Essays On Industrial Organization And Health Care Economics

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Essays On Industrial Organization And Health Care Economics

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Author : Zachary Y. Brown
language : en
Publisher:
Release Date : 2017

Essays On Industrial Organization And Health Care Economics written by Zachary Y. Brown and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.

Combining the price transparency website with high cost sharing would give individuals more incentive to use the price transparency tool, reducing health care spending by 18 percent. My research is intended to inform the policy debate surrounding the value of health care price transparency tools. In sum, I argue that while the value of price transparency tools is modest when only a small fraction of consumers are incentivized to use the tools, the savings become quite substantial when enough consumers are informed about prices.

Essays In Industrial Organization And Health Economics

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Author : Yu Ding
language : en
Publisher:
Release Date : 2019

Essays In Industrial Organization And Health Economics written by Yu Ding and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.

In Chapter 1, I empirically quantify how competition and price regulation affect dialysis clinics' incentives to provide high-quality treatment. I first document improvement of medical quality following two concurrently implemented nationwide policies, and then examine the effects of two separate channels --- competition and price regulation. The two policies implemented are: (1) mandated information disclosure on medical quality through in-center posters; (2) a new price regulation, pay-for-performance payment method, which monetarily punished substandard clinical performance. In a counterfactual where quality competition is shut down, there is a 30% decrease in mean quality compared to when quality competition and pay-for-performance payment are both present, which is evidence that competition is important in driving medical quality. In Chapter 2, I empirically examine how Common Application (CAPP), a platform that standardizes college applications and reduces time cost of additional applications, affects students' applications and colleges' prices. I find that students send out 0.56 (17%) more applications when flagship public universities in their states adopt CAPP and an increase of 10 percentage points in within-state CAPP adoption rate decreases prices of private universities by 9.4%.

Essays In Industrial Organization And Health Economics

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Author : Yijun Pan
language : en
Publisher:
Release Date : 2016

Essays In Industrial Organization And Health Economics written by Yijun Pan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.

This dissertation is a collection of three independent essays in industrial organization and health economics. The first two essays discuss the relationship between patents and firms' incentives in the design and timing of new product introductions in the pharmaceutical industry. The third essay discusses consumer incentives generated by health insurance plans, examining whether more generous health insurance encourages people to smoke more. Essay 1 studies when companies are doing R&D, to what extent they do it in-house, to what extent they outsource it, and how do firms' incentives in patent protection affect their integration decisions in new product development. Essay 1 asserts that a firm may want to protect its own patented products from becoming obsolete when introducing new ones in the same product area. In particular, a firm may want to invest to ensure minimal product substitutability when the firm's existing patents are of high value. Under an incomplete contract framework, my model incorporates such an incentive in patent protection, and predicts that a firm is more likely to develop a new product in-house if it already owns at least one existing patented product in the same area. This likelihood also increases both with the patent length and the expected market share of the firm's existing product(s) by the time the new one reaches the market. The pharmaceutical sector is a natural setting to test these predictions. Controlling for firm characteristics and therapeutic class heterogeneity, my empirical findings are consistent with the theory. Essay 2 explores firms' timing strategies in new compound development in the pharmaceutical industry, particularly how firms make pipeline planning and licensing deci- sions when their existing drugs are approaching patent expiration. Using compound development data between 1989 and 2004, I find that controlling for heterogeneity in firm characteristics, a firm is more likely to advance its pipeline compounds to a higher level of development when the firm also has drugs with expiring patents in the same therapeutic class. In contrast, this effect is weaker when the expiring patents belong to a different class. Additionally, the likelihood of a firm licensing out a late stage compound is lower when the firm has expiring patents in that compound's same class. Yet this negative association is again weaker when the expiring patents and the compound of interest are from different classes. These results are all consistent with a firm's incentive to introduce a new patented drug in a timely manner so that customers can switch from the old drug about to go off-patent to the new one. Essay 3 uses data from the Rand Health Insurance Experiment (HIE) to study whether insurance plans create incentives for individuals to smoke. I exploit the exogenous variation of coinsurance rates in the HIE, and find that the benefit from a more generous plan has to be large for non-smokers to start smoking, while smaller benefits suffice for smokers to continue smoking. Additionally, older individuals are more prone to moral hazard in the HIE than younger ones. This difference is consistent with the notion that older individuals have a higher expected benefit from low coinsurance than younger ones in the HIE.

