Martin Hackmann is an Assistant Professor of Economics at the University of California Los Angeles, a faculty research fellow at the National Bureau of Economic Research, a CESifo research network member, and a faculty affiliate of the California Center for Population Research at UCLA. Professor Hackmann’s research specializes in topics in industrial organization and health economics. His recent work focuses on the financial benefits of health insurance, the quality and quantity of long term care utilization, and the productivity of health care professionals.
Professor Hackmann holds a Ph.D. in Economics from Yale University and a Diplom (Master equivalent) in Economics from the University of Mannheim.
“Incentivizing Better Quality of Care: The Role of Medicaid and Competition in The Nursing Home Industry” (Latest Version: August 2018) [PDF] (NBER Working Paper 24133) Accepted, American Economic Review
This paper develops a model of the nursing home industry to investigate the quality effects of policies that either raise regulated reimbursement rates or increase local competition. Using data from Pennsylvania, I estimate the parameters of the model. The findings indicate that nursing homes increase the quality of care, measured by the number of skilled nurses per resident, by 8.8% following a universal 10% increase in Medicaid reimbursement rates. In contrast, I find that pro-competitive policies lead to only small increases in skilled nurse staffing ratios, suggesting that Medicaid increases are more cost effective in raising the quality of care.
“The Returns to Nursing: Evidence from a Parental Leave Program”, joint with Benjamin Friedrich (NBER Working Paper 23174). [Latest Version: January 2018 [PDF] ] Revise and Resubmit, Review of Economic Studies
In this paper, we quantify the effects of nurses on health care delivery and patient health in hospital and nursing home care. Our empirical strategy takes advantage of a parental-leave program in Denmark, which led to a sharp and persistent 10% reduction in nurse employment. Combining rich administrative micro-data on program eligibility of employees and patient health records, we find detrimental effects on hospital-care delivery as indicated by an increase in 30-day readmission rates and a distortion of technology utilization. We find no evidence for an increase in hospital mortality. In contrast, we estimate a persistent 13% increase in nursing-home mortality among the elderly aged 85 and older. Taken together, our findings point to higher returns of nursing on patient welfare in nursing home care. Our results also highlight an unintended negative consequence of parental-leave programs borne by providers and patients.
“The Credit Consequences of Unpaid Medical Bills”, joint with Kenneth Brevoort, Daniel Grodzicki, and Sergei Koulayev [Latest Version: July 2018 [PDF] ] (Previously circulated as “Medicaid and Financial Health” in NBER Working Paper 24002; BFI Working Paper). Submitted
This paper quantifies the costs of leaving medical bills unpaid and what these costs imply for the value of health insurance to beneficiaries. We argue that most unpaid medical bills are sent to third-party collections and reported to credit bureaus, with detrimental effects on patients’ credit outcomes. Combining a large panel of credit records with data on credit offers, we find that the ACA Medicaid expansion reduced newly reported medical collections by $5.89 billion and led to better terms of credit valued at $670 million annually. We calculate the financial benefits of Medicaid double when including this indirect credit channel.
“Patient vs. Provider Incentives in Long Term Care”, joint with Vincent Pohl [Latest Version: October 2018 [PDF] ] Submitted
How do patient and provider incentives affect mode and cost of long-term care? Our analysis of 1 million nursing home stays yields three main insights. First, Medicaid-covered residents prolong their stays instead of transitioning to community-based care due to limited cost-sharing. Second, nursing homes shorten Medicaid stays when capacity binds to admit more profitable out-of-pocket payers. Third, providers react more elastically to financial incentives than patients, so moving to episode-based provider reimbursement is more effective in shortening Medicaid stays than increasing resident cost-sharing. Moreover, we do not find evidence for health improvements due to longer stays for marginal Medicaid beneficiaries.
Publications and Forthcoming Papers
“Adverse Selection and an Individual Mandate: When Theory Meets Practice” (with Amanda E. Kowalski and Jonathan T. Kolstad). American Economic Review, March 2015. Vol. 105, No.3: 1030-66 (NBER Working Paper 19149). [Latest pre-publication version [PDF]]
We develop a model of selection that incorporates a key element of recent health reforms: an individual mandate. Using data from Massachusetts, we estimate the parameters of the model. In the individual market for health insurance, we find that premiums and average costs decreased significantly in response to the individual mandate. We find an annual welfare gain of 4.1% per person or $51.1 million annually in Massachusetts as a result of the reduction in adverse selection. We also find smaller post-reform markups.
“Health Reform, Health Insurance, and Selection: Estimating Selection into Health Insurance Using the Massachusetts Health Reform” (with Amanda E. Kowalski and Jonathan T. Kolstad). American Economic Review: Papers & Proceedings, May 2012, Vol. 102, No.3: 498-501. [PDF]
We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the reform. We find that counties with larger increases in insurance coverage over the reform period face the smallest increase in average hospital costs for the insured population, consistent with adverse selection into insurance before the reform. Additional results, incorporating cross-state variation and data on health measures, provide further evidence for adverse selection.
Work in Progress
“Why Does Insurance Reduce Borrowing: Evidence from the ACA Medicaid Expansion”, joint with Daniel Grodzicki
“College Admissions, Student Talent, and Career Dynamics in Health Care Markets”, joint with Benjamin Friedrich and Anne Brink Nandrup
“Long-Term Care Insurance, Well-Being, and Longevity at Older Ages”, joint with Maria Polyakova