New Releases by Jonathan Gruber

I review the key issues that arise in financing health care delivery. I begin by documenting the key features of health care markets that make financing so central in this sector, such as the skewed and unpredictable nature of health care spending and market failures in health care delivery. I then review the key issues that public and private payers face in designing health care markets, from the proper mix of public and private provision to the role of risk bearing for consumers and providers. Finally, I illustrate how these issues manifest in practice by comparing the design of insurance systems in the United States and Canada.

Cities with a larger concentration of scientists have been shown to be more productive places for additional scientists to do Research and Development. At the same time, these urban areas tend to be associated with higher costs of doing research, in terms of both wages and land. While the literature on the benefits of agglomeration economies is extensive, it offers no direct evidence of how productivity gains from agglomeration compare with higher costs of production. This paper aims to shed light on the balance between local productivity and local costs in science. Using a novel dataset, we estimate place-based costs of carrying out R&D in each US metro area and assess how these place-based costs vary with the density of scientists in each area. We then compare these costs with estimates of the corresponding productivity benefits of more scientist density from Moretti (2021). Adding more scientists to a city increases both productivity and production costs, but the rise in productivity is larger than the rise in production costs. In particular, each 10% rise in the stock of scientists is associated with a 0.11% rise in costs and a 0.67% rise in productivity. This implies that firms moving from cities with a small agglomeration of scientists to cities with a large agglomeration of scientists experience productivity gains that are 6 times larger than the increase in production costs. This finding is consistent with the increased concentration of R&D activity observed over the past 30 years. However, while the productivity estimate has only modest non-linearities, the cost estimates suggest much larger non-linearities as the concentration of scientists increases. For the most concentrated R&D cities, the difference between productivity gains and cost increases is close to zero.

Questo manuale, giunto alla quinta edizione americana, si rivolge in particolare agli studenti che frequentano i corsi di Scienza delle Finanze nell’ambito dei percorsi di laurea triennale in Economia, Scienze Politiche e di laurea triennale o magistrale a ciclo unico in Giurisprudenza, fornendo loro le nozioni base per comprendere le ragioni e le modalità dell’intervento dello Stato nel sistema economico di mercato. L’edizione italiana del manuale ne conserva l’elemento distintivo: l’utilizzo ricorrente di esempi ripresi da politiche pubbliche concretamente implementate da cui vengono fatte scaturire considerazioni di carattere generale utili ai fini della trattazione dei temi più tradizionali della scienza delle finanze e/o per la comprensione della loro rilevanza. Nello spirito dell’impostazione originale, il testo è stato rivisto, integrato e adattato per i corsi e gli studenti delle università italiane. Al testo cartaceo è affiancata un’Appendice online composta da tre ulteriori capitoli, dedicati agli strumenti teorici ed empirici per la scienza delle finanze e all’analisi costi-benefici, e da risorse integrative.

Medicaid’s federal-state matching system of financing is the nation’s largest example of fiscal federalism. Using generous federal subsidies, the Affordable Care Act incentivized states to expand Medicaid, which became a state option in the aftermath of a 2012 Supreme Court ruling. As of early 2020, 14 states had not yet expanded, with concerns over state budgetary effects described as a key barrier. We use an event-study approach to analyze state budget data from 2010-2018 and assess the effects of state Medicaid expansion decisions. We find that Medicaid expansion increased total spending in expansion states by 6% to 9%, compared to non-expansion states. By source of funds, federal spending via the states increased by 10% in the first year of Medicaid expansion, rising to 27% in 2018. Changes in spending from state funding were modest and non-significant, with less than a 1% change from baseline annually in the most recent years, 2017 and 2018. Meanwhile, we find no evidence that increased Medicaid spending from expansion produced any reductions in spending on education, corrections, transportation, or public assistance. Changes in Medicaid spending tracked closely with the baseline pre-ACA (2013) uninsured rate in each states, with expansion leading to roughly $2680 in added annual spending per uninsured adult. As a result, we estimate states that didn’t expand Medicaid passed up $43 billion in federally-subsidized program funds in 2018. Finally, state projections in the aggregate were reasonably accurate, with expansion states projecting average Medicaid spending from 2014-2018 within 2 percent of the actual amounts, and in fact overestimating Medicaid spending in most years.

