The risk of losing health insurance in the United States is large, and remained so after the Affordable Care Act.

Health insurance coverage in the United States is highly uncertain. In the post-Affordable Care Act (ACA), pre-COVID United States, we estimate that while 12.5% of individuals under 65 are uninsured at a point in time, twice as many-one in four-are uninsured at some point over a 2-y period. Moreover, the risk of losing insurance remained virtually unchanged with the introduction of the landmark ACA. Risk of insurance loss is particularly high for those with health insurance through Medicaid or private exchanges; they have a 20% chance of losing coverage at some point over a 2-y period, compared to 8.5% for those with employer-provided coverage. Those who lose insurance can experience prolonged periods without coverage; about half are still uninsured 6 mo later, and almost one-quarter are uninsured for the subsequent 2 y. These facts suggest that research and policy attention should focus not only on the "headline number" of the share of the population uninsured at a point in time, but also on the stability and certainty (or lack thereof) of being insured.

A Blueprint for U.S. Health Insurance Reform.

The current U.S. health insurance "system" was not deliberately planned and constructed but has emerged piecemeal over the past half-century through a series of incremental and haphazard reforms. That policy history also reveals a clear but unfulfilled societal commitment to providing access to essential health care regardless of resources. To fulfill this obligation, the solution proposed in this article has 2 key elements: 1) universal coverage that is automatic, free, and basic, and 2) the option to buy supplemental coverage in a well-designed market. Such a system could, if desired, be created without raising taxes and without disrupting or changing the delivery of medical care.

Randomized trial shows healthcare payment reform has equal-sized spillover effects on patients not targeted by reform.

Changes in the way health insurers pay healthcare providers may not only directly affect the insurer's patients but may also affect patients covered by other insurers. We provide evidence of such spillovers in the context of a nationwide Medicare bundled payment reform that was implemented in some areas of the country but not in others, via random assignment. We estimate that the payment reform-which targeted traditional Medicare patients-had effects of similar magnitude on the healthcare experience of nontargeted, privately insured Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of healthcare payment reforms and more generally for the design of healthcare policy.

Consolidation of primary care physicians and its impact on healthcare utilization.

We use administrative data from Medicare to document the massive consolidation of primary care physicians over the last decade and its impact on patient healthcare utilization. We first document that primary care organizations have consolidated all over the United States between 2008 and 2014. We then show that regions that experienced greater consolidation are associated with greater decline in overall healthcare spending. Finally, in our primary exercise, we exploit transitions of patients across organizations that are driven by changes in the organizational affiliations of their primary care physicians to study the impact of organizational size on overall spending. Our preferred specification suggests that patients switching from small to large physician organizations reduce their overall healthcare spending by 16%, and that this reduction is primarily driven by a 13% reduction in primary care visits and 0.09 (21%) fewer inpatient admissions per year.

Screening and Selection: The Case of Mammograms.

We analyze selection into screening in the context of recommendations that breast cancer screening start at age 40. Combining medical claims with a clinical oncology model, we document that compliers with the recommendation are less likely to have cancer than younger women who select into screening or women who never screen. We show this selection is quantitatively important: shifting the recommendation from age 40 to 45 results in three times as many deaths if compliers were randomly selected than under the estimated patterns of selection. The results highlight the importance of considering characteristics of compliers when making and designing recommendations.

Prediction Accuracy With Electronic Medical Records Versus Administrative Claims.

