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Current Topics in Health and Public Economics

Paper Session

Saturday, Jan. 4, 2020 8:00 AM - 10:00 AM (PST)

Manchester Grand Hyatt, Cortez Hills C
Hosted By: Chinese Economic Association in North America
  • Chair: Ching-to Albert Ma, Boston University

Changing Preferences: An Experiment and Estimation of Market-Incentive Effects on Altruism

Undral Byambadalai
,
Boston University
Ching-to Albert Ma
,
Boston University
Daniel Wiesen
,
University of Cologne

Abstract

This paper studies how altruistic preferences are changed by markets and incentives. We conduct a
laboratory experiment in a within-subject design. Subjects are asked to choose health care qualities for hypothetical patients in monopoly, duopoly, and quadropoly. Prices, costs, and patient bene…ts are experimental incentive parameters. In monopoly, subjects choose quality to tradeo¤ between pro…ts and altruistic patient bene…ts. In duopoly and quadropoly, we model subjects playing a simultaneous-move game. Each subject is uncertain about an opponent’s altruism, and competes for patients by choosing qualities. Bayes-Nash equilibria describe subjects’quality decisions as functions of altruism. Using a nonparametric method, we estimate the population altruism distributions from Bayes-Nash equilibrium qualities in different markets and incentive con…gurations. Markets tend to reduce altruism, although duopoly and quadropoly equilibrium qualities are much higher than those in monopoly. Although markets crowd out altruism, the disciplinary powers of market competition are stronger. Counterfactuals con…firm markets change preferences.

Social Interactions and Social Preferences in Social Networks

Chih-Sheng Hsieh
,
National Taiwan University
Xu Lin
,
Virginia Tech

Abstract

We extend the utility specification in Ballester et al. (2006) to study social interactions when individuals hold altruistic preferences in social networks. We show that rich network features can be captured in the best response function derived by maximizing the extended utility which incorporates altruism, thereby providing microfoundation for studies on how network features mediate peer effects or other important features in social interactions. We demonstrate that the often ignored altruism is another serious confounding factor of peer effects. Our results show that the estimates of peer affects are approximately 36% smaller un- der social preferences. Furthermore, we could separately identify two different types of effects caused by peers’ outcomes: the (usually positive) spillover effects and the direct (negative or positive) externality effects, which is impossible in a conventional social interactions model based on the self-interest hypothesis.

The Impacts of Medicare Advantage on Skilled Nursing Facility Deficiencies and Staffing

Sean Sheng-Hsiu Huang
,
Georgetown University
John R Bowblis
,
Miami University

Abstract

Skilled nursing facilities (SNFs) face an increasing percentage of post-acute care patients enrolled in Medicare Advantage (MA), yet our understanding of how this affects quality is limited. On one hand, managed care may provide better coordination that enhances SNF quality. However, MA plans can also negotiate lower payments than traditional fee-for-service Medicare which provides SNFs with fewer financial resources to invest in staffing and quality. This study empirically examines how a greater reliance on post-acute care admissions from MA plans affects SNF quality and staffing. We use Medicare Beneficiary Summary File to calculate county-level MA penetration rates among all Medicare beneficiaries. This data is linked with the Minimum Dataset to calculate each SNF’s proportion of Medicare post-acute care admissions in which the beneficiary is enrolled in an MA plan (henceforth MA admission proportion). Facility characteristics are obtained from the Certification and Survey Provider Enhanced Reporting. Dependent variables include measures of number of deficiencies, severity- weighted deficiency score, and nursing staff levels. Because MA admission proportion could be endogenous, we use county-level MA penetration rates as an exclusion restriction in an instrumental variable (IV) fixed-effect panel regression. The analytical sample includes all freestanding, privately-owned SNFs in the continental United States from 2011 through 2015, totaling about 14,000 unique facilities and 61,000 NH-year observations. We find that higher MA admission proportion leads to worse deficiency scores and lower nursing staff levels. Overall, our finding suggests that MA creates downward financial pressure to SNFs and leads to lower staffing levels and worse quality. While MA plans may be attractive to healthier Medicare beneficiaries, our results highlight how the growth of MA can have negative consequences for the quality of care provided in SNFs. As MA continues to grow, policymakers should pay close attention to the unintended consequences to SNF quality.

Health Insurance Parity for Behavioral Health Treatment and Labor Market Outcomes

Jason Hockenberry
,
Emory University
Hefei Wen
,
University of Kentucky

Abstract

Policies to ensure health insurance coverage for those seeking behavioral health services, either for mental health (MH) or substance use disorder (SUD), have been enacted at both the state and federal level. In this study we employ the National Survey of Drug Use and Health restricted geocoded data from 2004-2012 to examine whether increasing health insurance parity for behavioral health services impacted treatment and labor market outcomes among those with major depression or SUD. We find little evidence that parity reduced the probability of group insurance coverage or employment; though the effects are imprecisely estimated for both state level changes and the 2010 interim rule enacted under the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. With regard to service use and other labor outcomes, we find that state parity laws increased the probability of MH treatment receipt among those with major depression who were covered by group insurance by 23.5% relative to the baseline period, and decreased the number of jobs a person had in the past year by 10.6% among those who were employed. We also find that SUD treatment receipt doubles among those with SUD who are covered by group insurance and currently employed as a result of these state parity laws. Among this group absenteeism decreases by 1/2 of a day per month, with hours worked in the past week increasing by about 1.8. We find some limited evidence of effects of federal parity on absenteeism for those with major depression, but no statistically discernible impacts among those with SUD.
Discussant(s)
Kosali Simon
,
Indiana University
Ernest Lai
,
Lehigh University
Hsien-Chang Lin
,
Indiana University
Shin-Yi Chou
,
Lehigh University
JEL Classifications
  • I1 - Health
  • H0 - General