Research Interests: industrial organization, health economics, public economics, education
An applied microeconomist, Professor Swanson’s research focuses primarily on the economics of health care. In particular, she studies the effects of industrial organization and information on choices, costs, and health outcomes. Her recent work has examined the effect of physician ownership on health care quality and provider incentives; the effects of lack of transparency and other frictions on negotiations between hospitals and suppliers; the effects of complex prices and payments from pharmaceutical firms on prescription drug utilization and prices; and the effects of insurers’ provider and pharmacy networks on prices.
Professor Swanson also studies the factors affecting high achievement in secondary education. Recent work includes studies on gender disparities and school quality.
Jason Abaluck, Ashley Swanson, Jonathan Gruber (2018), Prescription Drug Use under Medicare Part D: A Linear Model of Nonlinear Budget Sets, Journal of Public Economics, 164, pp. 106-138.
Abstract: Medicare Part D enrollees face a complicated decision: they dynamically choose prescription drug consumption in each period given difficult-to-find prices and a nonlinear budget set. We use Part D claims data to estimate a flexible model of consumption that accounts for nonlinear prices, dynamic responses, and salience. We use reduced form price responses from a linear regression of consumption on coverage range prices to compare performance under several models of behavior. We find small price elasticities, substantial myopia, and that salient characteristics impact consumption beyond their effect on prices. A hyperbolic discounting model with salience fits the data best.
Ashley Swanson and Glenn Ellison (Under Review), Dynamics of the Gender Gap in High Math Achievement.
Abstract: We examine dynamics in the gender gap in high school math achievement using mathematics competition data. A clear gender gap is present by 9th grade, and the gap widens over time. Gender-related differences in dropout rates and in the mean and variance of year-to-year improvement contribute to the widening of the gender gap. The most important difference is that fewer girls make large enough gains to improve their rankings. We also document a discouragement effect: among students falling just short of qualifying for a prestigious second-stage exam, some drop out of future years, and this reaction is stronger among girls.
Abstract: Selective contracting is an increasingly popular tool for reducing health care costs, but these savings must be weighed against consumer surplus losses from restricted access. In both public and private prescription drug insurance plans, issuers utilize preferred pharmacy networks to reduce drug prices. We show that, in the Medicare Part D program, drug plans with more restrictive preferred pharmacy networks, and plans with fewer enrollees who are insensitive to preferred pharmacy discounts on copays, pay lower retail drug prices. We then use estimates of plan and pharmacy demand to estimate the first-order costs and benefits of selective contracting in the presence of enrollees with heterogeneous sensitivity to preferred supplier incentives.
Matthew Grennan, Kyle Myers, Ashley Swanson, Aaron Chatterji (Working), Physician-industry Interactions: Persuasion and Welfare.
Abstract: In markets where consumers seek expert advice regarding purchases, firms seek to influence experts, raising concerns about biased advice. Assessing firm-expert interactions requires identifying their causal impact on demand, amidst frictions like market power. We study pharmaceutical firms' payments to physicians, leveraging instrumental variables based on regional spillovers from hospitals' conflict-of-interest policies and market shocks due to patent expiration. We find that the average payment increases prescribing of the focal drug by 73 percent. Our structural model estimates indicate that payments decrease total surplus, unless payments are sufficiently correlated with information (vs. persuasion) or clinical gains not captured in demand.
Abstract: Using a detailed dataset of hospitals’ purchase orders, we find that information on purchasing by peer hospitals leads to reductions in the prices hospitals negotiate for supplies. Identification is based on staggered access to information across hospitals over time. Within coronary stents, reductions are concentrated among hospitals previously paying relatively high prices and for brands purchased in large volumes, and are consistent with resolving asymmetric information problems. Estimates across a large number of other important product categories indicate that the effects of information are largest in both absolute and relative terms for physician preference items (PPIs). Among PPIs, high-price, high-quantity hospital-brand combinations average 3.9 percent savings, versus 1.6 percent for commodities.
Abstract: We estimate the effects of horizontal mergers on marginal cost efficiencies – a ubiquitous merger justification – using data containing supply purchase orders from a large sample of US hospitals 2009-2015. The data provide a level of detail that has been difficult to observe previously, and a variety of product categories that allows us to examine economic mechanisms underlying “buyer power.” We find that merger target hospitals save on average $176 thousand (or 1.5 percent) annually, driven by geographically local efficiencies in price negotiations for high-tech “physician preference items.” We find only mixed evidence on savings by acquirers.
Abstract: In a wide range of product markets in which prices are negotiated, price dispersion across buyers for similar (and even identical) products can be driven by heterogeneity in brand preferences, search/contracting costs, and bargaining abilities. We develop a model that allows for each of these mechanisms and estimate it using data on purchases of medical devices/supplies in a broad variety of product categories purchased by over 20 percent of U.S. hospitals 2009-15. While nearly all categories exhibit substantial price dispersion, the drivers vary. Among physician preference items, brand preferences are important drivers of price heterogeneity; among more commodity-like products, bargaining heterogeneity plays a dominant role. Search/contracting costs keep choice sets small, affecting welfare via access to more and better suppliers, and also slightly increasing negotiated markups. We relate these results to expected heterogeneity in the welfare impacts of the growth of conglomerate device suppliers and the entry of information into the marketplace that could facilitate search.
