Vertical Integration and Optimal Reimbursement Policy

Health care providers may vertically integrate not only to facilitate coordination of care, but also for strategic reasons that may not be in patients' best interests. Optimal Medicare reimbursement policy depends upon the extent to which each of these explanations is correct. To investigate, we compare the consequences of the 1997 adoption of prospective payment for skilled nursing facilities (SNF PPS) in geographic areas with high versus low levels of hospital/SNF integration. We find that SNF PPS decreased spending more in high integration areas, with no measurable consequences for patient health outcomes. Our findings suggest that subjecting integrated providers to higher-powered reimbursement incentives, i.e., less cost-sharing, may enhance medical productivity. More generally, we conclude that it may be efficient for purchasers of health services (and other services subject to agency problems) to consider the organizational form of their suppliers when choosing a reimbursement mechanism.

Replication data for: Reform and its ramifications: The impact of term limits on legislative decision-making, 1997

What impact will term limits have on legislative decision making in the United States? This dissertation adds to a growing academic literature on this issue. The work is composed of three related essays, which draw upon ideas and tools from the field of legislative politics to evaluate the effects of the reforms. Using data on the tenure patterns of members of the U.S. state legislatures, the first essay evaluates how term limits will affect turnover and partisan composition in these bodies. Term-specific "survival rates" are estimated for the lower chambers of 41 legislatures. These rates are then employed to evaluate the impact of the reforms on legislative careers, as well as on turnover rates and the partisan balance of power in each state. The results fill an important gap in the literat ure on term limits by making predictions about their impact in the state legislatures.The second essay considers the impact of these reforms on the retirement decisions of legislators. I draw upon previous work on legislative membership reform to explore how term limits could alter the value legislators place on holding office. The work employs duration analysis, which yields empirical estimates of the impact of term limits on the timing of legislators' career decisions. Using data o n the decisions of members of the California State Assembly, I find that term limitations have increased the retirement rate for all legislators, but I find no evidence of partisan differences in retirements due to the reforms. The third essay explores the effects of term limits on interaction within legislatures. The model used is an overlapping generations game, which evaluates the possibilities for cooperation in an organization with a rotating membership. The results suggest that term limits will upset the viability of cooperation in three different ways: through the limit level itself, the rate of reelection to the legislature, and the short term changes the reforms would have on the tenure distributio n of the legislature. The results shed light on how the policy making process itself may be affected by these new reforms