Health care.

• Position: Program and Working Group Meetings

The NBER'S Program on Health Care met in Cambridge on May 8. Kate Bundorf, NBER and Stanford University, and Mark Pauly, NBER and University of Pennsylvania, organized the meeting. These papers were discussed:

Mark Duggan, University of Maryland and NBER, and Fiona Scott Morton, Yale University and NBER, "The Effects of Medicare Part D on Pharmaceutical Prices and Utilization"

Helen Levy, University of Michigan and NBER, and David Weir, University of Michigan, " The Impact of Medicare Part D on Drug Utilization and Out-of-Pocket Spending: Evidence from the Health and Retirement Study"

Jay Bhattacharya, Stanford University and NBER, and Mikko Packalen, University of Waterloo, "The Other Ex-Ante Moral Hazard in Health"(NBER Working Paper No. 13863)

Liran Einav, Stanford University; Amy Finkelstein, MIT and NBER, and Mark R. Cullen, Yale University, "Using Price Variation to Estimate Welfare in Insurance Markets"

Guy David, University of Pennsylvania, and Tanguy Brachet, The Children's Hospital of Philadelphia, "Human Capital Accumulation and Forgetting in Emergency Medical Services"

Tom Chang, MIT, and Mireille Jacobson, University of California, Irvine, "Ownership Status and Response to Cost Shocks: Evidence from California's Seismic Retrofit Mandate"

The federal government began providing insurance coverage for Medicare recipients' prescription drug expenditures on January 1, 2006 through a program known as Medicare Part D. Rather than setting pharmaceutical prices itself, the government contracted with private insurance plans to provide this coverage. Enrollment in Part D was voluntary, with each Medicare recipient allowed to choose from one of the private insurers with a contract to offer coverage in her geographic region. Duggan and Scott Morton evaluate the effect of this program on the price and use of pharmaceutical treatments. Using data on product-specific prices and quantities sold in the United States, the researchers find that Part D substantially lowered the average price and increased the total use of prescription drugs by Medicare recipients. The results further suggest that the magnitude of these average effects varies across drugs, as economic theory predicts.

Levy and Weir use data from the 2004 and 2006 waves of the Health and Retirement Study to estimate the extent of adverse selection into Part D--that is, whether beneficiaries with high existing demand for prescription drugs disproportionately choose to enroll in the...