Amy Finkelstein

The current U.S. health insurance "system" was not deliberately planned and constructed but has emerged piecemeal over the past half-century through a series of incremental and haphazard reforms. That policy history also reveals a clear but unfulfilled societal commitment to providing access to essential health care regardless of resources. To fulfill this obligation, the solution proposed in this article has 2 key elements: 1) universal coverage that is automatic, free, and basic, and 2) the option to buy supplemental coverage in a well-designed market. Such a system could, if desired, be created without raising taxes and without disrupting or changing the delivery of medical care.

When a randomized evaluation finds null results, it is important to understand why. We investigated two very different explanations for the finding from a randomized evaluation that the Camden Coalition's influential care management program-which targeted high-use, high-need patients in Camden, New Jersey-did not reduce hospital readmissions. One explanation is that the program's underlying theory of change was not right, meaning that intensive care coordination may have been insufficient to change patient outcomes. Another explanation is a failure of implementation, suggesting that the program may have failed to achieve its goals but could have succeeded if it had been implemented with greater fidelity. To test these two explanations, we linked study participants to Medicaid data, which covered 561 (70 percent) of the original 800 participants, to examine the program's impact on facilitating postdischarge ambulatory care-a key element of care coordination. We found that the program increased ambulatory visits by 15 percentage points after fourteen days postdischarge, driven by an increase in primary care; these effects persisted through 365 days. These results suggest that care coordination alone may be insufficient to reduce readmissions for patients with high rates of hospital admissions and medically and socially complex conditions.

We study the sources of high end-of-life spending for cancer patients. Even among patients with similar initial prognoses, spending in the year postdiagnosis is over twice as high for those who die within the year than those who survive. Elevated spending on decedents is predominantly driven by higher inpatient spending, particularly low-intensity admissions. However, most such admissions do not result in death, making it difficult to target spending reductions. Furthermore, end-of-life spending is substantially more elevated for younger patients, compared to older patients with similar prognoses. Results highlight sources of high end-of-life spending without revealing any natural “remedies.”

We study the impact of expanded adult Medicaid eligibility on the enrollment of already-eligible children. We analyze the 2008 Oregon Medicaid lottery, in which some low-income uninsured adults were randomly selected to be allowed to apply for Medicaid. Children in these households were eligible for Medicaid irrespective of the lottery outcome. We estimate statistically significant but transitory impacts of adult lottery selection on child Medicaid enrollment: at three months after the lottery, for every nine adults who enrolled in Medicaid due to winning the lottery, one additional child also enrolled. Our results shed light on the existence, magnitude, and nature of so-called "woodwork effects."

Government programs are often offered on an optional basis to market participants. We explore the economics of such voluntary regulation in the context of a Medicare payment reform, in which one medical provider receives a single, predetermined payment for a sequence of related healthcare services, instead of separate service-specific payments. This “bundled payment” program was originally implemented as a five-year randomized trial, with mandatory participation by hospitals assigned to the new payment model; however, after two years, participation was made voluntary for half of these hospitals. Using detailed claim-level data, we document that voluntary participation is more likely for hospitals that can increase revenue without changing behavior (“selection on levels”) and for hospitals that had large changes in behavior when participation was mandatory (“selection on slopes”). To assess outcomes under counterfactual regimes, we estimate a stylized model of responsiveness to and selection into the program. We find that the current voluntary regime generates inefficient transfers to hospitals, and that alternative (feasible) designs could reduce these inefficient transfers and raise welfare. Our analysis highlights key design elements to consider under voluntary regulation.

We estimate the effect of current location on elderly mortality by analyzing outcomes of movers in the Medicare population. We control for movers’ origin locations as well as a rich vector of pre-move health measures. We also develop a novel strategy to adjust for remaining unobservables, using the correlation of residual mortality with movers’ origins to gauge the importance of omitted variables. We estimate substantial effects of current location. Moving from a tenth to a ninetieth percentile location would increase life expectancy at age 65 by 1.1 years, and equalizing location effects would reduce cross-sectional variation in life expectancy by 15 percent. Places with favorable life expectancy effects tend to have higher quality and quantity of health care, less extreme climates, lower crime rates, and higher socioeconomic status. (JEL H51, I1, I11)

We describe a frame work for empirical welfare analysis that uses the causal estimates of a policy’s impact on net government spending. This framework provides guidance for which causal effects are (and are not) needed for empirical welfare analysis of public policies. The key ingredient is the construction of each policy’s marginal value of public funds (MVPF). The MVPF is the ratio of beneficiaries’ willingness to pay for the policy to the net cost to the government. We discuss how the MVPF relates to “traditional” welfare analysis tools such as the marginal excess burden and marginal cost of public funds. We show how the MVPF can be used in practice by applying it to several canonical empirical applications from public finance, labor, development, trade, and industrial organization.

Significance: A full picture of the COVID-19 pandemic requires information on how its impact on lives and on livelihoods relates across different groups. We therefore estimate excess all-cause mortality and employment displacement in April 2020 nationally and separately by state and by age group. Initial economic damages from the pandemic are more widespread across groups than deaths, which were primarily concentrated in a few states and among the oldest old. While the two states with the largest mortality increase account for about half of national excess mortality, the two most economically affected states account for only 7% of national economic damages. These findings suggest that policy responses to contain the pandemic involve trade-offs across different demographic and geographic groups.

Significance: In the US healthcare system, most medical providers treat patients covered by multiple insurers. As a result, changes in the way one health insurer pays for medical services could, by changing provider behavior, spill over onto patients covered by other insurers. In this article, we present evidence of such spillovers in the context of a large Medicare payment reform that was implemented in some areas of the country but not in others, via random assignment. We show that the payment reform had effects of similar magnitude on both the directly covered patients and on patients covered by other insurers. We discuss implications of these findings for our interpretation of existing estimates as well as for the design of healthcare policy.