Cures
The cure effect: Individuals demand universal access for health treatments that claim to eliminate disease symptoms
Mathew Isaac
Journal of Experimental Psychology: Applied, forthcoming
Abstract:
The present research documents a cure effect, whereby individuals are more likely to demand affordable prices when health treatments (e.g., drugs, medications, therapies) claim to eliminate (vs. reduce) disease symptoms. This preference for low-priced “cures” contradicts the fundamental premise of value-based pricing, which would expect individuals to tolerate higher prices for cures because they are putatively more effective and therefore more valuable. Five studies with over 2,500 participants provide robust evidence for the cure effect and show that it occurs because individuals judge a health treatment’s acceptable price by focusing predominantly on its communal value rather than its market value. Given that cures are associated with maximal effectiveness, they are disproportionately endowed with communal value and more likely to yield price judgments that reflect concerns about universal access.
Can Whistleblowers Root Out Public Expenditure Fraud? Evidence from Medicare
Jetson Leder-Luis
Review of Economics and Statistics, forthcoming
Abstract:
This paper analyzes private anti-fraud enforcement under the False Claims Act, which compensates whistleblowers for litigating against healthcare providers who overbill the US government. I conduct several case studies of successful whistleblower lawsuits concerning Medicare fraud, pairing new legal data with large samples of Medicare claims. I estimate that deterrence from $1.9 billion in whistleblower settlements generated Medicare cost savings of nearly $19 billion, while imposing low costs on the government. These results suggest private enforcement is a cost-effective way to combat public expenditure fraud.
The diffusion of health care fraud: A bipartite network analysis
James O'Malley, Thomas Bubolz & Jonathan Skinner
Social Science & Medicine, June 2023
Abstract:
Many studies have examined the diffusion of health care innovation but less is known about the diffusion of health care fraud. In this paper, we consider the diffusion of potentially fraudulent Medicare home health care billing in the United States during 2002–16, with a focus on the 21 hospital referral regions (HRRs) covered by local Department of Justice (DOJ) anti-fraud “strike force” offices. We hypothesize that patient-sharing across home health care agencies (HHAs) provides a mechanism for the rapid diffusion of fraudulent strategies. We measure such activity using a novel bipartite mixture (or BMIX) network index, which captures patient sharing across multiple agencies and thus conveys more information about the diffusion process than conventional unipartite network measures. Using a complete population of fee-for-service Medicare claims data, we first find a remarkable increase in home health care activity between 2002 and 2009 in many regions targeted by the DOJ; average billing per Medicare enrollee in McAllen TX and Miami increased by $2127 and $2422 compared to just an average $289 increase in other HRRs not targeted by the DOJ. Second, we establish that the HRR-level BMIX (but not other network measures) was a strong predictor of above-average home health care expenditures across HRRs. Third, within HRRs, agencies sharing more patients with other agencies were predicted to increase billing. Finally, the initial 2002 BMIX index was a strong predictor of subsequent changes in HRR-level home health billing during 2002–9. These results highlight the importance of bipartite network structure in diffusion and in infection and contagion models more generally.
Differential spatial-social accessibility to mental health care and suicide
Daniel Tadmon & Peter Bearman
Proceedings of the National Academy of Sciences, 9 May 2023
Abstract:
In recent years, the United States has been experiencing historically high suicide rates. In the face of mental health care provider shortages that leave millions needing to travel longer to find providers with schedule openings, if any are available at all, the inaccessibility of mental health care has become increasingly central in explaining suicidality. To examine the relationship between access to care and suicide, we leverage a dataset mapping all licensed US psychiatrists and psychotherapists (N= 711,214), as of early 2020, and employ real-world transportation data to model patients’ mobility barriers. We find a strong association between reduced mental health care provider spatial-social accessibility and heightened suicide risk. Using a machine learning approach to condition on a host of 22 contextual factors known to be implicated in suicide (e.g., race, education, divorce, gun shop prevalence), we find that in locales where individuals seeking care can access fewer mental health care providers, already more likely to be saturated by demand, suicide risk is increased (3.2% for each reduced SD of psychiatrist accessibility; 2.3% for psychotherapists). Additionally, we observe that local spatial-social accessibility inequalities are associated with further heightened risk of suicide, underscoring the need for research to account for the highly localized barriers preventing many Americans from accessing needed mental health services.
Corporate Ownership and Firm Performance: Evidence from Fertility Clinics
Ambar La Forgia & Julia Bodner
University of California Working Paper, April 2023
Abstract:
Corporate investors are often credited with boosting target firm performance but criticized for prioritizing profits over consumer well-being. This tension is particularly evident in the healthcare sector, where information frictions contribute to underinvestment in quality. This paper finds that corporate ownership can improve healthcare outcomes in a setting where patients have access to service pricing and quality information -- the market for In Vitro Fertilization (IVF). After acquisition by a fertility chain, clinic volume increases by 28.2%, and IVF success rates increase by 13.6%. Fertility chains also implement changes that enhance quality, benefit underperforming clinics, and expand the IVF market.
