Working Papers

Physician Behavior in the Presence of a Secondary Market: The Case of Prescription Opioids

Abstract: This paper analyzes the forces driving the opioid epidemic and shows how both patient and physician behavior across legal and illegal markets have contributed to the crisis. To access prescription opioids for medical purposes or misuse, patients search over physicians on the legal, primary market and an illegal, secondary market. Physicians, who care about their revenue and their patients' health, take into account the existence of this secondary market when prescribing. To analyze how these factors contribute to the crisis, I develop a model of physician behavior in the presence of a secondary market with patient search. I estimate this model using information on physician-level opioid prescriptions and street prices on black markets across the US. Estimates demonstrate that physicians currently overprescribe by at least 20%. However, the presence of a secondary market induces physicians to be more careful in their prescribing: physicians would overprescribe by up to 46% if a secondary market did not exist. Despite bringing prescriptions closer to their optimal level, the secondary market still results in significant harm due to the reallocation of prescriptions for abuse. Policies that simultaneously target the reallocation of prescriptions across patients and unnecessary prescribing by physicians have potential health benefits of at least $18 billion per year, an increase of $33 billion over the status quo.

Is the Focus on Food Deserts Fruitless? Retail Access and Food Purchases Across the Socioeconomic Spectrum 
(NBER Working Paper No. 21126) with Jessie Handbury and Ilya Rahkovsky

Abstract: Using novel data describing the healthfulness of household food purchases and the retail landscapes consumers face, we measure the role of access in explaining why wealthier and more educated households purchase healthier foods. We find that spatial differences in access, though significant, are small relative to spatial differences in the nutritional content of sales. Socioeconomic disparities in nutritional consumption exist even among households with equivalent access, and the healthfulness of household consumption responds minimally to improvements in local retail environments. Our results indicate that access-improving policies alone will eliminate less than one third of existing socioeconomic disparities in nutritional consumption. 

Closing the Gap: The Impact of the Medicaid Primary Care Rate Increase on Access and Health 
(FRB of Chicago Working Paper No. WP-2017-10) with Diane Alexander

Abstract: The difficulties that Medicaid beneficiaries face accessing medical care are often attributed to the program's low reimbursement rates relative to other payers. There is little evidence, however, as to the actual effects of doctor payment rates from Medicaid on access and health outcomes for beneficiaries. In this paper, we exploit within-state variation in Medicaid reimbursement rates driven by the Medicaid fee bump—a provision of the Affordable Care Act mandating that states raise Medicaid payments to match Medicare rates for primary care visits for 2013 and 2014—to quantify the impact of changes in physician payment on access to treatment. As Medicaid rates are set at the state level and vary considerably in generosity, the policy had a large and heterogeneous impact across states. We find that increasing Medicaid payments to primary care doctors is associated with significant increases in office visits, improvements in access measures, and better self-reported health among Medicaid beneficiaries. Among children on Medicaid, fee increases are also associated with fewer days of missed school.

Check Up Before You Check Out: Retail Clinics and Emergency Room Use 
Revision requested at Journal of Public Economics

(NBER Working Paper No. 23585) with Diane Alexander and Janet Currie

Abstract: We use the universe of emergency room (ER) visits in New Jersey from 2006-2014 to examine the impact of retail clinics on ER usage in a difference-in-difference framework. We find significant effects of retail clinics on ER visits for both minor and preventable conditions, with residents who live close to an open clinic being 4.1-12.3 percent less likely to use an ER for these conditions. Our estimates suggest annual cost savings from reduced ER usage of over 70 million if retail clinics were to be readily available across all of New Jersey.

Just What the Nurse Practitioner Ordered: Independent Prescriptive Authority and Population Mental Health 
Revision requested at Journal of Health Economics

(FRB of Chicago Working Paper No. WP-2017-8) with Diane Alexander

Abstract: We examine whether relaxing occupational licensing to allow nurse practitioners (NPs)—registered nurses with advanced degrees—to prescribe medication without physician oversight is associated with improved population mental health. Exploiting time-series variation in independent prescriptive authority for NPs from 1990–2014, we find that broadening prescriptive authority is associated with improvements in self-reported mental health and decreases in mental-health-related mortality, including suicides. These improvements are concentrated in areas underserved by psychiatrists and among populations traditionally underserved by mental health providers. Our results demonstrate that extending prescriptive authority to NPs can help mitigate physician shortages and extend care to disadvantaged populations.

U.S. Employment and Opioids: Is There a Connection?
(NBER Working Paper No. 24440) with Janet Currie and Jonas Jin

Abstract: This paper uses quarterly county-level data to examine the relationship between opioid prescription rates and employment-to-population ratios from 2006–2014. We first estimate models of the effect of opioid prescription rates on employment-to-population ratios, instrumenting opioid prescriptions for younger ages using opioid prescriptions to the elderly. We then estimate models of the effect of employment-to-population ratios on opioid prescription rates using a shift-share instrument. We find that the estimated effect of opioids on employment-to-population ratios is positive but small for women, but there is no relationship for men. These findings suggest that although they are addictive and dangerous, opioids may allow some women to work who would otherwise leave the labor force. When we examine the effect of employment-to-population ratios on opioid prescriptions, our results are more ambiguous. Overall, our findings suggest that there is no simple causal relationship between economic conditions and the abuse of opioids. Therefore, while improving economic conditions in depressed areas is desirable for many reasons, it is unlikely to curb the opioid epidemic.


Addressing the Opioid Epidemic: Is There a Role for Physician Education? (online appendix)
with Janet Currie
American Journal of Health Economics, 2018, 4(3): 383-410 

Abstract: Using data on all opioid prescriptions written by physicians from 2006-2014, we uncover a striking relationship between opioid prescribing and medical school rank. Even within the same specialty and county of practice, physicians who completed their initial training at top medical schools write significantly fewer opioid prescriptions than physicians from lower ranked schools. Additional evidence suggests that some of this gradient represents a causal effect of education rather than patient selection across physicians or physician selection across medical schools. Altering physician education may therefore be a useful policy tool in fighting the current epidemic.

Practitioner Articles

A Closer Look at How the Opioid Epidemic Affects Employment
with Janet Currie
Harvard Business Review, August 2018

Evaluating the Economic Response to Japan's Earthquake
with David Weinstein
RIETI Policy Discussion Paper Series, February 2012