New Research

What Difference Does a Diagnosis Make? Evidence from Marginal Patients


with Mattan Alalouf and Laura R. Wherry, NBER Working Paper 26363

Over the past 30 years, the criteria used to diagnose many illnesses have been relaxed, resulting in millions more relatively healthy individuals receiving treatment. This paper explores the impact of receiving a diagnosis of a common disease among such “marginally ill” patients. We apply a regression discontinuity design to the cutoff in blood sugar levels used to classify patients as having diabetes. We find that a marginally diagnosed patient with diabetes spends $1,097 more on drugs and diabetes-related care annually after diagnosis, but find no corresponding changes in self-reported health or healthy behaviors. These increases in spending persist over the 6-year period we observe the patients. These marginally diagnosed patients experience improved blood sugar after the first year of diagnosis, but this improvement does not persist in subsequent years. Other clinical measures of health, such as BMI, blood pressure, cholesterol, and mortality show no improvement. The diagnosis rates for preventable disease-related conditions such as diabetic retinopathy, neuropathy, and kidney disease increase following a diagnosis, likely due to more intensive screening. Our results imply that a small relaxation in the diagnosis cutoff would increase total spending on diabetes-related care by about $2.4 billion annually and minimally impact patient health.

Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data


with Sean Altekruse, Norman Johnson and Laura R. Wherry, revise and resubmit, Quarterly Journal of Economics. NBER Working Paper 26081

We use large-scale federal survey data linked to administrative death records to investigate the relationship between Medicaid enrollment and mortality. Our analysis compares changes in mortality for near-elderly adults in states with and without Affordable Care Act Medicaid expansions. We identify adults most likely to benefit using survey information on socioeconomic and citizenship status, and public program participation. We find a 0.13 percentage point decline in annual mortality, a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time. We find no evidence of differential pre-treatment trends in outcomes and no effects among placebo groups.

Do Neighborhoods Affect Credit Market Decisions of Low-Income Borrowers? Evidence from the Moving to Opportunity Experiment


with Cindy Soo, Revise and resubmit, Review of Financial Studies, NBER Working Paper 25023

This paper provides new evidence on the role of neighborhood in the financial decisions and outcomes of low-income borrowers. We link participants in the Moving to Opportunity experiment to credit reports and "alternative" credit bureau data that tracks payday loan usage. We find that participants who were randomly selected to receive a voucher experienced better access to credit in adulthood; we also find evidence that, among some subgroups, moving to a lower poverty neighborhood reduced payday loan usage and delinquency behavior. We explore the mechanisms underlying our results by investigating the credit market behavior of peers, the presence of banks and payday loan stores, and approval rates in the neighborhoods in which MTO participants live as adults. Our analysis suggests that the presence of payday loan stores and peer behavior play an important role in the observed improvements in credit market outcomes.

The ACA Medicaid Expansion in Michigan and Financial Health


with Luojia Hu, Robert Kaestner, Bhashkar Mazumder, Ashley Wong Revise and resubmit, Journal of Policy Analysis and Management. NBER Working Paper 25053

This article examines the impact of the Affordable Care Act Medicaid expansion in Michigan, the Healthy Michigan Program (HMP), on the financial well-being of new Medicaid enrollees. Our analysis uses a dataset on credit reports matched to administrative data on HMP enrollment and use of health care services. We find that enrollment is associated with large improvements in several measures of financial health, including reductions in unpaid bills, medical bills, over limit credit card spending, delinquencies, and public records (such as evictions, judgments, and bankruptcies). These benefits are apparent across several subgroups, although individuals with greater medical need (such as those with chronic illnesses) experience the largest improvements.

Press Coverage: Detroit News, Michigan Public Radio, Forbes

Multi-generational Impacts of Childhood Access to the Safety Net: Early Life Exposure to Medicaid and the Next Generation's Health


with Chloe East, Marianne Page, and Laura Wherry, "Reject and resubmit," American Economic Review. NBER Working Paper 23810

We examine multi-generational impacts of positive in utero and early life health interventions. We focus on the 1980s Medicaid expansions, which targeted low-income pregnant women, and were adopted differently across states and over time. We use Vital Statistics Natality files to create unique data linking individuals’ in utero Medicaid exposure to the next generation’s health outcomes at birth. We find strong evidence that the health benefits associated with treated generations’ in utero access to Medicaid extend to later offspring in the form of higher average birth weight and decreased incidence of very low birth weight. Later childhood exposure to Medicaid does not lead to persistent health effects across generations. The return on investment is substantially larger than suggested by evaluations of the program that focus only on treated cohorts.

Press Coverage: Wall Street Journal, Bloomberg News, NBER Digest

Drug Firms' Payments and Physicians' Prescribing Behavior in Medicare Part D


with Colleen Carey and Ethan Lieber. Revise and resubmit, AEJ: Economic Policy.

In a pervasive but controversial practice, drug firms frequently make monetary or in-kind payments to medical providers. Critics are concerned that drug firms are distorting prescribing behavior away from the best interests of patients, while defenders of the practice claim that payments arise from the need to educate providers about changing drug technologies. Using two different identification strategies, we investigate the effect of payments from drug firms on individual-level prescribing behavior in Medicare Part D. We find that individuals whose providers receive payments from a drug firm tend to increase expenditure on the firm's products. Our method accounts for the selection of physicians into payments (which may result if, e.g., pharmaceutical firms target payments to physicians who see a large number of patients) and our finding holds even when we look over time within individuals who change providers. However, using hand-collected efficacy data on four major therapeutic classes, we find that those receiving payments also prescribe higher-quality drugs on average. In addition, we examine four case studies of major drugs going off patent. Providers receiving payments from the firms experiencing the patent expiry transition their patients just as quickly to generics as prescribers who do not receive such payments. These results suggest that, absent other interventions to facilitate education, policies such as the Physician Payments Sunshine Act may reduce the efficacy of drugs prescribed.