We estimate the plausibly causal effect of fee-for-service (FFS) contracts relative to less retrospective contracts between health insurers and healthcare practices on treatment decisions for deliveries. We find that covering c-sections under FFS increases the c-section rate by 16% while covering vaginal deliveries under FFS has no impact on procedure choice. Effects are explained mainly by payment retrospectiveness rather than payment amount. Impacts of FFS on treatment decisions do not vary by pregnancy risk, but also have no impact on maternal or infant health outcomes. Results constitute evidence of substantial moral hazard at the healthcare practice level generated by retrospective contracts.

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We quantify the impact of federal subsidies for graduate medical education on primary care physician (PCP) supply by examining the impact of Section 5503 of the Affordable Care Act, which increased the number of residents that teaching hospitals in rural and high-need areas could receive subsidies for training. Instrumenting for selection into the program using its eligibility criteria, we find that the provision increased both recruitment of residents into primary care and time spent at teaching hospitals in high-need areas, resulting in an increase in PCP supply in treated counties of 6 percent.

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The regulation of potentially anticompetitive industry consolidation is typically executed by federal antitrust officials. Under Certificate of Public Advantage (COPA) laws, local regulators may assume jurisdiction over horizontal mergers undertaken in hospital markets. Using a 27-year hospital panel and hand-collected data on hospital merger regulations, we estimate the effect of COPA regulation of hospital mergers relative to traditional antitrust scrutiny. We find that both traditional antitrust and COPA regulation are successful at constraining prices, but that increases in 30-day mortality among COPA mergers are over twice as large as those experienced by mergers consummated under traditional antitrust scrutiny. We also find that price and mortality effects are positively correlated across COPA hospitals but not for those subject to traditional antitrust scrutiny, which is consistent with a model of spillovers from regulated dimensions of hospital behavior to unregulated ones. Our results speak to the difficulty of writing complete contracts for regulating firm behavior and demonstrate that COPA laws serve as poor substitutes for federal antitrust regulation.

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