Mark V. Pauly

Mark V. Pauly
  • Bendheim Professor
  • Professor of Health Care Management
  • Professor of Business Economics and Public Policy

Contact Information

  • office Address:

    208 Colonial Penn Center
    3641 Locust Walk
    Philadelphia, PA 19104

Research Interests: health insurance, health policy, medical economics, other insurance, public finance/public choice, regulation

Overview

Education

PhD, University of Virginia, 1967; MA, University of Delaware, 1965; AB, Xavier University, 1963

Recent Consulting

Office of Assistant Secretary for Policy Evaluation, U.S. Department of Health and Human Services – Merck, Inc. American Enterprise Institute

Career and Recent Professional Awards; Teaching Awards

Spencer Kimball Article Award from the Journal of Insurance Regulation for “Terrorism Losses and All Perils Insurance” with Howard Kunreuther, December 2006 National Institute of Health Care Management Foundation’s Research Award for “Is Health Insurance Affordable for the Uninsured?” with M. Kate Bundorf (Journal of Health Economics, July 2006), May 2007 John M. Eisenberg Excellence in Mentorship Award, Agency for Health Care Research and Quality, June 2007 Distinguished Investigator Award, AcademyHealth, June 2007

Academic Positions Held

Wharton: 1983-present (Chairperson, Health Care Systems Department, 1997-2004; Vice Dean and Director, Doctoral Programs, 1995-99; named Bendheim Professor, 1990; Chairperson, Health Care Systems Department, 1990-94; Robert D. Eilers Professor of Health Care Management and Economics, 1984-89). University of Pennsylvania: 1984-present (Co-Director, Roy and Diana Vagelos Program in Life Sciences and Management, 2005-present; Professor of Economics, 1983-present; Executive Director, Leonard Davis Institute of Health Economics, 1984-89). Previous appointments: Northwestern University; University of Virginia. Visiting appointments: International Institute for Applied Systems Analysis, Laxenburg, Austria; International Institute of Management, Berlin, Germany

Professional Leadership 2005-2009

Co-Editor-in-Chief, International Journal of Health Care Finance and Economics, 2001-present; Advisory Editor, Journal of Risk and Uncertainty, 1987-present;

Corporate and Public Sector Leadership 2005-2009

Medicare Technical Advisory Panel; National Advisory Committee, National Institutes of Health, National Center for Research Resources; National Vaccine Advisory Commission Finance Working Group; Board Member, Independent Health

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Research

  • 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.

  • Mark V. Pauly and Robert J. Town (2012), “Counterpoint: Maryland Exceptionalism? All-Payers Regulation and Health Care System Efficiency”, Journal of Health Politics, Policy and Law, 37 (4), pp. 697-707.

  • Mark V. Pauly, TG McGuire, PP Barros, Handbook of Health Economics, Vol. 2 (2012)

  • Mark V. Pauly and A Saxena (2012), Health Employment, Medical Spending, and Long Term Health Reform, CESifo Economic Studies, 58 (1), pp. 49-72.

  • Mark V. Pauly (Forthcoming), Medical Spending Reform and the Fiscal Future of the United States.

Teaching

Past Courses

  • EAS 499 - SENIOR CAPSTONE

    The Senior Capstone Project is required for all BAS degree students, in lieu of the senior design course. The Capstone Project provides an opportunity for the student to apply the theoretical ideas and tools learned from other courses. The project is usually applied, rather than theoretical, exercise, and should focus on a real world problem related to the career goals of the student. The one-semester project may be completed in either the fall or sprong term of the senior year, and must be done under the supervision of a sponsoring faculty member. To register for this course, the student must submit a detailed proposal, signed by the supervising professor, and the student's faculty advisor, to the Office of Academic Programs two weeks prior to the start of the term.

  • ECON039 - ECON & FINCING-HLTHCR DL

    The course provides an application of economic models to demand, supply, and their interaction in the medical economy. Influences on demand, especially health status, insurance coverage, and income will be analyzed. Physician decisions on the pricing and form of their own services, and on the advice they offer about other services, will be considered. Competition in medical care markets, especially for hospital services, will be studied. Special emphasis will be placed on government as demander of medical care services. Changes in Medicare and regulation of managed care are among the public policy issues to be addressed. Prerequisite: If course requirement not met, permission of instructor required.

  • ECON199 - INDEPENDENT STUDY

    Individual study and research under the direction of a member of the Economics Department faculty. At a minimum, the student must write a major paper summarizing, unifying, and interpreting the results of the study. This is a one semester, one c.u. course. Please see the department for permission.

  • HCMG101 - HEALTH CARE SYSTEMS

    This introductory course takes a policy and politics angle to health care's three persistent issues - access, cost and quality. The roles of patients, physicians, hospitals, insurers, and pharmaceutical companies will be established. The interaction between the government and these different groups will also be covered. Current national health care policy initiatives and the interests of class members will steer the specific topics covered in the course. The course aims to provide skills for critical and analytical thought about the U.S. health care system and the people in it. No pass/fail. Grade only.