Three Essays In Health Economics And Industrial Organization

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Author : Jee-Hun Choi
language : en
Publisher:
Release Date : 2020

Three Essays In Health Economics And Industrial Organization written by Jee-Hun Choi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.

This dissertation consists of three essays in the field of health economics and industrial organization, focusing on the policies on public health insurance in the United States. The first chapter investigates the impact of expanding public health insurance through private insurers on equilibrium insurance market outcomes. Using the Arkansas All-Payer Claims Database, I measure the impact of the Affordable Care Act (ACA) insurance expansions on hospital reimbursement rates and premiums for non-ACA private plans, including employer-sponsored insurance plans not directly affected by the ACA. Using a Nash bargaining model based on the Ho and Lee (2017) framework, I find that the publicly-subsidized expansion decreases hospital reimbursement rates by 5.3% and insurance premiums by 0.6% for privately-insured enrollees who are not covered by the ACA. This spillover effect on reimbursement rates is driven by the increased bargaining leverage of insurers participating in the expansion. The increase in leverage results mainly from the change in the composition of enrollees, which goes hand-in-hand with enrollment increase as a result of the expansion. The second chapter, co-authored with Claire Lim, explores the linkages between government ideology in U.S. states and geographic variation in Medicaid program design and operations. Medicaid eligibility criteria tend to be more generous in liberal states. Simultaneously, fee-for-service reimbursement rates for physician services have been notably lower in liberal states. These two patterns lead to the following question: to what extent does the partisan composition of the government drive eligibility and reimbursement over time? If cost-saving measures accompany eligibility expansion, then what are their consequences for resource allocation? We explore long-run linkages among partisan composition of the government, eligibility, cost-saving measures, and expenditures for the Medicaid expansion from the mid-1990s to 2010. Our analysis consists of four steps. First, we analyze how much the partisan composition of the state government drives eligibility expansion. Second, we explore the tradeoff between breadth of eligibility and fee-for-service reimbursement rates. Third, we investigate driving forces behind the evolution of the delivery systems, i.e., Medicaid managed care diffusion. Fourth, we analyze the resulting patterns of per-enrollee spending. We find that the partisan composition of the state house played a critical role in the relatively later stage of eligibility expansion and the reduction of fee-for-service reimbursement rates over time. While the HMO penetration in the private insurance market drove the Medicaid managed care diffusion, the diffusion also tends to go hand in hand with the reduction of fee-for-service reimbursement rates. Finally, Medicaid per-enrollee spending increased substantially over time despite the adoption of cost-saving measures. This unintended consequence was due to the systematic changes in HMO practices that coincided with the eligibility expansion. The third chapter, co-authored with Claire Lim, investigates determinants of government subsidy in the U.S. health care industry, focusing on the Medicaid Disproportionate Share Hospital (DSH) program. We find that the amount of Medicaid DSH payment per bed increases significantly with increase in hospital size for government hospitals. This is partially explained by the distinctive role that large government hospitals play in the provision of care to the indigent population. However, costs, financial conditions, or types of services by themselves are not enough to explain DSH payments. Large government hospitals tend to have a higher ratio of DSH payments to Medicaid and uninsured costs. The difference in the DSH payment-to-cost ratio across ownership types increases significantly with increase in hospital size. We argue that these key patterns are unlikely to be driven by unobserved heterogeneity, using the Altonji-Elder-Taber-Oster method. Our results on payment-to-cost ratios are consistent with targeting by the state government to counterbalance disparities in hospitals' capability to cross-subsidize across patient types.

