Market Size and the Returns to Surgeon Volume: Evidence from Hip and Knee Replacements

Why are people in larger geographic markets more productive? I investigate one mechanism in the context of hip and knee replacements—the relationship between surgeons’ procedural volume and patient health outcomes. Using differential distance as an instrument, I find that surgeon volume affects outcomes and attribute 28% of the benefits of market size to this mechanism. This relationship underscores an externality: patient choice of surgeon affects others’ outcomes through surgeon quality. Evaluating a first-best policy and three feasible alternatives, I show the externality increases the welfare effects of these alternatives, but the best achieves only 9% of the first-best gain.

Media Coverage: The Economic Misfit

Policy Design under Labor Market Power: Evidence from Hospitals

There is a growing consensus that firms exert labor market power. Labor market power can distort employment and wages, which can be particularly problematic in industries that already struggle to recruit and retain workers, such as in health care. Despite this growing body of research, there is little evidence on how to design policy in these settings. In this paper, I investigate how to design labor policy in the hospital industry when the hospitals exert labor market power. I focus on place-based policies designed to increase employment and wages at certain hospitals through targeted reimbursements. To answer this question, I introduce a model of labor supply and demand. The key parameters in this model are the labor supply elasticity, a measure of labor market power, and the pass-through of hospital payments to wages. Using quasi-random variation in Medicare hospital payments, I identify these parameters and find that hospitals mark down wages by 30% relative to workers’ marginal products and workers capture roughly 29 cents of every dollar increase in hospital revenue. Remote hospitals, large hospitals, and hospitals in more concentrated labor markets exert more labor market power and have higher pass-through rates. I investigate the efficiency and distributional welfare implications of targeting these subsidies at hospitals with more labor market power and pass-through. 

When the Payer is Private: The Effect of Medicare Advantage on Hospital Finances (with Krista Cherry and Jeff Stensland)

While private Medicare plans, known as Medicare Advantage (MA) plans, have experienced tremendous growth in the past decade, little is known about the consequences of such growth, especially for providers. Hospitals, in particular, have surfaced concerns about low payments and administrative hassles when contracting with MA insurers, which is especially concerning due to the growing financial challenges hospitals face. In this project, therefore, we investigate the effect of MA on hospital finances. To estimate the effect, we leverage quasi-random variation in exposure to MA due to the timing of MA insurer entry into a market. We find that MA does not have a statistically significant effect on hospital revenues, costs, or profit margins, and the 95% confidence interval allows us to rule out meaningful effect sizes. This null effect persists for both rural hospitals and Critical Access Hospitals.

Media coverage: Healthcare Dive, Fierce Healthcare, Becker's Payer

I am passionate about teaching economics. I focus especially on building an appreciation of and skillset in using data to better understand applied economic contexts, such as those related to policy and business in the health care setting or labor market. I won the outstanding Teaching Assistant award for my teaching in Family and Society. 

• Principles of Economics with John Taylor, Mark Duggan (Fall 2021, Winter 2023) [Teaching Evaluations (Fall, 2021)] [Teaching Evaluations (Winter, 2023)]

• Family and Society with Petra Persson (Winter 2022) [Teaching Evaluations] Outstanding TA award

• Economic Policy Seminar with Ward Hanson (Spring 2022) [Teaching Evaluations]