Tracking the U.S. health sector: the impact of the COVID-19 pandemic

Business Economics - Health spending has grown faster than the U.S. economy for decades and currently represents approximately 18% of gross domestic product. As with other sectors of the economy,...     

More preventive care, and fewer emergency room visits and prescription drugs--health care utilization in a consumer-driven health plan

Although consumer-driven health plans (CDHPs) have grown dramatically, the question of whether CDHPs have reduced health care costs has not been answered definitively. This article presents what the authors believe to be the first study to analyze a large sample of claims data and to look in detail at different types of utilization among enrollees in a CDHP and those in a traditional comprehensive major medical (CMM) plan. After adjusting for the finding that CDHP enrollees are both younger and healthier than those in CMM plans, the authors found that CDHP enrollees show no consistent or significant utilization differences for measures over which consumers have little control (e.g., inpatient stays); lower utilization for measures over which consumers have greater control (e.g., emergency room visits); and higher utilization of preventive services.     

The Quality of Institutions and Organizational Form Decisions: Evidence from Within the Firm

In many retail and service sectors, firms have to establish a physical presence in a geographic market to access customers there. In countries where the quality of institutions is low, this can put assets at risk. We use data on the operations of a multinational, multibrand hotel company to show that in environments where local institutions are weaker—as proxied mainly by the World Bank's Checks index—the company eschews direct ownership. Rather than increasing its reliance on franchising, as predicted by some models, the company relies more on another form of organization commonly used in this industry, namely management contracts. We explain these patterns by emphasizing how the quality of the institutional environment affects the cost of using equity‐based organizational forms, per arguments in the current literature, but also the cost of enforcing the terms of franchise contracts.     

Innovation and Price Informativeness

We study whether the innovation decisions of a firm are improved as a result of information reflected in the firm's stock price. We show that firms with more informative stock prices, as measured by price nonsynchronicity, have better innovation outcomes, as measured by the number of patents and patent citations. Our results are not driven by managerial private information and are robust to various alternative specifications. We also find that price informativeness is more important to innovation when managers are less experienced or face greater uncertainty about the optimal innovation strategy, and that these effects are primarily observed in small‐ and mid‐sized firms where additional information may be of greater value. Our results are consistent with the notion that capital markets can have real effects on the economy.     

Race and gender effects on employer interest in job applicants: new evidence from a resume field experiment

We sent nearly 9000 fictitious resumes to advertisements for job openings in seven major cities in the United States across six occupational categories. We randomly assigned names to the resumes that convey race and gender but for which a strong socio-economic connotation is not implicated. We find little evidence of systematic employer preferences for applicants from particular race and gender groups.     

Updated trends in US brand-name and generic drug competition

Objective: To provide updated evidence on US trends in: market exclusivity periods (MEPs, time between brand-name drug launch and first generic competitors) for new molecular entities (NMEs); likelihood, timing and number of Hatch-Waxman Act Paragraph IV patent challenges; and generic drug penetration.

Methods: This study used IMS Health National Sales Perspectives^TM US data to calculate MEPs for the 288 NMEs experiencing initial generic entry between January 1995 and December 2014, the number of generic competitors for 12 months afterward (by level of annual sales prior to generic entry), and generic penetration rates. The likelihood, timing and number of Paragraph IV challengers were calculated using data from Abbreviated New Drug Approval (ANDA) letters, the FDA website, public information searches, and ParagraphFour.com.

Results: For drugs experiencing initial generic entry in 2013–2014, the MEP was 12.5 years for drugs with sales greater than $250 million (in 2008 dollars) in the year prior to generic entry ($250 million?+?NMEs), 13.6 years overall. After generic entry, brands rapidly lost sales, with their average unit share being 7% at 1 year for $250 million?+?NMEs, 12% overall. Ninety-four percent of $250 million?+?NMEs experiencing initial generic entry in 2013–2014 had faced at least one Paragraph IV challenge, an average of 5.2 years after brand launch (76% and 5.9 years for all NMEs). NMEs faced an average of 5.1 and 6.2 Paragraph IV challenges per NME, for all and $250 million?+?NMEs, respectively.

Limitations: Analyses, including Paragraph IV calculations, were restricted to NMEs where generic entry had occurred.

Conclusion: The average 2013–2014 MEP of 12.5 years for $250 million?+?NMEs, 13.6 overall remains consistent with prior research. MEPs are lower, and Paragraph IV challenges are more frequent and occur earlier for $250 million?+?drugs. Generic share erosion is also greater, and continues to intensify for both NME types.     

A Note on Capital IQ's Credit Line Data

Empirical work in finance is increasingly using Capital IQ's detailed data on capital structure. We compare the Capital IQ credit line data to hand‐collected data for a random sample of firms. Missing values in Capital IQ are prevalent, so the data set underreports the importance of corporate credit lines. When data are reported, Capital IQ often differs from hand‐collected credit line activity. We suggest methods for correcting the errors in the Capital IQ data, note which portions of the data are most reliable, and quantify the effects of Capital IQ's underreporting by examining the tradeoff between cash and lines of credit.     

To What Extent do United Kingdom Companies Provide Oil and Gas Reserves Information Sufficient to Satisfy Statement of Recommended Practice Requirements?

The uncertainty surrounding oil and gas reserves estimation and the cost of gathering reserves data discourage firms from disclosing sufficient data to satisfy SORP (statement of recommended practice) requirements, especially where oil and gas reserves disclosure is discretionary. However, the need to reduce agency cost and signal to stakeholders induces firms to disclose oil and gas reserves. The contrasting views on the rationale guiding the extent of disclosure were examined in this study. A sample was drawn from 83 United Kingdom (UK) oil and gas exploration and production companies listed on the London Stock Exchange. Appropriate statistical tools were used to investigate the extent of oil and gas reserves disclosure. The findings provide mixed results about the extent of disclosure to meet SORP's requirements. There was no particular evidence that UK oil and gas companies provide qualitatively acceptable oil and gas reserves quantity information. The observed varying degrees of disclosure in the market could be attributed to a discretionary regime that allows firms to determine how and when to disclose. Policy makers and industry regulators could find the results useful in assessing the current extent of disclosure compliance.