ESSAYS ON THE EFFECTS OF PUBLIC POLICIES AND MARKET ORGANIZATION ON HEALTH CARE MARKETS AND HEALTH OUTCOMES

Abstract

This dissertation comprises three chapters showing how public policies and market organization can affect healthcare markets and outcomes. A particular focus is given to non-developed countries, which tend to face tighter restrictions than rich countries in many aspects. Consequently, important policies can have adverse effects due to poor implementation that might not be evident at first glance. The first chapter studies the Chilean health insurance market to understand how the rules that link premiums to income distort incentives and their consequences for the public option. I also assess how the rules may interact with the rapid income growth that Chile has been experiencing. I find that the institutional setting in Chile allows private insurers to effectively screen out poor agents who do not generate profits. I also simulate how demand for plans and medical spending would change when incomes grow, showing that agents more likely to switch to private plans are inexpensive to cover but generate low revenues and reduce private profit margins. The public option benefits substantially from income growth, reducing its deficit. The second chapter, joint with Luiz Fontes, studies the Brazilian Psychiatric Reform, which introduced mental health centers (CAPS) as community-based substitutes for inpatient care. CAPS reduced psychiatric hospitalizations, but the effects were concentrated on patients with schizophrenia, a condition CAPS cannot adequately treat. Introducing centers also increased the rate of violent crimes, which is consistent with the hypothesis from the criminology literature that inpatient care reduces violent crime via an incapacitation effect on individuals with schizophrenia. The last chapter, joint with Rudi Rocha and Rodrigo Soares, studies the adoption of genetically modified soybean in Brazil and the consequent increase in the use of glyphosate, the most widely used herbicide in the world. Decades-old laboratory studies suggest that glyphosate has very low toxicity, a claim that has been recently disputed by the scientific literature. We find that the average increase in glyphosate use in the sample led to an increase in the infant mortality rate of 5% of the average through externality effects in a real-world agricultural setting.