Essays in health economics

This dissertation comprises three chapters. The first studies whether team members' past collaboration creates team-specific human capital and influences current team performance. Using administrative Medicare claims for two heart procedures, I find that shared work experience between the doctor who performs the procedure ("proceduralist") and the doctor(s) who provide(s) care to the patient during the hospital stay for the procedure ("physician(s)") reduces patient mortality rates. A one standard deviation increase in proceduralist-physician shared work experience leads to a 10-13 percent reduction in patient 30-day mortality. Patient medical resource use also declines with shared work experience, even as survival improves. This suggests that doctors' productivity increases with shared work experience. Further, I find that although general human capital acquired through individual work experience can substitute for team-specific human capital created by shared work experience, the extent of the substitution is small. The second chapter--coauthored with Petra Persson and Maria Polyakova--examines the impact of access to expertise on health, and whether unequal access to expertise contributes to the health-income gradient. In the context of Sweden, we use admissions lotteries into medical schools and variation in the timing of medical degrees to identify the causal effects of exposure to health-related expertise--captured by the presence of a health professional in the family--on health. We find that access to intra-family medical expertise has far-reaching health consequences, at all ages: it raises longevity and improves physical health in adulthood, raises vaccination rates in adolescence, and reduces tobacco exposure in utero. Unequal access to health-related expertise accounts for as much as 18% of the health-income gradient. The third chapter studies how financial integration between hospitals and physicians affects the effectiveness of a national performance pay program--the Hospital Readmissions Reduction Program (HRRP). Performance pay is an increasingly important regulatory tool in the US health care system and a centerpiece of the Affordable Care Act. Although health care quality depends importantly on physicians, many performance pay polices provide financial incentives to hospitals alone without accompanying incentives to physicians. This creates possible incentive misalignment: while hospitals are incentivized to improve quality, physicians--who to a large extent determine the quality of care and whether hospitals can improve performance--may have no direct incentive to improve current care quality. The extent to which hospital performance pay programs improve healthcare quality may depend on how effectively hospitals align physician incentives, in which financial integration between physicians and hospitals can play a role. I exploit a performance pay program that penalizes hospitals for high readmission rates--the HRRP, and study how financial integration between hospitals and physicians affects the effectiveness of the HRRP. I find that financial integration is associated with a lager effect of the HRRP

Keywords: Health Policy.
Advisor: Chan David C.
Baker Laurence Claude
Duggan Mark G. (Mark Gregory) 
Polyakova Maria A. (Maria Alexandrovna)