Improving Health Care Delivery and Health Insurance

My name is Katherine Baicker, and I am a professor of Health Economics in the department of Health Policy and Management at Harvard School of Public Health. I have been here since 2007. Before that, I spent two years at the Council of Economic Advisers in Washington, D.C., and before that I was a professor in the Economics Department at Dartmouth.

My work focuses on improving the delivery of health care and health insurance in the United States, primarily through programs like Medicaid for low-income populations or Medicare for older populations.

Current Research Project:

My biggest research project is focused on what happens when you expand public health insurance to low-income adults, which is a really important policy question in the United States as the Affordable Care Act is slated to expand Medicaid in states that choose to do so. There are a lot of open questions about the cost of the program, the benefits for people who are enrolled in it, and how Medicaid affects health and other outcomes.

There was an opportunity in Oregon a few years ago to answer those questions more definitively than ever before. Oregon created a waiting list for their public health insurance program for low-income adults. People were chosen from this waiting list by lottery. This created a control group, comprised of people who did not get chosen in the lottery, for us to compare to people who were extended the opportunity to apply for Medicaid. Ordinarily, if you compare people on Medicaid to those not on Medicaid, you end up comparing people with very different health prospects to begin with. With the waiting list, we had a control group that we could use as a benchmark to gauge what happens when people gain access to the public health insurance program in terms of their health care utilization, financial strain, and health outcomes.

I’m one of the principal investigators of that study along with Amy Finkelstein at MIT. We collected hundreds of thousands of mail surveys, over 12,000 blood samples, credit reports, emergency department data, hospital records, and many other data sets – so lots of different sources of data to quantify what the costs and benefits of expanding public health insurance are.

Our first batch of analysis, which focused on the first year after people gained access to insurance, came from mail surveys where people were asked about their health status and health care utilization, hospital data about people’s diagnoses and treatments, and credit reports to help us understand peoples’ financial strain. We found that expanding access to public health insurance increased health care utilization, which is one of the costs, but also improved self-reported health outcomes and reduced financial strain, which are clear benefits.

So our study says there are huge benefits to gaining access to Medicaid, but also that Medicaid does not pay for itself – at least over the first year. There is positive cost and positive benefit. Policymakers have to weigh those two against each other and decide whether it is worth expanding the program or not. The next batch of results will give much more nuanced information about the health consequences as we begin to analyze physical measures of health, such as cholesterol, blood pressure, obesity, etc. We will be able to say with a lot more detail what happens over a two-year horizon to people’s health outcomes.

For more information on the Oregon Health Study, check out:

– The Effects of Medicaid Coverage — Learning from the Oregon Experiment, Katherine Baicker and Amy Finkelstein (NEJM)
– The Oregon Health Insurance Experiment: Evidence from the First Year, Amy Finkelstein, et. al. (QJE)

I was an undergrad at Yale. I started with a major in Ethics, Politics, and Economics, and then switched to a major in Economics during my senior year. Then I received my Ph.D. in Economics from Harvard. After graduate school, I went to work in the Economics Department at Dartmouth. I considered myself a public finance economist, interested in public programs but not health in particular. At Dartmouth, however, I found a lot of people working on really interesting health issues, and of course if you are interested in public spending on programs, health is a bigger and bigger share of that, so my research began to focus on health economics there.

When I went to work on the Council of Economic Advisers in Washington, I spent at least half of my time working on health issues. The Council of Economic Advisers draws on academics from around the country who just come for a couple of years to be in government and bridge the divide between academic research and practical policy work. For me it was also an educational experience. I got a much better sense of how what we do in academic research does and does not translate into the policy world. When I left, I came to Harvard’s School of Public Health, which was a really natural fit. It has been a great place to keep a foot in the policy camp while keeping a strong foot in the academic research camp.

In addition to my academic work, I also serve on a number of public commissions. I am a commissioner on the Medicare Payment Advisory Commission, on the Congressional Budget Office’s Panel of Health Advisors, and the chair of the board of directors of AcademyHealth. So there are a number of opportunities to keep involved in the Washington policy-making scene, while having a really good home base for a research agenda.

I came to economics later in my college education than I think a lot of people. I was very interested in public policy questions of redistribution and how society takes care of low-income and vulnerable populations. I first approached these questions from a political science or a public policy perspective in my coursework. But I found it really frustrating to have to trade off competing interests and different policy goals in a non-quantitative way.

When I took my first economics class I really appreciated the tools that put a structural framework and numbers on things. It made so much sense to me to think about those trade-offs in really concrete ways so that you could make concrete policy decisions. It is all well and good to say this program is good for this population but it comes with these costs to this other population. However, if you can’t put concrete values on these things, you can never make a real policy decision. That is what was really appealing to me about economics: being able to quantify things in a way that let you make better policy decisions that could translate into program improvements that really affected people’s lives.

