Adrienne Sabety

Adrienne Sabety

Wilson Family LEO Assistant Professor, Department of Economics, University of Notre Dame

Dissertation Title:  "Essays on the Institutional Design of Health Care Markets"The institutional design of health care markets directly impacts patients’ access, quality, and affordability of health care. Chapter one quantifies how patient-primary care provider (PCP) relationships affect patients' access to and quality of care. Chapter two designs a care coordination intervention targeting undocumented immigrants’ access to and quality of care. Chapter three asks how plan choice affects consumers’ quality, access, and affordability of health insurance.

Chapter one shows that relationships determine where patients demand care and positively affect patients’ health. In cases where a PCP exogenously exits the market, patients do not form new PCP relationships, decreasing their use of primary care long-term. Instead, patients switch to specialists they know for less-extensive preventive care, which increases patients’ probability of death by about 50 deaths per 100,000 individuals. Emergency department and inpatient admissions also increase for one year after a PCP’s exit, increasing patients’ spending by $4,640 and Medicare spending by $16,052 per exiting PCP. I establish the importance of relationship-specific capital in explaining effects, information that grows over time. Travel-cost revealed preference estimates suggest that patients are willing to pay $400-$500 to maintain a PCP relationship, providing a lower bound on patients’ monetary valuation of relationship-specific capital.

Chapter two uses a randomized evaluation to measure the impact of coordinating undocumented immigrants' health care on utilization and health status. We show that coordinating undocumented immigrants' health care increases utilization of primary care, self-reported access to care, and preventive care, leading to a 7% decrease in individuals' long-run probability of death in back-of-the-envelope calculations. The intervention also causes high risk individuals to decrease their use of the emergency department by 26%, leading to $19,000 in government savings on net.

Chapter three focuses on choice over coverage level, “vertical choice.” There limited evidence on how vertical choice affects welfare despite it being a widespread feature of U.S. health insurance markets. The socially efficient level of coverage for a given consumer optimally trades off the value of risk protection and the social cost from moral hazard. Providing choice does not necessarily lead consumers to select their efficient coverage level. We show that in regulated competitive health insurance markets, vertical choice should be offered only if consumers with a higher willingness to pay for insurance have a higher efficient coverage level. We test for this condition empirically using administrative data from a large employer representing 45,000 households. We estimate a model of consumer demand for health insurance and healthcare utilization that incorporates heterogeneity in health, risk aversion, and moral hazard. Our estimates imply substantial heterogeneity in efficient coverage levels, but we do not find that households with higher efficient coverage levels have a higher willingness to pay. It is therefore optimal to offer only a single coverage level. Relative to a status quo with vertical choice, offering only the optimal single level of coverage increases welfare by $302 per household per year. This policy shift also leads to a more even distribution of health-related spending (premiums plus out-of-pocket costs) in the population, suggesting equity and efficiency improvements.

 

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