Treatment Advice
Bad-Drug Ads or Killer Ads: The Effects of Drug Injury Advertising on Public Health
Sylvia Hristakeva
Management Science, forthcoming
Abstract:
This paper analyzes the impact of lawsuit advertisements targeting drug companies. Although the main purpose of the ads is to recruit potential lawsuit plaintiffs, they also reach a broad audience of viewers. Medical professionals have raised concerns that drug injury ads may lead uninjured patients to misperceive the risks and benefits of treatment, leading them to discontinue medically necessary drugs. The paper examines how drug injury ads affect prescription fills and subsequent health outcomes. The empirical context analyzes anticoagulants, which are commonly used by elderly patients to prevent strokes. The study finds that drug injury ads lead to a decrease in filled prescriptions for targeted drugs and a corresponding increase in hospitalizations for conditions treated with anticoagulants. These results point to meaningful public health consequences and highlight the benefits from policy responses that promote accurate and balanced information.
The Effect of Private vs Shared Rooms on Nursing Home Resident Health Outcomes
Dianne McWilliam
University of Michigan Working Paper, October 2025
Abstract:
Nursing home care presents a significant fiscal challenge in the U.S., with an aging population increasing demand and an industry plagued by decades of poor quality of care. With the need for systemic change spotlighted by the Covid-19 pandemic, one proposed solution is more private rooms. Despite growing interest, policymakers lack critical evidence required to determine whether policy should incentivize nursing homes to provide more private rooms: do private rooms actually improve residents' health? This study provides the first causal estimates of the effect of receiving a private room on post-acute nursing home residents' health outcomes. First, using standardized clinical assessments that list residents' room number, I implement a novel method to determine whether residents' rooms are private or shared -- data that is otherwise unavailable. Second, to address concerns of selection into room types within nursing homes, I use a new instrumental variable for the room type residents receive: the availability of private rooms in the nursing home on the day before the resident enters. Among ∼380,000 post-acute care residents across the U.S. in 2017-2019, I do not find evidence that receiving a private room improves health outcomes, including mortality, hospital readmission, discharge to home, length of stay, and resident mood. If anything, estimates are suggestive of private rooms potentially being worse for post-acute resident health, with private room receipt leading to lower probability of discharge directly to home, within 30, 60, and 90 days after nursing home entry. These results imply that policymakers seeking to improve post-acute resident health should consider prioritizing other proven nursing home quality improvement interventions.
Incentivizing Information Exchange Within Groups: The Role of Voting Protocols in U.S. Food and Drug Administration Advisory Committees
Panos Markou & Tian Heong Chan
Management Science, forthcoming
Abstract:
Complex and important decisions are often made with advice from a committee of experts. But how do a committee’s “rules of engagement” affect the way individuals discuss, how they vote, and ultimately the quality of their collective recommendation? Compiling verbatim transcripts from U.S. Food and Drug Administration advisory committee meetings, we study how a 2007 switch from sequential to simultaneous voting procedures changed discussions, information exchange, and decision making. Consistent with past findings, we show that, compared with a sequential voting protocol, simultaneous voting led to a reduction in the likelihood of unanimous votes. Importantly, we show novel evidence that the majority of this reduction in unanimity was mediated by changes in discussion patterns -- specifically, by the increased diversity of information surfaced during discussions. We also find evidence of behavioral and linguistic changes that support our theory that voting protocols changed the incentives for members to elicit more diverse information from each other: under simultaneous voting, members exhibited greater equality in talking time, directed a greater proportion of questions to each other, and adopted language that was more positive, authentic, and equal in projecting status and confidence. Finally, we show that recommendations under simultaneous voting were more likely to be accurate, as drugs recommended and approved were less likely to encounter safety-related postmarket events. In sum, voting protocols affect the incentives for individuals to engage in robust discussions, leading to marked improvements in how information is exchanged between individuals, and in the process by which groups of experts arrive at joint recommendations.
An AI-Powered Lifestyle Intervention vs Human Coaching in the Diabetes Prevention Program: A Randomized Clinical Trial
Nestoras Mathioudakis et al.
Journal of the American Medical Association, forthcoming
Design, Setting, and Participants: This phase 3, parallel-group, pragmatic, noninferiority randomized clinical trial was conducted from October 11, 2021, to December 16, 2024 (last follow-up) at 2 US clinical sites in Baltimore, Maryland, and Reading, Pennsylvania. Adults 18 years or older with prediabetes and overweight or obesity were enrolled.
