Programs on Health Care and Industrial Organization.

• Position: National Bureau of Economic Research

On February 6 and 7, the NBER sponsored a joint meeting of the "Programs on Health Care and Industrial Organization." Organized by Alan M. Garber of NBER, and Garth Saloner and Frank A. Wolak of NBER and Stanford University, this joint session was held in Stanford, CA. Presentations included the following:

David M. Cutler, NBER and Harvard University, "Cost Shifting or Cost Cutting?: The Incidence of Reductions in Medicare Payments"

Tomas Philipson, NBER and University of Chicago, Darius Lakdawalla, University of Chicago, "Nonprofit Production and Competition"

Discussant: Fiona Scott Morton, NBER and University of Chicago

Laurence C. Baker, NBER and Stanford University, "Managed-Care and Technology Adoption in Health Care: Evidence from Magnetic Resonance Imaging"

Discussant: William Vogt, Carnegie-Mellon University

Sarah Feldman, Brigham and Women's Hospital, and David S. Scharfstein, NBER and MIT, "Managed-Care and Provider Volume"

Discussant: Martin Gaynor, NBER and Carnegie Mellon University Dinner speaker: Victor R. Fuchs, NBER and Stanford University

Daniel Kessler, NBER and Stanford University, and Mark B. McClellan, "Is Hospital Competition Socially Wasteful?"

Discussant: Roger Noll, Stanford University

Scott Stern, NBER and MIT, and Manuel Trajtenberg, NBER and Tel-Aviv University, "The Empirical Implications of Physician Authority in Pharmaceutical Decision Making"

Discussant: Peter C. Reiss, NBER and Stanford University

Arthur Kalnins, University of Michigan, and Francine Lafontaine, NBER and University of Michigan, "Incentive and Strategic Motives for Vertical Separation: Evidence from Location Patterns in the Texan Fast-Food Industry"

Discussant: Severin Borenstein, NBER and University of California, Berkeley

Judith A. Chevalier, NBER and University of Chicago, Glenn Ellison, NBER and MIT, "Career Concerns of Mutual Fund Managers"

Discussant: Jeff Zwiebel, Stanford University

Cutler examines how Medicare's reductions in hospital payments affect hospital operations. The author looks at two episodes of payment reductions - the late 1980s and the early 1990s and finds a large difference in the impact of payment reductions in these two time periods. In the 1980s, reduced Medicare payments were offset dollar for dollar by increased prices to private insurers. In the 1990s, however, payment reductions result in lower hospital profits, which must ultimately reduce hospital costs. Hospitals have responded to the payment reductions by...