Essays in Health Economics

Abstract

In this dissertation, I study three issues in the field of health economics. Chapter 1, ``The Effect of Internet Gambling Laws on Suicide: Evidence From New Jersey,'' examines the effect of legalizing Internet gambling on suicide rates following the introduction of legal Internet gambling in New Jersey. The emergence and subsequent rapid growth of Internet gambling has raised significant public health questions and concerns. The relationship between Internet gambling and pathological gambling has been studied extensively. However, the link between them is not well understood. This study exploits a change in the legal status of Internet gambling to estimate the effects of Internet gambling on state level suicide rates using both a differences-in-differences model and a synthetic control model. I find no statistically significant effect of the law on suicides. Secondary analyses using Internet search data find evidence of an effect on mental health and addiction. These results are important because they show that, once endogenous correlation in Internet gambling participation is controlled for, the effects of its legalization on public health may diminish. This is in sharp contrast to the heft of existing literature and may help to better understand the link between Internet gambling and pathological gambling. Chapter 2, ``The Effect of Increased Cost-Sharing on Low-value Service Use,'' examines the effect of a value-based insurance design (VBID) program implemented at a large public employer in the state of Oregon. The program substantially increased cost-sharing for several healthcare services likely to be of low-value for most patients: diagnostic services (e.g., imaging services) and surgeries (e.g., spinal surgeries for pain). Using a differences-in-differences design coupled with granular, administrative health insurance claims data over the period 2008 to 2013, we estimate the change in low-value service use among beneficiaries before and after program implementation relative to a comparison group not exposed to the VBID. Our findings suggest that the VBID significantly reduced the use of targeted services, with implied elasticities of demand somewhat larger than estimates for general healthcare services. We find no evidence that increasing cost-sharing for these low-value services led to substitution to non-targeted services or increased overall healthcare costs. These findings have implications for both public and private healthcare policies as VBID principles are proliferating in United States healthcare markets. Chapter 3, ``The Effect of Mandatory Managed Care on Preventable Hospitalizations for the Aged, Blind, and Disabled Population of Medicaid in New Jersey,'' examines the effect of a mandatory transition to Medicaid managed care for the aged, blind, and disabled population in New Jersey Medicaid. Medicaid has grown over the last few decades to a program which now covers one in five Americans and costs over half of one trillion dollars to administer. Medicaid represents the largest item on a state's budget; the largest share of that money is spent on a small group of high-cost individuals: the disabled. Seeking to expand upon the successes, no mater how limited, and the ability to smooth costs over time, states began to shift these high-cost, complex patients into managed care plans. The evidence on how well these plans can handle the demanding needs of this population is still debated. In this paper, I utilize the variation induced from a shift to mandatory managed care in preventable hospitalizations for the physically and developmentally disabled in New Jersey's Medicaid program to asses the impact on access to care for this extremely vulnerable population. Using a difference-in-differences model I find the introduction of managed care reduced the monthly preventable hospitalization rate 6.4%[-11.5,-1.3]. To my knowledge, this would be one of the first causal estimates for this population, and the first for New Jersey.