Interventions: Participants were randomized in a 1:1 ratio to receive either a referral to an AI-powered DPP [Diabetes Prevention Program] lifestyle intervention delivered via a mobile app and Bluetooth-enabled digital scale or a referral to a human coach–led DPP lifestyle intervention delivered remotely. Both interventions were delivered independently of the study team over a 12-month period.
Main Outcomes and Measures: The primary outcome was a composite of maintaining an HbA1c less than 6.5% throughout the study and achievement of at least 5% weight loss, at least 4% weight loss plus at least 150 minutes of weekly physical activity (assessed with actigraphy), or an absolute reduction in HbA1c of at least 0.2 percentage points at 12 months. Noninferiority of referral to the AI-led DPP compared with referral to the human-led DPP was prespecified to be determined if the 1-sided 95% CI lower boundary of the risk difference did not cross −15%.
Results: A total of 368 participants were included (median [IQR] age, 58 [50-65] years; 71% were female, 27% were Black, 6% were Hispanic, and 61% were White; median [IQR] BMI, 32.3 [28.5-37.1]). After referral, 171 of 183 participants (93.4%) initiated the AI-led DPP and 153 of 185 (82.7%) initiated the human-led DPP. The primary outcome was achieved by 58 of 183 participants (31.7%) in the AI-led DPP group and 59 of 185 (31.9%) in the human-led DPP group (risk difference, −0.2% [1-sided 95% CI, −8.2%]), meeting the criterion for noninferiority. Findings were consistent across individual components of the composite end point and in sensitivity analyses.
How Does Health Insurance Affect Firm Employment and Performance? Evidence from Obamacare
Heitor Almeida et al.
Management Science, forthcoming
Abstract:
This article discusses how mandating employers to provide health insurance of a minimum quality and the associated increases in health insurance premia affect firm employment and performance. Using firm-level employee health insurance data around the passage of the Patient Protection and Affordable Care Act (PPACA), we show that the PPACA is associated with a significant increase in health insurance premia for employees in company-sponsored health insurance plans. In response, employers with greater exposure to the PPACA reduce employee enrollments in their health insurance plans to a larger extent after the law’s enactment. Our analysis suggests that employers achieve this reduction in enrollment by shifting employment composition from full-time employees to part-time, temporary, or seasonal workers, who are not covered in employer-sponsored health insurance plans. Furthermore, we find no evidence of deterioration in performance at companies more exposed to the increase in health insurance premia. Overall, our findings illustrate how firms adapt to and mitigate cost increases associated with regulatory changes through strategic labor practices.
Community Rating and Vertical Price Distortions in Insurance Menus
Honglin Li, Chenyuan Liu & Justin Sydnor
NBER Working Paper, October 2025
Abstract:
How does community rating distort relative prices for vertically differentiated plans in insurance markets? We show that common community-rating approaches can distort price differentials in the opposite direction to the distortions in overall price levels. Partial age-based community rating in the U.S. private health insurance exchanges causes older individuals to pay marginal prices for generous coverage significantly above marginal cost, while younger enrollees are subsidized on the margin. These distortions are large enough that older individuals often face and sometimes choose dominated options. We present simulations and theoretical discussions of community rating’s impacts on efficiency and distributional outcomes.
Provider Autonomy and Labor Allocation: Evidence from Medicaid Maternity Care
Sukriti Beniwal
Dartmouth College Working Paper, October 2025
Abstract:
This paper studies how regulatory constraints on provider autonomy affect labor allocation and care delivery in public health insurance programs. Using Medicaid claims, I examine how the adoption of full practice authority (FPA) for Certified Nurse-Midwives (CNMs) affects provider involvement and maternal health outcomes. FPA increases CNM use by 31% in low-risk deliveries and shifts prenatal care toward CNM-led model of care. Cesarean rates also decline slightly, with no evidence of adverse maternal outcomes. Effects are concentrated in states with complementary payment reforms. Results suggest that easing practice restrictions improves provider efficiency and task allocation without compromising the quality of care.
