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) [PDF] Revise and Resubmit, American Economic Review (2nd 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, by 8.2% following a universal 10% increase in Medicaid reimbursement rates. I find an annual welfare gain of $68 million, 30% of additional Medicaid spending. In contrast, I find that pro-competitive policies lead to only small increases in staffing ratios.
“The Returns to Nursing: Evidence from a Parental Leave Program”, joint with Benjamin Friedrich (NBER Working Paper 23174). [Latest Version: October 2017 [PDF] ] Submitted
More than half of health care spending is wages of health care professionals, who comprise more than 10% of the total workforce in several OECD countries. In this paper, we take advantage of a sharp reduction in the labor supply of nurses, the largest health profession, to measure the productivity of nurses in health care delivery and to investigate whether nurses are allocated efficiently among health care sectors. Our empirical strategy leverages a parental-leave program, which led to a sudden, unintended, and persistent 10% reduction in nurse employment. Our findings indicate detrimental effects on hospital-care delivery as indicated by an increase in 30-day readmission rates and a distortion of technology utilization. The effects for nursing-home care are more drastic. We estimate a persistent 13% increase in nursing-home mortality among the elderly aged 85 and older. These results suggest larger returns to nursing in nursing-home care, providing evidence for a misallocation of nurses between sectors. Our results also highlight an unintended negative consequence of parental-leave programs borne by providers and patients.
Media Coverage: Market Watch
This paper investigates the effects of the Medicaid expansion provision of the Affordable Care Act (ACA) on households’ financial health. Our findings indicate that, in addition to reducing the incidence of unpaid medical bills, the reform provided substantial indirect financial benefits to households. Using a nationally representative panel of 5 million credit records, we find that the expansion reduced unpaid medical bills sent to collection by $3.4 billion in its first two years, prevented new delinquencies, and improved credit scores. Using data on credit offers and pricing, we document that improvements in households’ financial health led to better terms for available credit valued at $520 million per year. We calculate that the financial benefits of Medicaid double when considering these indirect benefits in addition to the direct reduction in out-of-pocket expenditures.
“Patient vs. Provider Incentives and Overspending in Long Term Care”, joint with Vincent Pohl (draft coming soon)
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
“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