Topics in Health Economics
Friday, Jan. 5, 2018 2:30 PM - 4:30 PM
- Chair: Jonathan Gruber, Massachusetts Institute of Technology
Patient Versus Provider Incentives and Overspending in Long Term Care
AbstractRising health care expenditures due to the overuse of medical services pose a growing policy concern, but it is difficult to assess if provider or patient incentives are accountable for excessive utilization. In this paper, we provide the first evidence on the joint effect of consumer and provider incentives on overspending in the long term care industry, which accounts for 1.8% of U.S. GDP. It is possible that Medicaid beneficiaries, who can return to the community, prolong their nursing home stays because of low out-of-pocket spending and since nursing homes profit from longer stays. Our research design explores changes in residents’ Medicaid coverage and variation nursing homes' financial incentives regarding the discharge timing of relatively healthy elderly residents, who can return home. Using resident-level micro data from California, New Jersey, Ohio, and Pennsylvania, we find that nursing home residents prolong their stays immediately after becoming covered by Medicaid. Moreover, nursing homes are less likely to discharge Medicaid beneficiaries at low occupancies. As nursing homes approach their capacity limit, however, we see an increase in discharge rates among Medicaid beneficiaries because nursing homes prefer to occupy beds with more profitable private payers. Moreover, residents and providers are more likely to prolong stays if their respective financial incentives are stronger. We also find that longer nursing home stays among Medicaid beneficiaries do not lead to improved health outcomes. Based on these empirical findings, we develop and estimate a dynamic model of nursing home discharges to quantify the relative contributions of consumer and provider incentives to prolonged nursing home stays. The estimated structural parameters that represent the relative strength of provider and patient incentives allow us to conduct counterfactual analyses and inform policymakers whether incentives for consumers or provider are more effective in reducing long term care spending.
Does Medicaid Improve Mental Health? An Examination of Treatment Use and Financial Security
AbstractEvidence of the Medicaid program’s impact on adult health outcomes lags far behind research on Medicaid coverage and health care access. Few studies have investigated the effects of adult Medicaid coverage on health outcomes, and mental health is one of the few areas in which there is some causal evidence of improvement. Most of these studies are limited to one or a handful of states, and the robustness of this relationship to other state contexts is unclear. Additionally, empirical analyses of the channels through which Medicaid coverage may improve mental health are scarce. In this paper we examine whether the introduction of Medicaid coverage for adults without dependent children in a wave of pre-ACA reforms across the nation improves mental health. Additionally, we study the degree to which changes in mental health can be attributed to changes in financial security versus changes in treatment. We use the natural experiments created by state-level decisions to introduce Medicaid for adults without dependent children between 2001-2013 to estimate the effect of acquiring Medicaid on four different measures of mental health. Data for this study consist of 12 panels of a restricted version of the nationally representative Medical Expenditure Panel Survey (MEPS) that includes state identifiers for the years 2001 – 2013 combined with a unique dataset we created that characterizes Medicaid coverage for non-elderly adults without dependent children, or childless adults. We use difference-in-differences and instrumental variables methods to identify the effect of acquiring Medicaid coverage on study outcomes.
The Effect of Minimum Wage Laws on Employer Health Insurance: Do Outside Options Matter?
AbstractBetween 2009 and 2015, several states increased the minimum wage while the federal minimum wage remained at $7.25/hr. Although many studies investigate the impact of minimum wage increases on employment outcomes of low-wage workers, very little prior work evaluates effects on employer-sponsored insurance (ESI). About 28% of those close to the state’s minimum wage reported ESI in 2009. Despite the individual and employer mandates of the Affordable Care Act (ACA) aimed at increasing the number of insured working adults, the declining trend in ESI coverage has continued since ACA implementation. We explore if 2009-2015 minimum wages increases affect ESI; we also investigate whether firms are more responsive to minimum wage increases when there is greater availability of subsidized private and public insurance. Theory suggests labor markets may be more flexible in reducing employer health insurance in response to minimum wage increases when public health insurance is more available for affected workers and their families. We use American Community Survey (2009-2015), yielding a pooled cross-sectional panel at the state/year by worker wage-level to estimate the impact of minimum increases on ESI coverage using a standard difference-in-differences identification strategy. We find an increase in the state minimum wage significantly reduces the likelihood of ESI coverage for minimum wage workers, and that these results are robust to several checks on assumptions. We do not find evidence that ACA Medicaid expansion affects the way ESI reacts to minimum wage increases. This could be due to the fact that full-time, full-year minimum wage workers generally earn above the Medicaid eligibility threshold. However, we find that minimum wages effects on ESI are statistically significant only in the post-2013 time period, suggesting that the ACA’s other insurance expansions (through Marketplace means-tested tax subsidies) itself may be providing an outside option valuable to workers near the minimum wage.
- I1 - Health