Published and Working Papers:
"Medical Malpractice Reform, the Supply of Physicians, and Adverse Selection" forthcoming in Journal of Law and Economics, 2014
Abstract: Malpractice reforms tend to reduce physician liability for harming patients. Because these reforms are passed at the state level, the costs of harming patients vary widely by geographic location. In this paper, I test whether malpractice reforms affect where physicians choose to practice and whether physicians who relocate in response to reforms are particularly prone to commit malpractice. Because a state's own reforms can not separately identify moral hazard from adverse selection and because those reforms are likely to have direct impacts on measures of malpractice via the legal market, I focus attention on neighboring states' reforms. I find that when a state's neighbor passes a cap on noneconomic damages, both the physician to population ratio and the malpractice rate fall. This suggests that physicians who relocate in response to noneconomic damages caps are more likely to commit malpractice.
Abstract: Consumer search forces firms to compete with each other. However, in the presence of price dispersion, insurance creates a moral hazard in search: consumers search less and consequently pay higher prices. I formalize this intuition in an equilibrium price dispersion model and test for these effects in the private market for health care. Compass Professional Health Services, a firm that consumers contact for price information, provided a unique dataset that contains a direct measure of consumer search. I use two different identification strategies to measure the impact of insurance on search. First, consumers who had met their insurance deductibles by the date they gained access to Compass, and so faced a lower marginal price for care, were significantly less likely to search than were people who had not yet met their deductibles. Second, a sharp change in the set of health plans available to the consumers dramatically reduced their insurance coverage and increased their search. To estimate how much search reduced transacted prices, I use variation in the timing of access to price information. To gauge the size of this moral hazard in search, I combine the model and empirical estimates to estimate the fraction of consumers who would have searched if they had not had insurance. The results suggest that consumer search is roughly one-sixth what it would be if consumers did not have insurance and that this moral hazard in search substantially increases health care expenditures.
Research in Progress:
"Costs and Benefits of In-Kind Transfers: the Case of Medicaid Home Care" with Lee Lockwood (Northwestern)
"Private vs. Social Incentives to Search in Health Care: Evidence from a Field Experiment"
"The Marginal Product of Medical Care: Evidence from Screening Guidelines"