Is Occupational Licensing a Barrier to Interstate Migration?

January 10, 2018

Occupational licensure, one of the most significant labor market regulations in the United States, may restrict the interstate movement of workers. We analyze the interstate migration of 22 licensed occupations. Using an empirical strategy that controls for unobservable characteristics that drive long-distance moves, we find that the between-state migration rate for individuals in occupations with state-specific licensing exam requirements is 36 percent lower relative to members of other occupations. Members of licensed occupations with national licensing exams show no evidence of limited interstate migration. The size of this effect varies across occupations and appears to be tied to the state specificity of licensing requirements. We also provide evidence that the adoption of reciprocity agreements, which lower re-licensure costs, increases the interstate migration rate of lawyers. Based on our results, we estimate that the rise in occupational licensing can explain part of the documented decline in interstate migration and job transitions in the United States.

via Is Occupational Licensing a Barrier to Interstate Migration? by Janna Johnson, Morris M. Kleiner :: SSRN

The Effect of Primary Care Visits on Health Care Utilization: Findings from a Randomized Controlled Trial

January 10, 2018

We conducted a randomized controlled trial, enrolling low-income uninsured adults to determine whether cash incentives are effective at encouraging a primary care provider (PCP) visit, and at lowering utilization and spending. Subjects were randomized to four groups: untreated controls, and one of three incentive arms with incentives of $0, $25, or $50 for visiting a PCP within six months of group assignment. Compared to the untreated controls, subjects in the incentive groups were more likely to have a PCP visit in the initial six months. They had fewer ED visits in the subsequent six months, but outpatient visits did not decline. We also used the exogenous variation generated by the experiment to obtain causal evidence on the effects of a PCP visit. We observed modest reductions in emergency department use and increased outpatient use, but no reductions in overall spending.

via The Effect of Primary Care Visits on Health Care Utilization: Findings from a Randomized Controlled Trial by Cathy Bradley, David Neumark, Lauryn Saxe Walker :: SSRN

Public Attitudes Toward Healthcare Fraud: Reasons to Commit Fraud and Common Schemes

December 18, 2017

Cases of health care fraud have been on the rise in recent years and are believed to continue to increase over time. Every year a significant amount of the federal healthcare budget is lost to fraudulent claims by providers and/or to government agencies involved with the enforcement of the healthcare laws and prosecution of offenders. This study investigates the reasons for committing fraud and finds that the primary contributing factors are the explosion in the size of health care spending and the ever expanding network of providers and subscribers of health care services causing wide access to the system.

While fraud is committed against both public and private health care agencies, the primary emphasis for prevention and reporting of fraud is on the public side (Rosenbaum et. al., 2009). The research investigates whether there are any differences in public attitudes towards fraud committed against the public agencies versus the private insurance companies. The study selects two equal samples and mails to each group a survey that includes similar questions pertaining to either Medicare/Medicaid or private insurance companies. The results show that both groups of participants view the fee-for-service payment system where doctors and other providers are tempted to perform or bill for unnecessary services as the most important reason for fraud. In addition, both groups rated double billing and incorrect reporting of diagnosis or procedures as the top two schemes committed against health care agencies.

via Public Attitudes Toward Healthcare Fraud: Reasons to Commit Fraud and Common Schemes by Nasrollah Ahadiat :: SSRN

The Impact of Federal Regulation on the 50 States

December 17, 2017

The federal regulation and state enterprise (FRASE) index ranks the 50 states and the District of Columbia according to the impact of federal regulation on the private-sector industries in each state’s economy. A ranking of 1 indicates the highest level of impact of federal regulation on a state’s economy, whereas a ranking of 51 means the lowest.

For several decades, the federal government has relied on regulations as the primary vehicle to intervene in economic activity across the United States. The continual buildup of regulations in the Code of Federal Regulations, shown in the figure below, is known as regulatory accumulation. The FRASE index is designed to quantify the effects of regulatory accumulation at the state level.

via The FRASE Index – QuantGov

Do Physicians’ Financial Incentives Affect Medical Treatment and Patient Health?

December 15, 2017

We investigate whether physicians’ financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 3 percent increase in care provision. Elective procedures such as cataract surgery respond much more strongly than less discretionary services. Non-radiologists expand their provision of MRIs, suggesting effects on technology adoption. We estimate economically small health impacts, albeit with limited precision.

via American Economic Association

Occupational Licensing Reduces Interstate Mobility

December 13, 2017

People working in state-specific licensed occupations move between states at a rate 31 percent lower than those in quasi-national licensed occupations. Some of this effect might be driven by mechanisms outside the scope of the licensing structure, such as having a network of clients in a specific place that might increase the incentive to stay. After accounting for this dynamic, the authors estimate that the relative migration rate for workers in state-specific licensed occupations is 16 percent lower.

In the aggregate, the increase in occupational licensing from 15 percent of the labor force in 1980 to 30 percent in 2015 explains 6 percent of the decline in interstate migration and 2 percent of the decline in job-to-job flows over the period. The effect might not seem substantial at first glance, but the aging of the population explains only 10 percent of the fall in interstate migration and 9 percent of the fall in job-switching between 1998 and 2010.

Reduced geographic mobility and job-switching have deleterious effects on the earnings and career trajectories of individual workers as well. The authors estimate that if licensing reduces interstate migration for licensed workers by about 20 percent, the number of annual interstate migrants falls by 93,600. These would-be migrants do not see the earnings gains that normally flow to job-switchers and their total annual earnings are reduced by $356 million [more than $4,000 per would-be migrant].

via Occupational Licensing Reduces Interstate Mobility | Economics21

Competition and Physician Behaviour: Does the Competitive Environment Affect the Propensity to Issue Sickness Certificates?

December 11, 2017

Competition among physicians is widespread, but compelling empirical evidence on the impact on service provision is limited, mainly due to lack of exogenous variation in the degree of competition. In this paper we exploit that many GPs, in addition to own practice, work in local emergency centres, where the matching of patients to GPs is random. This allows us to observe the same GP in two different competitive environments; with competition (own practice) and without competition (emergency centre). Using rich administrative patient- level data from Norway for 2006-14, which allow us to estimate high-dimensional fixed-effect models to control for time-invariant patient and GP heterogeneity, we find that GPs with a fee-for-service (fixed-salary) contract are 12 (7.5) percentage points more likely to certify sick leave at own practice than at the emergency centre. Thus, competition has a positive impact on GPs’ sick listing that is strongly reinforced by financial incentives.

via Competition and Physician Behaviour: Does the Competitive Environment Affect the Propensity to Issue Sickness Certificates? by Kurt Richard Brekke, Tor Helge Holmas, Karin Monstad, Odd Straume :: SSRN