  • HCMG202 - ECON & FINCING-HLTHCR DL

    The course provides an application of economic models to demand, supply, and their interaction in the medical economy. Influences on demand, especially health status, insurance coverage, and income will be analyzed. Physician decisions on the pricing and form of their own services, and on the advice they offer about other services, will be considered. Competition in medical care markets, especially for hospital services, will be studied. Special emphasis will be placed on government as demander of medical care services. Changes in Medicare and regulation of managed care are among the public policy issues to be addressed. Prerequisite: If course requirement not met, permission of instructor required.

  • HCMG204 - COMPARATIVE HC SYSTEMS

    This course examines the structure of health care systems in different countries, focusing on financing, reimbursement, delivery systems and adoption of new technologies. We study the relative roles of private sector and public sector insurance and providers, and the effect of system design on cost, quality, efficiency and equity of medical services. Some issues we address are normative: Which systems and which public/private sector mixes are better at achieving efficiency and equity? Other issues are positive: How do these different systems deal with tough choices, such as decisions about new technologies? Our main focus is on the systems in four large, prototypical OECD countries--Germany, Canada, Japan, and the United Kingdom--and then look at other countries with interesting systems- including Italy, Chile, Singapore, Brazil, China and India. We draw lessons for the U.S. from foreign experience and vice versa.

  • HCMG653 - HCMG FIELD APP PROJECT

    This course focuses on leadership and management issues in health care organizations while providing students with a practice setting to examine and develop their own management skills. Each team acts as a consultant to a local healthcare organization which has submitted a project proposal to the course. The teams define the issue and negotiate a contract with the client organization. By the end of the semester, teams present assessments and recommendations for action to their clients and share their experience with the class in a series of workshops and cross-team consultations.

  • HCMG845 - US PAYER PROVIDER STRAT

    This course, co-taught with Brad Fluegel (former Chief Strategy Officer at Aetna, Anthem, and Walgreens and presently on the boards of several health care firms, including Fitbit and Premera Blue Cross), provides an overview of the challenges facing payers and providers in US healthcare as well as the strategies they use (or should use) to succeed. We cover all major aspects of the healthcare sector as seen from the perspective of payers and providers, starting from their core products and services (consumer preferences and health plan design, provider quality), the market environment they operate in (regulation and the role of public insurers, payment reforms, rising costs, and consolidation), and their strategic and operational responses (new organization models, mergers and acquisitions, and new ventures). The pedagogy is accordingly a mix of faculty lectures and talks by senior industry leaders to balance theory and practice.

  • HCMG850 - HEALTH CARE REFORM

    Under stress from COVID-19, this course provides students with a rigorous understanding of the current American health care system and how it is likely to evolve over the next decade. The course will focus on six topics: 1) the development of the current health care system; 2) challenges of health care costs, quality, and access; 3) lessons of previous attempts to reform the system including the Affordable Care Act (ACA); 4) analysis of current policies regarding provider payment, technology, and electronic health records and how various sectors (e.g. public health and hospitals) are evolving in the current system; 5) impact of COVID-19 on health care delivery and finance, and 6) future megatrends in American health care system. Throughout the course, lessons will integrate basic health economics, history, health policy, and politics to elucidate key principles for understanding the health care system. The course will also examine at least one other country's health system for comparison. The course will end with a consideration of the long-term outlook for the structure of the US health system and potential reforms.

  • HCMG859 - COMPARATIVE HC SYSTEMS

    This course examines the structure of health care systems in different countries, focusing on financing, reimbursement, delivery systems and adoption of new technologies. We study the relative roles of private sector and public sector insurance and providers, and the effect of system design on cost, quality, efficiency and equity of medical services. Some issues we address are normative: Which systems and which public/private sector mixes are better at achieving efficiency and equity? Other issues are positive: How do these different systems deal with the tough choices, such as decisions about new technologies? Our focus first on the systems in four large, prototypical OECD countries- Germany, Canada, Japan, and the United Kingdom -and then look at other developed and emerging countries with interesting systems - including Italy, Chile, Singapore, Brazil, China and India. We will draw lessons for the U.S. from foreign experience and vice versa.

  • HCMG863 - MGMT&ECONOFPHARM&BIOTECH

    This course provides an overview of the management, economic and policy issues facing the pharmaceutical and biotechnology industries. The course perspective is global, but with emphasis on the U.S. as the largest and most profitable market. Critical issues we will examine include: R&D intensive cost structure with regulation and rapid technological change; strategic challenges of biotech startups; pricing and promotion in a complex global marketplace where customers include governments and insurers, as well as physicians and consumers; intense and evolving M&A, joint ventures, and complex alliances; government regulation of all aspects of business including market access, pricing, promotion, and manufacturing. We use Wharton and industry experts from various disciplines to address these issues.

