Policy Incentives, Resource Allocation, and Organizational Behavior in Health Care

Session Submission Type: Panel

Abstract

How do policy incentives shape behavior in complex, highly regulated health care markets? This panel brings together four papers that examine how public policies—ranging from insurance mandates and spending regulations to market restructuring and labor-cost shocks—alter decision-making, resource allocation, and outcomes across health care systems. Together, the papers provide new evidence on how individuals, providers, and institutions respond to financial and regulatory incentives, with implications for efficiency, equity, and quality of care. The first paper exploits the repeal of the Affordable Care Act’s individual mandate as a natural experiment to study adverse selection in insurance markets. Using administrative data from 2015–2019, it shows that removing the mandate increased uninsurance rates by 0.56 percentage points (a 27% increase relative to baseline), driven primarily by healthier individuals exiting coverage. The repeal also reduced premiums and out-of-pocket spending, suggesting changes in both coverage decisions and health care utilization. The second paper examines the spillover effects of nursing home closures on residents who remain in neighboring facilities. Using a staggered difference-in-differences design with national administrative and clinical data, it finds that closures lead to worsening chronic health outcomes among incumbent residents, particularly in concentrated markets and lower-quality facilities. These results highlight how policy-driven restructuring of long-term care markets can generate unintended consequences beyond directly affected individuals. The third paper evaluates state-level minimum direct care spending requirements in nursing homes, focusing on recent reforms in Massachusetts and New Jersey. Using facility-level data from 2022–2024, it finds modest differences in staffing levels between compliant and non-compliant facilities in Massachusetts, and universal compliance in New Jersey. The findings suggest that while spending thresholds may improve financial accountability, their effectiveness depends critically on policy design and enforcement. The fourth paper analyzes how nursing homes respond to labor-cost shocks induced by minimum wage increases. Using facility-level panel data from 2011–2017 and variation in exposure to low-wage labor, it shows that providers largely maintain total staffing levels but adjust staffing composition, reducing reliance on lower-wage workers while reallocating toward higher-skilled labor. This re-optimization behavior underscores the importance of distinguishing between quantity and composition of care inputs. Collectively, these papers demonstrate that policy incentives shape behavior along multiple margins—coverage decisions, market structure, financial allocation, and input choice. By highlighting both intended and unintended consequences of policy design, this panel contributes to a deeper understanding of how to structure effective health policy in complex institutional environments

Policy Area

• Health Policy

Chair

• Sooa Ahn, The Ohio State University

Discussants

• Megdalynn Fisher, Florida International University

• Seoyeon (Sienna) Lim, University of Georgia

Organizer

• Lady Loveday Ikeya, Indiana University

Individual Presentations

• Exploring the Differential Impact of the Repeal of the ACA Individual Mandate Tax Penalty - Presenting Author: Zachariah Emmanuel, Georgia State University

• Minimum Spending Thresholds for Nursing Homes: Evidence from Two States - Presenting Author: Amanda Chen, University of Southern California

•   Provider Labor‑Cost Shocks and Input Re‑optimization in Nursing Homes     - Presenting Author: Lady Loveday Ikeya, Indiana University