Research

Research Interests:

Current Research:

My research focuses on how health insurance access and reimbursement policies affect the provision and utilization of healthcare in the United States.


Published Work:




Working Papers:

Abstract

We identify and quantify a new form of welfare loss in insurance markets. We first show theoretically that moral hazard from subsidies for cost-sharing combined with community rating mimics adverse selection and can unravel insurance markets. To quantify the potential welfare loss, we use exogenous variation in the number of subsidized enrollees on the ACA exchanges. We find that subsidy-induced moral hazard led to higher premiums, which has lowered enrollment among the unsubsidized by 7.8 percentage points. We estimate the welfare costs of this ``moral hazard induced unraveling'' to be around 25% of the welfare loss from existing adverse selection.



Abstract

Strict reimbursement rules stipulate that Medicare will only cover an ambulance encounter if the patient is transported to a hospital for a medically necessary reason. Using the 2012 to 2016 National Emergency Medical Services Information System data, I use a regression discontinuity at age 65 to determine how Medicare reimbursement rules impact the treatment and transport decision of an EMS provider, the final destination of a patient, and the use of condition codes that qualify transport by an EMS provider as medically necessary. I find that moral hazard increases the consumption of ambulance services by Medicare patients. I then find that to meet the reimbursement requirements of Medicare while also satisfying the legal restrictions of 911 encounters,  EMS providers disproportionately transport Medicare-eligible patients to a hospital and upcode condition codes that qualify as medically necessary. These practices increased expenditures by $450 million over five years, with half due to upcoding.


Abstract

We examine the cost-cutting strategies employed by private equity (PE) firms in public goods markets. We use the ambulance industry as a laboratory since price and choice regulation limits other avenues of increasing profitability. We exploit the staggered acquisition of the two largest national private ambulance companies and detailed operations and cost data from all Arizona ambulance operators in a staggered difference-in-differences design to discern whether PE firms enhance profits through operational efficiencies or by selectively serving lower-cost consumers (cream-skimming). We find a 40% increase in profit among PE firms, driven entirely by cream-skimming from fire departments. We identify the specific mechanism of cream-skimming -- firing the paramedics required to operate high-cost runs. These runs are then shifted to fire departments. This cream-skimming behavior leads to a 7% increase nationally in fatalities from traffic accidents in areas serviced by PE-owned ambulances. We highlight the complex implications of PE investment in public services, where cost-cutting measures to increase profitability may compromise public health outcomes and public provider balance sheets.


Abstract

 We examine how firms navigate investment decisions when confronted with tail risk -- the small possibility of extreme financial loss. We focus on hospital investments in trauma centers faced with medical malpractice risk. We focus on hospitals for three reasons: first, medical malpractice insurance inherently leaves hospitals exposed to substantial tail risk; second, the consequential financial stakes of medical liability for hospitals are quite large; and third, while trauma centers are financially beneficial, they are also exceptionally susceptible to tail risk given the critical nature of their services. For identification, we exploit the staggered adoption of caps on non-economic damages across states from 1991 to 2011, treating this as a quasi-random modulation of tail risk. These caps impose a ceiling on potential awards in malpractice lawsuits, thereby attenuating the tail risk. Employing a staggered synthetic control methodology, we find a 25% increase in the likelihood that a hospital has a trauma center following the reduction of tail risk. This effect is predominantly driven by non-profit hospitals and new investments (i.e., trauma center openings) rather than disinvestment (i.e., decrease in trauma center closures), indicating a one-sided response to decreased tail risk. 


Research In Progress: