Lifesaving
Did the ACA Medicaid Expansion Save Lives?
Mark Borgschulte & Jacob Vogler
Journal of Health Economics, forthcoming
Abstract:
We estimate the effect of the Affordable Care Act Medicaid expansion on county-level mortality in the first four years following expansion using restricted-access microdata covering all deaths in the United States. To adjust for pre-expansion differences in mortality rates between treatment and control, we use a propensity-score weighting model together with techniques from machine learning to match counties in expansion and non-expansion states. We find a reduction in all-cause mortality in ages 20 to 64 equaling 11.36 deaths per 100,000 individuals, a 3.6 percent decrease. This estimate is largely driven by reductions in mortality in counties with higher pre-expansion uninsured rates and for causes of death likely to be influenced by access to healthcare. A cost-benefit analysis shows that the improvement in welfare due to mortality responses may offset the entire net-of-transfers expenditure associated with the expansion.
Does publicly subsidized health insurance affect the birth rate?
Makayla Palmer
Southern Economic Journal, forthcoming
Abstract:
The Affordable Care Act (ACA) greatly expanded subsidized health insurance opportunities for low‐income childless women through Medicaid and the Marketplace. This insurance provides better access to prescription‐based contraception, which could reduce the number of births. At the same time, it lowers childbirth costs for women who previously would not have qualified for Medicaid‐paid pregnancies. I examine how Medicaid and non‐Medicaid subsidized insurance (NMSI) eligibility have impacted insurance enrollment and the birth rate for childless women from 2011 through 2016 using the American Community Survey and birth information from the Vital Statistics. To estimate the causal effects of subsidized insurance, I use simulated eligibility to utilize variation in the timing and income eligibility thresholds for Medicaid, the Marketplace, and other pre‐ACA state subsidized insurance programs. My results indicate expanding Medicaid had no significant effect on the birth rate, but that a 10 percentage point increase in NMSI eligibility increased the birth rate between 1.60 and 2.30%, depending on the age group. These findings indicate that expanding Medicaid to childless adults did not produce cost savings from fewer Medicaid paid births, but improvements in the nongroup insurance market increased births.
Health insurance and self‐assessed health: New evidence from Affordable Care Act repeal fear
Xiaoxue Li & Sarah Stith
Health Economics, forthcoming
Abstract:
Self‐assessed health is one of the most commonly used health measures by economists. However, changes in self‐assessed health are not always accompanied by changes in physical health as measured by clinical outcomes. This study provides suggestive evidence that this discrepancy arises because self‐assessed health is significantly influenced by psychological factors. Specifically, when the perceived risk of Affordable Care Act (ACA) repeal increased, as documented by Google Trends data, self‐assessed health declined among low‐income childless adults living in states that expanded Medicaid under the ACA.
Health Insurance as an Income Stabilizer
Emily Gallagher et al.
Federal Reserve Working Paper, February 2020
Abstract:
We evaluate the effect of health insurance on the incidence of negative income shocks using the tax data and survey responses of nearly 14,000 low income households. Us-ing a regression discontinuity (RD) design and variation in the cost of nongroup private health insurance under the Affordable Care Act, we find that eligibility for subsidized Marketplace insurance is associated with a 16% and 9% decline in the rates of unexpected job loss and income loss, respectively. Effects are concentrated among households with past health costs and exist only for “unexpected” forms of earnings variation, suggesting a health-productivity link. Calculations based on our fuzzy RD estimate imply a $256 to $476 per year welfare benefit of health insurance in terms of reduced exposure to job loss.
Medicaid Expansion and the Mental Health of College Students
Benjamin Cowan & Zhuang Hao
NBER Working Paper, June 2020
Abstract:
Reported mental health problems have risen dramatically among U.S. college students over time, as has treatment for these problems. An open question is how healthcare access affects diagnosis of mental illness and treatments such as prescription psychotropic medication use. We examine the effect of state-level Medicaid expansion following the 2014 implementation of the Affordable Care Act on the diagnosis of mental health conditions and psychotropic prescription drug use of a national sample of college students. We find that students from disadvantaged backgrounds are more likely to report being on public insurance after 2014 in expansion states relative to non-expansion states, while more advantaged students do not see this increase. Both diagnosis of common mental health conditions and psychotropic drug use increase following expansion for disadvantaged students relative to advantaged ones, which translates into an elimination of the pre-treatment gap in these outcomes by family background in expansion states. However, these changes are not associated with short-term improvements in measures of mental health status or academic outcomes.
A polling experiment on public opinion on the future expansion of Medicare and Medicaid
Mahesh Karra & Emma Sandoe
Health Services Research, forthcoming
Objective: To conduct a polling experiment to understand the possible framing effects that drive constituents’ views around Medicare For All (MFA) and Medicaid Buy‐In (MBI).
