Essays in Health Economics

Markus B. Bjoerkheim

Advisor: Alex T Tabarrok, PhD, Department of Economics

Committee Members: Thomas Stratmann, Alison E. Cuellar

Carow Hall, Conference Room
May 02, 2022, 02:00 PM to 04:00 PM


This dissertation consists of three papers in health economics. The first paper estimates the effect of targeting oversight toward underperforming nursing homes on quality of care. The second asks whether pandemic-era unemployment programs discouraged work, and the third, co-authored with Alex Tabarrok, examines the course of the pandemic in nursing homes focusing especially on whether nursing homes could have been better shielded. 

Certification requirements are a key policy lever to incentivize quality in the nursing home industry, but the effects of regulation have been hard to identify, in part because homes are all subject to the same regulatory requirements and sanctions are imposed in response to care failures. This paper studies the Special Focus Facility program (SFF), which aims to improve quality of care by targeting oversight toward some, but not all, of the industry’s worst performing facilities. I leverage capacity constraints in a difference-in-difference framework and show that after two years treated facilities improve an additional 17% compared to untreated candidates, or about two fewer deficient practices. I find performance reverts back after treatment ends, which makes alternative explanations unlikely.

The generosity and coverage of unemployment insurance increased dramatically with the March 2020 passing of the CARES Act. This paper investigates whether these expansions discouraged nurses and nurse aides from returning to work in the nursing home industry. Using variation from 24 states that withdrew from the programs in a difference-in-difference design, I find suggestive evidence the withdrawals reduced facility-reported labor shortages by between 0.5-2 percentage points (3-11%). Placebo tests using physicians, physician assistants, and advanced practice nurses find no effect. Placebo tests using states that intended to withdraw but were ordered to remain are inconclusive. 

The death toll in nursing homes accounted for almost 30% of total COVID-19 deaths in the U.S. during 2020. We examine the course of the pandemic in nursing homes focusing especially on whether nursing homes could have been better shielded. Across all nursing homes the key predictor of infections and deaths was community spread, i.e., a factor outside of the control of nursing homes. We find that higher quality nursing homes, as measured by the CMS Five-Star Rating system, were not better able to protect their residents. Policy failures from the CDC and FDA, especially in the early stages of the pandemic, created extended wait times for COVID-19 tests which hampered attempts to isolate infectious residents and allowed outbreaks to grow larger and deadlier. But testing would have had to have been much greater to have had an appreciable effect on nursing home deaths once community spread became widespread. We find, however, that starting vaccinations just five weeks earlier could have saved on the order of 14,000 lives and starting them ten weeks earlier could have saved 40,000 lives.