In numerous high stakes markets skilled experts play a key role in facilitating consumer choice of complex products. New artificial intelligence (AI) technologies are increasingly being used to augment expert decisions. We study the role of technology and expertise in the market for health insurance, where consumer choices are widely known to be sub-optimal. Our analysis leverages the large-scale implementation of an AI-based decision support tool in a private Medicare exchange where consumers are randomized to skilled agents over time. We find that, prior to AI-based technology, skilled experts in this market exhibit the same type of inconsistent behavior found in previous studies of individual choices, costing consumers $1260 on average. The addition of AI-based decision support improves outcomes by $278 on average and substantially reduces heterogeneity in broker performance. Experts efficiently synthesize private information, incorporating AI-based recommendations along dimensions that are well suited to AI (e.g. total expected patient costs), but overruling AI-based recommendations along dimensions for which humans are better suited (e.g. specifics of doctor networks). As a result, switching plans, an ex-post measure of plan satisfaction, is meaningfully lower for agents making AI-based recommendations. While AI is a complement to skill on average, we find that it is a substitute across the skill distribution; lower quality agents provide better recommendations with AI than the top agents did without it. Overall productivity rises, with the introduction of decision support associated with a 21% reduction in call time for enrollment.

We are currently engaged in the most fundamental debate about the role of government in decades, and who better than Jonathan Gruber to guide students through the particulars in the new edition of his best-selling text, Public Finance and Public Policy, 6e. The new edition details ongoing policy debates, with special focus on the largest tax reform in 30 years. New topics include universal basic income, the legalisation of weed, and congestion pricing. And, of course, there is an extensive, in-depth discussion of the debate over health care At the heart of this new edition is the author’s belief that at no other time has it been so important to know the facts, to distinguish facts from falsehoods, and to be thinking clearly about problem, policy, and politics. The sixth edition delivers on all counts.

We are currently engaged in the most fundamental debate about the role of government in decades, and who better than Jonathan Gruber to guide students through the particulars in the new edition of his best-selling text, Public Finance and Public Policy, 6e. The new edition details ongoing policy debates, with special focus on the largest tax reform in 30 years. New topics include universal basic income, the legalization of pot, and congestion pricing. And, of course, there is an extensive, in-depth discussion of the debate over health care. At the heart of this new edition is the author’s belief that at no other time has it been so important to know the facts, to distinguish facts from falsehoods, and to be thinking clearly about problem, policy, and politics. The sixth edition delivers on all counts.

The untold story of how America once created the most successful economy the world has ever seen—and how we can do it again. The American economy glitters on the outside, but the reality is quite different. Job opportunities and economic growth are increasingly concentrated in a few crowded coastal enclaves. Corporations and investors are disproportionately developing technologies that benefit the wealthiest Americans in the most prosperous areas -- and destroying middle class jobs elsewhere. To turn this tide, we must look to a brilliant and all-but-forgotten American success story and embark on a plan that will create the industries of the future -- and the jobs that go with them. Beginning in 1940, massive public investment generated breakthroughs in science and technology that first helped win WWII and then created the most successful economy the world has ever seen. Private enterprise then built on these breakthroughs to create new industries -- such as radar, jet engines, digital computers, mobile telecommunications, life-saving medicines, and the internet-- that became the catalyst for broader economic growth that generated millions of good jobs. We lifted almost all boats, not just the yachts. Jonathan Gruber and Simon Johnson tell the story of this first American growth engine and provide the blueprint for a second. It''s a visionary, pragmatic, sure-to-be controversial plan that will lead to job growth and a new American economy in places now left behind.