Data Sources and Study Setting: Five thousand and fifty‐one US adults aged 18 and older were recruited to participate in an online poll conducted between September 12, 2018, and September 26, 2018.
Study Design: Participants were randomized to receive one of four polls: (a) a poll measuring respondent approval for MFA, with the name of the proposal stated with a description; (b) a poll measuring approval for MFA, with only a description of the proposal; (c) a poll measuring approval for MBI, with the name stated with a description; or (d) a poll measuring approval for MBI, with only a description.
Principal Findings: Including the names “Medicare For All” and “Medicaid Buy‐In” increases approval by 3.4 (from 32.7 percent to 36.1 percent) and 5.0 (from 50.1 percent to 55.1 percent) percentage points, respectively. Support varies by age, where MBI is most strongly supported by Millennials, while Baby Boomers and those older than 65 are more likely to support MFA.
Impacts of Public Health Insurance on Occupational Upgrading
Ammar Farooq & Adriana Kugler
ILR Review, forthcoming
Abstract:
Using data from the Current Population Survey’s Merged Outgoing Rotation Groups, the authors examine whether greater Medicaid generosity encourages people to switch toward better quality occupations. Exploiting variation in Medicaid eligibility expansions for children across states during the 1990s and early 2000s, they find that a one standard deviation increase in Medicaid infant income thresholds increased the likelihood that working parents move to a new occupation by 1.6 percentage points or 3.3%. Findings show that these effects are larger for those below 150% of the poverty line and for married parents who were not benefiting from Medicaid prior to the expansions. In addition, findings indicate that Medicaid generosity also increased mobility toward occupations with higher average wages and higher educational requirements. This article contributes to the literature on job lock by showing that access to public health insurance not only increases employment and job switches but also encourages occupational upgrading.
Medicaid Expansion and Medical Liability Costs
Jingshu Luo, Hua Chen & Martin Grace
Temple University Working Paper, May 2020
Abstract:
This paper examines the impact of health insurance expansion on medical liability costs using the case of the Affordable Care Act’s (ACA) Medicaid expansion. Medicaid expansion has increased the demand for medical services, but in doing so it may also have increased physicians’ liability in medical practices. By studying medical malpractice insurers’ performance in the U.S. for the period 2010-2018, we find insurers operating in states with Medicaid expansion experienced significantly higher medical liability costs than those in non-expansion states. While insurers in expansion states did increase premiums, the increase was not enough to fully offset rising costs. In addition, we do not find evidence that tort reforms mitigate ACA-induced malpractice liability costs. By exploring the frequency and severity of malpractice claims, we find Medicaid expansion increased malpractice costs mainly by increasing the claim frequency, while tort reforms generally focus on reducing claim severity.
How to Get Away with Merger: Stealth Consolidation and Its Real Effects on US Healthcare
Thomas Wollmann
NBER Working Paper, May 2020
Abstract:
Most US mergers are not reported to the government on the basis of their size, which can effectively exempt them from antitrust scrutiny, thereby leading to anticompetitive behavior. This paper studies premerger notification exemptions in the US dialysis industry. Over two decades, dialysis providers attempted over 4,000 facility acquisitions, half of which were not reported to the nation’s competition authorities. I estimate the effect of premerger notification exemptions on antitrust enforcement rates, and then I estimate the impact of the resulting market structure changes on patient health outcomes. First, I find that exemptions severely limit enforcement. Most striking, proposed facility acquisitions that would result in monopoly are blocked more than 80% of the time when a part of reportable mergers but less than 2% of the time when a part of exempt ones. Second, I find that the resulting market structure changes reduce the quality of care, evidenced by higher hospitalization rates and lower survival rates.
Seeking Efficiency or Price Gouging? Evidence from Pharmaceutical Mergers
Mosab Hammoudeh & Amrita Nain
University of Iowa Working Paper, May 2020
Abstract:
We show that pharmaceutical mergers are a response to competitive pressure. Firms whose drugs face more competition tend to become acquirers and these acquirers pursue firms whose drugs hold strong competitive positions in their product spaces. However, we find no evidence of greater post-merger price increases of merging firms’ drugs as compared to a control group. Rather, we find robust support for the efficiency perspective of mergers. Firms with a high product overlap are more likely to merge and mergers are followed by a decline in prices of drugs that are similar across the acquirer and target portfolios.
State strategies to address Medicaid prescription spending: Negotiated pricing vs price transparency
Shihyun Noh, Christian Janousek & Ji Hyung Park
Health Economics, Policy and Law, forthcoming
Abstract:
This research longitudinally examines the association between levels of state Medicaid prescription spending and the state strategies intended to constrain cost increases: the negotiated pricing strategy, as indicated by state rebate programs, and the price transparency strategy, as indicated by state operation of All-Payer Claims Databases. The findings demonstrate evidence that state Medicaid prescription spending is influenced by the negotiated pricing strategy, especially Managed Care Organization (MCO) rebates under the Patient Protection and Affordable Care Act, but not influenced by the price transparency strategy. State decisions for MCO rebates, such as carving prescription benefits into managed care benefits, were effective in containing levels of Medicaid prescription spending over time, while other single- and multi-state rebate programs were not. Based on these findings, state policymakers may consider utilizing the MCO rebate program to address increases in Medicaid prescription spending.
