Laurie J. Bates

Market Structure and Technical Efficiency in the Hospital Services Industry: A DEA Approach:

This article uses data envelopment analysis and multiple regression analysis to examine empirically the impact of various market-structure elements on the technical efficiency of the hospital services industry in various metropolitan areas of the United States. Market-structure elements include the degree of rivalry among hospitals, extent of HMO activity, and health insurer concentration. The DEA results show the typical hospital services industry experienced 11 percent inefficiency in 1999. Moreover, multiple regression analysis indicates the level of technical efficiency varied directly across metropolitan hospital services industries in response to greater HMO activity and private health insurer concentration in the state. The analysis suggests the degree of rivalry among hospitals had no marginal effect on technical efficiency at the industry level. Evidence also implies that the presence of a state Certificate of Need law was not associated with a greater degree of inefficiency in the typical metropolitan hospital services industry.

Does the U.S. health care sector suffer from Baumol's cost disease? Evidence from the 50 states.

This study examines if health care costs in the United States are affected by Baumols cost disease. It relies on an empirical test proposed by Hartwig (2008) and extended by Colombier (2010) and uses a panel data set of 50 states over the 1980-2009 period. The results suggest that health care costs grow more rapidly when economy-wide wage increases exceed productivity gains. The findings are fairly robust with respect to time- and state-fixed effects, individual state time trends, and two-stage least square estimation. Consequently, this study suggests that the U.S. health care sector suffers from Baumols cost disease.

Do health insurers possess monopsony power in the hospital services industry

This paper uses metropolitan data to test empirically if health insurers possess monopsony or monopoly-busting power on the buyer-side of the hospital services market. According to theory, monopsony power is indicated by a fall in output, whereas, monopoly-busting power is shown by an increase in output when buyer concentration rises. The empirical results provide evidence that greater health insurer buyer concentration is not associated with monopsony power. Instead, some evidence is found to suggest that higher health insurer concentration translates into increased monopoly-busting power. That is, metropolitan hospitals offer increased services when the buyer-side of the hospitals services market is more highly concentrated.

Do Health Insurers Possess Market Power

During the 2009–2010 health care reform debates, many policy makers presumed that a lack of competition in the U.S. health insurance industry had resulted in greater levels of uninsurance. However, such a presumption has no basis in current research. This study, with a panel data set of the 50 states and the District of Columbia over the years 2001–2007, examines how health-insurer market concentration at the state level influences the percentage of the population with either individually purchased or employer-sponsored private health insurance. Two-stage least squares estimates are derived using a lagged measure of health-insurer concentration as an instrument. Results suggest that health insurers exercise market power on the seller side of the health insurance marketplace, but the restriction of output is limited to the individually purchased insurance market segment.

A Time Series Analysis of Private College Closures and Mergers

This study examines and explains private four-yearcollege closures and mergers in the United Statesusing time series data at the national level for theperiod 1960 to 1994. The data imply that, exceptduring the 1970s, private colleges were much lesslikely to close than businesses in general.Furthermore, the data indicate that private collegemergers occur more often than casual empiricismsuggests. Multiple regression analysis of the exit andmerger decision reveals that private college closuresand mergers are more likely when the real tuition ratedeclines and real faculty salaries rise at privatecolleges. Both the closure and merger rates are foundto be highly responsive with respect to changes inprivate tuition and faculty salaries. The empiricalresults further indicate that religiously-affiliatedcolleges are less likely to close and merge thansecular institutions and that a larger student poolleads to less closing and merging of private four-yearcolleges.

The demand for local public health services: do unified and independent public health departments spend differently?

Objective: To identify the factors affecting the demand for local public health services and to compare the spending patterns of independent and unified public health departments. Data Sources/Study Setting: Cross-sectional data for 2004 from various public health departments in Connecticut. Study Design: Uses probit analysis to examine the factors affecting the consolidation of public health departments. These results help correct for sample selection bias in the estimation of the demand for local public health services using multiple regression analysis. A simulation technique determines how much each independent public health department would be expected to spend upon joining a unified public health district. Data Collection: Data obtained from various government sources in Connecticut. Ninety-two of the municipalities participated in 18 different unified public health districts whereas 77 municipalities operated independent health departments. Principal Findings: Wealthier municipalities are less likely to consolidate health departments. Population and income differences among municipalities inhibit consolidation. The tax-share elasticity of the demand for local public health is approximately −1.28 and the income elasticity equals 0.27. Little difference in spending is found between unified and independent public health departments. Conclusions: Given that differences among communities inhibit the formation of public health districts, higher levels of government may have to offer financial inducements for communities to voluntarily join a district. The relatively large tax-share elasticity means that matching intergovernmental grants have the potential of stimulating the demand for local public health. An independent public health department is unlikely to experience a sharp spike in taxes upon joining a public health district.

The impact of a state mandated expenditure floor on aggregate property values

Abstract Using a test of allocative efficiency in the local public sector developed by Brueckner [Journal of Public Economics 19 (1982) 311–331], this study empirically examines the impact of a state minimum education expenditure requirement on aggregate property values in Connecticut communities. The empirical results reveal that the typical community in Connecticut spends less on education and municipal services than the level that maximizes aggregate property values. The results further indicate that spending on education falls further below the property maximization level in those communities constrained by the state expenditure floor. It follows from the analysis that some state expenditure floors can raise aggregate property values and promote efficiency.

The Demand for Municipal Infrastructure Projects Some Evidence from Connecticut Towns and Cities

Many studies have investigated the determinants of current local public expenditures whereas only a few have studied the factors explaining the capital decision-making process at the local government level. This study uses a panel data set of Connecticut town and cities over the 2000 to 2010 period to estimate the local public demand for various types of capital infrastructure projects. The multiple regression analysis reveals a number of insights regarding the capital-investment decision of local communities. First, unlike the demand for current expenditures, the demand for capital-investment projects is elastic with respect to tax price. Second, unlike the demand for current expenditures, the demand for capital projects is not directly related to changes in income. Finally, intergovernmental grants are shown to be an important determinant of capital investment spending although the specific aid doesn’t always seem to stick where it initially hits.

Short-run marginal medical costs from booze and butts: Evidence from the states

This article uses a panel data set of U.S. states over the 1980 to 2007 period to estimate the demands for medical care, cigarettes, and beer. The estimation process generates own-price, income, and cross-price elasticities for all three goods. Implied per capita beer and cigarette consumption elasticities of per capita health care expenditures, suggested by our baseline estimates, are 0.83 and 0.14, respectively. These results are robust to a number of specification tests. Simulations suggest that yearly marginal medical costs amount to approximately

Performance and Pay in the Public Sector: the Case of the Local Tax Assessor

12 per bottle and 27 cents per cigarette in the short run (in 2012 dollars). These results are likely to be driven by the much larger corresponding increases in the consumption of binge drinkers and heavy smokers.