Business Advancement Center for Health Publications

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Featured Faculty Publications in Healthcare

Carlson School faculty members consistently produce influential research in healthcare that is published in top industry journals. Learn more about recent and forthcoming publications by Carlson's world-renowned faculty. 


Faculty Healthcare Reference List


Check back regularly as this list is continually updated.

Journal of Financial Intermediation, forthcoming

Authors: Andrew W. Lo and Richard T. Thakor

The authors review the literature on financial intermediation in the process by which new medical therapeutics are financed, developed, and delivered. They discuss the contributing factors that lead to a key finding in the literature—underinvestment in biomedical R&D—and focus on the role that banks and other intermediaries can play in financing biomedical R&D and potentially closing this funding gap. They conclude with a discussion of the role of financial intermediation in the delivery of healthcare to patients.

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American Journal of Managed Care, August 2022

Authors: Brian J. Miller, Stephen T. Parente, and Gail R. Wilensky

As Medicare Advantage increasingly becomes the dominant form of Medicare, meaningful and accurate comparisons with traditional fee-for-service Medicare will be increasingly important for both beneficiaries and policy makers. Recent debate among policy experts, government advisory bodies, and health plans highlights the need to create standardized comparison between the 2 Medicare programs. Supplemental benefits, Part B cost-sharing differences, and prescription drug benefits should be valued with a series of structured comparisons. Making this information transparent to beneficiaries through the plan finder would improve beneficiary decision-making. Finally, pragmatic comparisons would support policy makers in making improvements to Medicare Advantage program policy, undertaking comparative program evaluation, and engaging in Medigap plan oversight.

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Medical Care Research and Review, July 2022

Authors: Yi Zhu, Caitlin Carroll, Khoa Vu, Soumya Sen, Archelle Georgiou, & Pinar Karaca-Mandic

Since the summer of 2020, the rate of coronavirus cases in the U.S. has been higher in rural areas than in urban areas, raising concerns that patients with COVID-19 will overwhelm under-resourced rural hospitals. Using data from the University of Minnesota COVID-19 Hospitalization Tracking Project and the U.S. Department of Health and Human Services, this study documents disparities in COVID-19 hospitalization rates between rural and urban areas. The insights in this article are relevant to policymakers as they consider the adequacy of hospital resources across rural and urban areas during the COVID-19 pandemic.

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Medical Care, July 2022

Authors: Finn Petersen, Anne Errore, and Pinar Karaca-Mandic

As states reopened their economies, state and local officials made decisions on policies and restrictions that had an impact on the evolution of the pandemic and the health of the citizens. Some states made the decision to lift mask mandates starting spring 2021. This study investigates the association of lifting the mask mandate with changes in the cumulative coronavirus case rate using data-driven methods to evaluate the appropriateness and consequences of such decisions.

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JAMA Health Forum, June 2022

Authors: Hannah Neprash, David Vock, Alexandra Hanson, Brent Elert, Sonja Short, Pinar Karaca-Mandic, Alexander Rothman, Genevieve Melton, David Satin, Rebecca Markowitz, & Ezra Golberstein

Tools that are directly integrated with the electronic health record (EHR) workflow can reduce the hassle cost of certain guideline-concordant practices, such as querying a prescription drug monitoring program (PDMP) before prescribing opioids. This study investigates the effect of integrating access to a PDMP within the EHR on the frequency of program queries by primary care clinicians. The clinical trial found that integrating access to the PDMP in the EHR increased PDMP-querying rates, suggesting that direct access reduced hassle costs and can dramatically improve adherence to guideline-concordant care practices among primary care clinicians.

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JAMA Otolaryngology-Head & Neck Surgery, April 2022

Authors: Meredith E. Adams, Pinar Karaca-Mandic, and Schelomo Marmor


Overuse of costly neuroimaging technology is associated with low-value care for the prevalent symptom of dizziness. Although quality improvement initiatives have focused on the overuse of computed tomography (CT) scans in emergency departments (EDs), most patients with dizziness present to outpatient clinics.This cross-sectional study of commercial and Medicare Advantage claims aims to characterize neuroimaging use, timing, and spending as well as factors associated with imaging acquisition within 6 months of presentation for dizziness in outpatient vs ED settings.

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American Journal of Health Economics, March 2022

Authors: Conor Ryan, Roger Feldman, and Stephen T. Parente

We use a novel data set from a private online marketplace to estimate the demand for individual health insurance among a set comprising many high-income households across 18 states. Households earning more than 4 times the federal poverty level (FPL) are willing to pay $30 to $135 per month to increase the actuarial value of their insurance by 10 percentage points, much less than households earning less than 2.5 times FPL. Higher-income households are also less likely to forgo insurance due to a premium increase. These results are important for understanding the effect of health reform proposals targeting higher-income populations.

