Death and taxes the impact of government policy on health /

by Cotet, Anca M.

This dissertation investigates the impact of various government policies on health. First, I study the effect of labor income taxes on health. Labor income taxes are predicted to affect health through their impact on the value of time, which is at the same time an important input but also the output of health production. Using variation in labor income tax rates among US states, I find that both higher taxes and more progressive taxes keeping tax liability constant lead to a decline in health. Second, I challenge the common wisdom that non-economic damage caps on malpractice awards have a positive effect on medical care delivery. My hypothesis is that caps may damage the quality assurance offered by physicians through their willingness to pay the full cost of their medical mistakes. If that is the case, the demand for medical services will decrease, and the net effect on the quantity of medical services delivered is ambiguous. I find evidence that the amount of medical services delivered to the population drops: caps lead to a reduction of the number surgeries performed, the number of individuals treated inpatient or outpatient in community hospitals, and to an increase in the average length of hospitalization. And third, I explore the issue of licensure requirements in health. I test the hypothesis that current requirements are too strict using state variation in the regulation of telemedicine practices. Telemedicine is predicted to offset the impact of licensing by lowering the quality of the marginal medical services delivered and easing access to medical care, but any regulation that prevents telemedicine practices restores the state of the world originally envisaged by the regulator. My results indicate that states that adopted regulation preventing telemedicine experience an increase in mortality. The interpretation is that current regulation preventing telemedicine has unwanted effects and, thus, I conclude that since telemedicine, which partially offsets the impact of licensing, improves health, current licensing requirements are too strict. iv To my family.