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From Prof. Ho: “We investigate whether patients whose physicians have a …financial incentive to control costs receive care at lower-priced hospitals than similar patients. Using California hospital discharge data from 2003, we fi…rst estimate multinomial logit demand models that include price in the choice equation. We obtain price coefficients which differ in sign with the severity of the patient’s condition on entering the hospital. We then develop an estimator based on inequalities that addresses endogeneity concerns by matching patients based on insurer and severity and then averaging. The estimates indicate that the impact of price varies with the capitation rate of the patient’s insurance plan; higher capitation rate plans are more averse to high priced hospitals. In contrast severity-adjusted outcome measures do not differ significantly across insurers.”

About the Speaker

Kate Ho is an associate professor of Economics at Columbia University. She graduated from Harvard University with a Ph.D. in Business Economics. She also has an M.A. in Mathematics from Cambridge University. Prior to her academic career, she spent four years as chief of staff to the minister of state for Health in the U.K.

Kate Ho’s research focuses on the industrial organization of the medical care market. Her recent publications include “Insurer-Provider Networks in the Medical Care Market” (2009, American Economic Review), “Barriers to Entry of a Vertically Integrated Health Insurer: An Analysis of Welfare and Entry Costs” (2008, Journal of Economics and Management Strategy) and “The Welfare Effects of Restricted Hospital Choice in the U.S. Medical Care Market”(2006, Journal of Applied Econometrics). Her work has been recognized by the International Health Economics Association (which voted her the Arrow Award for best paper published in 2009) and the Journal of Applied Econometrics (the Stone Prize for best paper in 2006-07).