Working Papers
Rationing Medicine Through Bureaucracy: Authorization Restrictions in Medicare (with Zarek Brot-Goldberg, Timothy Layton and Boris Vabson). 2023. Revise & Resubmit at American Economic Review
[ Abstract | PDF | NBER working paper ]
Media coverage: Tradeoffs, Medscape, Crain’s Chicago Business, AEIdeas
Policy impact: U.S. Senate Committee on the Budget testimony
High administrative costs in US health care have provoked concern among policymakers over potential waste, but many of these costs are generated by managed care policies that trade off bureaucratic costs against reductions in moral hazard. We study this trade-off for prior authorization restriction policies in Medicare Part D, where low-income beneficiaries are randomly assigned to default plans. Beneficiaries who face restrictions on a drug reduce their use of it by 26.8%. Approximately half of marginal beneficiaries are diverted to another related drug, while the other half are diverted to no drug. These policies generated net financial savings, reducing drug spending by \$96 per beneficiary-year (3.6% of drug spending), while only generating approximately \$10 in paperwork costs. Revealed preference approaches suggest that the cost savings likely exceed beneficiaries’ willingness to pay for foregone drugs.
Mixed Public-Private Provision in Healthcare: Evidence from England 2023.
[ Abstract ]
Should governments outsource publicly funded healthcare to the private sector? I study the aggregate and distributional effects of partial outsourcing in the context of a major policy reform in the English National Health Service that allowed patients to choose treatment at private hospitals as well as incumbent public hospitals. Private hospitals locate in high-income areas and treat less severe patients. Using variation in market-level exposure to the reform, I find that outsourcing increased volume of elective admissions and reduced wait times. Exposure to outsourcing slightly increased average severity of the patients at nearby public hospitals but did not reduce physician labor supply. I use variation from the reform to estimate a model of patient demand in the presence of capacity constraints. Outsourcing increased patient surplus and reduced average wait time by 16%. One third of gains come from reduced congestion at public hospitals. Gains for patients in the top quintile of the income distribution are 55% higher than for patients in the bottom quintile. Results highlight the potential for outsourcing to expand patient choice and relieve public sector congestion, at the cost of increasing inequality in access to care.
Universal Coverage with Financial Constraints: How Public Health Systems Ration Care 2023.
[ Abstract ]
I study how government budget constraints in publicly funded health systems restrict access to health care. Using data from England, I show that cuts to government funding negatively impact access to hospital care for fully insured individuals. I exploit a ‘pace-of-change’ policy used to determine financial allocations for administrative regions. This policy translates aggregate funding shocks into regional funding allocations using a non-linear formula that generates variation in funding that is plausibly exogenous to demand for health care. Government funding cuts reduceelective hospital admissions and increase hospital wait times. These effects are most pronounced for orthopedic patients. Using survey data on patient-reported benefits from orthopedic surgery, I show that the patients who are rationed out by funding cuts have lower propensity to benefit from treatment and higher income.
Publications
Socio-Economic Deprivation and Ethnicity Inequalities in Disruption to NHS Hospital Admissions during the COVID-19 Pandemic: A National Observational Study (with Max Warner, Samantha Burn, George Stoye, Alex Bottle, Paul Aylin and Carol Propper). BMJ Quality & Safety, 2022.
[ Abstract | Publisher’s version]
Media coverage: Medscape
Policy impact: IFS observation
Introduction: Hospital admissions in many countries fell dramatically at the onset of the COVID-19 pandemic. Less is known about how care patterns differed by patient groups. We sought to determine whether areas with higher levels of socio-economic deprivation or larger ethnic minority populations saw larger falls in emergency and planned admissions in England.
Methods: We conducted a national observational study of hospital care in the English National Health Service in 2019-2020. Weekly volumes of elective and emergency admissions in 2020 compared with 2019 were calculated for each census area. Multiple linear regression analysis was used to estimate the reductions in volumes for areas in different quintiles of socio-economic deprivation and ethnic minority populations after controlling for national time trends and local area composition.
Results: Between March and December 2020, there were 35.5% (3.0 million) fewer elective admissions and 22.0% (1.2 million) fewer emergency admissions with a non-COVID-19 primary diagnosis than in the previous year. Areas with the largest share of ethnic minority populations experienced a 36.7% (95% CI 24.1% to 49.3%) larger reduction in non-primary-COVID-19 emergency admissions compared with those with the smallest. The most deprived areas experienced a 10.1% (95% CI 2.6% to 17.7%) smaller reduction in non-COVID-19 emergency admissions compared to the least deprived. These patterns are not explained by differential prevalence of COVID-19 cases by area.
Conclusions: Even in a healthcare system founded on the principle of equal access for equal need, the impact of COVID-19 on NHS hospital care for non-COVID patients has not been spread evenly across ethnic groups in England. While we cannot conclusively determine the mechanisms behind these differences, if these falls are due to forgone care rather than changes in need, they risk exacerbating pre-pandemic health inequalities.
Peri-operative pulse oximetry in low-income countries: a cost–effectiveness analysis (with Peter Chilton, Atul Gawande and Richard Lilford). WHO Bulletin, 2014.
[Publisher’s version]
Protocol for evaluation of the cost-effectiveness of ePrescribing systems and candidate prototype for other related health information technologies (with Richard J Lilford, Alan J Girling, Aziz Sheikh, Jamie J Coleman, Peter J Chilton, David J Jenkinson, Laurence Blake and Karla Hemming). BMC Health Services Research, 2014.
[Publisher’s version]
Increasing the QOF upper payment threshold in general practices in England: impact of implementing government proposals (with Michael Caley, Tom Marshall and Andrew Rouse). British Journal of General Practice, 2014.
[Publisher’s version]
Work in Progress
Informative Ordeals in Healthcare: Prior Authorization of Drugs in Medicaid (with LJ Ristovska)
Are Health Insurance Expansions Progressive? (with Tim Layton and Mark Shepard)
Patients: The efficiency and equity consequences of waiting for health care in the English National Health Service
Double Agents? The dual role of primary care doctors as agents for patients and stewards of health system resources
