Nicholas Diebel

Ph.D. Candidate in Economics
Boston College
I am a Ph.D. candidate in Economics at Boston College. My primary research interests lie at the intersection of industrial organization, health economics, and advertising.

Job Market Paper ( Download)

Welfare Effects of Using Hospital Rate Setting as an Alternative to Bargaining​

Prices paid by insurers to hospitals are determined by bilateral negotiations in all U.S. states except Maryland, where a unique all-payer rate setting health care regulation sets common prices for all insurers. Theoretical predictions on how bilateral bargaining affects total welfare are ambiguous. We empirically analyze how a Maryland style regulation would affect overall welfare relative to bilateral bargaining, using the New Jersey health care market as an example. Using hospital-, insurer-, and patient-level data from 2010, we estimate a structural model of hospital and insurer demand, and simulate consumer and insurer responses to the new price regime. We find that replacing bargaining with all-payer rate setting increases total surplus in the market. However, not all agents benefit, and the effects depend on how the largest player in our market, Blue Cross Blue Shield (BCBS), sets premiums. If BCBS sets premiums a la Bertrand Nash, consumer surplus decreases, but joint hospital-insurer surplus increases by more. The number of uninsured increases by two percent. Total surplus increases are robust to different pricing strategies of BCBS, which account for its non-profit status, but diminish the magnitude of surplus gain. 
Work in Progress
Advertisers’ Strategic Decisions to Purchase Commercial Spots in Television Networks (with Sylvia Hristakeva and Julie Holland Mortimer)