the reform as an instrument for health insurance coverage, we estimate its large impact on overall life-satisfaction. Our results provide novel evidence on the psychological consequences of Massachusetts' healthcare reform.
Two Hundred Years of Health and Medical Care: The Importance of Medical Care for Life Expectancy Gains
Maryaline Catillon, David Cutler & Thomas Getzen
NBER Working Paper, December 2018
Abstract:
Using two hundred years of national and Massachusetts data on medical care and health, we examine how central medical care is to life expectancy gains. While common theories about medical care cost growth stress growing demand, our analysis highlights the importance of supply side factors, including the major public investments in research, workforce training and hospital construction that fueled a surge in spending over the 1955-1975 span. There is a stronger case that personal medicine affected health in the second half of the twentieth century than in the preceding 150 years. Finally, we consider whether medical care productivity decreases over time, and find that spending increased faster than life expectancy, although the ratio stabilized in the past two decades.
Business Cycles, Medicaid Generosity, and Birth Outcomes
Sarah Hamersma et al.
Population Research and Policy Review, October 2018, Pages 729–749
Abstract:
Birth outcomes influence many aspects of later life health and wellbeing, making healthcare access during pregnancy a policy priority. Low-income mothers often depend on Medicaid, for which eligibility is determined by their income relative to state eligibility thresholds. The prevalence of adverse birth outcomes is known to exhibit cyclical variation, due in part to changes in the composition of women giving birth in response to changing economic conditions. However, cyclical variation in adverse birth outcomes also varies with respect to Medicaid eligibility thresholds. Our analysis uses birth-records data for 2000 through 2013, aggregated into 173,936 county-by-quarter observations and linked to county-level unemployment rates and state-level parental Medicaid thresholds. Using fixed-effects negative binomial models, we examine the role of Medicaid generosity in influencing birth outcomes across business cycles. We test for interactions between Medicaid and unemployment, hypothesizing that the negative effects of recessions are worse where Medicaid thresholds are more restrictive. We find that higher Medicaid generosity dampens the negative effects of recessions on birth outcomes. The extent to which Medicaid interacts with unemployment also varies according to the age and race composition of mothers; in particular, Black mothers are both most affected by unemployment and most responsive to Medicaid generosity. Given current concerns about racial gaps in both infant and maternal mortality, our findings suggest that Medicaid may be an important feature of a strategy to close gaps in the prevalence of adverse birth outcomes across racial groups, especially during bust years.
Health Insurance and Human Capital: Evidence from the Affordable Care Act's Dependent Coverage Mandate
Leonard Lopoo, Emily Cardon & Kerri Raissian
Journal of Health Politics, Policy and Law, December 2018, Pages 917-939
Abstract:
Prior to 2010, young adults between the ages of 18 and 34 had the highest rates of uninsurance in America. The “Dependent Care Provision” of the Affordable Care Act sought to increase insurance rates among young adults by allowing them to stay on their parents' policy until age 26. We examine the human capital decisions young adults make once they have an option for health insurance outside of employer-sponsored health insurance. Using the American Community Survey from 2001 to 2016 and a difference-in-differences research design, we found that the implementation of the mandate was associated with a 3–5 percent increase in college enrollment among women 23–25 years of age. This result is robust to a variety of specifications. We did not find a consistent effect among men. Our results suggest that increased flexibility in health insurance markets has implications for human capital investment.
Demand for Health Insurance: Evidence from the California and Washington ACA Exchanges
Evan Saltzman
Journal of Health Economics, forthcoming
Abstract:
I estimate demand for health insurance using consumer-level data from the California and Washington ACA exchanges. I use the demand estimates to simulate the impact of policies targeting adverse selection, including subsidies and the individual mandate. I find (1) own-premium elasticities of −7.2 to −10.6 and insurance coverage elasticities of −1.1 to −1.2; (2) limited response to the mandate penalty amount, but significant response to the penalty's existence, suggesting consumers have a “taste for compliance”; (3) mandate repeal slightly increases consumer surplus because the ACA's price-linked subsidies shield most consumers from premium increases resulting from repeal and some consumers are not compelled to purchase insurance against their will; and (4) mandate repeal decreases consumer surplus if ACA subsidies are replaced with vouchers that expose consumers to premium increases. The economic rationale for the mandate depends on the extent of adverse selection and the presence of other policies targeting selection.