OBJECTIVE: The objective of this study was to evaluate the incremental predictive power of electronic medical record (EMR) data, relative to the information available in more easily accessible and standardized insurance claims data. DATA AND METHODS: Using both EMR and Claims data, we predicted outcomes for 118,510 patients with 144,966 hospitalizations in 8 hospitals, using widely used prediction models. We use cross-validation to prevent overfitting and tested predictive performance on separate data that were not used for model training. MAIN OUTCOMES: We predict 4 binary outcomes: length of stay (≥7 d), death during the index admission, 30-day readmission, and 1-year mortality. RESULTS: We achieve nearly the same prediction accuracy using both EMR and claims data relative to using claims data alone in predicting 30-day readmissions [area under the receiver operating characteristic curve (AUC): 0.698 vs. 0.711; positive predictive value (PPV) at top 10% of predicted risk: 37.2% vs. 35.7%], and 1-year mortality (AUC: 0.902 vs. 0.912; PPV: 64.6% vs. 57.6%). EMR data, especially from the first 2 days of the index admission, substantially improved prediction of length of stay (AUC: 0.786 vs. 0.837; PPV: 58.9% vs. 55.5%) and inpatient mortality (AUC: 0.897 vs. 0.950; PPV: 24.3% vs. 14.0%). Results were similar for sensitivity, specificity, and negative predictive value across alternative cutoffs and for using alternative types of predictive models. CONCLUSION: EMR data are useful in predicting short-term outcomes. However, their incremental value for predicting longer-term outcomes is smaller. Therefore, for interventions that are based on long-term predictions, using more broadly available claims data is equally effective.

The impact of financial incentives on health and health care: Evidence from a large wellness program.

Workplace wellness programs have become increasingly common in the United States, although there is not yet consensus regarding the ability of such programs to improve employees' health and reduce health care costs. In this paper, we study a program offered by a large U.S. employer that provides substantial financial incentives directly tied to employees' health. The program has a high participation rate among eligible employees, around 80%, and we analyze the data on the first 4 years of the program, linked to health care claims. We document robust improvements in employee health and a correlation between certain health improvements and reductions in health care cost. Despite the latter association, we cannot find direct evidence causally linking program participation to reduced health care costs, although it seems plausible that such a relationship will arise over longer horizons.

Bunching at the kink: implications for spending responses to health insurance contracts.

A large literature in empirical public finance relies on "bunching" to identify a behavioral response to non-linear incentives and to translate this response into an economic object to be used counterfactually. We conduct this type of analysis in the context of prescription drug insurance for the elderly in Medicare Part D, where a kink in the individual's budget set generates substantial bunching in annual drug expenditure around the famous "donut hole". We show that different alternative economic models can match the basic bunching pattern, but have very different quantitative implications for the counterfactual spending response to alternative insurance contracts. These findings illustrate the importance of modeling choices in mapping a compelling reduced form pattern into an economic object of interest.

Selection on Moral Hazard in Health Insurance.

We use employee-level panel data from a single firm to explore the possibility that individuals may select insurance coverage in part based on their anticipated behavioral ("moral hazard") response to insurance, a phenomenon we label "selection on moral hazard." Using a model of plan choice and medical utilization, we present evidence of heterogeneous moral hazard as well as selection on it, and explore some of its implications. For example, we show that, at least in our context, abstracting from selection on moral hazard could lead to over-estimates of the spending reduction associated with introducing a high-deductible health insurance option.

Adoption and utilization of device-assisted telemedicine.

We estimate the effect of adopting a digital device for performing medical exams at home during telehealth visits. We match visits of adopters and non-adopters who used the same virtual care clinic but without the device and compare healthcare utilization after the matched visits. We find that device adoption, partially offset by decreased use of other primary care modalities, results in a 12% higher utilization rate of primary care and increased use of antibiotics. But - particularly among adults - adoption lowers the use of urgent care, the emergency room, and hospital care, resulting in no increase in total cost.

How General are Risk Preferences? Choices under Uncertainty in Different Domains.

We analyze the extent to which individuals' choices over five employer-provided insurance coverage decisions and one 401(k) investment decision exhibit systematic patterns, as would be implied by a general utility component of risk preferences. We provide evidence consistent with an important domain-general component that operates across all insurance choices. We find a considerably weaker relationship between one's insurance decisions and 401(k) asset allocation, although this relationship appears larger for more "financially sophisticated" individuals. Estimates from a stylized coverage choice model suggest that up to thirty percent of our sample makes choices that may be consistent across all six domains.

VOLUNTARY REGULATION: EVIDENCE FROM MEDICARE PAYMENT REFORM.

