Three Essays in Health Economics

Abstract

State governments play a major role in the United States health care market. Moreover, states administer much of the regulation, budgeting, and policy for their own markets, which creates idiosyncratic differences across states. This dissertation contributes to the literature by evaluating those differences to analyze the effectiveness of certain regulations and policies and to explore the relationship between state health care markets and other state obligations.

The first chapter uses state differences in the nurse practitioner (NP) market to evaluate the effects of state laws allowing NPs to prescribe controlled substances on prescription opioid use. I study these effects by merging nationwide data from the Medical Expenditure Panel Survey (MEPS) over 18 years (1996-2013) with data on state laws. I then exploit variation in these laws over time to create a quasi-natural experiment and to estimate the causal impact of NP deregulation on prescription opioid use. I find, relative to patients living in more restrictive states, that patients who live in states with more flexible NP laws emph{reduce} their prescription opioid use by 7 percent to 9 percent. I also find that health outcomes either slightly improve or remain unaffected by the enactment of these laws. Taken together, these results indicate that NP deregulation slows the trend in prescription opioid growth while potentially improving patient outcomes. Furthermore, suggestive evidence implies that these effects may be even larger for the least restrictive states, opening the door for future reforms.

The second chapter (co-authored with Andrew Litten) seeks to identify the causal relationship between increased state Medicaid obligations and higher education spending. After several decades of federal mandates and high rates of health cost inflation, Medicaid spending has taken an increasingly larger share of state budgets, forcing states to make offsetting cuts elsewhere. We argue that state governments are likely to cut higher education in response to these changes, as institutions of higher education have the capacity to find additional revenues elsewhere. We use federally administered Supplemental Security Income (SSI) enrollments to instrument for state Medicaid spending. We find that a one dollar increase in Medicaid costs leads to a decrease in higher education subsidies of 20 cents to 37 cents. Our approach provides estimates which are both more credible and more precise than those which have previously been used in the literature.

The third chapter studies the effectiveness of Prescription Drug Monitoring Programs (PDMPs). These programs are widely considered to be a promising tool for preventing prescription opioid misuse. Using a nationally representative sample that spans the majority of PDMP implementation, I find little evidence that PDMP implementation is effective in preventing prescription opioid misuse. Nonetheless, I find that when states pair PDMPs with policies mandating health care provider use ("must access" laws), they can successfully reduce high-volume opioid prescriptions. States that add "must access" laws reduce high-volume prescriptions by about 20 percent. In addition, these states do not appear to affect overall prescribing behavior, suggesting that PDMPs with "must access" laws can target potential misuse without hindering medically appropriate access.