Economics of Health Care, Health Investments, and Risky Behaviors
Paper Session
Saturday, Jan. 6, 2024 8:00 AM - 10:00 AM (CST)
- Chair: John Cawley, Cornell University
Improving Performance Through Allocation and Competition: Evidence from a Patient Choice Reform
Abstract
We study the allocative effects of expanding patient choice among heterogenous hospitals in a publicly-funded health system. Designing public policies to improve allocation and use of resources in society is particularly relevant but challenging in the health care sector, which is known to have inefficiencies and frictions in consumer choice, together with variations across producers in their available resources and performance. While quality and efficiency are important domains of health system performance, inadequate access to care along with long waiting times have become a significant policy issue in many countries.We use comprehensive administrative data on hospital discharges and a difference-in-differences (DiD) method exploiting a unique quasi-natural experiment: a regional patient choice reform for planned surgeries in Finland. Prior to this reform, patients were typically referred to the closest hospital within their own health care district. After the reform, patients had a right to choose any public hospital within and outside their own health care district in the reform area, leaving the rest of the country unaffected. By improving patients' opportunities to choose and substitute across hospitals, the reform acts as a shock to the competitive environment.
Using the DiD approach, we document that the reform had substantial effects on hospital choices. We also find that large teaching hospitals attracted more patients and concentration in their markets increased. Thus, by increasing patients’ opportunities to substitute across hospitals, choice reforms can increase market concentration and market power of large hospitals. The reform did not have much effect on clinical quality outcomes such as emergency readmissions, the average costs of surgeries, or the case mix of hospitals, despite the large allocative effects and increased supply. Taken all together, our results suggest that the reform that promoted patient choice improved hospital performance and allocation with more efficient use of existing resources.
Frosty Climate, Icy Relationships: Frosts and Intimate Partner Violence in Rural Peru
Abstract
Violence against women—especially intimate partner violence (IPV)—is a global concern, affecting one in three ever-partnered women worldwide (Sardinha et al., 2022). We study the impact of frosts (temperatures below 0°C/32°F) on IPV among women in Peru, where IPV both IPV and cold events are prevalent (WHO, 2021; Keller & Echeverría, 2013; FAO, 2008). Extreme cold can have adverse consequences for agricultural income in rural settings and decreased income typically increases IPV (e.g., Heath et al., 2020; Hidrobo et al., 2016). Additionally, extreme cold may confine individuals indoors, increasing interactions between victims and perpetrators. Unsurprisingly, more exposure to violent partners increases domestic violence (Bhalotra et al., 2021; Agüero, 2021; Arenas-Arroyo et al., 2021; Chin, 2012).We match data on ever-partnered women with hourly temperatures using GPS location and month of interview over the period 2010-2018. Building on Schlenker and Roberts (2006), we calculate the cumulative degree hours a household experienced freezing temperatures in the year prior to the survey. Exploiting within-district variation in temperatures, we find that extreme cold increases the prevalence of IPV. Experiencing 10 degree hours below -9°C in the past year increases the likelihood a woman experiences IPV by 0.5 percentage points; this effect is much larger when we consider more extreme temperature thresholds.
Critically, we present the first evidence of the income and exposure channels' relative importance, utilizing variation in frost timing. Specifically, we separate growing season frosts (using data on the timing of sowing and harvests)—which affect both household income and time spent indoors—from frosts occurring outside of the growing season, which primarily affect time spent indoors. Non-growing season frosts have no statistically significant effects but freezing temperatures during the growing season substantially raise IPV; 10 degree hours below -9°C increases the probability of experiencing IPV by 1.3 percentage points.
Do Physicians Follow the Golden Rule? Evidence on Imperfect Agency from Physicians’ Self-Prescriptions
Abstract
We use a unique dataset from Denmark on prescription drug claims for cholesterol-lowering drugs to explore whether physicians choose different drugs for themselves than for their patients. In the statin drug class, the Danish government recommends the first-line use of generic simvastatin as opposed to the newer, more costly, and more potent Lipitor and Crestor. We find that physicians are more likely to use the newer and stronger statins for their own treatment than for their patients, both in treatment initiations and for ongoing treatment. Our findings suggest that physicians substantially discount patient utility relative to their own, and are willing to trade off more government costs for clinical benefit when they themselves receive the clinical benefit. To estimate the welfare effects of this agency problem, we exploit variation in cost-sharing schedules over the year to estimate the amount physicians are willing to pay, out of pocket, for a stronger statin.Discussant(s)
Andrea Kiss
,
Carnegie Mellon University
Anthony Yu
,
Harvard University
Marguerite Obolensky
,
Columbia University
Manasvini Singh
,
Carnegie Mellon University
JEL Classifications
- I1 - Health
- Y9 - Other