New Research

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, 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.