NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Zack Cooper

Yale School of Public Health
Department of Health Policy
60 College Street
New Haven, CT 06520

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Yale University

NBER Working Papers and Publications

July 2018Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans
with Michael Chernew, Eugene Larsen-Hallock, Fiona Scott Morton: w24869
We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in high-priced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients’ home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.
August 2017Politics, Hospital Behavior, and Health Care Spending
with Amanda E Kowalski, Eleanor N Powell, Jennifer Wu: w23748
This paper examines the link between legislative politics, hospital behavior, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for reelection. We study a provision - Section 508 – that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of Representatives who voted ‘Yea’ on the MMA were significantly more likely to receive a 508 waiver than hospitals represented by m...
July 2017Surprise! Out-of-Network Billing for Emergency Care in the United States
with Fiona Scott Morton, Nathan Shekita: w23623
Hospitals and physicians independently negotiate contracts with insurers. As a result, a privately insured individual can attend an in-network hospital emergency department, but receive care and potentially a large, unexpected bill from an out-of-network emergency physician working at that hospital. Because patients do not choose their emergency physician, emergency physicians can remain out-of-network and charge high prices without losing patient volume. As we illustrate, this strong outside option improves emergency physicians’ bargaining power with insurers. We then analyze a New York State law that introduced binding arbitration between emergency physicians and insurers and therefore weakened physicians’ outside option in negotiations. We observe that the New York law reduced out-of-ne...
December 2015The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured
with Stuart V. Craig, Martin Gaynor, John Van Reenen: w21815
We use insurance claims data covering 28 percent of individuals with employer-sponsored health insurance in the US to study the variation in health spending on the privately insured, examine the structure of insurer-hospital contracts, and analyze the variation in hospital prices across the nation. Health spending per privately insured beneficiary differs by a factor of three across geographic areas and has a very low correlation with Medicare spending. For the privately insured, half of the spending variation is driven by price variation across regions and half is driven by quantity variation. Prices vary substantially across regions, across hospitals within regions, and even within hospitals. For example, even for a near homogenous service such as lower-limb MRIs, about a fifth of the to...

Published: Zack Cooper & Stuart V Craig & Martin Gaynor & John Van Reenen, 2019. "The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured*," The Quarterly Journal of Economics, vol 134(1), pages 51-107.

 
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