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.

Working Papers

“Incentivizing Better Quality of Care: The Role of Medicaid and Competition in The Nursing Home Industry” (Latest Version: November 2017)  [NBER Working Paper 24133] [Online Appendix]
 Revised and Resubmitted, American Economic Review (2nd round)

Media Coverage: Skilled Nursing News; Journalist’s Resource

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] ] Submitted

Media Coverage: Freakonomics Radio; Bloomberg; Kellogg Insight; NBER Bulletin on Aging and Health

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.

“Medicaid and Financial Health”, joint with Kenneth Brevoort and Daniel Grodzicki (NBER Working Paper 24002; BFI Working Paper). [Latest Version: February 2018  [PDF] ] Submitted

Media Coverage: AARP; Market Watch; Equitablog

We quantify the effects of the Medicaid expansion provision under the Affordable Care Act on beneficiaries’ financial health. Our analysis details how Medicaid provided substantial indirect financial benefits from fewer unpaid medical bills, through credit markets, in addition to the direct benefits from lower out-of-pocket spending. Combining a large panel of credit records with data on credit offers, we find that the expansion reduced unpaid medical bills by $8.6 billion, raised credit scores, and led to better credit terms valued at $700 million annually. We calculate that 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: February 2018)

We develop an empirical model of nursing home discharges to the community that nests patient and provider incentives. Using administrative micro data from California, New Jersey, Ohio, and Pennsylvania, we find that nursing homes increase their efforts to discharge Medicaid beneficiaries to the community when the occupancy rate rises in order to allocate remaining beds to more profitable seniors. Residents decrease their efforts to leave a nursing home as they become eligible for Medicaid leading to overall longer nursing home stays. We find no health benefits from longer nursing homes stays among the relatively healthy marginal residents with low care needs. Our results imply potential LTC cost savings of at least $1.2 billion per year if Medicaid-covered stays are reduced to the length of stay for seniors who pay out-of-pocket. Findings from a structural model suggest that changing provider incentives is more effective than modifying patient incentives in shortening the length of Medicaid stays.

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]] 

Press Coverage: SHADAC Brief; Awarded the NIHCM Research Award, 2016

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

“The Effect of the ACA Medicaid Expansion on Household Borrowing”, joint with Kenneth Brevoort and Daniel Grodzicki   

“Long-Term Care Insurance, Well-Being, and Longevity at Older Ages”, joint with Maria Polyakova