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Management Science, March 2022

Authors: Joshua L. Krieger, Xuelin Li, and Richard T. Thakor

How do innovative firms react when existing products experience negative shocks? We explore this question with detailed project-level data from drug development firms. Using FDA Public Health Advisories as idiosyncratic negative shocks to approved drugs, we examine how drug makers react through investment decisions. Following these shocks, affected firms increase R&D expenditures, driven by a higher likelihood of acquiring external innovations, rather than developing novel projects internally. Such acquisition activities are concentrated in firms with weak research pipeline. We also find that competing developers move resources away from the affected therapeutic areas. Our results show how investments in specialized commercialization capital create path dependencies and alter the direction of R&D investments.

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JAMA Health Forum, January 2022

Authors: Stephen T. Parente & Karoline Mortensen

The Health Resources and Services Administration (HRSA) within the US Department of Health and Human Services (HHS) began covering COVID-19 related testing and treatment costs for those without health insurance during the COVID-19 pandemic in April 2020. The Provider Relief Fund (PRF) operates a Medicare-like fee-for-service claims reimbursement system, reimbursing health care clinicians and facilities for each uninsured claim at the Medicare payment rate. As of September 2021, $2.5 billion had been paid by HRSA for COVID-19 treatment of uninsured patients with COVID-19. A policy choice was made to create the PRF rather than implement an emergency expansion of Medicaid or a special marketplace enrollment period. To our knowledge, there has been no analysis of the distribution of funds to health care professionals and facilities treating uninsured patients. This study aims to evaluate this method of distribution of disbursement relative to the number of uninsured people in a state.

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Social Science Research Network (SSRN), December 2021

Authors: Mochen Yang and Xuan Bi

Limited access to large-scale data is one of the key obstacles to building machine learning and artificial intelligence applications in healthcare, partly due to a reluctance of information exchange among healthcare institutions out of privacy and data security concerns. To address this issue, federated machine learning techniques have been proposed that enable decentralized model training via an orchestrating platform. Despite its superior privacy protection property, a lack of systematic understanding of the economic incentives and strategic trade-offs in federated learning deters its wide adoption in practice. In this paper, we use an iterated prisoner's dilemma (IPD) framework to characterize the decisions - to share information or not - faced by participants (e.g., healthcare institutions) in a federated learning partnership, and to derive boundary conditions under which stable information exchange can arise. 

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Journal of Policy Analysis and Management, December 2021

Authors: Alice Chen, Elizabeth Munnich, Stephen T. Parente, and Michael Richards

Medicare is a roughly $700 billion public program, with physician payments representing one of its largest expenditures. Medicare's prices are also administratively set, which leaves the structure of payment changes subject to a political process that may introduce idiosyncratic features and even perverse incentives. At the same time, physician responses to changes in Medicare reimbursements are likely to vary according to the policy's duration, scope, and size. We study a setting where broad federal laws contained specific provisions that financially benefit a narrow group: Alaskan physicians. 

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The Review of Corporate Finance Studies, November 2021

Authors: Adam Jørring, Andrew W. Lo, Tomas J. Philipson, Manita Singh, and Richard T. Thakor

Firms conducting biomedical research and development (R&D) face very high costs and risks, which makes financing difficult, creating a “funding gap” that impedes biomedical innovation. We propose and analyze a new class of simple financial instruments, Food and Drug Administration (FDA) hedges, which allow biomedical R&D investors to potentially better share the pipeline risk associated with FDA approval with the capital market. We first explain the market failure that FDA hedges can prevent to help increase investment in biomedical R&D, thus providing a microfoundation for such hedges. Then, using historical FDA approval data, we examine the pricing of FDA hedges and mechanisms under which they can be traded. Using unique data sources, we find that FDA approval risk—a major risk in biomedical R&D—has a low correlation across drug classes, as well as with other assets and the overall market. We argue that this zero-beta property of scientific FDA risk could be an additional source of gains from trade, between developers looking to offload FDA approval risk and issuers of FDA hedges looking for diversified investments. 

