Politics, Hospital Behavior, and Health Care Spending

NBER Working Paper No. 23748. This paper examines the link between legislative politics, hospital behavior, and health care spending. Our work demonstrates a pathway through which the link between politics and Medicare policy can dramatically affect US health spending.

The health care industry is the most heavily lobbied industry in the US

An increase in Medicare payments led hospitals to increase their discharges

Members of Congress representing hospitals that got a payment bump saw an increase in donations