Stemming from the belief that the key barrier to achieving high-quality and low-cost health care is the deficiency of information and medical knowledge among patients, an enormous number of health policies are focused on patient education. In this paper, we attempt to place an upper bound on the improvements to health care quality that may emanate from such information campaigns. To do so, we compare the care received by a group of patients that should have the best possible information on health care service efficacy--i.e., physicians as patients--with a comparable group of non-physician patients, taking various steps to account for unobservable differences between the two groups. Our results suggest that physicians do only slightly better in adhering to both low- and high-value care guidelines than non-physicians - but not by much and not always.

As we approach the tenth anniversary of the passage of the Affordable Care Act, it is important to reflect on what has been learned about the impacts of this major reform. In this paper we review the literature on the impacts of the ACA on patients, providers and the economy. We find strong evidence that the ACA''s provisions have increased insurance coverage. There is also a clearly positive effect on access to and consumption of health care, with suggestive but more limited evidence on improved health outcomes. There is no evidence of significant reductions in provider access, changes in labor supply, or increased budgetary pressures on state governments, and the law''s total federal cost through 2018 has been less than predicted. We conclude by describing key policy implications and future areas for research.

We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients--active-duty or not--that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.

Using a combination of subsidized premiums for Marketplace coverage, an individual mandate, and expanded Medicaid eligibility, the Affordable Care Act (ACA) has significantly increased insurance coverage rates. We assessed the relative contributions to insurance changes of these different ACA provisions in the law’s first full year, using rating-area level premium data for all 50 states and microdata from the 2012-2014 American Community Survey. We employ a difference-in-difference-in-difference estimation strategy that relies on variation across income groups, areas, and years to causally identify the role of the ACA policy levers. We have four key findings. First, insurance coverage was only moderately responsive to price subsidies, but the subsidies were still large enough to raise coverage by almost one percent of the population; the coverage gains were larger in states that operated their own health insurance exchanges (as opposed to using the federal exchange). Second, the exemptions and tax penalty structure of the individual mandate had little impact on coverage decisions. Third, the law increased Medicaid coverage both among newly eligible populations and those who were previously eligible for Medicaid (the “woodwork” effect), with the latter driven predominantly by states that expanded their programs prior to 2014. Finally, there was no "crowdout" effect of expanded Medicaid on private insurance. Overall, we conclude that exchange premium subsidies produced roughly 40% of the ACA''s 2014 coverage gains, and Medicaid the other 60%, of which 2/3 occurred among previously-eligible individuals.

Jonathan Gruber’s market-leading Public Finance and Public Policy was the first textbook to truly reflect the way public policy is created, implemented, and researched. Like no other text available, it integrated real-world empirical work and coverage of transfer programs and social insurance into the traditional topics of public finance. By augmenting the traditional approach of public finance texts with a true integration of theory, application, and evidence, Public Finance and Public Policy engages students like no other public finance text. Thoroughly updated, this timely new edition gives students the basic tools they need to understand the driving issues of public policy today, including healthcare, education, global climate change, entitlements, and more.

Drawing on research from both the original RAND Health Insurance Experiment and her own research, the author presents compelling evidence that health insurance does indeed affect medical spending and encourages policy solutions that acknowledge and account for this.

First-year insurer participation in the Health Insurance Marketplaces (HIMs) established by the Affordable Care Act is limited in many areas of the country. There are 3.9 participants, on (population-weighted) average, in the 395 ratings areas spanning the 34 states with federally facilitated marketplaces (FFMs). Using data on the plans offered in the FFMs, together with predicted market shares for exchange participants (estimated using 2011 insurer-state market shares in the individual insurance market), we study the impact of competition on premiums. We exploit variation in ratings-area-level competition induced by United Healthcare''s decision not to participate in any of the FFMs. We estimate that the second-lowest-price silver premium (which is directly linked to federal subsidies) would have decreased by 5.4 percent, on average, had United participated. If all insurers active in each state''s individual insurance market in 2011 had participated in all ratings areas in that state''s HIM, we estimate this key premium would be 11.1 percent lower and 2014 federal subsidies would be reduced by $1.7 billion.

