Samuel A. Kleiner

The Effect of Child Health Insurance Access on Schooling: Evidence from Public Insurance Expansions

Although a sizable literature analyzes the effects of public health insurance programs on short-run health outcomes, little prior work has examined their long-term effects. We examine the effects of public insurance expansions among children in the 1980s and 1990s on their future educational attainment. We find that expanding health insurance coverage for low-income children increases the rate of high school and college completion. These estimates are robust to only using federal Medicaid expansions and mostly are due to expansions that occur when the children are not newborns. Our results indicate that the long-run benefits of public health insurance are substantial.

Measuring Returns to Hospital Care: Evidence from Ambulance Referral Patterns

We consider whether hospitals that receive higher payments from Medicare improve patient outcomes, using exogenous variation in ambulance company assignment among patients who live near one another. Using Medicare data from 2002–10 on assignment across ambulance companies and New York State data from 2000–6 on assignment across area boundaries, we find that patients who are brought to higher-cost hospitals achieve better outcomes. Our estimates imply that a one standard deviation increase in Medicare reimbursement leads to a 4 percentage point (or 10 percent) reduction in mortality; the implied cost per at least 1 year of life saved is approximately

A Structural Approach to Market Definition with an Application to the Hospital Industry

80,000.

Market power and provider consolidation in physician markets

Market definition is common in merger analysis, and often the decisive factor in antitrust cases. This has been particularly relevant in the hospital industry, where many merger challenges have been denied due to disagreements over geographic market definition. We compare geographic markets produced using frequently employed ad hoc methodologies to structural methods that directly apply the ‘SSNIP test’ to California hospitals. Our results suggest that markets produced using previous methods overstate hospital demand elasticities by a factor of 2.4 to 3.4 and were likely a contributing factor to the permissive legal environment for hospital mergers.

Antitrust and Accountable Care Organizations: Observations for the Physician Market.

Physician services comprise a substantial share of total health care spending, and the price of health care services has been cited as a key contributor to the disproportionately high rate of health care spending in the US. However, despite a large literature analyzing market power in the hospital and insurance industries, less is known about the extent to which physicians exercise market power. In this study we make use of a private health insurance claims data set to analyze physician market power for two specialties within three mid-sized US metropolitan areas. Using a method developed for hospital competition analysis, we estimate measures of consumer willingness-to-pay for physician practices within each of these markets and relate these to the prices paid to these practices for a set of physician services. Our results are suggestive of the presence of market power in the markets that we analyze. We simulate physician practice mergers for the two largest practices in each market for each specialty analyzed. Results suggest that practice mergers could result in price increases deemed significant by antitrust authorities in some markets but not in others.

Do High-Cost Hospitals Deliver Better Care? Evidence from Ambulance Referral Patterns

The creation of Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program has generated antitrust concerns. Utilizing a framework developed by the antitrust authorities for analyzing provider concentration for potential ACO participants, we examine the market for physician services, with a focus on the share of practices that could potentially be subject to antitrust scrutiny. Our findings suggest that while most physician practices would fall below the threshold that could raise anticompetitive concerns, this varies considerably by market and specialty. Furthermore, we find that the largest physician practice in most markets potentially remains at risk for antitrust review under the existing criteria.