Essays In Health Economics And Industrial Organization

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Author : Paul Evan Wong
language : en
Publisher:
Release Date : 2015

Essays In Health Economics And Industrial Organization written by Paul Evan Wong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.

This dissertation presents three essays in health economics and industrial organization. In the first essay, titled "Entry and Long-Run Market Structure in Nongroup Health Insurance, " I examine why there are many highly concentrated markets for nongroup (individual) health insurance in the United States. I do this by estimating a static model of entry, with which I show two results. First, incumbent insurers attract disproportionately high market share but do not get a disproportionate share of the most profitable consumers via underwriting (screening). Due to their high market share, they partially deter entry by other more marginal insurers, contributing to high market concentration. Second, rural areas have low population, unprofitable demographics (low-income, high disease incidence), and higher fixed costs of entry (isolated, few physicians). All three confluent factors at once cause rural areas to face significantly more market concentration than others. I use the estimated model to simulate the long-run changes in market concentration under the Affordable Care Act. Most urban areas face a decline in market concentration, but most rural areas - which were already highly concentrated - face an increase in market concentration. In the second essay, titled "Competition and Innovation: Did Monsanto's Entry Encourage Innovation in GMO Crops?, " I examine the relationship between competition and innovation using Monsanto's entry into agricultural biotechnology. In 1996, Monsanto - then a chemical firm - bought a plant breeder that had developed a new corn hybrid, which could withstand Monsanto's powerful herbicide Roundup. Due to the pre-existing structure of the US plant-breeding industry, this acquisition and Monsanto's acquisition of five other corn breeders meant that Monsanto had also entered soy breeding, in addition to corn. As a result, the market structure of soy breeding shifted from a quasi monopoly (by Pioneer Hi-Bred) to a duopoly with a competitive fringe. At the same time, Monsanto's acquisitions created no significant change in the market structure for other crops, such as wheat or cotton. Using new data on field trials, I study the effects of these changes on innovation. These data indicate that Pioneer and the competitive fringe innovated less in response to Monsanto's entry. Data on patent applications, however, indicate that Pioneer and the competitive fringe patented more after Monsanto entered. In the third essay, titled "Studying State-Level Variation in Nongroup Health Insurance Regulation: Insurers' Incentives to Screen Consumers, " I compare different state-level regulations for nongroup (individual) health insurance, and I use the comparison to show how regulation may affect insurers' incentives to screen and reject high-cost consumers. The study is possible because of historical variation in regulation - various states instituted high-risk pool (HRP), community rating (CR), and guaranteed issue (GI) regulation in the 1990s. I compare rejections of individual insurance applications across the different regulatory regimes. Rejections do not decline under HRP regulation. Historically, HRPs have generated little change to demand for private nongroup insurance among high-cost consumers, leaving underwriting (i.e. screening) unchanged. CR by itself (without GI) increases rejections. Insurers have a stronger incentive to underwrite when it is allowed but pricing is restricted. GI (with CR) decreases rejections, but they are not fully eliminated - a non-zero fraction of consumers are still rejected. Insurers face substantial incentive to screen consumers, which may outweigh the implicit cost of screening that regulation imposes. In light of insurers' behavior under these three regulations, future policy should decrease insurers' incentives to screen consumers. This reduces wasted resources devoted to underwriting.

Essays In Industrial Organization And Health Economics

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Author : Dennis Bernard McWeeny
language : en
Publisher:
Release Date : 2019

Essays In Industrial Organization And Health Economics written by Dennis Bernard McWeeny and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019 with categories.

