does medical malpractice law improve health care quality we assess the potential for medical liability forces to deter medical errors and improve health care treatment quality identifying liability s influence by drawing on variations in the manner by which states formulate the negligence standard facing physicians using hospital discharge records from the national hospital discharge survey and clinically validated quality metrics inspired by the agency for health care research and quality we find evidence suggesting that treatment quality may improve upon reforms that expect physicians to adhere to higher quality clinical standards we do not find evidence however suggesting that treatment quality may deteriorate following reforms to liability standards that arguably condone the delivery of lower quality care similarly we do not find evidence of deterioration in health care quality following remedy focused liability reforms such as caps on non economic damages awards

effects of universal health insurance on health care utilization and supply side responses evidence from japan abstract we investigate the effects of a massive expansion in health insurance coverage on health care utilization and supply side responses by focusing on universal health insurance introduced in japan in 1961 there are two major findings first health care utilization measured in terms of admissions inpatient days and outpatient visits to hospitals increased significantly second we also find a supply response but the size of the supply response differs across service types while the number of beds increases effects on the number of medical institutions physicians and nurses are either negligible or inconclusive our results suggest that countries planning a large expansion in health insurance coverage would need to generate sufficient financial resources to cover the surge in health care expenditures both in the short and long run our results also indicate that any slowdown in the supply side response may constrain the ability of the health care system to meet increased demand

pricing prototypical products when we think of colas coca cola first comes to mind products such as cola cola tide laundry detergent and chapstick lip balm are the prototypical products in their respective categories for more than three decades research in consumer psychology has accumulated evidence on how prototypicality influences memory shapes the composition of consideration set and affects purchase decision yet there is no research on how it changes the competitive behavior of firms in a horizontally differentiated market for example some prototypical products are priced lower than other products in their category whereas in certain other categories the prototypical product is priced higher we propose a novel model of spatial competition where the prototypicality of a product influences the probability of the product being included in consumers consideration sets without affecting its valuation using the model we examine theoretically the impact of prototypicality on the pricing decisions of competing firms our analysis shows that when consumer valuations are low the prototypical product is priced lower than a nonprototypical product and earns more profits however when consumer valuations are high the rank order of the prices of the prototypical product and a nonprototypical product is reversed but not the order of profits we subject these predictions to an empirical test the experimental results lend support for the qualitative predictions of the model

hips and hearts the variation in incentive effects of insurance across hospital procedures the separate identification of effects due to incentives selection and preference heterogeneity in insurance markets is the topic of much debate in this paper we investigate the presence and variation in moral hazard across health care procedures the key motivating hypothesis is the expectation of larger causal effects in the case of more discretionary procedures the empirical approach relies on an extremely rich and extensive dataset constructed by linking survey data to administrative data for hospital medical records using this approach we are able to provide credible evidence of large moral hazard effects but for elective surgeries only

environment health and human capital in this review we discuss three major contributions economists have made to our understanding of the relationship between the environment and individual well being first in explicitly recognizing how optimizing behavior particularly in the form of residential sorting can lead to nonrandom assignment of pollution economists have employed a wide range of quasi experimental techniques to develop causal estimates of the effect of pollution second economic research has placed a considerable focus on the role of avoidance behavior which is an important component for understanding the difference between biological and behavioral effects of pollution and for proper welfare calculations lastly economic research has expanded the focus of analysis beyond traditional health outcomes to include measures of human capital including labor supply productivity and cognition our review of the quasi experimental evidence on this topic suggests that pollution does indeed have a wide range of effects on individual well being even at levels well below current regulatory standards given the importance of health and human capital as an engine for economic growth these findings underscore the role of environmental conditions as an important factor of production jel i12 i31 j24 q51 q53

