Working Papers

The Costs and Benefits of Monitoring Providers: Evidence from Medicare Audits

Latest version April 2022. Job market paper.

[One Page Summary] [Media: RACMonitor]

Abstract: This paper examines the extent to which government programs should monitor for wasteful expenditure when outsourcing to third parties, taking into account the costs and savings associated with monitoring. I use novel administrative data to study the largest Medicare monitoring program aimed at identifying and reclaiming payments for unnecessary inpatient admissions. I exploit plausibly exogenous variation across hospitals and across patients, and find that the majority of savings are due to the deterrence of future admissions. I do not find evidence that the marginal patient denied admission is harmed, suggesting that hospitals fine-tune their response to target unnecessary care. But in doing so, they incur compliance costs and adopt technology specifically aimed at assessing the medical necessity of care. For every $1,000 in savings to Medicare, hospitals incur $216 in compliance costs.

Regulated Revenues and Hospital Behavior: Evidence from a Medicare Overhaul

with Tal Gross, Adam Sacarny, and David Silver

Latest version May 2022. R&R, The Review of Economics and Statistics

[Ungated] [NBER WP]

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.

Job Lock, Retirement, and Dependent Health Insurance: Evidence from the Affordable Care Act

Latest version April 2022.

Abstract: The 2010 Affordable Care Act expanded health insurance coverage to dependents up to age 26, allowing some parents to add adult children to their employer- sponsored plans. I consider a potential spillover of the dependent mandate policy on the labor supply of parents: did parents delay retirement to take advantage of the dependent mandate? I find that among parents aged 55-66, affected parents’ retirement rate fell by 3.9 percentage points after policy enactment, causing them to delay retirement by 0.74 years on average. An estimated 296,000 parents delayed retirement in order to obtain coverage for their children.

Free to Spend? The Effect of Decentralization on Local Governments

with Andrea Tulli

Latest version April 2022.

Abstract: We consider how decentralization of fiscal autonomy to local governments affects their budgetary decisions. We study an Italian reform which expanded municipal discretion and responsibility over property taxation, using novel data on what the national government would have done in a more centralized system. Municipalities on average picked higher tax rates than the national government would have. Municipalities respond to additional responsibility by raising more revenue and spending more on public services. Local conditions shape these municipal responses: those with greater political competition or worse economic conditions spend more on public services, but less on administration and public official remuneration.

Work in Progress

Medical Necessity and the Cost and Quality of Health Care

with Ashvin Gandhi

Research Question: How does requiring healthcare providers to demonstrate medical necessity affect the cost and quality of care they provide?

The Effect of Deregulation on the Cost, Availability, and Quality of Health Care

with Yunan Ji and Parker Rogers

Research Question: How does supply-side deregulation affect the market for healthcare inputs, and how do these effects ripple through the healthcare supply chain?