Mark V. Pauly

Mark V. Pauly, Lawton R. Burns, David A. Asch, Kevin Volpp, Flaura Winston, Mary Naylor, Ralph Muller, Rachel Werner, Seemed Like a Good Idea: Alchemy versus Evidence-Based Approaches to Healthcare Management Innovation (Cambridge, UK: Cambridge University Press, 2022)

Mark V. Pauly and Lawton R. Burns, “When is Medical Care Price Transparency a Good Thing (And When Isn’t It)?”. In Advances in Health Care Management – Transforming Health: A Focus on Consumerism and Profitability, edited by Jennifer Hefner and Mona Al-Amin, (Emerald Press, 2020), pp. 75-97

Abstract: There is a widespread push by government and private payers to make the prices of health care services more transparent to consumers. The main goal is to promote more effective consumer shopping; secondary goals include promoting provider competition and reducing pricing variation. There are several headwinds opposing these efforts. One problem is that there may be several valid reasons for why price variations persist. Another is that provider (and other health care) markets are not very competitive, and sometimes widespread information about prices may make them even less so. A third is that price discrimination may be economically efficient. Any analysis of price transparency must take the specific market setting into account. This chapter analyzes markets characterized by monopolistic, oligopolistic, and competitive conditions to determine when and under what economic and managerial circumstances price transparency will be useful.

Lawton R. Burns and Mark V. Pauly (2018), Transformation of the Healthcare Industry: Curb Your Enthusiasm?, Milbank Quarterly, 96(1) (), pp. 57-109.

Philip Rea, Lawton R. Burns, Mark V. Pauly, Managing Discovery: Harnessing Creativity to Drive Biomedical Innovation (Cambridge, UK: Cambridge University Press, 2018)

Mark V. Pauly and Ashley Swanson (2017), Social Impact Bonds: New Product or New Package?, The Journal of Law, Economics, and Organization, 33 (4), pp. 718-760.

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.

Mark V. Pauly, Scott E. Harrington, Adam Leive (2015), “Sticker Shock” in Individual Insurance under Health Reform?, American Journal of Health Economics, 1 (), pp. 494-514.

Description: with Mark Pauly and Adam Leive

Howard Kunreuther and Mark V. Pauly (Work In Progress), Behavioral Economics and Insurance: Principles and Solutions.

J Doshi, P Li, Sean McElligott, Aditi Sen, M Olfson, Mark V. Pauly, Robert Rosenheck, Steven C. Marcus (Draft), Antipsychotic Copayment, Adherence, and Hospital Admission in Dual Eligibles with Schizophrenia.

Abstract: BACKGROUND: Limited evidence exists on the impact of cost-sharing on access to prescription drugs among vulnerable patients enrolled in both Medicare and Medicaid (“dual-eligibles”), in particular, those with schizophrenia. METHODS: Medicare Part D, passed in 2006, required dual-eligibles to switch from prescription coverage through Medicaid to a private Part D plan and resulted in higher drug copayments for dual-eligibles in many states. We use a quasi-experimental design to compare changes in antipsychotic use and schizophrenia-related hospitalization  before (2005) and after (2006-2007) the implementation of Part D among dual-eligibles with schizophrenia. Patients in a state that provided copayment assistance to eliminate copayments (Connecticut) are compared to patients in a state that did not provide such assistance (Florida). RESULTS: The increase in copayments among dual-eligibles in Florida was associated with significantly higher odds of having continuous medication gaps of ≥60 days in 2006 than in 2005 compared to the change over the same period in Connecticut (odds ratio OR: 1.18, 95% confidence interval CI: 1.06-1.32) and in 2007 (OR: 1.28, 95% CI: 1.12-1.46). This reduction in antipsychotic use among dual-eligibles in Florida was accompanied by higher odds of an inpatient hospitalization related to schizophrenia in 2006 (OR: 1.58, 95% CI: 1.30-1.94) and in 2007 (OR: 1.73, 95% CI: 1.39-2.15). CONCLUSIONS: Dual-eligibles with schizophrenia appeared to suffer adverse consequences from copayment increases due to the transition to Part D. The increase cost in hospital admissions in the state that did not provide assistance likely offset any savings from not providing copayment assistance. 

Howard Kunreuther, Mark V. Pauly, Stacey McMorrow, Behavioral Economics and Insurance: Improving Decisions in the Most Misunderstood Industry (:, 2013)

Lawton R. Burns and Mark V. Pauly (2012), Accountable Care Organizations May Have Difficulty Avoiding The Failures of Integrated Delivery Networks Of The 1990s, Health Affairs, 31 (), pp. 2407-2416. 10.1377/hlthaff.2011.0675

Abstract: Accountable care organizations are intended to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Providers employed several of these mechanisms in forming the integrated delivery networks of the 1990s. The networks failed, however, because of heavy financial losses stemming from hospitals’ purchase of physician practices and their inability to align incentives, garner capitated contracts, and develop the infrastructure to manage risk. Although the current mechanisms underlying accountable care organizations continue to evolve, whether and how they will have an impact on quality and costs remains open to question. Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply. As in the 1990s, success depends on targeting specific populations, such as people with multiple chronic conditions who need and may benefit from coordinated care.