Abstracts Economics

Essays on the Economics of Health Policy

by Mengdi Shi

In the U.S., the healthcare sector is highly regulated – government regulation touches almost every dimension of healthcare, from health insurance to pharmaceuticals to medical services. The healthcare sector and the policies that govern it present an interesting setting to study many classic questions in public economics: how does regulation interact with or change individual and firm behavior? How do you monitor third parties who decide how to spend public funds? What happens when policy changes spill over from one segment of the economy to others? The three papers in this dissertation seek to answer these questions via the lens of the U.S. healthcare system. The first paper, "Job Lock, Retirement, and Dependent Health Insurance: Evidence from the Affordable Care Act,'' considers the extent to which changes in policies governing health insurance spill over onto individual labor market decisions. In particular, it looks at whether parents with young adult children eligible for the Affordable Care Act's dependent mandate delayed retirement to take advantage of the mandate. The second paper, "Regulated Revenues and Hospital Behavior: Evidence from a Medicare Overhaul'' (with Tal Gross, Adam Sacarny, and David Silver), considers how healthcare providers respond to changes in regulated prices. In it, we study a major reform that increased Medicare prices for some hospitals but decreased them for others, and consider how hospitals responded to these payment changes. Finally the third paper, "The Costs and Benefits of Monitoring Providers: Evidence from Medicare Audits,'' studies the efficacy of policies aimed at monitoring healthcare providers for wasteful expenditure. It studies a large monitoring program run by Medicare, and estimates the costs and benefits of this monitoring for the government, providers, and patients.