Impacts of the ACA Medicaid expansion on health behaviors: Evidence from household panel data
Chad Cotti, Erik Nesson & Nathan Tefft
Health Economics, forthcoming
Abstract:
A motivation for increasing health insurance coverage is to improve health outcomes for impacted populations. However, health insurance coverage may alternatively increase risky health behaviors due to ex ante moral hazard, and past research on this issue has led to mixed conclusions. This paper uses a panel of household purchases to estimate the effects of the recent state‐level Medicaid expansions resulting from the Affordable Care Act (ACA) on consumption goods that present adverse health risks. We utilize within‐household variation to identify whether increases in Medicaid availability impacted household purchase patterns of alcohol, nicotine‐related, snack food, and carbonated beverage products. Overall, we find little evidence that the ACA Medicaid expansion led to ex ante moral hazard across any of these products, but we find compelling evidence that the Medicaid expansions reduced cigarette consumption and increased smoking cessation product use among the Medicaid‐eligible population.
The effect of cancer diagnosis on switching health insurance in Medicare
Brett Lissenden
Health Economics, forthcoming
Abstract:
Because health insurance is intended to protect patients in the event of a health shock, it is important to evaluate health insurance policy in the context of patients who experience health shocks. I measure the effect of cancer diagnosis on health insurance switching in order to compare cancer patient's preferences among private and publicly administered Medicare. I estimate that a cancer diagnosis increases the probability a patient will leave a private Medicare plan, for the public plan, by 0.8% points (41%). Similarly, a cancer diagnosis decreases the probability a patient will leave the public Medicare plan, for a private plan, by 0.5% points (16%). The implication is that private Medicare plans are relatively less attractive to cancer patients than they are to noncancer patients.
Can the Affordable Care Act provisions explain the recent wave of acquisitions in the health insurance industry?
Haowen Luo & Zafar Nazarov
Applied Economics Letters, forthcoming
Abstract:
This research shows that the ACA health insurance exchanges have generated more merger activity in the health insurance market. The impact is robust to control for an extensive set of factors suggested by both neoclassical and behavioural frameworks. The economic impact of this ACA provision is substantial with 3.8 more months of unusually high merger activity or 52 more merger bids per year.
The Long-run Impact of New Medical Ideas on Cancer Survival and Mortality
Frank Lichtenberg
NBER Working Paper, December 2018
Abstract:
I investigate whether the types of cancer (breast, colon, lung, etc.) subject to greater penetration of new ideas had larger subsequent survival gains and mortality reductions, controlling for changing incidence. I use the MEDLINE/PubMED database, which contains more than 23 million references to journal articles published in 5400 leading biomedical journals, to construct longitudinal measures of the penetration of new medical ideas. The 5-year survival rate is strongly positively related to the novelty of ideas in articles published 12-24 years earlier. This finding is consistent with evidence from case studies that it takes a long time for research evidence to reach clinical practice. The estimates suggest that about 70% of the 1994-2008 increase in the 5-year observed survival rate for all cancer sites combined may have been due to the increase in the novelty of medical ideas 12-24 years earlier. The number of years of potential life lost from cancer before ages 80 and 70 are inversely related to the novelty of ideas in articles published 12-24 years earlier, conditional on incidence. The increase in medical idea novelty was estimated to have caused a 38% decline in the premature (before age 80) cancer mortality rate 12-24 years later.
Hospital responses to price shocks under the prospective payment system
Eunhae Shin
Health Economics, forthcoming
Abstract:
Under the prospective payment system (PPS), hospitals receive a bundled payment for an entire episode of treatment based on diagnosis‐related groups (DRG). Although there is ample evidence regarding the impact of the introduction of the PPS, there is little research on the effects of the ensuing changes in payment levels under the PPS. In 2005, the Medicare PPS changed its definition of payment areas from the Metropolitan Statistical Areas to the Core‐Based Statistical Areas, generating substantial area‐specific price shocks. Using these exogenous price variations, this study examines hospital responses to price changes under the PPS. The results demonstrate that, while the average payment amount significantly increases in the affected areas, no parallel trend is observed in admission volume, treatment intensity, and quality of services. Conversely, hospitals facing a price increase are more liable to the perverse incentives that the PPS is known to encourage, namely, selecting or shifting patients into higher‐paying DRGs. These results suggest that paying a higher price for a given service may not induce hospitals to offer services of better quality, but can rather prompt even higher payments through other behavioral responses.
