In most US health insurance markets, plans face strong incentives to "upcode" the patient diagnoses they report to the regulator, as these affect the risk-adjusted payments plans receive. We show that enrollees in private Medicare plans generate 6% to 16% higher diagnosis-based risk scores than they would under fee-for-service Medicare, where diagnoses do not affect most provider payments. Our estimates imply upcoding generates billions in excess public spending and significant distortions to firm and consumer behavior. We show that coding intensity increases with vertical integration, suggesting a principal-agent problem faced by insurers, who desire more intense coding from the providers with whom they contract.
In this paper, we shed new light on a long-standing puzzle: In India, Muslim children are substantially more likely than Hindu children to survive to their first birthday, even though Indian Muslims have lower wealth, consumption, educational attainment, and access to state services. Contrary to the prior literature, we show that the observed mortality advantage accrues not to Muslim households themselves but rather to their neighbors, who are also likely to be Muslim. Investigating mechanisms, we provide a collage of evidence suggesting externalities due to poor sanitation are a channel linking the religious composition of neighborhoods to infant mortality. In this paper, we address a long-standing puzzle in the development and health literature: In India, Muslim children are substantially more likely than Hindu children to survive to their first birthday, even though Muslims have lower wealth, consumption, and educational attainment, and face worse access to state services such as piped water and health infrastructure, compared to the majority Hindus. 1 By age one, mortality among Muslims is 17% lower than among Hindus, with an additional 1.1 infants per 100 surviving. Bhalotra, Valente and van Soest (2010) named this robust and persistent pattern a "puzzle," showing that individual and household characteristics could not explain it. 2 After replicating the fact that Muslim children have a large survival advantage in India, we show that the mortality difference can be accounted for by two facts. First, compared to the typical Hindu infant, the typical Muslim infant lives in a neighborhood where a larger share of her neighbors are Muslim. Second, both Hindu and Muslim infants are more likely to survive in neighborhoods with high shares of Muslim neighbors. The natural question, then, is: what makes neighborhoods disproportionately inhabited by Muslims better places for the health of (Muslim and Hindu) children? Michael Geruso University of Texas at AustinWe show, consistent with the well-known relative disadvantage of Muslims in India (Sachar et al., 2006 andDeolalikar, 2008), that neighborhoods with high shares of Muslim households are associated with worse characteristics that predict infant health along many observable dimensions-with the important exception of sanitation.Despite relative economic advantage, India's majority Hindu population is 25 percentage points more likely to defecate in the open-that is, in open places such as in fields, behind bushes, or near roads-than the minority Muslim population. This Hindu-Muslim behavioral difference implies that the fraction of a household's neighbors who are Muslim is strongly correlated with the local sanitation environment to which the household is exposed. For example, in nationally representative data, Hindus residing in neighborhoods that are 10% Muslim are exposed to a local open defecation prevalence of 63%, while Hindus residing in neighborhoods that are 90% Muslim are exposed to a local open defecation prevalence of 46%. To better unders...
This article quantifies the extent to which socioeconomic and demographic characteristics can account for black-white disparities in life expectancy in the United States. Although many studies have investigated the linkages between race, socioeconomic status, and mortality, this article is the first to measure how much of the life expectancy gap remains after differences in mortality are purged of the compositional differences in socioeconomic characteristics between blacks and whites. The decomposition is facilitated by a reweighting technique that creates counterfactual estimation samples in which the distribution of income, education, employment and occupation, marital status, and other theoretically relevant variables among blacks is made to match the distribution of these variables among whites. For males, 80% of the black-white gap in life expectancy at age 1 can be accounted for by differences in socioeconomic and demographic characteristics. For females, 70% percent of the gap is accounted for. Labor force participation, occupation, and (among women only) marital status have almost no additional power to explain the black-white disparity in life expectancy after precise measures for income and education are controlled for.
In this paper, we shed new light on a long-standing puzzle: in India, Muslim children are substantially more likely than Hindu children to survive to their first birthday, even though Indian Muslims have lower wealth, consumption, educational attainment, and access to state services. Contrary to the prior literature, we show that the observed mortality advantage accrues not to Muslim households themselves but rather to their neighbors, who are also likely to be Muslim. Investigating mechanisms, we provide a collage of evidence suggesting externalities due to poor sanitation are a channel linking the religious composition of neighborhoods to infant mortality. (JEL I12, I14, J13, O15, Q53, R23, Z12)
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