Abstract: This paper considers a relatively new form of financing for social services, the “social impact bond (SIB).” Proponents of SIBs argue that they present a solution to several problems in funding social services, including performance incentives and risk allocation. Using a simple model, we first demonstrate that, despite their apparent novelty, SIBs in concept need not produce any difference in outcome from standard financing arrangements with private nonprofit firms. We then argue that SIBs will lead to greater program success if investors’ effort responds to incentives and can positively influence outcomes, either directly (e.g., effort exerted in production) or indirectly (e.g., effort devoted to screening), but are unlikely to do so otherwise. We conclude that, as in the more general theoretical literature, the value of this particular application in terms of funding innovation will be strongly context-dependent.
Heidi Allen, Ashley Swanson, Jialan Wang, Tal Gross (2017), Early Medicaid Expansion Reduced Payday Borrowing in California, Health Affairs, 36 (10), pp. 1769-1776.
Abstract: We examined the impact of California’s early Medicaid expansion under the Affordable Care Act on the use of payday loans, a form of high-interest borrowing used by low- and middle-income Americans. Using a data set for the period 2009–13 (roughly twenty-four months before and twenty-four months after the 2011–12 Medicaid expansion) that covered the universe of payday loans from five large payday lenders with locations around the United States, we used a difference-in-differences research design to assess the effect of the expansion on payday borrowing, comparing trends in early-expansion counties in California to those in counties nationwide that did not expand early. The early Medicaid expansion was associated with an 11 percent reduction in the number of loans taken out each month. It also reduced the number of unique borrowers each month and the amount of payday loan debt. We were unable to determine precisely how and for whom the expansion reduced payday borrowing, since to our knowledge, no data exist that directly link payday lending to insurance status. Nonetheless, our results suggest that Medicaid reduced the demand for high-interest loans and improved the financial health of American families.
Daniel Polsky, Zuleyha Cidav, Ashley Swanson (2016), Marketplace Plans with Narrow Physician Networks Feature Lower Monthly Premiums than Plans with Larger Networks, Health Affairs, 35 (10), pp. 1842-1848.
Abstract: The introduction of health insurance Marketplaces under the Affordable Care Act has been associated with growth of restricted provider networks. The value of this plan design strategy, including its association with lower premiums, is uncertain. We used data from all silver plans offered in the 2014 health insurance exchanges in the fifty states and the District of Columbia to estimate the association between the breadth of a provider network and plan premiums. We found that within a market, for plans of otherwise equivalent design and controlling for issuer-specific pricing strategy, a plan with an extra-small network had a monthly premium that was 6.7 percent less expensive than that of a plan with a large network. Because narrow networks remain an important strategy available to insurance companies to offer lower-cost plans on health insurance Marketplaces, the success of health insurance coverage expansions may be tied to the successful implementation of narrow networks.
HCMG 213: Health Care Management and Strategy – The Business of Health Care
BEPP 214: The Nonprofit Sector: Economic Challenges and Strategic Responses
HCMG 903: The Economics of Health Care and Policy
The nonprofit sector plays a key role in the provision of many goods and services which are fundamental in our society and which may be difficult to provide using market mechanisms alone. Education, health care, charitable services, and the arts are some primary examples of these. Nonprofit organizations operate in service of specific social missions rather than profit maximization, but in order to serve those missions effectively while ensuring their own survival, they must also make many of the decisions typically associated with private firms. That is, they must compete for funding, human resources, and consumers of their services, they must manage and invest their resources efficiently, and they must innovate new products and services over time. Importantly, the latter requirements may at times come in conflict with the organizations' social values. As a result, nonprofit organizations as economic decision-makers confront a number of unique challenges to their success and growth. The goal of this course is to give students a broad overview of the economic, organizational, and strategic concerns facing the non-profit sector. Our objective is to characterize the unique economic environment, identify effective strategic governance, and management approaches, and explore how appropriate measurement techniques can can inform the policy treatment of nonprofits. This course is organized around a number of lectures, readings and outside speakers, a midterm exam and a required project.
BEPP214001 ( Syllabus )
This course applies basic economic concepts to analyze the health care market and evaluate health policies. The course begins with a discussion of productivity in health care and of the theoretical and empirical effects of asymmetric information and market failure. The second part of the course explores several topic areas in the health care economics literature: health insurance and the labor market; health policy interventions; and health as human capital. The third part of the course examines competition and the behavior of health care providers, with emphasis on the impact of policy on competition, behavior, and finally, bringing us full circle, health care productivity.
Government intervention could work where market mechanisms have failed to keep prescription drug prices affordable – but policymakers will have a tough time cutting through the finger-pointing from all sides, experts say.Knowledge @ Wharton - 2019/03/4