Assistant Professor, Columbia University Mailman School of Public Health
Reducing Administrative Barriers Increases Take-up of Subsidized Health Insurance Coverage: Evidence from a Field Experiment (with Keith Marzilli Ericson, Timothy Layton, and Adrianna McIntyre, NBER Working Paper No. 30885) Show AbstractAdministrative barriers to social insurance program take-up are pervasive, including in subsidized health insurance. We conducted a randomized controlled trial with Massachusetts’ Affordable Care Act marketplace to reduce these barriers and other behavioral frictions. We find that a “check the box” streamlined enrollment intervention raises enrollment by 11%, more than personalized reminder letters (7.9% increase) or generic reminder letters (4.5% increase). Effects are concentrated among individuals eligible for zero-premium plans, who faced no further administrative burdens of setting up payments. Producing this enrollment effect through premium reduction would cost about $6 million in subsidies, highlighting the importance of these burdens.
The Anatomy of a Hospital System Merger: The Patient Did Not Respond Well to Treatment (with Martin Gaynor, Raffaella Sadun, Chad Syverson, and Shruthi Venkatesh, NBER Working Paper No. 29449, revisions resubmitted to The Review of Economics and Statistics) Show AbstractThere is an ongoing merger wave in the US hospital industry, but it remains an open question how hospital mergers change, or fail to change, hospital behavior, performance, and outcomes. In this research, we open the “black box” of practices within hospitals in the context of a mega-merger between two large for-profit chains. Benchmarking the effects of the merger against the acquirer’s stated aims, we show that they achieved some of their goals: they harmonized their electronic medical records and sent managers to target hospitals; after the acquisition, managerial processes were similar across hospitals in the merged chain. However, these interventions failed to drive detectable gains in profitability or patient outcomes. Our findings demonstrate the importance of hospital organizations and internal processes for merger research and policy in health care and the economy more generally.
Dangerous Prescribing and Healthcare Fragmentation: Evidence from Opioids (with Keith Marzilli Ericson and Annetta Zhou, NBER Working Paper No. 29992) Show AbstractFragmented healthcare received from many different physicians results in higher costs and lower quality, but does it contribute to dangerous opioid prescribing? The effect is theoretically ambiguous because fragmentation can trigger costly coordination failures but also permits greater specialization. We examine dangerous opioid prescribing, defined as receiving high dosages, long prescription durations, or harmfully interacting medications. Cross-sectionally, regions with higher fragmentation have lower levels of dangerous opioid prescribing. This relationship is associational and may result from unobserved patient-level confounders. Identifying the impact of healthcare fragmentation by examining patients who move across regions, we find a relatively precise null effect of fragmentation on dangerous opioid prescribing. These results cast doubt on the role of fragmentation in this phenomenon and highlight the potential role of other forces in driving it.
A Randomized Trial Of Letters To Encourage Prescription Monitoring Program Use And Safe Opioid Prescribing (with Tatyana Avilova, David Powell, Ian Williamson, Weston Merrick, and Mireille Jacobson – Health Affairs, January 2023) Show AbstractTo facilitate safer prescribing of opioids and other drugs, nearly all states operate prescription monitoring programs (PMPs), which collect and share data on controlled substance dispensing. Policy makers have sought to raise clinicians’ engagement with these programs but lack evidence on effective interventions. Working with the Minnesota Prescription Monitoring Program, we conducted a randomized trial to assess whether letters to clinicians increased program use and decreased risky coprescribing of opioids with benzodiazepines or gabapentinoids. In March 2021 we randomly assigned 12,000 coprescribers to either a control arm or one of three study arms sent differing letters. The respective letters highlighted a new mandate to check the PMP before prescribing, provided information about coprescribing risks with a list of coprescribed patients, or contained both messages combined. Letters highlighting the mandate alone or along with coprescribing information increased PMP search rates by 4.5 and 4.0 percentage points, respectively, with no significant effect on coprescribing. These letters also increased PMP account-holding rates among clinicians. Effects persisted for at least eight months. The letter with only coprescribing information had no detected effects on key outcomes. Our results support the use of simple letter interventions as evidence-based tools to increase PMP engagement and potentially facilitate better-informed prescribing.
Regulated Revenues and Hospital Behavior: Evidence from a Medicare Overhaul (with Tal Gross, Maggie Shi, and David Silver, NBER Working Paper No. 29023, accepted at The Review of Economics and Statistics) Show AbstractWe 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.
