Research

[Ungated] [NBER WP] | [Summary]

Abstract: Coverage for dependents is a standard feature of employer-sponsored insurance. While prior work shows that employees trade off job mobility for their own coverage, less is known about the intra-family spillovers of dependent coverage on parental labor supply. We study this question using a large panel of employer-based insurance claims that links dependent enrollment to a proxy for parental job retention. We use a regression discontinuity design that exploits a sharp change in the duration of dependent eligibility by birth month under the Affordable Care Act. We find that additional dependent insurance eligibility increases both dependent take-up and parental job retention. This "job lock" effect is strongest among parents more likely to be on the margin of a job exit, for families that place higher value on dependent coverage, and employees of  firms offering a broader range of insurance options.

[Ungated] [Online Appendix] [MVPF Appendix] [NBER WP] [Replication code]  |  [Summary] | [The Pie (podcast)]

Research Question: How effective is monitoring for wasteful healthcare spending?

Abstract: This paper examines the tradeoffs of monitoring for wasteful public spending. By penalizing unnecessary spending, monitoring improves the quality of public expenditure and incentivizes firms to invest in compliance technology. I study a large Medicare program that monitored for unnecessary healthcare spending and consider its effect on government savings, provider behavior, and patient health. Every dollar Medicare spent on monitoring generated $24-29 in government savings. The majority of savings stem from the deterrence of future care, rather than reclaimed payments from prior care. I do not find evidence that the health of the marginal patient is harmed, indicating that monitoring primarily deters low-value care. Monitoring does increase provider administrative costs, but these costs are mostly incurred upfront and include investments in technology to assess the medical necessity of care. 

[Ungated] [NBER WP] [Replication code]

Research Question: How do hospitals respond to changes in the price of an inpatient admission?

Abstract:  We study a 2008 policy reform in which Medicare revised its hospital payment system to better reflect patients’ severity of illness. We construct a simulated instrument that predicts a hospital’s policy-induced change in reimbursement using pre-reform patients and post-reform rules. The reform led to large persistent changes in Medicare payment rates across hospitals. Hospitals that faced larger gains in Medicare reimbursement increased the volume of Medicare patients they treated. The estimates imply a volume elasticity of 1.2. To accommodate greater volume, hospitals increased nurse employment, but also lowered length of stay, with ambiguous effects on quality.

[NBER WP] | [Summary]

Abstract: This paper examines the impact of reducing the administrative fragmentation of billing and payment, one commonly cited cause of inefficiency in US health care. We study a Medicare reform that consolidated billing processes across service types, using its staggered rollout and hospitals’ prior levels of administrative fragmentation for identification. The reform dramatically reduced fragmentation and modestly lowered claim denial rates but had no effect on spending, post-discharge care, or rehospitalizations. It also did not affect administrative costs or technology adoption. These findings suggest that addressing administrative fragmentation alone is unlikely to significantly improve health care efficiency.

[NBER WP]

Abstract: Governments and firms often employ soft spending limits to restrict overspending while still allowing exceptions on a case-by-case basis. This paper studies a Medicare policy which capped per-patient physical therapy spending, with exceptions for patients with documented medical need.  The cap reduced spending by 8 percent without harming patient health, with the targeting improvements driven by Medicare discretion in granting exceptions rather than improved provider screening. However, the documentation requirement also introduced horizontal inequity: conditional on need, lower-income and minority patients were more likely to be screened out, as they tended to see providers with poorer documentation practices. 

[NBER WP] | [Summary]

Abstract: Information technology (IT) can enhance firms’ long-run performance but is also a risky investment, with high fixed costs and uncertain returns. Whether market events influence this tradeoff has received limited attention. We leverage the healthcare context to empirically examine hospitals’ IT investments following economic downturns and public insurance expansions––i.e., large industry shocks in opposite directions. We find novel and symmetrical responses. Recessions restrain investments while expansion policy indirectly stimulates them. Importantly, the IT margin is more elastic than other spending responses to market fluctuations. Supplementary analyses suggest that hospitals’ finances and perceptions of uncertainty drive these capital investment adjustments.

[NBER WP] | [Summary] | [The Pie (podcast)]

Abstract: Private equity (PE) plays an increasingly important role in the modern US economy. However, its impacts on owned-firms are incompletely understood. We exploit a historically large leveraged buyout of a national hospital chain to examine how the full life cycle of PE influences hospital-level revenues, technology sourcing, labor use, and financial performance. We find permanent improvements in hospital volumes and revenues. PE also reduces growth in fulltime employees, with a suggestive partial substitution toward parttime workers. Technology adoption is restrained, but the number of vendors expands. Overall, PE has nuanced effects on hospital management, which translate to improved operating margins.