Zack Cooper, Yale University

“How Does Rising Health Care Spending in the US Impact Labor Markets and Mortality? Evidence from Hospital Mergers”

Abstract

We analyze how increases in health care spending on the privately insured in the US impact labor market outcomes. We use price increases caused by horizontal hospital mergers as an instrument for local health care spending, and trace the incidence of rising health spending through the labor market using de-identified data from tax records. We find that a 10% increase in health care spending (roughly $500 per person) lowers income by 2.7%, increases the unemployment rate by 0.7 percentage points, and lowers federal income tax receipts by 2.8%. These effects are driven by a worsening of labor market outcomes in non-health-care industries. Likewise, the job losses we observe are concentrated entirely among workers in the bottom third of the income distribution. We find that the same increase in health care spending leads to 3.8 additional “deaths of despair” per 100,000 individuals each year, which implies that individuals who lose their jobs die at a rate of approximately 1 in 200. 

Zack Cooper is an Associate Professor of Public Health and of Economics and serves as director of Health Policy at the Yale University Institution for Social and Policy Studies.

Professor Cooper is a health economist whose work is focused on producing data-driven scholarship that can inform public policy. In his academic work, he has analyzed the impact of competition in hospital and insurance markets, studied the influence of price transparency on consumer behavior, investigated the causes of surprise out-of-network bills, and examined the influence of electoral politics on health care spending growth.

Cooper has published his research in leading economics and medical journals including the Quarterly Journal of Economics and the New England Journal of Medicine. He has also presented his research at the White House, the Department of Justice, the Federal Trade Commission, and the Department of Health and Human Services.

In January 2021, Zack Cooper and Fiona Scott Morton launched the 1% Steps for Health Care Reform project. The aim of the project is harness the power of rigorous economic scholarship to identify tangible steps that can be taken to reduce health care spending in the US without harming quality. The project includes 16 briefs written by leading economists that describe 16 specific interventions, which would collectively lower health care costs in the US by approximately $400 billion annually. You can hear a description of the project on the Freakenomics Podcast (Part 1and Part 2).

Cooper received his undergraduate degree from the University of Chicago and his PhD from the London School of Economics, where he received the Richard Titmuss prize for Best PhD thesis. He was an Economic and Social Science Research Council Postdoctoral Fellow in economics at the LSE’s Centre for Economic Performance where he remains a Faculty Associate.

His research on health care spending on the privately insured can be found at: healthcarepricingproject.org.

and You can read more about Zack Cooper here

CEBI contact: Torben Heien Nilesen