  • HCMG890 - ADVANCED STUDY PROJECT

    HCMG 890-001: This course examines issues related to the Services Sector of thehealth care industry. For those interested in management, investing, or bankingto the health care industry, the services sector will likely be the largest and most dynamic sector within all of health care. We will study key management issues related to a number of different health care services businesses with a focus on common challenges related to reimbursement, regulatory, margin, growth, and competitive issues. We will look at a number of different businesses and subsectors that may have been unfamiliar to students prior to taking the course. We will make extensive use of outside speakers, many of whom will be true industry leaders within different sectors of the health care services industry. Speakers will address the current management issues they face in running their businesses as well as discuss the career decisions and leadership styles that enables them to reach the top of their profession. Students will be asked to develop a plan to both buyout and manage a specific health care services business of their choosing and will present their final plans to a panel of leading Health Care Private Equity investors who will evaluate their analysis. Prerequisites: HCMG 841. Health Care Management MBA majors only Senior healthcare executives and policy leaders will be engaged as guest speakers.

  • HCMG899 - INDEPENDENT STUDY

    Arranged with members of the Faculty of the Health Care Systems Department. For further information contact the Department office, Room 204, Colonial Penn Center, 3641 Locust Walk, 898-6861.

  • HCMG900 - PROSEMINAR IN HE

    This course is intended to provide entering doctoral students with information on the variety of health economics models, methods, topics, and publication outlets valued and used by faculty in the HCMG doctoral program and outside of it. The course has two main parts: the first, to acquaint students with theoretical modeling tools used frequently by health economists. This part of the course involves a number of lectures coupled with students' presentations from the health economics, management and operations research community at Penn on a research method or strategy they have found helpful and they think is important for all doctoral students to know.

  • HCMG901 - PROSEMINAR IN HE

    This course will cover empirical methods used in economics research with an emphasis on applications in health care and public economics. The methods covered include linear regression, matching, panel data models, instumental variables, regression discontinuity, bunching, qualitative and limited dependent variable models, count data, quantile regressions, and duration models. the discussion will be a mix of theory and application, with emphasis on the latter. The readings consist of a blend of classic and recent methodological and empirical papers in economics. Course requirements include several problem sets, paper presentations, an econometric analysis project and a final exam. The course is open to doctoral students from departments other than Health Care Management with permission from the instructor.

  • HPR 501 - ECON HLTH CARE DELIV

    This course examines how medical care is produced and financed in private and public sectors, economic models of consumer and producer behavior, applications of economic theory to health care. Prerequisite: Course only open to Masters of Science in Heath Policy Research students.

  • HPR 951 - HPR THESIS I

    Each student completes a mentored research project that includes a thesis proposal and a thesis committee and results in a publishable scholarly product. Prerequisite: Course only open to Masters of Science in Health Policy Research students.

  • HPR 952 - HPR THESIS II

    Each student completes a mentored research project that includes a thesis proposal and a thesis committee and results in a publishable scholarly product. Prerequisite: Course only open to Masters of Science in Health Policy Research students.

  • PUBH505 - PH POLICY AND ADMIN

    This course is an introduction to health policy and management. It examines both the historical and current state of health policy in America and integrates these concepts within the context of public health practice. We will examine key concepts in understanding US health care organization, financing and delivery, our current political and economic debate on health care reform, exmamining the role and management issues of public health departments, and case studies in public health policy and management.

Awards and Honors

  • Victor R, Fuchs Lifetime Achievement Award from ASHEcon, 2012
  • President of the American Society of Health Economics, 2012
  • William B. Graham Prize for Health Services Research from the Baxter International Foundation and the Association of University Programs in Health Administration, 2012
  • University of Pennsylvania Provost’s Award for Distinguished Ph.D. Teaching and Mentoring, 2011-2012
  • John M. Eisenberg Excellence in Mentorship Award from the Agency for Health Care Research and Quality, 2007
  • Distinguished Investigator Award from AcademyHealth, 2007
  • National Institute of Health Care Management Foundation’s Research Award (with M. Kate Bundorf) for “Is Health Insurance Affordable for the Uninsured?” (Journal of Health Economics 2006), 2007
  • Spencer Kimball Article Award (with Howard Kunreuther) from the Journal of Insurance Regulation for, 2006

In the News

Knowledge @ Wharton

Activity

Latest Research

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.
All Research

In the News

When — and How — Should the U.S. Economy Reopen?

Measures to protect the population while easing the county’s economic burden could include everything from electronic surveillance to radically altered work environments. Wharton experts weigh the options.

Knowledge @ Wharton - 2020/05/12
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Awards and Honors

Victor R, Fuchs Lifetime Achievement Award from ASHEcon 2012
All Awards