censored quantile instrumental variable estimates of the price elasticity of expenditure on medical care efforts to control medical care costs depend critically on how individuals respond to prices i estimate the price elasticity of expenditure on medical care using a censored quantile instrumental variable cqiv estimator cqiv allows estimates to vary across the conditional expenditure distribution relaxes traditional censored model assumptions and addresses endogeneity with an instrumental variable my instrumental variable strategy uses a family member s injury to induce variation in an individual s own price across the conditional deciles of the expenditure distribution i find elasticities that vary from 0 76 to 1 49 which are an order of magnitude larger than previous estimates

the effect of patient cost sharing on utilization health and risk protection abstract this paper exploits a sharp reduction in patient cost sharing at age 70 in japan using a regression discontinuity design to examine its effect on utilization health and financial risk arising from out of pocket expenditures due to the national policy cost sharing is 60 80 percent lower at age 70 than at age 69 i find that both outpatient and inpatient care are price sensitive among the elderly while i find little impact on mortality and other health outcomes the results show that reduced cost sharing is associated with lower out of pocket expenditures especially at the right tail of the distribution jel g22 i11 i12 i13 i18 j14

life cycle responses to health insurance status this paper studies the lifetime effects of exogenous changes in health insurance coverage e g medicare ppaca termination of employer provided plans on the dynamic optimal allocation consumption leisure health expenditures status health and wealth and welfare we solve simulate and structurally estimate a parsimonious life cycle model with endogenous exposure to morbidity and mortality risks and exogenous health insurance by varying coverage we identify the marginal effects of insurance when young and or when old on allocations statuses and welfare our results highlight positive effects of insurance on health wealth and welfare as well as mid life substitution away from healthy leisure in favor of more health expenses caused by peaking wages and accelerating health issues

do physicians financial incentives affect medical treatment and patient health we investigate whether physicians financial incentives influence health care supply technology diffusion and resulting patient outcomes in 1997 medicare consolidated the geographic regions across which it adjusts physician payments generating area specific price shocks areas with higher payment shocks experience significant increases in health care supply on average a 2 percent increase in payment rates leads to a 3 percent increase in care provision elective procedures such as cataract surgery respond much more strongly than less discretionary services non radiologists expand their provision of mris suggesting effects on technology adoption we estimate economically small health impacts albeit with limited precision

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

hospital treatment and patient outcomes evidence from capacity constraints abstract understanding the relationship between health care service provision and patient outcomes has become more important as providers are increasingly evaluated on the efficacy of their care delivery this study examines this relationship using an approach that recognizes the role that capacity constraints at hospitals within a local area serve in patient allocation hourly data on hospital patient censuses over a 12 year period show that hospital assignment is influenced by supply side hospital level constraints on the number of empty beds available for the period during which treatment is sought using this as a source of variation the estimates indicate that treatment at a more procedure intensive hospital lowers readmission rates and that the effect is particularly pronounced for unplanned hospital readmissions the results reinforce the importance of identifying the relationship between treatment intensity and outcomes in a causal framework and indicate that these hospitals are providing higher quality care

the value of medicaid interpreting results from the oregon health insurance experiment we develop frameworks for welfare analysis of medicaid and apply them to the oregon health insurance experiment across different approaches we estimate low income uninsured adults willingness to

reimbursing health plans and health providers efficiency in production versus selection the tradeoff between an insurer s or medical provider s incentives to select good risks and to produce efficiently is governed by the supply price analog to the demand price tradeoff between moral hazard and risk aversion under a variety of models the optimum supply price is a mixture of capitation and fee for service payments empirical literature shows that pure capitation payment leaves strong incentives for selection that are acted upon the presence of contracting costs in a rothschild stiglitz model means a limited pooling equilibrium can exist and that poor risks will not be at their preferred outcome

health insurance and the demand for medical care evidence from a randomized experiment we estimate how cost sharing the portion of the bill the patient pays affects the demand for medical services the data come from a randomized experiment a catastrophic insurance plan reduces expenditures 31 percent relative to zero out of pocket price the price elasticity is approximately 0 2 we reject the hypothesis that less favorable coverage of outpatient services increases total expenditure for example by deterring preventive care or inducing hospitalization

