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.
“The Returns to Nursing: Evidence from a Parental Leave Program”, joint with Benjamin Friedrich (NBER Working Paper 23174). [Latest Version: December 2019 [PDF] ] Revised and Resubmitted, Review of Economic Studies
In this paper, we quantify the effects of nurses on health care delivery and patient health in the context of an unintended and policy-induced nurse shortage. Our empirical strategy takes advantage of a parental-leave program in Denmark, which offered any parent the opportunity to take up to one year’s absence per child aged 0-8. Combining the policy variation with administrative employer-employee match data, we document substantial program take-up among nurses, who could not be replaced on net despite public education and immigration expansion efforts to mitigate the employment effects. We find that the parental leave program reduced hospital and nursing home nurse employment by 15 percent and 10 percent, respectively. Using detailed patient health records, we find detrimental effects on hospital-care delivery as indicated by a large increase in 30-day readmission rates among acute myocardial infarction patients. We find no evidence for an increase in hospital mortality. In nursing homes, we estimate a large increase in mortality.
“Patient vs. Provider Incentives in Long Term Care”, joint with Vincent Pohl [Latest Version: October 2018 [NBER WP 25178] ]
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.
“The Credit Consequences of Unpaid Medical Bills”, joint with Kenneth Brevoort and Daniel Grodzicki [Latest Version: January 2020 [PDF] ] (Previously circulated as “Medicaid and Financial Health” in NBER Working Paper 24002; BFI Working Paper). Revised and Resubmitted, Journal of Public Economics
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 a large fraction of unpaid medical bills is 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. We find that the financial benefits of Medicaid double when including this indirect credit channel.
Publications and Forthcoming Papers
“Incentivizing Better Quality of Care: The Role of Medicaid and Competition in The Nursing Home Industry” American Economic Review, May 2019. Vol. 109, No.5: 1684-1716 (NBER Working Paper 24133) [Latest pre-publication version [PDF]; Online Appendix [PDF]]
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.
“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
“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