UnitedHealthcare Pays Optum Providers More Than Non-Optum Providers
Daniel Arnold & Brent Fulton
Health Affairs, November 2025, Pages 1395-1403
Abstract:
During the past several decades, physicians have transitioned from small, physician-owned practices to larger practices owned by corporations such as hospitals, private equity firms, and health insurers. UnitedHealth Group, the largest US health care company by revenue, sells insurance products under the UnitedHealthcare brand while providing health care services under the Optum brand, which has more than 90,000 aligned physicians. Although there are benefits to insurer-physician integration, potential concerns include regulatory gaming of the medical loss ratio and partial foreclosure of rival physician practices. This descriptive study used Centers for Medicare and Medicaid Services payer transparency data for the employer-sponsored and individual markets to show that when the relative price paid to Optum versus non-Optum providers is analyzed, UnitedHealthcare’s payments are 17 percent higher than the relative price of its competitors. In markets where UnitedHealthcare has 25 percent or more market share, this percentage increases to 61 percent. The results suggest that intercompany transactions within health care conglomerates may warrant scrutiny, as they may be signals of regulatory gaming or attempted foreclosure.
Returns to Trainees in a Highly Regulated Labor Market
Michael Richards, Jonathan Seward & Christopher Whaley
NBER Working Paper, October 2025
Abstract:
Human capital formation enhances worker productivity and firm performance. However, firms may not fully internalize the financial benefits from investing in employee skill-building, which can disincentivize worker training and suggest roles for government support. We examine such tradeoffs in the context of physician training (i.e., “residency” programs). Using the universe of Medicare inpatient and outpatient records from 2014-2019 and differences-in-differences analyses, we show that hospitals’ productivity and revenues grow by 10-20% after underwriting a procedure-oriented residency -- though heterogeneity exists. The hospitals benefiting from trainee labor conservatively net over $2 million in steady-state, revealing substantive private incentives to finance physician training.
How Deadly Is Financial Leverage? Evidence from Care Homes During the COVID-19 Crisis
Peter Morris, Ludovic Phalippou & Betty Wu
Management Science, forthcoming
Abstract:
Once information about leasing and corporate structure is incorporated into the way financial leverage is calculated, highly leveraged care homes are found to have a death rate twice as high as that of non-leveraged care homes before the government provided financial support (i.e., during the first wave). Highly leveraged care homes cut costs more aggressively and experienced the largest drop in cash reserves. Care homes controlled by private equity firms no longer display higher COVID-19 death rates once their significantly higher leverage is controlled for. Our results illustrate the importance of accurately measuring financial flexibility and the negative externalities caused by high leverage.
Fee cuts for radiology and low-value imaging
David Howard, Michal Horný & Marcus Dillender
International Journal of Health Economics and Management, September 2025, Pages 383-406
Abstract:
Based on the belief that fee-for-service reimbursement contributes to the overuse of costly medical procedures, policymakers have sought to cut payments for low-value services. Using a difference-in-differences model and Medicare claims linked with cancer registry records, we evaluate the impact of a large payment reduction for an imaging procedure commonly used in prostate cancer patients. We find that the payment cut did not affect imaging use, even in low-risk patients for whom imaging is not recommended. Our results suggest that supply may be relatively insensitive to fee levels when decisions about the use of a service are made exclusively by referring physicians, not the physicians who deliver and receive payment for it.
Social Costs of Work Disruptions: Evidence from Physicians and their Patients
Leila Agha, Na'ama Shenhav & Myles Wagner
NBER Working Paper, October 2025
Abstract:
Work disruptions among women are common and costly for workers and firms, but do consumers also shoulder some of these costs? We study the impact of physicians’ births -- a large, temporary shock to women’s labor supply -- on their patients’ access to care, using administrative Medicaid claims data from California. Female physicians reduce their office visits by 85% in the quarter after giving birth, but return nearly to pre-birth levels within two years. These supply disruptions generate persistent effects on child patients: those whose primary care physician gives birth are less likely to see their usual physician for up to two years and receive less preventative care, including a 50% reduction in vaccination claims and a 42% reduction in lead testing. In contrast, we find little impact on adult patients. The lasting effects on children coincide with fewer pediatrician encounters overall, consistent with limited availability of substitute providers and the central role of pediatricians in monitoring children’s preventative care. Our findings demonstrate how shocks to women’s labor supply can generate persistent consumer welfare losses.