Medicare's prospective payment system for long-term acute-care hospitals (LTCHs) provides modest reimbursements at the beginning of a patient's stay before jumping discontinuously to a large lump-sum payment after a prespecified number of days. We show that LTCHs respond to the financial incentives of this system by disproportionately discharging patients after they cross the large-payment threshold. We find this occurs more often at for-profit facilities, facilities acquired by leading LTCH chains, and facilities colocated with other hospitals. Using a dynamic structural model, we evaluate counterfactual payment policies that would provide substantial savings for Medicare.

Competitive elections are essential to establishing the political legitimacy of democratizing regimes. We argue that insurgents undermine the state’s mandate through electoral violence. We study insurgent violence during elections using newly declassified microdata on the conflict in Afghanistan. Our data track insurgent activity by hour to within meters of attack locations. Our results suggest that insurgents carefully calibrate their production of violence during elections to avoid harming civilians. Leveraging a novel instrumental variables approach, we find that violence depresses voting. Collectively, the results suggest insurgents try to depress turnout while avoiding backlash from harming civilians. Counterfactual exercises provide potentially actionable insights for safeguarding at-risk elections and enhancing electoral legitimacy in emerging democracies. (JEL D72, D74, O17)