Essays On The Intersection Of Healthcare Operations And Economics

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Doctor of Philosophy (PhD)
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Health Care Management & Economics
Health and Medical Administration
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Lim, Jong Myeong

The essays in this dissertation wrestle with unique challenges presented by multiple, interacting entities within the healthcare industry. The essay, "Searching for the Best Yardstick: Cost of Quality Improvements in the U.S. Hospital Industry," takes the perspective of the regulator in improving incentive programs designed to induce hospitals to invest in quality. The key challenge in evaluating potential changes to such programs is to understand the underlying incentives that hospitals have in responding to the new incentives. Using structural estimation methods, the parameters of each hospital’s decision-making process are estimated. The counterfactual analyses quantify the effects of recalibrating the Hospital Value-based Purchasing Program. The essay, "The Spillover Effects of Capacity Pooling in Hospitals," focuses on the unintended effects of off-service placement, a common capacity pooling strategy. Building on previous studies that document negative first-order effects on patients who are placed off service themselves, the spillover effects onto patients who are placed on service are analyzed. The instrumental variables approach reveals that there is a significant causal impact of off-service placement on patients who are placed on service. The essay, "Should We Worry About Moral Hazard? Estimation of the Slutsky Equation Using Indemnity Health Insurance Contracts," uncovers the differential response of consumers to different designs of health insurance. While previous studies have convincingly shown that ex-post moral hazard in health care does exist, there has been a lack of empirical evidence on the degree in which such moral hazard is welfare-reducing. Using a novel setting, the analysis provides evidence that moral hazard can lead to a significant welfare loss.

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Ken Moon
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