adverse selection and competitive market making empirical evidence from a limit order market this article presents a new methodology for testing economic restrictions on the price schedules offered in a limit order book that are based on i break even conditions for marginal limit orders and ii rational updating conditions for order book revisions over time using order flow data from the stockholm stock exchange i find strong evidence of insufficient depth in the limit order books relative to the theoretical predictions an extended model which allows the model parameters to depend on market conditions captures some of the systematic variation in the observed order book depth article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

does medicare save lives health insurance characteristics shift at age 65 as most people become eligible for medicare we measure the impacts of these changes on patients who are admitted to hospitals through emergency departments for conditions with similar admission rates on weekdays and weekends the age profiles of admissions and comorbidities for these patients are smooth at age 65 suggesting that the severity of illness is similar on either side of the medicare threshold in contrast the number of procedures performed in hospitals and total list charges exhibit small but statistically significant discontinuities implying that patients over 65 receive more services we estimate a nearly 1 percentage point drop in 7 day mortality for patients at age 65 equivalent to a 20 reduction in deaths for this severely ill patient group the mortality gap persists for at least 9 months after admission

the mortality effects of retirement evidence from social security eligibility at age 62 abstract social security eligibility begins at age 62 and approximately one third of americans immediately claim at that age we examine whether age 62 is associated with a discontinuous change in aggregate mortality a key measure of population health using mortality data that covers the entire u s population and includes exact dates of birth and death we document a robust two percent increase in male mortality immediately after age 62 the change in female mortality is smaller and imprecisely estimated additional analysis suggests that the increase in male mortality is connected to retirement from the labor force and associated lifestyle changes

the impact of health insurance on stockholding a regression discontinuity approach economic theory predicts that a reduction in background risk should induce financial risk taking particularly for individuals with low stock market participation costs hence health insurance coverage could affect financial risk taking by offsetting health related background risk we use a regression discontinuity design to examine whether medicare eligibility at age 65 increases stockholding in the us and find that it does so for those with college education but not for their less educated counterparts who face higher stock market participation costs our results are unlikely due to the reduction of medical expenses associated with medicare coverage because the latter does not affect bondholding

long lasting effects of socialist education abstract political regimes influence the content of education and criteria used to select and evaluate students we study the impact of a socialist education on the likelihood of obtaining a college degree and on several labor market outcomes by exploiting the reorganization of the school system in east germany after reunification our identification strategy uses cutoff birth dates for school enrollment that lead to variation in the length of exposure to the socialist education system within the same birth cohort an additional year of socialist education decreases the probability of obtaining a college degree and affects longer term labor market outcomes for men

health insurance and mortality experimental evidence from taxpayer outreach we evaluate a randomized pilot study in which the irs sent informational letters to 3 9 million taxpayers who paid a tax penalty for lacking health insurance coverage under the affordable care act drawing on administrative data we study the effect of the intervention on taxpayers subsequent health insurance enrollment and mortality we find the intervention led to increased coverage in the two years following treatment and that this additional coverage reduced mortality among middle aged adults over the same time period our results provide the first experimental evidence that health insurance reduces mortality

the oregon health insurance experiment evidence from the first year in 2008 a group of uninsured low income adults in oregon was selected by lottery to be given the chance to apply for medicaid this lottery provides an opportunity to gauge the effects of expanding access to public health insurance on the health care use financial strain and health of low income adults using a randomized controlled design in the year after random assignment the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected we find that in this first year the treatment group had substantively and statistically significantly higher health care utilization including primary and preventive care as well as hospitalizations lower out of pocket medical expenditures and medical debt including fewer bills sent to collection and better self reported physical and mental health than the control group

econometric models of limit order executions we develop and estimate an econometric model of limit order execution times using survival analysis and actual limit order data we estimate versions for time to first fill and time to completion for both buy and sell limit orders and incorporate the effects of explanatory variables such as the limit price limit size bid offer spread and market volatility execution times are very sensitive to the limit price but are not sensitive to limit size hypothetical limit order executions constructed either theoretically from first passage times or empirically from transactions data are very poor proxies for actual limit order executions r 2002 elsevier science b v all rights reserved jel classification g23

