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Essays on information and innovation in health economics

This dissertation consists of three essays that study the role of information acquisition and processing in health decision-making. Each chapter underscores the ways in which new information shapes the choices of health providers and consumers. Understanding these responses sheds light on critical health policy problems, including the potential overuse of low-value health services, gaps between medical evidence and practice, and inequitable access to high-value health services.

The first essay studies the role of a consumer’s family network in the formation of their risk perceptions. I assess whether people correctly interpret new risk information communicated through household health events and analyze how these
responses impact household welfare. Individuals respond to new diagnoses in ways most consistent with individual reevaluations of health risk rather than other possible explanations. To assess welfare implications, I estimate a structural model of health choices in which individuals learn about risk after health events reveal information. I find that consumers over-respond to recent, salient health events by over-weighting their risks ex-post. This leads to individual and social welfare losses, and suggests that aiding consumers in interpreting health risk information should be an important
aim of health literacy policies.

The second essay explores how health providers respond to information about innovations in mental health treatments, paying particular attention to the heterogeneous adoption costs of different practices. I compare the impact of continuing
education on takeup across innovations that incur learning costs (psychotherapy) and those that do not (psychopharmacology). I use a novel extension of an estimator proposed by Calvi et al. (2021) to estimate a dynamic treatment effect in the presence of classification error. Therapists respond more to education when learning costs are
negligent, being about three percentage points more likely to write new prescriptions following a conference.

The third essay assesses the tradeoff between adopting novel medical technologies and achieving health equity. I study the adoption of transcatheter valve replacement surgeries in Medicare patients; these surgeries disrupted the supply of medical interventions from cardiothoracic surgeons to interventional cardiologists. This transition led providers to adjust practice styles along two margins: medium-risk patients became more likely to receive surgery, and low-risk patients received fewer medical interventions overall. I incorporate these findings into a model of physician decision-making, showing that both the expansion of high-intensity intervention and the crowd-out of low-intensity treatment can be rationalized by the presence of technological spillovers. The model further highlights that crowd-out may be inequitably
distributed across the patient population when treatment appropriateness is not directly observed. I validate these predictions in my setting, showing that technology adoption resulted in disproportionately high barriers to care for low-income patients.

Identiferoai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/45281
Date28 October 2022
CreatorsHoagland, Alexander
ContributorsEllis, Randall P.
Source SetsBoston University
Languageen_US
Detected LanguageEnglish
TypeThesis/Dissertation

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