Hospital Allocation and Racial Disparities in Health Care (with Amitabh Chandra and Pragya Kakani, NBER Working Paper No. 28018, accepted at The Review of Economics and Statistics) Show AbstractWe develop a framework to measure the role of hospital allocation in racial disparities in health care and use it to study Black and white heart attack patients. Black patients receive care at lower-performing hospitals than white patients. However, over two decades, the performance gap between hospitals treating Black and white patients shrank by over two-thirds. This progress is due to more rapid performance improvement at hospitals that tended to treat Black patients, rather than reallocation of patients. Hospital improvement is correlated with adoption of a productivity-raising input, beta-blockers. Our work highlights reallocation and performance improvement as future disparity-reduction levers.
Common Practice: Spillovers from Medicare on Private Health Care (with Michael Barnett and Andrew Olenski, NBER Working Paper No. 27270, accepted at American Economic Journal: Economic Policy) Show AbstractEfforts to raise the productivity of the U.S. health care system have proceeded slowly. One potential explanation is the fragmentation of payment across insurers. Each insurer’s efforts to improve care could influence how doctors practice medicine for other insurers, leading to unvalued externalities. We study these externalities by examining the unintended private insurance spillovers of a public insurer’s intervention. In 2015, Medicare randomized warning letters to doctors to curtail overuse of antipsychotics. Even though the letters did not mention private insurance, they reduced prescribing to privately insured patients by 12%. The reduction to Medicare patients was 17%, and we cannot reject one-for-one spillovers. If private insurers conducted a similar intervention with their own limited information, they would stem half as much prescribing as a social planner able and willing to better target the intervention. Our findings establish that insurers can affect health care well outside their direct purview, raising the question of how to match their private objectives with their scope of influence.
Technology Adoption and Market Allocation: The Case of Robotic Surgery (with Danea Horn and Annetta Zhou – Journal of Health Economics, December 2022; Ungated Download) Show AbstractThe adoption of health care technology is central to improving productivity in this sector. To provide new evidence on how technology affects health care markets, we focus on one area where adoption has been particularly rapid: surgery for prostate cancer. Within just eight years, robotic surgery grew to become the dominant intensive prostate cancer treatment method. Using a difference-in-differences design, we show that adopting a robot drives prostate cancer patients to the hospital. To test whether this result reflects market expansion or business stealing, we also consider market-level effects of adoption and find effects that are significant but smaller, suggesting that adoption expands the market while also reallocating some patients across hospitals. Marginal patients are relatively young and healthy, inconsistent with the concern that adoption broadens the criteria for intervention to patients who would gain little from it. We conclude by discussing implications for the social value of technology diffusion in health care markets.
Out of the Woodwork: Enrollment Spillovers in the Oregon Health Insurance Experiment (with Katherine Baicker and Amy Finkelstein, American Economic Journal: Economic Policy, August 2022; Ungated Download) Show AbstractWe analyze the impact of expanded adult Medicaid eligibility on the Medicaid enrollment of already-eligible children. To do so, we exploit the 2008 Oregon Medicaid lottery, in which some low-income uninsured adults were randomly selected for the chance to apply for Medicaid. Children in these households were eligible for Medicaid irrespective of whether the household won the lottery. We estimate statistically significant but transitory impacts of adult lottery selection on children’s Medicaid enrollment: for every 9 adults who enroll in Medicaid due to the lottery, one additional child also enrolls at the same time. Our results shed light on the existence, magnitude, and nature of so-called “woodwork effects”.
Is the US Health Care System Wasteful and Inefficient? A Review of the Evidence (with Sherry Glied – Journal of Health Politics, Policy and Law, October 2018; Ungated Download) Show AbstractThis review critically evaluates perspectives on waste in the US health care sector. The conventional discussion of waste is often imprecise and blames factors outside the purview of the health care system. Taking an economic perspective, we propose that productive inefficiency is a more tractable concept than waste. We then review the literature on the efficiency of health providers. We discuss the evidence on whether supply- and demand-side policies, such as value-based payment and cost sharing, can raise efficiency, finding that many of these policies have effects that are meaningful but small. We then turn to the literature on variations, where we argue that the body of evidence suggests there are large efficiency gaps, though these gaps are smaller than the initial eye-catching results that began this strand of research. Ultimately, these findings provide a potential roadmap for efficiency gains, a process in which a diverse array of policies compound, over time, to bring the US system closer to the efficiency frontier.
Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice (Journal of Health Economics, July 2018; Ungated Download) Show AbstractPerformance-raising practices tend to diffuse slowly in the health care sector. To understand how incentives drive adoption, I study a practice that generates revenue for hospitals: submitting detailed documentation about patients. After a 2008 reform, hospitals could raise their Medicare revenue over 2% by always specifying a patient’s type of heart failure. Hospitals only captured around half of this revenue, indicating that large frictions impeded takeup. Exploiting the fact that many doctors practice at multiple hospitals, I find that four-fifths of the dispersion in adoption reflects differences in the ability of hospitals to extract documentation from physicians. A hospital’s adoption of coding is robustly correlated with its heart attack survival rate and its use of inexpensive survival-raising care. Hospital-physician integration and electronic medical records are also associated with adoption. These findings highlight the potential for institution-level frictions, including agency conflicts, to explain variations in health care performance across providers.
Government-Academic Partnerships in Randomized Evaluations: The Case of Inappropriate Prescribing (with David Yokum and Shantanu Agrawal – American Economic Review Papers & Proceedings, May 2017; Ungated Download) Show AbstractThere is growing evidence that inappropriate prescribing is harming patients and raising costs in the U.S. health care system. Through a partnership between the federal government and academics, we seek to develop evidence on reducing this prescribing. We conduct several randomized letter interventions targeting high-volume prescribers of drugs that can harm patients. We take a continuous improvement approach, rapidly evaluating each round and using the results to inform subsequent work. The first round of letters yielded no effects, and we responded with new interventions that are now under evaluation. We discuss lessons our work provides for future government-academic partnerships.
Nudging Leads Consumers In Colorado To Shop But Not Switch ACA Marketplace Plans (with Keith Ericson, Jon Kingsdale, and Tim Layton – Health Affairs, February 2017; Ungated Download) Show AbstractThe Affordable Care Act (ACA) dramatically expanded the use of regulated marketplaces in health insurance, but consumers often fail to shop for plans during open enrollment periods. Typically these consumers are automatically reenrolled in their old plans, which potentially exposes them to unexpected increases in their insurance premiums and cost sharing. We conducted a randomized intervention to encourage enrollees in an ACA Marketplace to shop for plans. We tested the effect of letters and e-mails with personalized information about the savings on insurance premiums that they could realize from switching plans and the effect of generic communications that simply emphasized the possibility of saving. The personalized and generic messages both increased shopping on the Marketplace’s website by 23 percent, but neither type of message had a significant effect on plan switching. These findings show that simple “nudges” with even generic information can promote shopping in health insurance marketplaces, but whether they can lead to switching remains an open question.
Healthcare Exceptionalism? Performance and Allocation in the U.S. Healthcare Sector(with Amitabh Chandra, Amy Finkelstein, and Chad Syverson – American Economic Review, August 2016; Ungated Download) Show AbstractThe conventional wisdom in health economics is that idiosyncratic features of the healthcare sector leave little scope for market forces to allocate consumers to higher performance producers. However, we find robust evidence across a variety of conditions and performance measures that higher quality hospitals tend to have higher market shares at a point in time and expand more over time. Moreover, we find that the relationship between performance and allocation is stronger among patients who have greater scope for hospital choice, suggesting a role for patient demand in allocation in the hospital sector. Our findings suggest that the healthcare sector may have more in common with “traditional” sectors subject to standard market forces than is often assumed.
Productivity Dispersion in Medicine and Manufacturing (with Amitabh Chandra, Amy Finkelstein, and Chad Syverson – American Economic Review Papers and Proceedings, May 2016; Ungated Download) Show AbstractThe conventional wisdom in health economics is that large differences in average productivity across US hospitals are the result of idiosyncratic features of the healthcare sector which dull the role of market forces. Strikingly, however, we find that productivity dispersion in heart attack treatment across hospitals is, if anything, smaller than in narrowly defined manufacturing industries such as ready-mixed concrete. While this fact admits multiple interpretations, it suggests that healthcare may have more in common with “traditional” sectors than is often assumed, and relatedly, that insights from research on productivity and allocation in other sectors may enrich analysis of healthcare.
Medicare Letters To Curb Overprescribing Of Controlled Substances Had No Detectable Effect On Providers(with David Yokum, Amy Finkelstein, and Shantanu Agrawal – Health Affairs, March 2016; Ungated Download) Show AbstractInappropriate prescribing is a rising threat to the health of Medicare beneficiaries and a drain on Medicare’s finances. In this study we used a randomized controlled trial approach to evaluate a low-cost, light-touch intervention aimed at reducing the inappropriate provision of Schedule II controlled substances in the Medicare Part D program. Potential overprescribers were sent a letter explaining that their practice patterns were highly unlike those of their peers. Using rich administrative data, we were unable to detect an effect of these letters on prescribing. We describe ongoing efforts to build on this null result with alternative interventions. Learning about the potential of light-touch interventions, both effective and ineffective, will help produce a better toolkit for policy makers to improve the value and safety of health care.