Administrative Burdens in the US Health Care Sector

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2023

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Abstract

In this dissertation, I investigate the impact of administrative burdens on the US health care sector. Using observational data---particularly medical claims from Medicare----and policy variation in the administrative burdens to which health care providers are exposed, I use causal inference methods to understand the effects of various administrative burdens on economic, health, and fiscal outcomes in multiple contexts within the US health care system. I also use theoretical and structural modeling techniques to highlight and quantify the trade-offs faced by economic agents in the health care system and the impact of policy choices. Using turnover in the identity of private contractors that administer Traditional Medicare, I first find that exposing providers to the increased administrative burden imposed by higher-denial contractors does not reduce Medicare spending despite increasing claim denials. The increased administrative burden also leads providers to invest in billing effort, consolidate into larger firms, and earn lower profits. Next, I use similar variation across contractors to show that Medicare coverage restrictions slow the adoption of new medical procedures. Furthermore, I find that the diffusion patterns induced by these administrative burdens are consistent with social learning by providers about the value of the innovations, motivating a structural model of provider learning that indicates that coverage restrictions slow the learning process of the medical community. Finally, I use the staggered roll out of a prior authorization regulation along with criminal and civil lawsuits to identify the effects of ``pay-and-chase" litigation and an administrative burden regulation on the prevalence of health care fraud. I find that prior authorization was extremely effective at reducing health care spending without causing any adverse patient health outcomes, while litigation was much less effective. In conclusion, this dissertation finds that the administrative burdens that permeate the US health care sector have major impacts on market structure, innovation, and health care fraud, with the benefits and costs of these burdens being highlight context dependent.

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League, Riley J (2023). Administrative Burdens in the US Health Care Sector. Dissertation, Duke University. Retrieved from https://hdl.handle.net/10161/27699.

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