Health care markets have become increasingly concentrated through mergers and acquisitions. Proponents of this consolidation cite several potential benefits, including lower costs due to economies of scale and better patient outcomes through coordinated care. Greater concentration may also result in higher prices or lower quality, however. In a recent paper, funded in part by a […]
We report on research that concerns the efficacy of health care markets and the health of the population. This includes:
The functioning of health insurance markets
The impact of incentive mechanisms for the provision and quality of health care services by physicians and hospitals.
The functioning of markets for pharmaceuticals and medical devices
The interaction between health outcomes and economic behavior, and the effect of policy levers in changing them.
Social insurance programs, such as health insurance and social security, have traditionally been paid for and provided by the government. However, more recently, there have been a number of high-profile initiatives to replace government-provided services with private provision via regulated competition. The motivation for these programs is if incentives are set up in the right […]
Wealth is highly correlated between parents and their children; however, little is known about what drives this relationship. Is it that children of wealthy parents are inherently more talented, and that is what shapes their later success? Or is it that children had parents who gave them more opportunities because they themselves had more wealth? […]
A substantial body of evidence shows that high-quality early childhood programs boost the skills of disadvantaged children. Most of this research reports short-run treatment effects of these programs on cognitive test scores, school readiness, and measures of early-life social behavior. A few studies analyze longer-term benefits in terms of completed education, adult health, crime, and […]
Children from poorer backgrounds typically have lower cognitive and socio-emotional skills. This is due to differences in the quality of the environment, with disadvantaged children facing lower family incomes, higher levels of stress, poorer parenting practices, and less academic stimulation. Consequently, living in disadvantaged circumstances early in life is frequently associated with poorer health, education, […]
The desirability and effectiveness of health network regulation depends on the reasons insurers might engage in exclusion in the first place, and whether the gains they realize are shared with consumers. In our research, we identify three main reasons why an insurer might wish to exclude a medical provider from its network, and we highlight […]
How much are low-income people willing to pay for health insurance – and what are the implications for our understanding of health insurance markets and the role of subsidies? This research investigates these questions drawing on subsidy variation in Massachusetts’ health insurance exchange for low-income individuals.
There is considerable geographical variation in the use of healthcare by beneficiaries of Medicare, the US federal health insurance program for people who are 65 or older. This research explores the extent to which regional disparities are driven by the providers, whose use of expensive tests or procedures might vary across different places, or by the patients, who might have different healthcare needs and preferences. Analyzing data on Medicare beneficiaries who have migrated from one part of the country to another, the study finds that patients and providers account for roughly equal shares of the differences in regional spending. The results provide a better understanding of the components of medical costs, adding nuance to the debate about possible inefficiencies in US healthcare spending.
A central question in the US debate over privatized Medicare is whether increased government contributions to private plans generate lower premiums for consumers or higher profits for producers. This research finds that insurance companies pass through 45% of higher payments in lower premiums and an additional 9% in more generous benefits for those who enroll in Medicare Advantage. Since the findings also suggest that the less than full pass-through is a result of insurer market power, efforts to make markets more competitive may be key to increasing the pass-through to consumers.
In evaluating health insurance mergers recently proposed in the U.S., regulators have grappled with the costs and benefits of reduced insurer competition. Our study examines the direct and indirect effects that a reduction in the number of insurers has on premiums, provider reimbursement rates, and consumer welfare. Using detailed health and enrollment data and focusing on a part of the commercial health care market, we examine whether consumers are typically harmed when an insurer is removed from the market. Absent premium setting constraints, we find that premiums typically rise, and consumers are generally harmed as they suffer from having fewer options. However, we also find that the reimbursement rates negotiated by hospitals need not always increase, and in many cases, can actually fall.