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This paper investigates consumer inertia in health insurance markets , where adverse selection is a potential concern. We leverage a major change to insurance provision that occurred at a large firm to identify substantial inertia, and develop and estimate a choice model that also quantifies risk preferences and ex ante health risk. We use these estimates(More)
We estimate a bargaining model of competition between hospitals and managed care organizations (MCOs) and use the estimates to evaluate the effects of hospital mergers. We find that MCO bargaining restrains hospital prices significantly. The model demonstrates the potential impact of coinsurance rates, which allow MCOs to partly steer patients towards(More)
The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. ABSTRACT In the 1990s the US hospital industry consolidated. This paper estimates the impact of the wave of hospital mergers on welfare focusing on the impact on consumer surplus for the under-65 population. For the(More)
Mortality rates are a widely used measure of hospital quality. A central problem with this measure is selection bias: simply put, severely ill patients may choose high quality hospitals. We control for severity of illness with an instrumental variables (IV) framework using geographic location data. We use IV to examine the quality of pneumonia care in(More)
  • Leemore Dafny, David Dranove, Vivian Ho, Rich Lindrooth, Michael Mazzeo, Scott Stern +1 other
  • 2005
Existing empirical estimates of merger effects are compromised by the fact that merging and nonmerging entities differ in unobserved ways that independently affect outcomes of interest. To obtain an unbiased estimate of the effect of consummated mergers, I propose an approach that focuses on the response of rivals to mergers and accounts for the endogeneity(More)
  • Gautam Gowrisankaran, Claudio Lucarelli, Philipp Schmidt-Dengler, Robert Town
  • 2008
Many government policies either target the underlying supply infrastructure or have indirect effects on market structure. In this paper we seek to understand the impact of the Critical Access Hospital (CAH) program on the U.S. rural hospital infrastructure and societal welfare. This program provides generous reimbursement to hospitals in exchange for size(More)
Premiums in health insurance markets frequently do not reflect individual differences in costs, either because consumers have private information or because prices are not risk rated. This creates inefficiencies when consumers self-select into plans. We develop a simple econometric model to study this problem and estimate it using data on small employers.(More)
A longstanding and yet unsettled question in labor economics is: does marriage cause men's wages to rise? Cross-sectional wage studies consistently find that married men earn significantly higher wages than do men who are not currently married. However, it is well-known that inferring causal relationships from crosssectional analysis is inappropriate(More)
1 6 POLICY IMPLICATIONS 2 3 4 5 THE SYNTHESIS PROJECT (Synthesis) is an initiative of the Robert Wood Johnson Foundation to produce relevant, concise, and thought-provoking briefs and reports on today's important health policy issues. By synthesizing what is known, while weighing the strength of fi ndings and exposing gaps in knowledge, Synthesis products(More)