This dissertation consists of two essays on market power and market failure in the airline and healthcare industries. The first chapter examines spatial competition in the airline industry. Airline passengers consider flights departing from airports in different cities to be substitutes and sometimes travel large distances to board a flight with lower fares. However, the industrial organization literature has assumed that flights departing from airports in different cities are in totally separate markets. This assumption rules out these substitution patterns altogether and could yield biased estimates of elasticities and markups. Using an airline passenger survey conducted annually at San Francisco International Airport, I estimate a structural model of air travel demand that allows consumers to choose among flights departing from airports in different cities. I then compare the results from my model to those from the conventional model that defines markets as origin-destination airport pairs. I find that leisure passengers are willing to travel up to 69 miles to save $100 on airfare. As a result, demand is 74 percent more elastic and markups are 41 percent lower when spatial competition is accounted for. These results suggest that airlines face substantial competition from flights departing from nearby airports and that the airport pair definition of airline markets overstates market power. The second chapter (coauthored with Amrita Kulka) studies rural physician shortages. Although fourteen percent of the U.S. population lives in rural areas, only ten percent of primary care physicians practice medicine there; populations in areas with physician shortages have measurably worse health outcomes. We provide evidence on the effects of government incentive programs intended to eliminate rural physician shortages. Using a differences-in-differences approach, we estimate that student loan forgiveness programs increase the number of physicians in rural areas by about three physicians per county in the long run. We also estimate a structural model of physician specialty and location decisions and simulate counterfactual incentive policies. We find that physicians are relatively unresponsive to differences in salaries across locations and strongly prefer to practice medicine in their home state. As a result, current incentive payments are too small to eliminate shortages.

Essays On Industrial Organization And Health Care Markets

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Author : Alexander Lee Olssen
language : en
Publisher:
Release Date : 2021

Essays On Industrial Organization And Health Care Markets written by Alexander Lee Olssen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.

This thesis comprises three essays on the industrial organization of health care markets. In the first essay, joint with Mert Demirer, I study how formulary–contingent rebates affect insurers formulary placement of branded statins. The prices charged for on–patent, branded pharmaceuticals represent a large, and controversial, component of medical spending in the U.S. In contrast to many countries and many other government programs, drug prices in the Medicare Part D program are determined by privately negotiated rebates between insurance plans and drug manufacturers. How large are these rebates? What would happen to formularies, consumer surplus, and firm profits if the government could increase the rebates of a blockbuster Medicare Part D drug? We estimate a simultaneous model of insurance demand and statin demand for the population of statin users in 2010. Our demand estimates allow us to quantify how insurer profits change under different statin formulary structures. We use these profit functions to estimate the rebates for Crestor and Lipitor, two blockbuster drugs, using a moment inequality approach; we estimate rebates between 25% and 54% for branded statins. In counterfactuals, we analyze the effect of rebates on formulary design and consumer surplus. We show that increasing only Crestor rebates has no effect on consumer surplus because of offsetting effects on winners and losers. In contrast, increasing only Lipitor rebates does increase consumer surplus. If rebates reduced U.S. prices to match those paid in Canada, then consumer surplus would increase by up to 3.1% In the second essay, I compare estimates of formulary–contingent rebates using three empirical moment inequality models. Unobserved private rebates are an important determinant of the prices that insurers pay drug manufacturers in Medicare Part D. There is growing interest in understanding these negotiated rebates and there consequences on market equilibrium. However rebates are secret and have proven difficult to estimate. In this paper I compare three moment inequality models that I use to estimate formulary–contingent rebates for branded statins. The first model, which only allows for measurement error, imposes the strong assumption that their is no rebate heterogeneity that is unobserved to the econometrician. Due to the fact that different insurers use different agents (Pharmacy Benefit Mangers) in rebate negotiations, this assumption is unlikely to hold. As a consequence I develop two models that allow for unrestricted insurer–specific unobserved rebate heterogeneity. Somewhat surprisingly, the measurement errors only model produces reasonable results in this context, however the rebates for Lipitor are approximately twice as large in my preferred model relative to the measurement errors only model. In the third essay, also joint with Mert Demirer, I study the effects of government negotiated drug prices using Nash–in–Nash bargaining models. One of the most controversial aspects of Medicare Part D is that the government is prohibited from being involved in price negotiations despite the fact that it provides almost $100 billion to the program in subsidies each year. We model pharmaceutical drug price setting using Nash–in–Nash bargaining models. We compare two models: one where insurers negotiate drug prices and another where the government negotiates prices. We show that the ability for the government to improve consumer surplus depends on both upstream and downstream market structure. With many insurers and few drug manufacturers, the government can increase consumer surplus, but with few insurers the government cannot increase consumer surplus no matter how much bargaining power it has vis–a–vis drug manufacturers. We also show that a Nash–in–Nash bargaining model where insurers and drug manufacturers negotiate over both manufacturer prices and copays can be used to estimate unobservable manufacturer prices and bargaining weights as long as there are profit spillovers across bilateral negotiations.

