Essays on Health and Medical Care

This dissertation consists of two essays that explain health outcomes and medical care in the United States. Health care has been a major concern of economists and policy makers. Policy intervention is one of the key factors that affect health outcomes, especially among low-income families. Welfare programs such as Medicaid and cash assistance are conventionally implemented to assist low-income families. The effectiveness of these efforts to improve health outcomes and medical utilization among low-income families is not entirely clear. As to the supply side of health care, the results of previous studies on how hospitals provide the services are mixed. Additionally, hospitals may compete to attract patients and generate spillover effects. Quality of hospitals may in turn differ by market. My two essays apply econometrics models to investigate the effects of public policies and hospital quality on health and medical care. Specifically, the first essay examines whether welfare programs affect the health outcomes and medical utilization of children in the low-income families, and if so, which policy has the strongest effect on them. The second essay explores how the spillover effects impact the treatment rates of hospitals. The first essay examines the effect of the Temporary Aid to Needy Families (TANF) program on children\u27s health outcomes using data from the Survey of Income and Program Participation (SIPP) over the period 1994 to 2005. The TANF policies have been credited with increased employment for single mothers and a dramatic drop in welfare caseload. Our results show that these policies also had a significant effect on various measures of children\u27s health and medical utilization especially among low-income families. These health measures include a rating of the child\u27s health status reported by the parents; the number of days an illness or injury kept the child in bed; the number of times that parents consulted a doctor; and the number of nights that the child stayed in a hospital. The second essay addresses the effect of hospital ownership on treatment rates allowing for spatial correlation among hospitals. Competition among hospitals and knowledge spillovers generate significant externalities which we try to capture using the spatial Durbin model. Using a panel of 2342 hospitals in the 48 continental states observed over the period 2005 to 2008, we find significant spatial correlation of medical service treatment rates among hospitals. We also get mixed results on the effect of hospital ownership on treatment rates that depends upon the market structure where the hospital is located and which varies by treatment type