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Journal of Accounting Research, July 2021

Authors: Cyrus Aghamolla and Richard T. Thakor

This paper investigates the effect of mandatory disclosure requirements for private firms on their decision to go public. Using detailed project-level data for biopharmaceutical firms, we explore the effects of a legal reform---the Food and Drug Administration Amendments Act (FDAAA)---which exogenously required that biotechnology and pharmaceutical firms publicly disclose information regarding clinical trials. Exploiting cross-sectional heterogeneity in firms' exposure to the regulation based on their internal development portfolios, we find that affected firms are significantly more likely to transition to public equity markets following the reform. We also find that firms that go public due to the increased disclosure requirements subsequently reduce the size of their project portfolios while shifting to safer investments acquired externally. We additionally explore the main hypothesis using a second empirical setting that considers a 2006 German legal reform which enhanced the enforcement of mandatory disclosure requirements for private firms. 

read the paper here

Management Science, June 2021

Authors: Kartik K. Ganju, Hilal Atasoy, and Paul A. Pavlou

Electronic health record (EHR) systems allow physicians to automate the process of entering patient data relative to manual entry in traditional paper-based records. However, such automated data entry can lead to increased reimbursement requests by hospitals from Medicare by overstating the complexity of patients. The EHR module that has been alleged to increase reimbursements is the Computerized Physician Order Entry (CPOE) system, which populates patient charts with default templates and allows physicians to copy and paste data from previous charts of the patient and other patients’ records. To combat increased reimbursements by hospitals from Medicare, the Centers for Medicare & Medicaid Services implemented the Recovery Audit Program first as a pilot in six states between 2005 and 2009 and then, nationwide in the entire United States in 2010. We examine whether the adoption of CPOE systems by hospitals is associated with an increase in reported patient complexity and if the Recovery Audit Program helped to attenuate this relationship. 

read the paper here

Social Science Research Network (SSRN), May 2021

Authors: Jeffrey McCullough, Kartik K. Ganju, and Chandy Ellimoottil

We examine telemedicine utilization during the COVID-19 pandemic. Advocates have argued that telemedicine can overcome barriers in accessing healthcare and protect patients from contracting COVID-19. Rural and poor patients, for example, would not need to make expensive and time-consuming trips to healthcare facilities when using telemedicine. Conversely, telemedicine adoption may depend on broadband access and technology skills, which could create a digital divide and exacerbate disparities. We study these questions using data on virtual and conventional care from a large commercial insurer. 

read the paper here

National Bureau of Economic Research, April 2021

Authors: Cyrus Aghamolla, Pinar Karaca-Mandic, Xuelin Li, and Richard T. Thakor

This study examines the link between credit supply and hospital health outcomes. Using detailed data on hospitals and the banks that they borrow from, we use bank stress tests as exogenous shocks to credit access for hospitals that have lending relationships with tested banks. We find that affected hospitals shift their operations to enhance their profit margins in response to a negative credit shock, but reduce the quality of their care to patients across a variety of measures. In particular, affected hospitals exhibit significantly lower attentiveness in providing timely and effective treatment and procedures, and are rated substantially lower in patient satisfaction. This decline in care quality is reflected in health outcomes: affected hospitals experience a significant increase in risk-adjusted, unplanned 30-day readmission rates of recently discharged patients and in risk-adjusted 30-day patient mortality rates. Overall, the results indicate that access to credit can affect the quality of healthcare hospitals deliver, pointing to important spillover effects of credit market frictions on health outcomes.

Read the paper here.

Journal of Financial Economics, April 2021

Authors: Cyrus Aghamolla and Richard T. Thakor

This study investigates whether a private firm's decision to go public affects the IPO decisions of its competitors. Using detailed data from the drug development industry, we identify a private firm's direct competitors at a precise level through a novel approach using similarity in drug development projects based on disease targets. The analysis shows that a private firm is significantly more likely to go public after observing the recent IPO of a direct competitor, and this effect is distinct from "hot" market effects or other common shocks. Furthermore, our effects are centered on firms that operate in more competitive areas. We additionally explore peer effects in private firm funding propensities more broadly, such as through venture capital or being acquired, and find results consistent with a competitive channel.

read the paper here

Journal of Financial and Quantitative Analysis, January 2021

Authors: Richard T. Thakor and Andrew W. Lo

The interaction between product market competition, R&D investment, and the financing choices of R&D-intensive firms on the development of innovative products is only partially understood. To motivate empirical hypotheses about this interaction, we develop a model which predicts that as competition increases, R&D-intensive firms will: (1) increase R&D investment relative to assets in place that support existing products; (2) carry more cash; and (3) maintain less net debt. Using the Hatch-Waxman Act as an exogenous shock to competition, we provide causal evidence which supports these hypotheses through a differences-in-differences analysis that exploits differences between the biopharma industry and other industries, and heterogeneity within the biopharma industry. We also explore how these changes affect innovative output, and provide novel evidence that increased competition causes companies to increasingly ``focus'' their efforts, i.e., there is a decline in the total number of innovations, but an increase in their economic value.

Read the paper here

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