Hospital concentration and low-income populations: Evidence from New York State Medicaid
Sunita Desai et al.
Journal of Health Economics, forthcoming
Abstract:
While a large body of evidence has examined hospital concentration, its effects on health care for low-income populations are less explored. We use comprehensive discharge data from New York State to measure the effects of changes in market concentration on hospital-level inpatient Medicaid volumes. Holding fixed hospital factors constant, a one percent increase in HHI leads to a 0.6% (s.e. = 0.28%) decrease in the number of Medicaid admissions for the average hospital. The strongest effects are on admissions for birth (-1.3%, s.e. = 0.58%). These average hospital-level decreases largely reflect redistribution of Medicaid patients across hospitals, rather than overall reductions in hospitalizations for Medicaid patients. In particular, hospital concentration leads to a redistribution of admissions from non-profit hospitals to public hospitals. We find evidence that for births, physicians serving high shares of Medicaid beneficiaries in particular experience reduced admissions as concentration increased. These reductions may reflect preferences among these physicians or reduced admitting privileges by hospitals as a means to screen out Medicaid patients.
On Resource Allocation in Health Care: The Case of Concierge Medicine
Adam Leive, Guy David & Molly Candon
Journal of Health Economics, forthcoming
Abstract:
Resource allocation generally involves a tension between efficiency and equity, particularly in health care. The growth in exclusive physician arrangements using non-linear prices is leading to consumer segmentation with theoretically ambiguous welfare implications. We study concierge medicine, in which physicians only provide care to patients paying a retainer fee. We find limited evidence of selection based on health and stronger evidence of selection based on income. Using a matching strategy that leverages the staggered adoption of concierge medicine, we find large spending increases and no average mortality effects for patients impacted by the switch to concierge medicine.
The Incidence of the Affordable Care Act’s Dependent Coverage Mandate
Sherry Glied & Hansoo Ko
NBER Working Paper, May 2023
Abstract:
Economic theory and empirical studies conclude that the cost of voluntary employer-sponsored health insurance falls on employees. However, the distribution of incidence and the mechanism through which incidence occurs have not been well-established. We provide new evidence about incidence by examining the dependent coverage mandate in the ACA, which requires group insurance to allow adult children to age 26 to remain on their parents’ policies. We establish that the incidence of the mandate fell on covered employees as a group. We then consider three situations in which the benefits of this new coverage to an employee differ from the costs to an employer. First, we compare incidence where the young adult dependent is the youngest child in the family to the situation where the child is not the youngest (so the family could add a dependent to existing family coverage). We find that incidence falls mainly on households where the newly-eligible child is the youngest in the household. Second, higher-income households face a lower tax price of coverage than do lower-income households. We find that the incidence of the mandate falls mainly on the highest income households. Finally, we find that the mandate leads to increased commuting time for parents of newly-eligible dependents.
Resourcing a Technological Portfolio: How Fairtown Hospital Preserved Results While Degrading Its Older Surgical Robot
Matthew Beane
Administrative Science Quarterly, forthcoming
Abstract:
Here I theorize about a common challenge that research on technology and organizing has not yet considered: how organizations preserve results given the challenges of managing increasingly heterogeneous technological portfolios. I do so via a study of how a top-tier hospital allocated scarce resources across two surgical robots. After acquiring its second robot, the hospital divided resources between the older and newer robots to build its surgical capacity: it allocated the best available infrastructure to the new robot, and it prioritized assigning inexperienced talent to the new technology to facilitate use and skill development. The hospital then adjusted its resources to build on initial successes, committing both the best available maintenance and more-complex surgical cases to the newer robot. These dynamics inadvertently degraded the older robot, making it increasingly difficult to use. In response, more-experienced surgeons and staff made do with the degrading system: they developed and mastered workarounds, and they developed a venting cycle with management. Their actions reduced concerns about the older technology and stabilized the situation for the hospital, such that for years this portfolio resourcing process facilitated satisfactory outcomes on organizational goals such as growth, new capability, and patient care. But by shunting scarce resources away from the older technology, this process also stressed the experienced talent (even as it built their resilience) and limited exploration of changes that could benefit the hospital.
Differences in Determinants: Racialized Obstetric Care and Increases in U.S. State Labor Induction Rates
Ryan Masters et al.
Journal of Health and Social Behavior, June 2023, Pages 174–191
Abstract:
Induction of labor (IOL) rates in the United States have nearly tripled since 1990. We examine official U.S. birth records to document increases in states’ IOL rates among pregnancies to Black, Latina, and White women. We test if the increases are associated with changes in demographic characteristics and risk factors among states’ racial-ethnic childbearing populations. Among pregnancies to White women, increases in state IOL rates are strongly associated with changes in risk factors among White childbearing populations. However, the rising IOL rates among pregnancies to Black and Latina women are not due to changing factors in their own populations but are instead driven by changing factors among states’ White childbearing populations. The results suggest systemic racism may be shaping U.S. obstetric care whereby care is not “centered at the margins” but is instead responsive to characteristics in states’ White populations.