Charity Care, Risk Pooling, and the Decline in Private Health Insurance by Michael Chernew, David Cutler and Patricia Seliger Keenan. Published in volume 95, issue 2, pages 209-213 of American Economic Review, May 2005

The Role of Information in Medical Markets: An Analysis of Publicly Reported Outcomes in Cardiac Surgery by David M. Cutler, Robert S. Huckman and Mary Beth Landrum. Published in volume 94, issue 2, pages 342-346 of American Economic Review, May 2004

The introduction of Medicare in 1965 was the single largest change in health insurance coverage in U.S. history.Many economists and commentators have conjectured that the introduction of Medicare may have also been an important impetus for the development of new drugs that are now commonly used by the elderly and have substantially extended their life expectancy.In this paper, we investigate whether Medicare induced pharmaceutical innovations directed towards the elderly.Medicare could have played such a role only if two conditions were met.First, Medicare would have to increase drug spending by the elderly.Second, the pharmaceutical companies would have to respond to the change in market size for drugs caused by Medicare by changing the direction of their research.Our empirical work finds no evidence of a "first-stage" effect of Medicare on prescription drug expenditure by the elderly.Correspondingly, we also find no evidence of a shift in pharmaceutical innovation towards therapeutic categories most used by the elderly.On the whole, therefore, our evidence does not provide support for the hypothesis that Medicare had a major effect on the direction of pharmaceutical innovation.

Report: Ad Hoc Search Committee for the Editor of the American Economic Journal: Economic Policy by David Cutler, Amy Finkelstein, Adriana Lleras-Muney, James Poterba, David Romer and Robert Shimer. Published in volume 103, issue 3, pages 774 of American Economic Review, May 2013

This paper develops a satellite account for the US health sector and measures productivity growth in health care for the elderly population between 1999 and 2012. We measure the change in medical spending and health outcomes for a comprehensive set of 80 conditions. Medical care has positive productivity growth over the time period, with aggregate productivity growth of 1.5% per year. However, there is significant heterogeneity in productivity growth. Care for cardiovascular disease has had very high productivity growth. In contrast, care for people with musculoskeletal conditions has been costly but has not led to improved outcomes.