Essays in health economics

This dissertation explores various topics in health economics, specifically the use of different types of health care (i.e., mental health, durable medical equipment, and chronic disease management in primary care settings) and how public insurance policies affect the price and utilization of health care products and services. In Chapter 1, I explore the geographic variation in mental health care use among the Medicare population. Using administrative data from Medicare, I isolates the patient- and place-specific drivers of the geographic variation in mental health care use among elderly adults. Specifically, I use an event-study framework with individual fixed effects to study changes in mental health care utilization for patients who move across areas with differing rates of average utilization. My results show that 60 percent of the geographic variation is attributed to place-specific factors. I then explore components of the "place effect", finding that mental health care provider capacity explains only one tenth of it. Beyond that, local attitudes toward mental health play an important role, as shown by asymmetric responses for people who move from low-to-high and high-to-low care utilization areas, especially among those who were never diagnosed with any mental illness before moving. Lastly, I find a strong negative correlation between area-level mental health care utilization and suicide rates, and evidence that moving to high utilization areas is associated with a lower risk of self-harm-related Emergency Department visits. These findings suggest that promoting mental health care could benefit the elderly population, and that there is substantial scope for achieving this goal with interventions targeting place-specific factors. In Chapter 2, along with co-authors Mark Duggan and Amanda Starc, I study Medicare's competitive bidding program (CBP) for durable medical equipment (DME). We use Medicare claims data to examine the effect on prices and utilization, focusing on continuous positive airway pressure (CPAP) devices for sleep apnea. We find that spending falls by 47.2% percent after a highly imperfect bidding mechanism is introduced. This is almost entirely driven by a 44.8% price reduction, though quantities also fall by 4.3\%. To disentangle supply and demand, we leverage differential cost sharing across Medicare recipients. We measure a demand elasticity of -0.272 and find that quantity reductions are concentrated among less clinically appropriate groups. In Chapter 3, along with co-authors Yiwei Chen, Min Yu, Jieming Zhong, Ruying Hu, Xiangyu Chen, Chunmei Wang, Kaixu Xie and Karen Eggleston, I investigate the effect of chronic disease management provided in primary health care (PHC) setting in rural China. Health systems globally face increasing morbidity and mortality from chronic diseases, yet many - especially in low- and middle-income countries - lack strong chronic disease management and PHC system. We provide evidence on China's efforts to promote PHC management using unique five-year panel data in a rural county, including health care utilization from medical claims and health outcomes from biomarkers. Utilizing plausibly exogenous variation in management intensity generated by administrative and geographic boundaries, we compare hypertension/diabetes patients in villages within two kilometers distance but managed by different townships. Results show that, compared to patients in townships with median management intensity, patients in high-intensity townships have 4.8% more PHC visits, 5.2% fewer specialist visits, 11.7% fewer inpatient admissions, and 3.6% lower medical spending. They also tend to have better medication adherence and better control of blood pressure. The resource savings from avoided inpatient admissions substantially outweigh the costs of the program

Keywords: Economics.
Advisor: Duggan Mark G. (Mark Gregory) 
Rossin-Slater Maya
Williams Heidi Louise