"Politics, Hospital Behavior, and Health Spending" with Amanda Kowalski, Eleanor Neff Powell, and Jennifer Wu. NBER Working Paper No. 23748, under review.
- Press Clippings: The Economist
- Summary: This paper examines the link between legislative politics, hospital behavior, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for reelection. We study a provision - Section 508 – that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of Representatives who voted ‘Yea’ on the MMA were significantly more likely to receive a 508 waiver than hospitals represented by members who voted ‘Nay.’ Following the payment increase generated by the 508 program, recipient hospitals treated more patients, increased payroll, hired nurses, added new technology, raised CEO pay, and ultimately increased their spending by over $100 million annually. Section 508 recipient hospitals formed the Section 508 Hospital Coalition, which spent millions of dollars lobbying Congress to extend the program. After the vote on the MMA and before the vote to reauthorize the 508 program, members of Congress with a 508 hospital in their district received a 22% increase in total campaign contributions and a 65% increase in contributions from individuals working in the health care industry in the members’ home states. Our work demonstrates a pathway through which the link between politics and Medicare policy can dramatically affect US health spending.
"Surprise! Out-of-Network Billing for Emergency Care in the United States" with Fiona Scott Morton and Nathan Shekita. NBER Working Paper No. 23623, under review.
- Press Clippings: New York Times, Dallas News, NPR, MarketWatch
- Summary: Using insurance claims data, we show that in 22% of emergency episodes, patients attended in-network hospitals, but were treated by out-of-network physicians. Out-of-network billing allows physicians to significantly increase their payment rates relative to what they would be paid for treating in-network patients. Because patients cannot avoid out-of-network physicians during an emergency, physicians have an incentive to remain out-of-network and receive higher payment rates. Hospitals incur costs when out-of-network billing occurs within their facilities. We illustrate in a model and confirm empirically via analysis of two leading physician-outsourcing firms that physicians offer transfers to hospitals to offset the costs of out-of-network billing and allow the practice to continue. We find that a New York State law that introduced binding arbitration between physicians and insurers to settle surprise bills reduced out-of-network billing rates.
"The Price Ain't Right? Hospital Prices and Health Spending on the Privately Insured" with Stuart Craig, Martin Gaynor, and John Van Reenen. NBER Working Paper No. 218215, under review.
- Press Clippings: New York Times, New Yorker, NPR MarketPlace
- Summary: We use insurance claims data for 27.6 percent of individuals with private employer-sponsored insurance in the US between 2007 and 2011 to examine the variation in health spending and in hospitals' transaction prices. We find that health care spending per privately insured beneficiary varies by a factor of three across hospital referral regions in the US. Variation in providers' prices explains a majority of the variation in health spending on the privately insured. Providers' prices can vary by a factor of 10 within cities and more than 20 across the US. Hospital market concentration is positively associated with hospital prices.
"Does Competition from Private Surgical Centers Improve Public Hospitals' Performance? Evidence from the English National Health Service" with Stephen Gibbons and Matthew Skellern. LSE Centre for Economic Performance Discussion Paper 1434, Revise and Resubmit, Journal of Public Economics.
- Press Clippings: Financial Times
- Summary: This paper examines the impact of competition from government-facilitated entry of private, specialty surgical centres on the efficiency and case mix of incumbent public hospitals within the English NHS. We exploit the fact that the government chose the location of these surgical centres based on nearby public hospitals’ waiting times – not length of stay or clinical quality – to construct treatment and control groups that are comparable with respect to key outcome variables of interest. We find that the entry of private surgical centres led to greater efficiency – measured by pre-surgery length of stay for hip and knee replacements – at nearby public hospitals. However, these new entrants took on healthier patients and left incumbent hospitals treating patients who were sicker, and who stayed in hospital longer after surgery.
"Out-of-Network Emergency-Physician Bills - An Unwelcome Surprise" with Fiona Scott Morton. New England Journal of Medicine, 375(20): 1915-1918.
- Press Clippings: New York Times, Washington Post, Time Magazine, Slate, Wall Street Journal, Reuters, NBC Nightly News with Lester Holt, CNBC.
- Summary: This paper explores the frequency and consequences of surprise out-of-network billing for emergency care using data on tens of millions of privately insured patients. We find that 22 percent of in-network visits to an emergency room involved out-of-network physicians. Patients face an average balance bill of $622.55 if their insurer only covers standard in-network physician rates.
"Does Hospital Competition Save Lives? Evidence from the English Patient Choice Reforms" with Stephen Gibbons, Simon Jones, and Alistair McGuire. Economic Journal, 121(554): 228-260.
- Press Clippings: Financial Times, the Guardian, the Economist.
- Summary: This paper examines whether the introduction of patient choice and provider competition in the English NHS in 2005 improved hospital quality. We find that it did. Mortality fell more quickly for patients living in more competitive hospital markets. Compared to the mean, AMI mortality fell approximately 0.31 percentage points per year faster in places that were one standard deviation higher on our market structure index (on a base mortality of 13.82% during the 2002-8 period).
"Equity, Waiting Times, and the NHS Reforms" with Simon Jones, Alistair McGuire, and Julian Le Grand. British Medical Journal, 339(32): 3264-3271.
- Press Clippings: Financial Times.
- Summary: This paper explores the distribution of waiting times in the English National Health Service across different socioeconomic groups. Between 1997 and 2007 waiting times for patients having elective hip replacement, knee replacement, and cataract repair in England went down and the variation in waiting times for those procedures across socioeconomic groups was reduced. Many people feared that the government’s NHS reforms would lead to inequity, but inequity with respect to waiting times did not increase; if anything, it decreased.
Additional Published Papers
“National Trends in Hospital Readmissions Rates among Medicare Fee-for-Service Survivors of Mitral Valve Surgery, 1999-2010” PLos One, 10(7): 132-40. 2015. (With John Dodson, Yun Wang, Karthik Murugiah, Kumar Dharmarajan, Sabet Hashim, Sudhakar Nuti, Erica Spatz, Nihar Desai, and Harlan Krumholz). 2015.
“Trend in Hospitalizations among Medicare Survivors of Aortic Valve Replacement in the United States”. Annals of Thoracic Surgery, 99(2): 509-517. (with Marthik Murugiah, Yun Wang, John Dodson, Sudhakar Nuti, Kumar Dharmarajan, Isuru Ranasinghe, and Harlan Krumholz). 2015.
“Framing health reform”. Health Economics, Policy, and Law, 8(02): 251-257 (With Julian Le Grand). 2013.
“In Defense of Our Research on Competition in England’s National Health Service”. The Lancet, 278(9808): 2064-2065 (Per economic guidelines, authorship was alphabetical: Nicholas Bloom, Martin Gaynor, Stephen Gibbons, Simon Jones, Alistair McGuire, Rodrigo Moreno-Serra, Carol Propper, John Van Reenen and Stephan Seiler). 2011.
“Making Competition Work in the English NHS: The Case For Maintaining Regulated Prices”. Journal of Health Services Research and Policy, 16(4): 193-195. (With Anita Charlesworth). 2011.