Victor R. Fuchs Award
Walter J. McNerney Professor of Health Industry Management
Kellogg School of Management, Northwestern University
Professor Dranove has paved the path for an entire subfield of health economics – the industrial organization of health care. As a result, his impact extends well beyond that of his many published works. Professor Dranove has brought his research (and that of countless others) into the mainstream via publications across an array of outlets (including textbooks and popular press books and blogs). His breadth, productivity, and powerful thinking have inspired a generation of economists to pursue studies related to health care markets.
Professor Dranove has published 85 articles in refereed scientific journals, and has authored or co-authored 27 book chapters and monographs, and 8 books, the most recent being the highly regarded Big Med: How Healthcare Megaproviders are Ruining the Health Economy and What We Can Do About It (2021).
He is best known for his extensive publications on competition among healthcare providers. These publications cover several important themes, including (1) demand inducement by physicians; (2) competition in quality and service breadth across a range of sectors; (3) hospital insurer negotiations and implications for antitrust enforcement. This last thread of research has been enormously influential in reshaping the way hospital mergers are challenged by antitrust enforcers and evaluated by courts.
Professor Dranove has also devoted his considerable talents to writing well-identified studies on a wide range of topics outside these themes, such as: (1) the sources of the healthcare spending slowdown; (2) health IT; and medical malpractice. He continues to show his curiosity and appetite for plunging into new issues, as demonstrated by four recent or forthcoming publications on medical and biopharmaceutical innovation.
Professor Dranove has devoted his lifetime to studying and improving the functioning of health care markets through scholarly engagement. He has served as a helpful and supportive mentor to a large number of PhD students and faculty in the beginning stages of their careers. He has shaped and advanced the field of health economics by his research and by advancing the scientific careers of the next generation of contributors to the field.
Assistant Professor of Business Economics and Public Policy
Stephen M. Ross School of Business, University of Michigan
Over the past decade, Professor Miller’s research program has dramatically changed our understanding of the impacts of health insurance coverage on health, and the role of health insurance in protection against financial risk. A major theme in Professor Miller’s work is creatively employing existing data to provide new insights on important research questions. She is bold and ambitious in her research endeavors, which often leads her to new opportunities to make major contributions. An example is a newly published study providing the first causal evidence on the relationship between gestation limits for abortion and women’s financial health. This study was made possible by a unique collaboration initiated by Professor Miller that extends an important public health study with new data and methods from economics. With this body of work she has set the standard for what an empirical health economist should be doing.
Professor Miller also goes out of her way to be helpful to other researchers — often recommending valuable extensions to their work, ways to address potential limitations, and thoughts about alternative data sources or approaches. She is never critical without being constructive, which is a unique and exemplary trait in our profession. She is an amazing “clubhouse presence” for the entire profession and serves as a positive role model for the up and coming generation of health economists.
The Willard G. Manning Memorial Award
Francesca Molinari, H. T. Warshow and Charles Manski, Board of Trustees Professor, Northwestern University
Robert Irving Warshow Professor,
Department of Economics, Cornell University
Estimating the COVID-19 infection rate: Anatomy of an inference problem,” 2021, Journal of Econometrics
The paper addresses a crucial question of great importance – how to measure the COVID-19 infection rate. The authors made their work on this issue available very early in the pandemic (as an NBER Working Paper), in April 2020. At that time there was a great deal of confusion about COVID-19 prevalence, and many widely differing and potentially misleading estimates. As a consequence, their work came out when the results were particularly likely to be useful. In contrast to other approaches to estimating COVID-19 prevalence, which focus on attaining point estimates, Professors Manski and Molinari focus on attaining bounds using cutting edge methods. In addition to the cutting edge methods, the work has a number of additional outstanding features. The assumptions employed to attain the bounds are well motivated by stylized real world facts and credible. Data from a number of widely disparate locations are utilized, including the small Italian town of Vo, within which a large fraction of the population was tested and retested, which makes the results more robust and general. The paper clearly explains how to think about the positive predictive value and negative predictive value of tests from a Bayesian perspective. Professors Manski and Molinari make a compelling case that this Bayesian perspective is much more informative than traditional reporting of Type I and Type II errors. This is a crucial point, and was especially important early in the pandemic.
Student Paper Award
Ph.D. Candidate in Health Policy and Economics
Harvard University, (Fall 2022)
Assistant Professor, McDonough School of Business
In this paper, Yunan Ji tackles an economically interesting and substantively important topic: how government procurement rules affect the health care sector. She studies a fascinating reform in which Medicare switched from administratively set prices for durable medical equipment (DME) to the introduction of a procurement auction for some DME items.
In the first half of the paper, she uses rich Medicare claims data to conduct a careful and compelling quasi-experimental analysis of the impact of the reform. To do so, she exploits the fact that the procurement auction was introduced in some markets but not others. She finds clear and convincing evidence that the procurement auction had an enormous impact on prices (reducing them by about 45 percent) and that it also reduced the quantity of DME purchased by about 11 percent. The motivation for the reform was the concern that administrative prices were set “too high” (i.e., above the market clearing price). The stated goal of the reform was to lower prices without changing quantity; however, prior theoretical work had argued that the auction design (which set the price at the median price of the winning bids and allows for non-binding bids) could produce price shortages. Ji’s findings of a reduction in both price and quantity – as well as several additional pieces of evidence – are consistent with this prediction, suggesting that the market moved from one of excess supply to one of excess demand.
Ji then went further. She wanted to understand how the market could perform under alternative, counterfactual market designs. To do this, she surmounted two key challenges. The first is that she needed data on the bids submitted by suppliers in the procurement auction. To obtain these, she submitted a Freedom of Information Act request and worked doggedly to secure the requisite bid data. The second was that she needed to estimate an empirical model of optimal bidding under this specific auction design (with the aforementioned unusual features). To do this, Yunan uses techniques from the empirical auctions literature to solve for equilibrium bidding under the current auction design and under alternative, counterfactual designs. She finds that alternative designs could have achieved the government’s stated objective of maintaining quantity (rather than lowering it as the current design does) while generating substantial savings (about 43 percent relative to the administratively set prices). Overall, the results are both elegant and substantively important: there is a feasible, win-win alternative reform for patients and payers.