The impact of financial incentives on health and health care: Evidence from a large wellness program
Liran Einav, Stephanie Lee & Jonathan Levin
Health Economics, forthcoming
Abstract:
Workplace wellness programs have become increasingly common in the United States, although there is not yet consensus regarding the ability of such programs to improve employees' health and reduce health care costs. In this paper, we study a program offered by a large U.S. employer that provides substantial financial incentives directly tied to employees' health. The program has a high participation rate among eligible employees, around 80%, and we analyze the data on the first 4 years of the program, linked to health care claims. We document robust improvements in employee health and a correlation between certain health improvements and reductions in health care cost. Despite the latter association, we cannot find direct evidence causally linking program participation to reduced health care costs, although it seems plausible that such a relationship will arise over longer horizons.
Can Malpractice Pressure Compel a Physician to Relocate?
Alice Ellyson & Justin Robertson
International Review of Law and Economics, March 2019, Pages 37-48
Abstract:
Existing literature considers the effect of changes in malpractice pressure by focusing on physician supply, and concludes that changes in tort laws have limited but some impact on physician movement. Using a panel dataset which follows a random sample of 28,227 family medicine physicians in the United States from 1992-2007, this paper evaluates whether changes in malpractice premiums impact a physician's decision to relocate their practice. Our findings suggest that even large premium growth has no impact on the physician relocation decision. Generally, these results suggest that family medicine physicians do not use relocation as a strategy to avoid malpractice pressure. However, some physicians are more inclined to relocate than others. Results indicate that group and hospital practice physicians are more likely to move to another state when premiums are high compared to solo and partnership practice physicians.
Changes in Reimbursement to Emergency Physicians After Medicaid Expansion Under the Patient Protection and Affordable Care Act
Jesse Pines et al.
Annals of Emergency Medicine, forthcoming
Methods: We conducted a retrospective study using data from a national emergency medicine group in a sample of 50 emergency departments (EDs) from July 1, 2012, to June 30, 2015. We categorized facilities in 14 states into full-expansion (23), partial-expansion (17), and nonexpansion (10) categories based on pre-expansion Medicaid eligibility criteria for all adults. We used a difference-in-differences design to assess the effect of Medicaid expansion on provider reimbursement per visit. Secondary outcomes included reimbursement per relative value unit and relative value units per visit, both overall and by payer type, controlling for age, sex, billing codes, and health system relationship.
Results: We studied greater than 6.7 million ED visits during July 2012 to December 2015, 3.0 million pre-expansion and 3.7 million postexpansion. After adjusting for covariates, reimbursement per visit increased 6.3% (95% confidence interval 1.4% to 11.1%) in full-expansion relative to nonexpansion states and did not change significantly in partial-expansion versus nonexpansion states. Reimbursement per visit for commercial insurance increased 17.1% (95% confidence interval 9.9% to 24.2%) in full-expansion versus nonexpansion states. Reimbursement for self-pay visits increased 9.7% (95% confidence interval 3.7% to 15.7%) in full-expansion versus nonexpansion states. Changes in payments were driven by higher reimbursement per relative value unit; relative value units per visit declined slightly in full-expansion compared with nonexpansion states.
Changes in primary care access at community health centers between 2012/2013 and 2016
Brendan Saloner et al.
Health Services Research, forthcoming
Objective: To compare access at community health centers (CHCs) vs private offices (non‐CHCs) under the Affordable Care Act.
Data Source: Ten state primary care audit conducted in 2012/2013 and 2016.
Principal Findings: In both rounds, Medicaid and uninsured callers had higher appointment rates at CHC than non‐CHCs. CHC appointment rates significantly increased between 2012/2013 and 2016 for both employer‐sponsored and Medicaid callers, with no significant wait time changes. Appointment rates increased (13.5% points, P < 0.001) and wait times decreased (−5.7 days, P = 0.017) at CHCs relative to non‐CHCs for employer‐sponsored insurance.