Jonathan Gruber’s groundbreaking Public Finance and Public Policy was the first textbook to truly reflect the way public policy is created, implement, and researched. Like no other text available, it integrated real-world empirical work and coverage of transfer programs and social insurance into the traditional topics of public finance. From its first edition, the book quickly became the market-leading text for Public Finance and Public Policy courses, and the margin is growing. Thoroughly updated, this timely new edition gives students the basic tools they need to understand the driving issues of public policy today, including healthcare, education, global climate change, entitlements, and more.

"A graphic explanation of the PPACA act"--Provided by publisher.

Many countries have social security systems that are currently financially unsustainable. Economists and policy makers have long studied this problem and identified two key causes. First, as declining birth rates raise the share of older persons in the population, the ratio of retirees to benefits-paying employees increases. Second, as falling mortality rates increase lifespans, retirees receive benefits for longer than in the past. Further exacerbating the situation, the provisions of social security programs often provide strong incentives to leave the labor force. "Social Security Programs and Retirement around the World" offers comparative analysis from twelve countries and examines the issue of age in the labor force. A notable group of contributors analyzes the relationship between incentives to retire and the proportion of older persons in the workforce, the effects that reforming social security would have on the employment rates of older workers, and how extending labor force participation will affect program costs. Dispelling the myth that employing older workers takes jobs away from the young, this timely volume challenges a raft of existing assumptions about the relationship between old and young people in the workforce.

The magnitude of provider uncompensated care has become an important public policy issue. Yet existing measures of uncompensated care are flawed because they compare uninsured payments to list prices, not to the prices actually paid by the insured. We address this issue using a novel source of data from a vendor that processes financial data for almost 4000 physicians. We measure uncompensated care as the net amount that physicians lose by lower payments from the uninsured than from the insured. Our best estimate is that physicians provide negative uncompensated care to the uninsured, earning more on uninsured patients than on insured patients with comparable treatments. Even our most conservative estimates suggest that uncompensated care amounts to only 0.8% of revenues, or at most $3.2 billion nationally. These results highlight the important distinction between charges and payments, and point to the need for a re-definition of uncompensated care in the health sector going forward.

Concerns over the impacts of hospital strikes on patient welfare led to substantial delay in the ability of hospitals to unionize. Once allowed, hospitals unionized rapidly and now represent one of the largest union sectors of the U.S. economy. Were the original fears of harmful hospital strikes realized as a result? In this paper we analyze the effects of nurses'' strikes in hospitals on patient outcomes. We utilize a unique dataset collected on nurses'' strikes over the 1984 to 2004 period in New York State, and match these strikes to a restricted use hospital discharge database which provides information on treatment intensity, patient mortality and hospital readmission. Controlling for hospital specific heterogeneity, patient demographics and disease severity, the results show that nurses'' strikes increase in-hospital mortality by 19.4% and 30-day readmission by 6.5% for patients admitted during a strike, with little change in patient demographics, disease severity or treatment intensity. This study provides some of the first analytical evidence on the effects of health care strikes on patients, and suggests that hospitals functioning during nurses'' strikes are doing so at a lower quality of patient care.

When first published, Gruber''s Public Finance and Public Policy brought a refreshingly contemporary approach. It was the first text written from the ground up to reflect current realities of public finance, enhancing its survey of traditional topics with an emphasis on empirical work and coverage of transfer programs and social insurance. The new edition, fully updated with the most recent data and research possible, includes new coverage of the Medicare drug benefit, changes in the tax code, Hurricane Katrina, and the ongoing debate over privatization.

The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family''s children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a set fine geographic group fixed effects while still identifying the price parameter. We analyze this variation by using data on over 3700 school tuition schedules collected from Catholic schools around the nation, matched to restricted Census data that identifies precise location that can be matched to the nearest Catholic school. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school.