Date of Award

12-11-2018

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Economics

First Advisor

Charles Courtemanche

Second Advisor

James Marton

Third Advisor

Shiferaw Gurmu

Fourth Advisor

Jason Hockenberry

Abstract

National Health Expenditures Accounts estimates that U.S health care spending grew4.3 percent from the previous year to reach $3.3 trillion, or $10,338 per person in 2016. The overall share of gross domestic product (GDP) related to health care spending was 17.9 percent in 2016, up from 17.7 percent in 2015. Moreover, increased use of opioid prescriptions led to excessive use and abuse of these drugs, resulting in nationwide "opioid epidemic". This dissertation examines how different policy interventions contributed to the rise in health care utilization and prescribed opioids in U.S.

The first chapter examines how medical marijuana laws changed utilization of prescription drugs with a special emphasis on prescribed opioids. More than half of the US population lives in a state that has adopted medical marijuana laws (MMLs). Studies show that most medical marijuana patients use marijuana for managing their pain with the overwhelming majority of them preferring it to opioids. Despite ongoing pro-marijuana policies and the growing trend of public acceptance, the evidence on how people change their prescription use due to the availability of marijuana as an alternative treatment is limited. Using the variations across state MMLs between 1996 and 2014 of Medical Expenditure Panel Survey (MEPS) this paper estimates the effects of MMLs on prescription drug utilization, with a focus on opioids. I find that MMLs lead to a $2.47 decrease in per person prescribed opioid spending among young adults (ages 18-39) over a year. Most of this decrease results from the intensive margin of use and MML states that allow home cultivation experience even larger decreases. Furthermore, the decreasing effects are persistent over time and they get stronger following the years of implementation. MMLs also decrease the number of opioid pill use among young adults. I do not find any discernible impact on older populations' opioid utilization. I then investigate the effects on other prescriptions for which marijuana can be a potential substitute and find the allowance of dispensaries is generally associated with decreases, although the effects depend on the type of MML, the margin of use and age.

The second chapter examines how universal insurance coverage affects health care utilization drawing evidence from the health reform of Massachusetts in 2006. This law reformed insurance markets, mandated that all residents in the state would be required to take up health insurance, and provided subsidies for lower-income individuals to purchase it. Using data from MEPS between 2000 and 2015, I provide evidence that the Massachusetts health care reform increased counts of hospital and office-based medical provider visits significantly. The results were robust to using alternative control groups and different functional form assumptions.

I find the reform's effects grew over time, reaching its maximum after 2010. The reform also increased health care expenditures and probability of health care service use significantly. Finally, I use the reform to instrument for health insurance and estimate large impacts of insurance on health care utilization.

The third chapter examines the impact of the Affordable Care Act on health care utilization. The Affordable Care Act (ACA) aimed to achieve nearly universal health insurance coverage in the United States through a combination of regulations, mandates, subsidies, exchanges, and Medicaid expansions. We use data from the Medical Expenditure Panel Survey (MEPS) to investigate the impacts of the ACA on the health care utilization and expenditures of non-elderly adults. A difference-in-difference-in-differences strategy separately identifies the effects of the ACA's expansions of private and Medicaid coverage by leveraging variation in states' Medicaid expansion decisions and individuals' pre-ACA insurance status. Intuitively, impacts of the ACA's insurance expansions should be concentrated among those who lacked insurance prior to the law, and such individuals are more likely to be affected in states that participated in the Medicaid expansion. Similar methods have been used to study the ACA's effects on outcomes such as health insurance coverage, access to care, risky health behaviors, and self-assessed health. However, they have not been previously used to investigate impacts on health care spending. Theoretically, the net effect on spending is ambiguous. On one hand, insurance lowers the effective price of care, which should increase utilization across-the-board. On the other hand, insurance improves access to primary and preventive care, which could potentially reduce use of expensive emergency services. The results suggest that the ACA increased health care utilization in some dimensions - including counts of inpatient hospital visits, medical-provider office visits and total counts of prescription pills, inpatient, outpatient, medical-provider office and ER visits combined on its first year. However, these increases in health care utilization in counts were not observed in ACA's second year. We also found that the ACA increased coverage and led to significant gains in both expansion and non-expansion states consistent with what has been found by prior studies. This significant gain in insurance was not limited to ACA's first year but it carried to second year.

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