medicaid insurance in old age the old age provisions of the medicaid program were designed to insure retirees against medical expenses we estimate a structural model of savings and medical spending and use it to compute the distribution of lifetime medicaid transfers and medicaid valuations across currently single retirees compensating variation calculations indicate that current retirees value medicaid insurance at more than its actuarial cost but that most would value an expansion of the current medicaid program at less than its cost these findings suggest that for current single retirees the medicaid program may be of the approximately right size

using rd design to understand heterogeneity in health insurance crowd out crowd out the switching from private to public insurance is often found but estimates are rarely consistent with prior measurements cutler and gruber 1996 found crowd out in up to half of the newly eligible children while card and shore sheppard 2004 found almost none this paper exploits many regression discontinuity rd designs to estimate heterogeneous effects of public insurance eligibility crowd out and its impact on spending and utilization is documented across the income spectrum but effects are smaller at higher income levels these differences vary by state and correspond to changes in the reimbursement rates of public insurance plans

or forum the cost of latency in high frequency trading modern electronic markets have been characterized by a relentless drive toward faster decision making significant technological investments have led to dramatic improvements in latency the delay between a trading decision and the resulting trade execution we describe a theoretical model for the quantitative valuation of latency our model measures the trading frictions created by the presence of latency by considering the optimal execution problem of a representative investor via a dynamic programming analysis our model provides a closed form expression for the cost of latency in terms of well known parameters of the underlying asset we implement our model by estimating the latency cost incurred by trading on a human time scale examining nyse common stocks from 1995 to 2005 shows that median latency cost across our sample roughly tripled during this time period furthermore using the same data set we compute a measure of implied latency and conclude that the median implied latency decreased by a

option pricing and replication with transactions costs transactions costs invalidate the black scholes arbitrage argument for option pricing since continuous revision implies infinite trading discrete revision using black scholes deltas generates errors which are correlated with the market and do not approach zero with more frequent revision when transactions costs are included this paper develops a modified option replicating strategy which depends on the size of transactions costs and the frequency of revision hedging errors are uncorrelated with the market and approach zero with more frequent revision the technique permits calculation of the transactions costs of option replication and provides bounds on option prices

health insurance and income inequality health insurance and other in kind forms of compensation and government benefits are typically not included in measures of income and analyses of inequality this omission is important given the large and growing cost of health care in the united states and the presence of large government health insurance programs such as medicaid and medicare it is crucial to understand how health insurance and related public policies contribute to measured economic well being and inequality our paper assesses the effect on inequality of the primary government programs that affect health insurance

what to expect when you are expecting are health care consumers forward looking a fundamental question in health insurance markets is how do health care consumers dynamically optimize their medical utilization under non linear insurance contracts our paper tests the neoclassical prediction that a fully forward looking agent only responds to their expected end of year price our unique identification strategy studies families during the year of childbirth who will likely satisfy their annual deductible thereby knowing their expected end of year price we find that during the year of a childbirth fathers increase medical spending by 11 per month after their deductible is satisfied rejecting the null of fully forward looking consumers this behavior cannot be explained by fathers increasing utilization in response to the childbirth itself furthermore this myopia translates to a 21 24 decrease in total annual medical spending relative to the counterfactual of fully forward looking behavior and is concentrated in elective procedures we find no response in low value or urgent care our findings suggest the need for modeling non linear incentives while accounting for myopic behavior when studying the medical utilization responses to health insurance