Government programs are often offered on an optional basis to market participants. We explore the economics of such voluntary regulation in the context of a Medicare payment reform, in which one medical provider receives a single, predetermined payment for a sequence of related healthcare services, instead of separate service-specific payments. This "bundled payment" program was originally implemented as a 5-year randomized trial, with mandatory participation by hospitals assigned to the new payment model; however, after two years, participation was made voluntary for half of these hospitals. Using detailed claim-level data, we document that voluntary participation is more likely for hospitals that can increase revenue without changing behavior ("selection on levels") and for hospitals that had large changes in behavior when participation was mandatory ("selection on slopes"). To assess outcomes under counterfactual regimes, we estimate a stylized model of responsiveness to and selection into the program. We find that the current voluntary regime generates inefficient transfers to hospitals, and that alternative (feasible) designs could reduce these inefficient transfers and raise welfare. Our analysis highlights key design elements to consider under voluntary regulation.

Financial Incentives to Facilities and Clinicians Treating Patients With End-stage Kidney Disease and Use of Home Dialysis: A Randomized Clinical Trial.

Importance: Home dialysis rates for end-stage kidney disease (ESKD) treatment are substantially lower in the US than in other high-income countries, yet there is limited knowledge on how to increase these rates. Objective: To report results from the first year of a nationwide randomized clinical trial that provides financial incentives to ESKD facilities and managing clinicians to increase home dialysis rates. Design, Setting, and Participants: Results were analyzed from the first year of the End-Stage Renal Disease Treatment Choice (ETC) model, a multiyear, mandatory-participation randomized clinical trial designed and implemented by the US Center for Medicare & Medicaid Innovation. Data were reported on Medicare patients with ESKD 66 years or older who initiated treatment with dialysis in 2021, with data collection through December 31, 2021; the study included all eligible ESKD facilities and managing clinicians. Eligible hospital referral regions (HRRs) were randomly assigned to the ETC (91 HRRs) or a control group (211 HRRs). Interventions: The ESKD facilities and managing clinicians received financial incentives for home dialysis use. Main Outcomes and Measures: The primary outcome was the percentage of patients with ESKD who received any home dialysis during the first 90 days of treatment. Secondary outcomes included other measures of home dialysis and patient volume and characteristics. Results: Among the 302 HRRs eligible for randomization, 18 621 eligible patients initiated dialysis treatment during the study period (mean [SD] age, 74.8 [1.05] years; 7856 women [42.1%]; 10 765 men [57.9%]; 859 Asian [5.2%], 3280 [17.7%] Black, 730 [4.3%] Hispanic, 239 North American Native, and 12 394 managing clinicians. The mean (SD) share of patients with any home dialysis during the first 90 days was 20.6% (7.8%) in the control group and was 0.12 percentage points higher (95% CI, -1.42 to 1.65 percentage points; P = .88) in the ETC group, a statistically nonsignificant difference. None of the secondary outcomes differed significantly between groups. Conclusions and Relevance: The trial results found that in the first year of the US Center for Medicare & Medicaid Innovation-designed ETC model, HRRs assigned to the model did not have statistically significantly different rates in home dialysis compared with control HRRs. This raises questions about the efficacy of the financial incentives provided, although further evaluation is needed, as the size of these incentives will increase in subsequent years. Trial Registration: ClinicalTrials.gov Identifier: NCT05005572.

Selection in insurance markets: theory and empirics in pictures.

Government intervention in insurance markets is ubiquitous and the theoretical basis for such intervention, based on classic work from the 1970s, has been the problem of adverse selection. Over the last decade, empirical work on selection in insurance markets has gained considerable momentum. This research finds that adverse selection exists in some insurance markets but not in others. And it has uncovered examples of markets that exhibit "advantageous selection"­a phenomenon not considered by the original theory, and one that has different consequences for equilibrium insurance allocation and optimal public policy than the classical case of adverse selection. Advantageous selection arises when the individuals who are willing to pay the most for insurance are those who are the most risk averse (and so have the lowest expected cost). Indeed, it is natural to think that in many instances individuals who value insurance more may also take action to lower their expected costs: drive more carefully, invest in preventive health care, and so on. Researchers have taken steps toward estimating the welfare consequences of detected selection and of potential public policy interventions. In this essay, we present a graphical framework for analyzing both theoretical and empirical work on selection in insurance markets. This graphical approach provides both a useful and intuitive depiction of the basic theory of selection and its implications for welfare and public policy, as well as a lens through which one can understand the ideas and limitations of existing empirical work on this topic.

Supply-side variation in the use of emergency departments.

We study the role of person- and place-specific factors in explaining geographic variation in emergency department utilization using detailed data on 150,000 patients who moved regions within Israel. We document that about half of the destination-origin differences in the average emergency department utilization rate across districts translates to the change (up or down) in movers' propensity to visit the emergency department. In contrast, we find no change in the probability of having a hospital admission through the emergency department. Similar results are obtained in a complementary event study, which uses hospital entry as a source of variation. The results from both approaches suggest that supply-side variation in emergency department access affects only the less severe cases-for which close substitutes likely exist-and that variation across emergency physicians in their propensity to admit patients is not explained by place-specific factors, such as differences in incentives, capacity, or diagnostic quality.

Health Care Spending and Utilization in Public and Private Medicare.

We compare healthcare spending in public and private Medicare using newly available claims data from Medicare Advantage (MA) insurers. MA insurer revenues are 30 percent higher than their healthcare spending. Adjusting for enrollee mix, healthcare spending per enrollee in MA is 9 to 30 percent lower than in traditional Medicare (TM), depending on the way we define "comparable" enrollees. Spending differences primarily reflect differences in healthcare utilization, with similar reductions for "high value" and "low value" care, rather than healthcare prices. We present evidence consistent with MA plans encouraging substitution to less expensive care and engaging in utilization management. (JEL H11, H42, H51, I11, I13).

Moral Hazard in Health Insurance: What We Know and How We Know It.

We describe research on the impact of health insurance on healthcare spending ("moral hazard"), and use this context to illustrate the value of and important complementarities between different empirical approaches. One common approach is to emphasize a credible research design; we review results from two randomized experiments, as well as some quasi-experimental studies. This work has produced compelling evidence that moral hazard in health insurance exists-that is, individuals, on average, consume less healthcare when they are required to pay more for it out of pocket-as well as qualitative evidence about its nature. These studies alone, however, provide little guidance for forecasting healthcare spending under contracts not directly observed in the data. Therefore, a second and complementary approach is to develop an economic model that can be used out of sample. We note that modeling choices can be consequential: different economic models may fit the reduced form but deliver different counterfactual predictions. An additional role of the more descriptive analyses is therefore to provide guidance regarding model choice.

Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals.

We study the design of provider incentives in the post-acute care setting - a high-stakes but under-studied segment of the healthcare system. We focus on long-term care hospitals (LTCHs) and the large (approximately $13,500) jump in Medicare payments they receive when a patient s stay reaches a threshold number of days. Discharges increase substantially after the threshold, with the marginal discharged patient in relatively better health. Despite the large financial incentives and behavioral response in a high mortality population, we are unable to detect any compelling evidence of an impact on patient mortality. To assess provider behavior under counterfactual payment schedules, we estimate a simple dynamic discrete choice model of LTCH discharge decisions. When we conservatively limit ourselves to alternative contracts that hold the LTCH harmless, we find that an alternative contract can generate Medicare savings of about $2,100 per admission, or about 5% of total payments. More aggressive payment reforms can generate substantially greater savings, but the accompanying reduction in LTCH profits has potential out-of-sample consequences. Our results highlight how improved financial incentives may be able to reduce healthcare spending, without negative consequences for industry profits or patient health.

Private provision of social insurance: drug-specific price elasticities and cost sharing in Medicare Part D.

We explore how private drug plans set cost-sharing in the context of Medicare Part D. While publicly-provided drug coverage typically involves uniform cost-sharing across drugs, we document substantial heterogeneity in the cost-sharing for different drugs within privately-provided plans. We also document that private plans systematically set higher consumer cost sharing for drugs or classes associated with more elastic demand; to do so we estimate price elasticities of demand across more than 150 drugs and across more than 100 therapeutic classes. We conclude by discussing the various channels that likely affect private plans' cost-sharing decisions.