Role of information, cost-sharing, and payment reforms in health care markets

This dissertation analyzes the role of information, cost-sharing, and payment reforms in health care markets. The first chapter analyzes the impact on total medical costs of using a risk-adjusted comprehensive payment model, to support a patient-centered medical home. We compare insurance claims data on treatment and control practices from a network health plan in upstate New York. Practices in the treatment group embraced a risk-based comprehensive payment model, receiving risk-adjusted base payments and bonuses, compared with fee-for-service in the control group. We estimate the treatment effect using difference-in-differences and use propensity weights to address differences in exogenous variability between control and treatment patients. Our estimation results suggest that risk-based comprehensive payment model has notably dampened spending growth for the practices in the treatment group. Chapter two presents empirical evidence on the impact of patient reviews on consumers' physician choices. Our study extracted data from ZocDoc.com--a unique website that integrates patient reviews, and appointment scheduling for physicians on one platform. Our results suggest that patient reviews are becoming an important source of reputation for physicians. Because ZocDoc displays each physician's rounded average rating to patients, we can use regression discontinuity to identify the causal impact of patient ratings on patient demand. Indeed, we find that half a star improvement in ratings, on a scale of 1 to 5 stars, leads to a 10% increase in the likelihood, at the mean, that a doctor will fill an appointment. The third chapter examines the joint effect of FDA's drug risk communication and consumer cost-sharing on the consumption of prescription drugs. Given different levels of cost sharing, one should expect the consumer response to any negative information regarding a particular drug to be slower at lower levels of cost-sharing. However, as a competing hypothesis one can also expect that the response to a severe drug risk communication to be swift and not responsive to cost sharing. Using MarketScan's database of privately insured individuals in the United, I find that higher cost sharing indeed has a significant impact of how patients respond to drug risk communication, I find that higher cost sharing combined with drug risk communication reduces the compliance rate