Haste or Waste? Peer Pressure and Productivity in the Emergency Department
David Silver
Princeton Working Paper, May 2020
Abstract:
Motivated by wide cross-sectional variations in intensity of care that are unrelated to patient outcomes, researchers and policymakers commonly claim that healthcare providers waste considerable re- sources, engaging in so-called “flat-of-the-curve (FOTC) medicine.” A key yet elusive prediction of this hypothesis is that providers ought to be able to cut back on care without sacrificing quality. This article examines the effects of a particular form of provider cutbacks - those generated by physicians working in high-pressure peer group environments. Using expansive, time-stamped discharge data from 137 hospital-based emergency departments, I document that physicians systematically alter their pace and intensity of care across frequently shuffled peer groups. Peer groups that induce a physician to work faster also induce her to order fewer tests and spend less money. Contrary to the FOTC hypothesis, these cutbacks come at the cost of patients’ lives. However, in line with FOTC’s motivating evidence, I find that physicians who on average spend more time and money do not achieve better outcomes. These patterns are consistent with underlying physician productivity differences driving observed differences in intensity of care, rather than underlying differences in physician preferences, as presumed in the FOTC model.
Admission Control Biases in Hospital Unit Capacity Management: How Occupancy Information Hurdles and Decision Noise Impact Utilization
Song-Hee Kim, Jordan Tong & Carol Peden
Management Science, forthcoming
Abstract:
Providing patients with timely care from the appropriate unit involves both correct clinical evaluation of patient needs and making admission decisions to effectively manage a unit with limited capacity in the face of stochastic patient arrivals and lengths of stay. We study human decision behavior in the latter operations management task. Using behavioral models and controlled experiments in which physicians and MTurk workers manage a simulated hospital unit, we identify cognitive and environmental factors that drive systematic admission decision bias. We report on two main findings. First, seemingly innocuous “occupancy information hurdles” (e.g., having to type a password to view current occupancy) can cause a chain of events that leads physicians to maintain systematically lower unit utilization. Specifically, these hurdles cause physicians to make most admission decisions without checking the current unit occupancy. Then - between the times that they do check - physicians underestimate the number of available beds when occupancy increases from admissions are more salient than occupancy decreases from discharges. Second, decision-related random error or “noise” leads to higher- or lower-than-optimal utilization of hospital units in predictable patterns, depending on the system parameters. We provide evidence that these patterns are due to some settings providing more opportunity for physicians to mistakenly admit patients and other settings that provide more opportunity to mistakenly reject patients. These findings help identify when and why clinicians are likely to make inefficient decisions because of human cognitive limitations and suggest mitigation strategies to help hospital units improve their capacity management.
The Effects of Physician and Hospital Integration on Medicare Beneficiaries' Health Outcomes
Thomas Koch, Brett Wendling & Nathan Wilson
Review of Economics and Statistics, forthcoming
Abstract:
We consider whether hospital acquisitions of physicians lead to improved clinical outcomes for Medicare patients aged 65 and older. The analysis combines 2005-2012 Medicare fee-forservice and enrollment data with merger and physician affiliation information from the Levin Reports and SK&A, respectively. We determine the effect of acquisitions on several health outcomes: mortality, acute myocardial infarctions, acute circulatory conditions, ischemic heart disease, glaucoma, symptomatic diabetes complications, and asymptomatic diabetes complications. These outcomes represent the progression of hypertension and diabetes into worse health states. Our results indicate that hospital acquisitions of existing physician practices have little effect on the health outcomes we consider.
Do Hospitals Respond to Changing Incentive Structures? Evidence from Medicare's 2007 DRG Restructuring
Amanda Cook & Susan Averett
Journal of Health Economics, forthcoming
Abstract:
In 2007, the Centers for Medicare and Medicaid restructured the diagnosis related group (DRG) system by expanding the number of categories within a DRG to account for complications present within certain conditions. This change allows for differential reimbursement depending on the severity of the case. We examine whether this change incentivized hospitals to upcode patients as sicker to increase their reimbursements. Using the National Inpatient Survey data from HCUP from 2005-2010 and three methods to detect the presence of upcoding, our most conservative estimate is an additional three percent of reimbursement is attributable to upcoding. We find evidence of upcoding in government, non-profit, and for-profit hospitals. We find spillover effects of upcoding impacting not only Medicare payers, but also private insurance companies as well.