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: November 2017) [NBER Working Paper 24133] [Online Appendix]
Revise and Resubmit, American Economic Review (3rd round)
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.
“Medicaid and Financial Health”, joint with Kenneth Brevoort and Daniel Grodzicki (NBER Working Paper 24002; BFI Working Paper). [Latest Version: June 2018 [PDF] ]
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: April 2018 [PDF] ] Submitted
We study how patient and provider incentives affect the mode and cost of long term care. Our analysis of 1 million nursing home stays yields four 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 residents who pay out-of-pocket. Third, longer stays for marginal Medicaid beneficiaries do not improve health outcomes on average, pointing to annual overspending of $0.9bn. Fourth, transitioning from per-diem to episode-based provider reimbursement is more effective than increasing resident cost-sharing in shortening 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]]
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 Kenneth Brevoort and 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