Topics in health economics

The rate of cesarean sections (CS) has grown substantially over the last two decades, now accounting for roughly one third of all births. The economics literature has established that a significant part of this growth is the result of physician incentives rather than medical necessity. Increasingly, however, the medical literature is raising questions about possible correlations between increased CS use and negative health outcomes for children in later life. For example, CS changes the intestinal bacteria of the infant and possibly compromises their immune system. My paper, "Cesarean Sections and Later Child Health Outcomes," provides the first causal evidence that CS has an effect on later child health outcomes. Using variation in medical malpractice premiums as an instrument for risk-adjusted MSA-level rates of CS, I find that CS significantly increases the total rate of hospitalizations and the rate of hospitalizations that present with asthma for children up to 18 years old. These findings suggest that CS may have negative externalities on the child born via CS, which has implications for the evaluation of the socially optimal use of the CS procedure. In "Financial Distress, Maternal Stress, and Infant Health," I investigate the effect of financial stress caused by the mortgage crisis, a large and negative exogenous financial shock, on infant health. I use all births in counties with over 100,000 individuals, spanning the entire country, and link these with county-level mortgage delinquency rates. I find that increases in financial stress increase premature births. A 10 percentage point increase in the mortgage delinquency rate, which occurred in roughly 10% of counties considered over this time period, would lead to an increase in premature births of approximately 5%. This result is robust to multiple specifications using different measures of financial stress collected from independent sources. I find evidence that financial stress decreases birth weight and increases NICU (Neo-Natal Intensive Care Unit) admissions. Decreases in prenatal care utilization and increases in cigarette consumption in the third trimester are important mechanisms underlying the negative relationship between financial stress and infant health. My third paper is "The Effect of Tort Reform on Patient Safety," co-authored with Sarah Miller. Tort reform reduces the liability for medical errors and may create moral hazard for physicians and hospitals. In this paper, we measure the effect of tort reform on a large class of medical errors: adverse patient safety events that occur in hospitals. We find that the adoption of a cap on non-economic damages is associated with an increase in adverse patient safety events of about 5 percent. Most of the observed increase is a result of higher levels of hospital-acquired infections and adverse events occurring during post-operative care. We do not find any evidence that tort reform affects the characteristics of patients admitted to the hospital, suggesting that selection of more risky patients is not driving our results