Three Essays Related To Sub Optimal Outcomes In Industrial Organization

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Author : Myles P. Gartland
language : en
Publisher:
Release Date : 2003

Three Essays Related To Sub Optimal Outcomes In Industrial Organization written by Myles P. Gartland and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Capitation fees (Medical care) categories.

This dissertation is a series of three separate studies with a common theme. All three essays examine the issue of sub-optimality in industrial organization. The first essay is a literature analysis of the economic theory of path dependency. I find that economics has ignored the contributions made by other social sciences and business research. The second essay uses a case study of the U.S. health care industry to demonstrate how behavioral lock-in can create and perpetuate market failure. The third essay is an empirical study which demonstrates how the implementation of a capitated payment mechanism has increased the physician organization's internal cost. Each of these essays demonstrate how inefficient and sub-optimal outcomes can persist and therefore result in market failure.

Essays On The Economics Of Industrial Organization

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Author :
language : en
Publisher:
Release Date : 2014

Essays On The Economics Of Industrial Organization written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.

This dissertation focuses on the industrial organization of Chilean health insurance markets. Chile is a particularly interesting case for study because in additional to the legality of risk-rated pricing, the purchase of insurance is mandated and a robust private health insurance market coexist with a large public sector plan. While the institutional background is different in several important ways from the United States, the regulations employed in the private market and studied here are very similar to those used in the Massachusetts Health Insurance Exchange, upon which the Affordable Care Act exchanges were modeled. In the first chapter, which is a joint work with Laura Dague, we study the welfare consequences of a switch from risk-rated premiums to community-rated premiums using a two stage model of health insurance demand and detailed claims data from Chilean health insurers. Our results suggest that if insurers are not allowed to scale premiums based on age and sex (in accordance with a recent court ruling), a significant fraction of young, healthy individuals will opt out of the private insurance market, raising the average cost of insuring those who remain. Chilean consumers in aggregate are likely to be worse off under community-rated premiums. While consumers may perceive uniform prices as more equitable, they are less efficient in this market. In the second chapter, we take advantage of discontinuities in the structure of Chilean Private health insurance market to identify the price elasticity of demand for health insurance. Under Chilean law, private health insurance firms may charge different prices to consumers on the basis of age and sex using a predetermined multiplicative factor. This creates discontinuities at each age where the price of the plan changes exogenously. We use this age-based pricing scheme to identify the elasticity of demand for insurance. Our estimates suggest that demand is relatively inelastic; in particular, there seems to be limited switching of insurance plans when consumers a price increase despite a wide variety of plans available on the market and a minimum requirement that a substantial number of consumers initially opt for. The elasticity is heterogeneous across consumers.

Health Economics

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Author : Xavier Martinez-Giralt
language : en
Publisher: Routledge
Release Date : 2013-06-17

Health Economics written by Xavier Martinez-Giralt and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06-17 with Business & Economics categories.

Research in Health Economics has developed into a separate discipline for the last 25 years. All this intense research activity, has translated in the inclusion of courses of health economics, mostly at graduate level. However, the Industrial Organization aspects of the health care market do not occupy a central place in those courses. We propose a textbook of health economics whose distinguishing feature is the analysis of the health care market from an Industrial Organization perspective. This textbook will provide teachers and students with a reference to study the market structure aspects of the health care sector. The book is structured in three parts. The first part will present the basic principles of economics. It will bring all readers to the required level of knowledge to follow subsequent parts. Part II will review the main concepts of health economics. The third part will contain the core of the book. It will present the industrial organization analysis of the health care market, based on our own research.