Long-Term Care Hospitals: A Case Study in Waste

Liran Einar, Amy Finkelstein, Neale Mahoney

There is substantial waste in U.S. healthcare, but little consensus on how to identify or combat it. We identify one specific source of waste: long-term care hospitals (LTCHs). These post-acute care facilities began as a regulatory carve-out for a few dozen specialty hospitals, but have expanded into an industry with over 400 hospitals and $5.4 billion in annual Medicare spending in 2014. We use the entry of LTCHs into local hospital markets and an event study design to estimate LTCHs’ impact.

What Are Consumers Willing to Pay for a Broad Network Health Plan?: Evidence from Covered California

Coleman Drake

I estimate consumer demand for network breadth for health plans in 2017 in California’s State-Based Health Insurance Marketplace, Covered California. Using individual-level enrollment data and provider network directories obtained directly from Covered California, I develop a geospatial measure of network breadth that reflects the physical locations of consumers and nearby in-network providers. I find that consumers are sensitive to both premiums and network breath in their plan choices.