Costs of Living
Political Adverse Selection
Leonardo Bursztyn et al.
NBER Working Paper, July 2022
Abstract:
We study how the politicization of policies designed to correct market failures can undermine their effectiveness. The Patient Protection and Affordable Care Act (ACA) was among the most politically divisive expansions of the US government. We examine whether partisanship distorted enrollment and market outcomes in the ACA insurance marketplaces. Controlling for observable characteristics and holding fixed plans and premiums available, Republicans enrolled less than Democrats and independents in ACA marketplace plans. Selection out of the ACA marketplaces was strongest among Republicans with lower expected healthcare costs, generating adverse selection. Computing enrollment and average cost with and without partisan differences, we find that this political adverse selection reduced enrollment by around three million people and raised average costs in the marketplaces, increasing the level of public spending necessary to provide subsidies to low-income enrollees by around $105 per enrollee per year. Lower enrollments and higher costs are concentrated in more Republican areas, potentially contributing to polarized views of the ACA.
Universal healthcare as pandemic preparedness: The lives and costs that could have been saved during the COVID-19 pandemic
Alison Galvani et al.
Proceedings of the National Academy of Sciences, 21 June 2022
Abstract:
The fragmented and inefficient healthcare system in the United States leads to many preventable deaths and unnecessary costs every year. During a pandemic, the lives saved and economic benefits of a single-payer universal healthcare system relative to the status quo would be even greater. For Americans who are uninsured and underinsured, financial barriers to COVID-19 care delayed diagnosis and exacerbated transmission. Concurrently, deaths beyond COVID-19 accrued from the background rate of uninsurance. Universal healthcare would alleviate the mortality caused by the confluence of these factors. To evaluate the repercussions of incomplete insurance coverage in 2020, we calculated the elevated mortality attributable to the loss of employer-sponsored insurance and to background rates of uninsurance, summing with the increased COVID-19 mortality due to low insurance coverage. Incorporating the demography of the uninsured with age-specific COVID-19 and nonpandemic mortality, we estimated that a single-payer universal healthcare system would have saved about 212,000 lives in 2020 alone. We also calculated that US$105.6 billion of medical expenses associated with COVID-19 hospitalization could have been averted by a single-payer universal healthcare system over the course of the pandemic. These economic benefits are in addition to US$438 billion expected to be saved by single-payer universal healthcare during a nonpandemic year.
Health Savings Accounts No Longer Promote Consumer Cost-Consciousnes
Sherry Glied, Dahlia Remler & Mikaela Springsteen
Health Affairs, June 2022, Pages 814-820
Abstract:
Two decades ago Congress enabled Americans to open tax-favored health savings accounts (HSAs) in conjunction with qualifying high-deductible health plans (HDHPs). This HSA tax break is regressive: Higher-income Americans are more likely to have HSAs and fund them at higher levels. Proponents, however, have argued that this regressivity is offset by reductions in wasteful health care spending because consumers with HDHPs are more cost-conscious in their use of care. Using published sources and our own analysis of National Health Interview Survey data, we argue that HSAs no longer appreciably achieve this cost-consciousness aim because cost sharing has increased so much in non-HSA-qualified plans. Indeed, people who have HDHPs with HSAs are becoming less likely than others with private insurance to report financial barriers to care. In sum, promised gains in efficiency from HSAs have not borne out, so it is difficult to justify maintaining this regressive tax break.
Do doctors prescribe antibiotics out of fear of malpractice?
Sebastian Panthöfer
Journal of Empirical Legal Studies, June 2022, Pages 340-381
Abstract:
This paper studies whether doctors prescribe antibiotics to protect themselves against potential malpractice claims. Using data from the National Ambulatory Medical Care Survey on a representative sample of doctor visits from 1993 to 2011, I find that doctors are significantly less likely to prescribe antibiotics following tort reforms that reduce malpractice pressure. The changing prescribing patterns appear to have no adverse effects on patient health outcomes over the same time period. Almost 100 million hospital records from the Nationwide Inpatient Sample reveal little to no effects of tort reforms on hospital stays involving conditions that can potentially be avoided through the timely use of antibiotics. Taken together, these findings suggest that malpractice pressure induces doctors to prescribe antibiotics that are medically unnecessary, thereby contributing to the rise in antibiotic resistance.
Health Care Centralization: The Health Impacts of Obstetric Unit Closures in the US
Stefanie Fischer, Heather Royer & Corey White
NBER Working Paper, June 2022
Abstract:
Over the last few decades, health care services in the United States have become more centralized. We study how the loss of hospital-based obstetric units in over 400 rural counties affect maternal and infant health via a difference-in-differences design. We find that closures lead to significant changes in obstetric practices such as inductions and C-sections. In contrast to concerns voiced in the public discourse, the effects on a range of maternal and infant health outcomes are negligible or slightly beneficial. While women travel farther to receive care, closures induce women to receive higher quality care.
Is Hospital Quality Predictive of Pandemic Deaths? Evidence from US Counties
Johannes Kunz & Carol Propper
Journal of Urban Economics, forthcoming
Abstract:
In the large literature on the spatial-level correlates of COVID-19, the association between quality of hospital care and outcomes has received little attention to date. To examine whether county-level mortality is correlated with measures of hospital performance, we assess daily cumulative deaths and pre-crisis measures of hospital quality, accounting for state fixed-effects and potential confounders. As a measure of quality, we use the pre-pandemic adjusted five-year penalty rates for excess 30-day readmissions following pneumonia admissions for the hospitals accessible to county residents based on ambulance travel patterns. Our adjustment corrects for socio-economic status and down-weighs observations based on small samples. We find that a one-standard-deviation increase in the quality of local hospitals is associated with a 2% lower death rate (relative to the mean of 20 deaths per 10,000 people) one and a half years after the first recorded death.
Veterans Affairs Hospital Productivity Change and the Policy Implications: A Research Note
Dongjin Oh, Ahreum Han & Keon-Hyung Lee
Armed Forces & Society, forthcoming
Abstract:
As a reaction to the Veterans Affairs (VA) hospital scandal in 2014, the Veterans Choice Act of 2014 was enacted to enhance veterans’ access to health care. This study evaluated the productivity change of a panel of 102 VA hospitals from 2011 through 2019 to examine how the Act influenced the overall VA hospital productivity. The results revealed that the overall productivity of VA hospitals declined over the period and VA hospitals were not operating at an optimal scale to produce maximum outputs due to a decrease in the number of veteran patients after the Act was implemented. In addition, the technical change value less than 1 implies that VA hospitals produced fewer outputs with the given input resources over the period due to lagged adoption of innovative health care technology.
Are firms with ‘deep pockets’ more responsive to tort liability? Evidence from nursing homes
James Brickley, Susan Lu & Gerard Wedig
Health Economics, August 2022, Pages 1590-1617
Abstract:
We provide time series evidence of tort reform's impact on inputs and quality in the nursing home industry. Between 2000 and 2010, 11 state reforms capped noneconomic damages for health care services. Small chain and unaffiliated nursing homes enjoyed “judgment proof standing” and were less apt to be sued, prior to reform. We find that the managers of such homes were relatively unresponsive to the implementation of state caps on noneconomic damages. Large “deep-pocketed” chain-affiliated homes lacked judgment proof standing and implemented greater reductions in their nursing inputs in the aftermath of tort relief. However, we find little evidence of service quality erosion across four measured dimensions of care outcomes. Our findings are consistent with a “defensive care” model in which large chain homes employ unproductive inputs in an effort to meet a negligence standard of care.