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.
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.
This paper quantitatively evaluates the trade-off between the provision of social insurance and the incentives to maintain good health through costly investments of labor market and health insurance policies.