Advanced Search
MyIDEAS: Login to save this paper or follow this series

Stock Prices and the Doctor Supply: Effect of Medicare Residency Policy on Healthcare Industry Firms

Contents:

Author Info

  • Jonathan Hartley

    (Federal Reserve Bank of Chicago)

Abstract

Funding for medical residencies has been capped by US Congress since the late 1997, and has resultantly become an increasingly limiting factor of the doctor supply in the US. The resulting impact of Medicare residency policy on managed care firms, especially private insurers has been unclear. Using equity price data for healthcare firms listed in the S&P Health Index, I use the surprise introduction of the Resident Physician Shortage Reduction Act of 2009 and its proposed amendment to a major healthcare overhaul bill, to evaluate the market's assessment of expanded medical residency programs on the healthcare industry. Using tight three-day event study periods to look at when the bill was unexpectedly introduced in Congress and amended to the overhaul bill, I find Cumulative Average Abnormal Returns for Managed Care Firms of 10.9% and 4.2%, respectively, corresponding to an increase in total market value of approximately $5.5 billion and $2 billion. I also find that roughly 27% of the cost of the bill is passed on to firms while the remaining 73% is either passed on to consumers or lost to static inefficiencies.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econresearch.uchicago.edu/sites/econresearch.uchicago.edu/files/BFI_2011-011.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Becker Friedman Institute for Research In Economics in its series Working Papers with number 2011-011.

as in new window
Length:
Date of creation: 2011
Date of revision:
Handle: RePEc:bfi:wpaper:2011-011

Contact details of provider:
Email:
Web page: http://bfi.uchicago.edu/
More information through EDIRC

Related research

Keywords: legislatures; voting behavior; information and market efficiency; event studies; analysis of health care markets; industrial policy;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Mohamad Al-Ississ & Nolan H. Miller, 2010. "What Does Health Reform Mean for the Healthcare Industry? Evidence from the Massachusetts Special Senate Election," NBER Working Papers 16193, National Bureau of Economic Research, Inc.
  2. Milton Friedman & Simon Kuznets, 1954. "Income from Independent Professional Practice," NBER Books, National Bureau of Economic Research, Inc, number frie54-1, January.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bfi:wpaper:2011-011. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Toni Shears).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.