Diane Alexander

Assistant Professor, The Wharton School

Working papers

Economic Consequences of Hospital Closures with Michael Richards, NBER WP No. 29110, 2021.

Revisions requested, Journal of Public Economics

Hospitals anchor much of US health care and receive a third of all medical spending, including various subsidies. Nevertheless, some become insolvent and exit the market. Research has documented subsequent access problems; however, less is understood about broader implications. We examine over 100 rural hospital closures spanning 2005-2017 to quantify the effects on the local economy. We find sharp and persistent reductions in employment, but these localize to health care occupations and are largely driven by areas experiencing complete closures. Aggregate consumer financial health is only modestly affected, and housing markets were already depressed prior to hospital closures.

The Impacts of Physician Payments on Patient Access, Use, and Health with Molly Schnell, NBER WP No. 26095, 2021.

Revisions requested, American Economic Journal: Applied Economics

We examine how the amount a physician is paid influences who they are willing to see. Exploiting large, exogenous changes in Medicaid reimbursement rates, we find that increasing payments for new patient office visits reduces reports of providers turning away beneficiaries: closing the gap in payments between Medicaid and private insurers would reduce more than two-thirds of disparities in access among adults and would eliminate disparities among children. These improvements in access lead to more office visits, better self-reported health, and reduced school absenteeism. Our results demonstrate that financial incentives for physicians drive access to care and have important implications for patient health.

Journal articles

The Impact of Car Pollution on Infant and Child Health: Evidence from Emissions Cheating with Hannes Schwandt, Review of Economic Studies, forthcoming (online appendix)

Car exhaust is a major source of air pollution, but little is known about its impacts on population health. We exploit the dispersion of emissions-cheating diesel cars—which secretly polluted up to 150 times as much as gasoline cars—across the United States from 2008-2015 as a natural experiment to measure the health impact of car pollution. Using the universe of vehicle registrations, we demonstrate that a 10 percent cheating-induced increase in car exhaust increases rates of low birth weight and acute asthma attacks among children by 1.9 and 8.0 percent, respectively. These health impacts occur at all pollution levels and across the entire socioeconomic spectrum.

Do stay-at-home orders cause people to stay at home? Effects of stay-at-home orders on consumer behavior with Ezra Karger, Review of Economics and Statistics, forthcoming (online appendix)

We link the county-level rollout of stay-at-home orders to anonymized cell phone records and consumer spending data. We document three patterns. First, stay-at-home orders caused people to stay home: County-level measures of mobility declined 8% by the day after the stay-at-home order went into effect. Second, stay-at-home orders caused large reductions in spending in sectors associated with mobility: small businesses and large retail stores. However, consumers sharply increased spending on food delivery services after orders went into effect. Third, responses to stay-at-home orders were fairly uniform across the country, and do not vary by income, political leanings, or urban/rural status.

How do Doctors Respond to Incentives? Unintended Consequences of Paying Doctors to Reduce Costs, Journal of Political Economy, Vol. 128, November, 2020 (online appendix)

Billions of dollars have been spent on pilot programs searching for ways to reduce healthcare costs. I study one such program, where hospitals pay doctors bonuses for reducing the total hospital costs of admitted Medicare patients. Doctors respond to the bonuses by becoming more likely to admit patients whose treatment can generate high bonuses, and sorting healthier patients into participating hospitals. Conditional on patient health, however, doctors do not reduce costs or change procedure use. These results highlight the ability of doctors to game incentive schemes, and the risks of basing nationwide healthcare reforms on pilot programs.

Check Up Before You Check Out: Retail Clinics and Emergency Room Use with Janet Currie and Molly Schnell, Journal of Public Economics, Vol. 178, October, 2019 (online appendix)

Given concern about inefficient use of the emergency room (ER) increasing health care costs, we use all ER visits in New Jersey from 2006–2014 to examine the impacts of retail clinics on ER use in a difference-in-difference framework. We find that among people residing close to an open retail clinic, the rate of ER use falls by 3.3–13.4 percent for preventable conditions and 5.7–12.0 percent for minor acute conditions, while a range of placebo conditions are not affected. Our estimates suggest annual cost savings of nearly $70 million from reduced ER use if retail clinics were readily available across New Jersey.

Just What the Nurse Practitioner Ordered: Independent Prescriptive Authority and Population Mental Health with Molly Schnell, Journal of Health Economics, Vol. 66, July, pp. 145-162, 2019 (online appendix)

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

Is It Who You Are or Where You Live? Residential Segregation and Racial Gaps in Childhood Asthma with Janet Currie, Journal of Health Economics, Vol. 55C, September. pp. 186-200, 2017 (online appendix)

Higher asthma rates are one of the more obvious ways that health inequalities between African American and other children are manifested beginning in early childhood. In 2010, black asthma rates were double non-black rates. Some but not all of this difference can be explained by factors such as a higher incidence of low birth weight (LBW) among blacks; however, even conditional on LBW, blacks have a higher incidence of asthma than others. Using a unique data set based on the health records of all children born in New Jersey between 2006 and 2010, we show that when we split the data by whether or not children live in a “black” zip code, this racial difference in the incidence of asthma among LBW children entirely disappears. All LBW children in these zip codes, regardless of race, have a higher incidence of asthma. Our results point to the importance of residential segregation and neighborhoods in explaining persistent racial health disparities.

Are Publicly Insured Children Less Likely to be Admitted to Hospital than the Privately Insured (and Does it Matter)? with Janet Currie, Economics and Human Biology, Vol. 25, May, pp. 33-51, 2017 (online appendix)

There is continuing controversy about the extent to which publicly insured children are treated differently than privately insured children, and whether differences in treatment matter. We show that on average, hospitals are less likely to admit publicly insured children than privately insured children who present at the ER and the gap grows during high flu weeks, when hospital beds are in high demand. This pattern is present even after controlling for detailed diagnostic categories and hospital fixed effects, but does not appear to have any effect on measurable health outcomes such as repeat ER visits and future hospitalizations. Hence, our results raise the possibility that instead of too few publicly insured children being admitted during high flu weeks, there are too many publicly and privately insured children being admitted most of the time.

Chicago Fed publications

Measuring the Relationship Between Business Reopenings, Covid-19, and Consumer Behavior, with Ezra Karger and Amanda McFarland, Chicago Fed Letter No. 445, 2020

The Recent Rise in Health Care Inflation, Chicago Fed Letter No. 407, 2018

Perpetual working papers

Does Physician Pay Affect Procedure Choice and Patient Health? Evidence from Medicaid C-section Use, Chicago Fed WP No. 2017-07

I investigate the relationship between physician pay, C-section use, and infant health, using vital statistics data and newly collected data on Medicaid payments to physicians. First, I confirm past results—when Medicaid pays doctors relatively more for C-sections, they perform them more often. I bolster the causal interpretation of this result by showing that salaried doctors do not respond to this pay differential, and by using a much larger sample of states and years. Second, unlike past work, I look at how changing physician pay affects infant health outcomes. I find that increased C-section use is associated with fewer infant deaths for births likely covered by Medicaid, suggesting that C-section rates may be too low for some groups. Taken together, these findings suggest that policies aimed at decreasing costs by lowering procedure use may have adverse health consequences, especially for low-income patients.