Working Papers

Consumer Responsiveness to Simple Health Care Prices: Evidence From Tiered Hospital Networks (draft)

This paper shows that consumers price-shop for complex health care when they can easily assess out-of-pocket prices. Health care cost containment efforts increasingly incentivize price-shopping, despite a dearth of evidence that this steers consumers toward lower-priced care for major medical services. I show that consumers price-shop in the highly simplified price information environment of health insurance plans with tiered hospital networks. These consumers observe a single predictable, well-defined price that applies to a broad range of services within each of at most three tiers of hospitals. The savings from price-shopping are large enough to both compensate for consumer welfare losses and raise insurer profits.

Employer Consolidation and Wages: Evidence from Hospitals (with Matt Schmitt; draft)

We test whether wage growth slows following employer consolidation by examining a decade of hospital mergers. To isolate the effects of changes in concentration due to mergers, we estimate difference-in-differences models comparing wage growth in markets with mergers to wage growth in markets without mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’ skills are at least somewhat industry-specific. Following such mergers, annual wage growth is 1.1pp slower for skilled non-health professionals and 1.7pp slower for nursing and pharmacy workers than in markets without mergers. In all other cases, we fail to reject zero wage effects. We argue that the observed patterns are unlikely to be explained by merger-related changes aside from labor market power. Wage growth slowdowns appear to be attenuated in markets with strong labor unions, and we do not observe reduced wage growth after out-of-market mergers that leave employer concentration unchanged. In a simple theoretical framework, we show how integrating negative wage effects can lead to more mergers being opposed by antitrust regulators, even without departing from a consumer welfare standard.

In Progress

Restricting the Bargaining Agenda: Evidence From Health Insurance

Externalities from Large Health Insurance Purchasers (with Nicholas Tilipman)

Application and Matriculation Behavior in Post-Secondary Education (with Ana Gazmuri)

Impact of Increasing Hospital Price Transparency: Collusion, Search, and Equilibrium Price (with Maryam Saeedi and Robert Town)