Abstract: We uncover persistent variation in Medicare billing intensity that is not explained by sicker patients, patient selection, or coding completeness, but by systematic upcoding of specific comorbidities absent in the immediately preceding hospital stay. Substantial cross-sectional variation in upcoding is largely unrelated to factors emphasized in the literature such as billing regimes, enforcement, and competition. Upcoding appears driven by firm-wide practices that spread across facilities within skilled nursing facility (SNF) firms and through rapid acquisitions. For-profit and private equity firms have higher upcoding on average, but wide differences across firms of all ownership types underscore the importance of firm-level ethos.
Discussant: Abhinav Gupta, University of North Carolina-Chapel Hill
Giorgo Sertsios, University of Wisconsin-Milwaukee
Jiadi Xu, University of Wisconsin-Milwaukee
Abstract: We examine corporate responses of U.S. hospitals to local immigration inflows, focusing on nonprofits. Using historical enclaves of foreign-born nationalities to instrument for immigration inflows, we find that a 1% increase in immigration (relative to a county’s initial population) leads to a 2.16% decline in hospital bed capacity over ten years. This contraction is driven primarily by nonprofit hospitals, which are more likely to exit through closures or mergers. Continuing nonprofits experience significant declines in profit margins and increases in uncompensated care; they respond by reducing capital investments rather than raising external funds. The evidence points to high uninsurance rates among recent immigrants as a key channel. More generally, the results suggest that nonprofit hospitals face tight financing and operating constraints that limit their ability to absorb profitability shocks and sustain mission-driven objectives. Government-owned hospitals experience comparably large losses but avoid exit and expand market shares, while for-profit hospitals limit exposure to unprofitable operations and acquire nonprofit assets.
Abstract: We show that individual negotiation skills affect equilibrium prices in societally important contracting. We develop a novel measure of managers’ bargaining ability from private vehicle transactions and link it to proprietary data on negotiated hospital prices. Higher-skilled managers negotiate
better prices, suggesting negotiation skill is a portable asset. Management turnovers and shocks to insurer bargaining positions support this interpretation. We estimate a model to quantify the role of individual skill and find heterogeneity in negotiation skills explains 37% of the price dispersion attributed to differences in hospitals’ bargaining power. Overall, human capital is an important determinant of market-wide price dispersion.
Discussant: Richard Thakor, University of Minnesota
