HMP Seminar Series - Alice Chen, Ph.D - University of Southern California
Friday, October 7, 2022 11am to 12pm
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"Pricing Innovation in Surgical Care Markets"
Technological innovation in medical services can benefit consumers, but provider adoption and diffusion depend on price signals from payers. We examine the supply response to large (typically 100-1,000%) upward price revisions from Medicare for a set of treatments provided by specialized firms and involving advanced surgical equipment. Industry-wide output increases by two-to-twelvefold for targeted cases via market expansion, rather than business stealing. Affected firms also capture 20% more net revenue from Medicare and attract 63% more physician equity investors. However, capacity constraints bind, causing them to substitute away from other procedures and payers and shrink their overall output by 10%.
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Alice Chen is an Associate Professor of Public Policy at the USC Sol Price School of Public Policy. Her academic research focuses on improving the efficiency of health care markets. She examines how providers respond to changes in financial incentives and considers how health spending jointly affects health and labor indicators. Her work has been published in leading economics, policy, and medical journals, and it has been cited in major media outlets, including Business Week, CBS News, Forbes, The Atlantic, and The Washington Post. At USC Price, Dr. Chen teaches health economics and health finance.
Prior to earning her MBA and PhD in business economics from the University of Chicago’s Booth School of Business, Dr. Chen graduated with an AB and SM in applied math from Harvard University.
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