Three essays in health economics

Abstract

Expenditures for health care and health insurance have increased rapidly over the last several decades. This thesis is composed of three essays that analyze markets for health care and health insurance, respectively. Chapter 1 studies risk selection between public and private health insurance when some, but not all, individuals can opt out of otherwise mandatory public insurance. Using a theoretical model, I show that public insurance is adversely selected when insurers and insureds are symmetrically informed about health-related risks, and that there can be adverse or advantageous selection when insureds are privately informed. Using data from the German Socio-Economic Panel, I find that: (1) public insurance is, on balance, adversely selected under the German public health insurance with opt-out scheme, (2) individuals advantageously select public insurance based on risk aversion and residential location, and (3) there is suggestive evidence of asymmetric information in the market for private health insurance. Chapter 2 investigates whether doctors prescribe antibiotics to protect themselves against potential malpractice claims. Using data from the National Ambulatory Medical Care Survey on more than half a million outpatient visits between 1993 and 2011, I find that doctors are 6% less likely to prescribe antibiotics after the introduction of a cap on noneconomic damages. Over 140 million discharge records from the Nationwide Inpatient Sample do not reveal a corresponding change in hospital stays for conditions that can potentially be avoided through antibiotic use in the outpatient setting. These findings, as well as a stylized model of antibiotic prescribing under the threat of malpractice, suggest that liability-reducing tort reforms can decrease the amount of antibiotics that are inappropriately prescribed for defensive reasons. Chapter 3 tests whether tort reforms induce physicians to adjust the amount of time spent with patients. Analyzing data from the National Ambulatory Medical Care Survey on more than half a million physician office visits between 1993 and 2011, I find that three of the most common tort reforms – caps on noneconomic damages, caps on punitive damages, and reforms of the joint-and-several liability rule – have no impact on length of ambulatory care visits. I discuss potential explanations for this finding