a simple adjustment for bandwidth snooping kernel based estimators such as local polynomial estimators in regression discontinuity designs are often evaluated at multiple bandwidths as a form of sensitivity analysis however if in the reported results a researcher selects the bandwidth based on this analysis the associated confidence intervals cis may not have correct coverage even if the estimator is unbiased this article proposes a simple adjustment that gives correct coverage in such situations replace the normal quantile with a critical value that depends only on the kernel and ratio of the maximum and minimum bandwidths the researcher has entertained we tabulate these critical values and quantify the loss in coverage for conventional cis for a range of relevant cases a conventional 95 ci has coverage between 70 and 90 and our adjustment amounts to replacing the conventional critical value 1 96 with a number between 2 2 and 2 8 our results also apply to other settings involving trimmed data such as trimming to ensure overlap in treatment effect estimation we illustrate our approach with three empirical applications

the employment effects of terminating disability benefits abstract few social security disability insurance di beneficiaries return to the labor force making it hard to assess their likely employment in the absence of benefits using administrative data i examine the employment of individuals who lost di eligibility after the 1996 removal of drug and alcohol addictions as qualifying conditions approximately 22 started working at levels that would have disqualified them for di an employment response that is large relative to their work histories those who received di for 2 3 years had the largest response suggesting that a period of public assistance may maximize the employment of some disabled individuals

the impact of rural pensions in china on labor migration we study the impact of china s new rural pension program on promoting migration of labor by applying a regression discontinuity analysis to this new pension program the results reveal a perceptibl

estimating health demand for an aging population a flexible and robust bayesian joint model in this paper we analyse two frequently used measures of the demand for health care namely hospital visits and out of pocket health care expenditure which have been analysed separately in the existing literature given that these two measures of healthcare demand are highly likely to be closely correlated we propose a framework to jointly model hospital visits and out of pocket medical expenditure furthermore the joint framework allows for the presence of non linear effects of covariates using splines to capture the effects of aging on healthcare demand sample heterogeneity is modelled robustly with the random effects following dirichlet process priors with explicit cross part correlation the findings of our empirical analysis of the u s health and retirement survey indicate that the demand for healthcare varies with age and gender and exhibits significant cross part correlation that provides a rich understanding of how aging affects health care demand which is of particular policy relevance in the context of an aging population

the impact of nearly universal insurance coverage on health care utilization evidence from medicare the onset of medicare eligibility at age 65 leads to sharp changes in the health insurance coverage of the u s population these changes lead to increases in the use of medical services with a pattern of gains across socioeconomic groups that varies by type of service while routine doctor visits increase more for groups that previously lacked insurance hospital admissions for relatively expensive procedures like bypass surgery and joint replacement increase more for previously insured groups that are more likely to have supplementary coverage after 65 reflecting the relative generosity of their combined insurance package under medicare

health insurance eligibility utilization of medical care and child health two economists applied data from the current population survey and the national health interview survey and state level data on child mortality to a simulation model of utilization of medical care that varies only with the states legislative environment to examine the utilization of medical care and health effects of medicaid eligibility on low income children the models took into consideration the recent expansions of medicaid to low income children 38 of those ineligible for medicaid in 1984 who became eligible due to changes during 1984 1992 were uninsured between 1984 and 1992 expansions of the medicaid program increased the proportion of children eligible for medicaid almost two fold 16 1 vs 31 2 yet coverage rates were always lower than eligibility rates 13 2 vs 16 1 in 1984 and 20 3 vs 31 2 in 1992 and the increase in coverage rates was only about 50 of the increase in eligibility rates during 1984 1992 the probability that a child was eligible for medicaid increased the probability of health insurance coverage by 29 77 when the model considered bias in variables e g a recession in a state the take up rate was only 22 73 nevertheless medicaid markedly increased use of medical care for example eligibility for medicaid increased the likelihood of making a visit to a physicians office in the last two weeks by about 50 it also increased the probability of a child visiting the hospital suggesting inefficiency in the way that providers deliver care to medicaid enrollees medicaid eligibility had a significant effect on reducing child mortality the 15 1 percentage point increase in eligibility during 1984 1992 reduced child mortality by 4 5 when the researchers examined parent assessed subjective health measures medicaid eligibility had no effect on child health medicaid eligibility reduced race and education based disparities in the number of visits and racial differences in mortality yet it may actually intensify current disparities in health care delivery site