Essays in Health Economics

Abstract

Health is a key determinant of the quality of life. As such, the extremely high cost of health care in the US and the resulting barriers to access are concerning. This dissertation consists of three essays exploring the determinants of health care provision---both in terms of access and type of treatment---and their impact on patient health and health care costs.

In Chapter 1, I investigate how policies that pay physicians to reduce costs affect treatment decisions. I show that a Medicare pilot program in New Jersey that paid doctors bonuses for reducing costs was unsuccessful; doctors changed which patients were admitted and sorted healthier patients into participating hospitals, but did not reduce costs. I argue that understanding the gaming behavior displayed by physicians is important for policy design.

While Chapter 1 explores how doctors make decisions over treatment, the second chapter shifts focus to the determinants of access to treatment itself. In Chapter 2, co-authored with Molly Schnell, we link the supply of available providers to the provision of mental health care and mental health outcomes. While the costs of untreated mental illness are widely recognized, access to treatment is often limited. In this chapter, we show that allowing nurse practitioners to prescribe medication without physician oversight is associated with improvements in population mental health. Our results suggest that liberalizing scope of practice legislation for nurse practitioners can extend care to both underserved and disadvantaged populations.

In the third chapter, I turn back to physicians, and examine how payment can affect both treatment choice and patient health. In particular, I explore how changing pay affects the decision of whether or not to perform a C-section. I find that when Medicaid pays physicians relatively more for C-sections, physicians perform more C-sections, and there are fewer infant deaths. Taken together, these findings suggest that C-section rates may be too low for some groups, and that policies aimed at decreasing costs by lowering procedure use among low-income patients may have adverse health consequences.