Research

Abstract. Medicare Advantage was designed to use competition among private insurers and managed care to reduce Medicare spending while improving care. However, imperfect risk adjustment does not fully account for healthier beneficiaries selecting into Medicare Advantage, creating a trade-off between selection-driven costs and managed-care efficiencies.

Using administrative claims data together with survey-based measures of health, I develop a structural model of beneficiary plan choice and insurers' equilibrium pricing. Counterfactual simulations show that eliminating Medicare Advantage would reduce annual government spending by $20.8 billion.

Incorporating selection beyond current risk adjustment into subsidy design reduces CMS expenditure by $7.56 billion, while the combined reduction in consumer surplus and producer profits is approximately $0.585 billion.

Abstract. Hospital systems increasingly integrate healthcare delivery and financing by sponsoring their own health plans. We study whether patients admitted to vertically integrated hospitals experience different 30-day unplanned readmission rates than patients admitted to non-integrated hospitals.

To address patient selection, we use an instrumental-variables strategy that exploits variation in hospital assignment from ambulance transportation in emergency episodes and patients' relative distance to integrated versus non-integrated hospitals. Hospital and year fixed effects account for persistent differences in hospital quality.

We find that in less concentrated hospital markets, admission to a vertically integrated hospital is associated with a substantially lower probability of readmission, while the estimated effect is smaller in more concentrated hospital markets.

Abstract. Medicare's major programs share healthcare providers, creating the possibility that incentives in one part of Medicare affect outcomes in another. We study whether incentives created by the Medicare Shared Savings Program (MSSP) spill over from Traditional Medicare to Medicare Advantage.

We exploit variation generated by the 2019 Pathways to Success reform and construct a Bartik-style instrument for Medicare Advantage plans' exposure to MSSP activity.

Greater MSSP exposure reduces Medicare Advantage plans' expected cost of coverage and increases plan generosity. A 1% increase in exposure reduces expected cost per beneficiary by 0.17%, increases rebates by 2.1%, lowers out-of-pocket maxima by 0.37%, and raises the probability of offering a zero-premium plan by 0.57 percentage points.