The Economic Incentives in Healthcare with Beth Munnich

Healthcare is full of good intentions. It is also full of incentives.In this episode of the Decode Econ Podcast, we sit down with Beth Munnich, Associate Professor of Economics at the University of Louisville, to discuss her research published in the American Economic Review on physician ownership of outpatient surgery centers.The question is straightforward:When doctors own the facilities where they operate, does behavior change?The answer, as in most markets, comes down to incentives.Outpatient (ambulatory) surgery centers have expanded rapidly over the past two decades. Advances in medical technology now allow many procedures to be performed safely without overnight hospital stays.This shift matters for three reasons:* Cost: Outpatient centers typically operate at lower overhead than hospitals.* Access: Patients benefit from shorter stays and quicker turnaround.* Market Structure: Increasingly, physicians are not just providers; they are also the owners.Ownership changes the economic equation.We also discuss teaching and advice for students and economists starting their academic journey.Key Takeaways* Physician ownership changes financial incentives in outpatient surgery markets.* Incentives influence referral patterns and potentially spending.* Healthcare markets are deeply shaped by ownership structure and insurance design.* Rigorous empirical research is essential to move beyond speculation.* Mentorship and persistence are critical in academic careers.This episode is about how markets respond when incentives change.And as Beth reminds us, incentives are always the keyOur goal is to amplify research and the people behind it, help us spread the word about Beth’s ResearchChapters00:00 Introduction to Decode Econ and Guest Beth Munnich00:12 Guest introduction and research overview01:06 Why Beth Munnich was drawn to healthcare economics01:35 The rise of outpatient surgery and its implications03:22 The importance of data and research questions05:18 Incentives and physician ownership in surgery centers07:44 Potential outcomes of ownership incentives08:31 Research findings on ownership and healthcare costs10:40 Doctor behavior and the principal-agent problem12:06 Insurance and patient financial incentives12:38 Research process and data collection challenges15:41 Long-term research journey and data acquisition20:46 Economic lesson: Always incentives22:06 Aligning incentives for better patient care23:22 Beth Munnich’s teaching philosophy and course design28:33 Target audience and topics of her new course30:00 Flipping the classroom: Relevance first in economics education31:35 Favorite subfields: Labor economics and social issues32:42 Impact of research on teaching and curriculum33:31 Career advice for students and early professionals35:44 Path to a PhD and career in economics38:02 Skills needed in modern economics39:44 Misconceptions about academic life41:38 Advice to younger self and career reflections45:05 Mentorship and networking in academia45:26 Connecting with Beth Munnich46:37 Closing remarks and gratituderesourcesBeth Munnich’s website https://www.bethmunnich.com/ Get full access to Decode Econ at www.decodeecon.com/subscribe