Lydia Cao (曹佳睿)

Insurers use utilization management (UM) to restrict access to high-cost prescription drugs. These non-financial restrictions steer demand away from the targeted options by requiring physicians to go through administrative processes. Since insurers interact with both physicians and drug manufacturers, UM influences not only physician behavior but also equilibrium market outcomes. Focusing on antidiabetic drugs in Medicare Part D, I develop and estimate a structural model in which UM affects patient treatment through physician prescribing and shifts the drug prices that insurers negotiate with manufacturers. Counterfactual exercises show that UM slightly harms patient treatment outcomes and burdens physicians, while generating substantial savings for insurers and potentially for the average consumer. Equilibrium price adjustments account for a quantitatively important share of the expenditure reduction, and ignoring them would understate the savings from UM. Addressing the root causes of UM is important: lowering drug prices is key to eliminating administrative frictions, while improving prescribing matters more for social welfare.

We study patterns in physician allocation following hospital mergers in the US and their implications for healthcare provision. Using Medicare data and the Florida Discharge database, we document that post-merger, more physicians work simultaneously at both acquiring and target hospitals as multi-homers, and more physicians move between the merged hospitals. The effects are more pronounced among physicians in specialties with lower private practice shares, pointing to the removal of firm boundaries as a key driver of the changes. To gauge the implications for the quality of and access to care, we construct a measure of the marginal productivity of physician labor. We find suggestive evidence that physician movers tend to move from hospitals with lower marginal productivity to those with higher productivity. Combining these findings with the observed merger-induced changes in physician movements, we argue that hospital mergers can lead to more efficient allocation of physician resources and improved matching between physicians and patients.

Firms often maintain dual career ladders for managers and individual contributors (ICs). Using personnel records from 43 medium-sized and large firms, we reconstruct complete reporting chains and organizational layers to document how these tracks are structured and compensated. We show that ICs are prevalent throughout the hierarchy but earn substantially less than managers in comparable positions, with the penalty increasing toward the top. To interpret these patterns, we develop and estimate a model of dual careers in which firms allocate workers across management and IC tracks subject to coordination and problem-solving frictions. The estimates reveal distinct firm types with respect to their hierarchy shape, degree of managerial specialization, and workforce composition that generate varying IC penalties and respond differently to organizational shocks. Motivated by the large pay gains associated with promotions from IC to manager roles, we then analyze the demographic composition of the IC workforce. While pay within each track does not significantly vary across demographic groups, women and minority workers are disproportionately represented on IC tracks, especially at higher ranks. Thus, assignment to IC and managerial tracks emerges as a key mechanism through which within-firm career inequality contributes to broader gender and racial pay gaps.