I am able to divide my time between research and policy work , but definitely the biggest part of my agenda is academic research at the School of Public Health. My policy work takes me to Washington about two or three times a month, which is time-consuming but really worthwhile. Then I teach a course in program evaluation at the HSPH, but teaching is not as big a slice of my time as it would be if my job was not so research focused.
I also have administrative work. I serve on committees, both at the school and the department level. I advise students and work with young researches. There is a real mix of activity, which is one of the great things about a job like this. You can many different kinds of things in a given day, which keeps things both interesting and challenging to balance.

I wear a lot of different hats, and sometimes I have to wear them at the same time. So I have a lot on my plate sometimes, but I feel very lucky to have that flexibility and that opportunity to be involved in so many different activities day in and day out.

The other people I work with here in the department have really different backgrounds in terms of academic perspectives. We have medical doctors, lawyers, biostatisticians, and that is great for getting different perspectives on a particular research problem. If you are interested in how to deliver care through Medicaid, economics has some great insights, but it is clearly only one slice of the picture. I learned a lot from my fellow economists at my first job at Dartmouth, and I feel like it deepened by economics toolbox. Now I have that toolbox to bring to bring to work with other people with complimentary skills. And that is really productive.

In Washington, I spend a lot of my time with the Medicare Payment Advisory Commission, which is the body that advises Congress on how to change Medicare policy and payment rates. The board comprises physicians, hospital administrators, nurses, and really has the goal of representing a variety of angles of the health care system. I also do a lot of public speaking, both on my research and on broader health policy issues, which gives me the chance to interactive with different stakeholders in the executive and legislative branches. And then some of my research has focused on state Medicaid policy, which allows me to talk with different state Medicaid offices about how they want to adapt their Medicaid programs.

The variety that I mentioned is a really big upside of the job. I enjoy the policy work, the research, and my interactions with students. Every job has components that are less fun. I don’t love administrative work. Getting grants is a big part of research, which is difficult and uncertain. So it is not just the time spent on grant proposals, but the fact that you have a low probability of getting any one grant you apply for so you have to try a lot (laughs), which can be frustrating. There is nothing fun about dealing with budgets, paperwork, and IRB approvals, but you just have to do it.

Getting the Oregon Health Study up and running presented a lot of challenges. The study was expensive and we needed to hire dozens of staff members to collect blood samples and survey people. We ended up with 12 grants. We also had to learn how to do primary data collection, which was something I had never done before. I certainly knew nothing about drawing blood or measuring cholesterol and the like, so there was a steep learning curve.

Amy and I also faced enormous time pressure because we learned about the policy experiment in Oregon as they were doing it. Amy heard about it on the news, and she came into my office and asked me if I had heard about it. It seemed like a fantastic opportunity, but it was happening in real time. We spent the first six to eight months catching up to policy on the ground. We also faced challenges as the policy environment changed and we had to change the study in real time to adapt to that. So there were some harrowing months in there when we were doing the data collection, but I think, knock on wood, it turned out successfully. I think we have great quality data that people will analyze for years to come, but there were some nail-biter moments when we weren’t sure if the study would collapse, which would have been sad from many different perspectives.

I am a fan of experimenting with lots of different classes as an undergraduate. I didn’t have the goal of being an economist when I went to college. I happened to take an economics class and I really liked it, but I think if I had been too narrowly focused I would never have even tried that. So in terms of figuring out what interests you, I am a big fan of trying lots and lots of different things in college, subjects that you’ve never taken any coursework in, and seeing what clicks with you.

Then, I think it is important to figure out a career that not only matches your interests, but matches your work style, too. You want ask: what do I want to spend my life doing and how do I want to spend my life doing it? People can do a lot of different things from a personal and social perspective, but different jobs require different skills and mind-sets. You have to figure out what work environment fits you and what subject you want to focus on. Every job has aspects that people don’t like, grants management, for example (laughs). I have never heard of a job that is 100% fun so if you don’t have a work environment that you like being in and colleagues you enjoy working with, it is harder to put up with those unpleasant aspects that every job has.

For the Oregon Health Study, the goal is to give the best scientific information about the costs and benefits of expanding access to Medicaid. It is really up to policymakers to decide what public priorities are. Economics can’t tell you how much you value a poor person’s health versus a poor person’s education versus a road. Those are different public policy priorities. Our job is to help quantify the costs and benefits so that policymakers can make an informed decision.