Mammography guidelines have weakened in response to evidence that mammograms diagnose breast cancers that would never eventually cause symptoms, a phenomenon called "overdiagnosis." Given concerns about overdiagnosis, instead of recommending mammograms, US guidelines encourage women aged 40-49 to get them as they see fit. To assess whether these guidelines target women effectively, I propose an approach that examines mammography behavior within an influential clinical trial that followed participants long enough to find overdiagnosis. I find that women who are more likely to receive mammograms are healthier and have higher socioeconomic status. More importantly, I find that the 20-year level of overdiagnosis is at least 3.5 times higher among women who are most likely to receive mammograms. At least 36% of their cancers are overdiagnosed. These findings imply that US guidelines encourage mammograms among healthier women who are more likely to be overdiagnosed by them. Guidelines in other countries do not.

A headline result from the Oregon Health Insurance Experiment is that emergency room (ER) utilization increased. A seemingly contradictory result from the Massachusetts health reform is that ER utilization decreased. I reconcile both results by identifying treatment effect heterogeneity within the Oregon experiment and extrapolating it to Massachusetts. Even though Oregon compliers increased their ER utilization, they were adversely selected relative to Oregon never takers, who would have decreased their ER utilization. Massachusetts expanded coverage from a higher level to healthier compliers. Therefore, Massachusetts compliers are comparable to a subset of Oregon never takers, which can reconcile the results.

We use administrative data from the IRS to examine long-term impacts of childhood Medicaid eligibility expansions on outcomes in adulthood at each age from 19-28. Greater Medicaid eligibility increases college enrollment and decreases fertility, especially through age 21. Starting at age 23, females have higher contemporaneous wage income, although male increases are imprecise. Together, both genders have lower mortality. These adults collect less from the earned income tax credit and pay more in taxes. Cumulatively from ages 19-28, at a 3% discount rate, the federal government recoups 58 cents of each dollar of its "investment" in childhood Medicaid.

We develop a model of selection that incorporates a key element of recent health reforms: an individual mandate. Using data from Massachusetts, we estimate the parameters of the model. In the individual market for health insurance, we find that premiums and average costs decreased significantly in response to the individual mandate. We find an annual welfare gain of 4.1% per person or $51.1 million annually in Massachusetts as a result of the reduction in adverse selection. We also find smaller post-reform markups.

We implement an empirical test for selection into health insurance using changes in coverage induced by the introduction of mandated health insurance in Massachusetts. Our test examines changes in the cost of the newly insured relative to those who were insured prior to the reform. We find that counties with larger increases in insurance coverage over the reform period face the smallest increase in average hospital costs for the insured population, consistent with adverse selection into insurance before the reform. Additional results, incorporating cross-state variation and data on health measures, provide further evidence for adverse selection.

A key policy question is whether the benefits of additional medical expenditures exceed their costs. We propose a new approach for estimating marginal returns to medical spending based on variation in medical inputs generated by diagnostic thresholds. Specifically, we combine regression discontinuity estimates that compare health outcomes and medical treatment provision for newborns on either side of the very low birth weight threshold at 1,500 grams. First, using data on the census of U.S. births in available years from 1983 to 2002, we find that newborns with birth weights just below 1,500 grams have lower one-year mortality rates than do newborns with birth weights just above this cutoff, even though mortality risk tends to decrease with birth weight. One-year mortality falls by approximately one percentage point as birth weight crosses 1,500 grams from above, which is large relative to mean infant mortality of 5.5% just above 1,500 grams. Second, using hospital discharge records for births in five states in available years from 1991 to 2006, we find that newborns with birth weights just below 1,500 grams have discontinuously higher charges and frequencies of specific medical inputs. Hospital costs increase by approximately $4,000 as birth weight crosses 1,500 grams from above, relative to mean hospital costs of $40,000 just above 1,500 grams. Under an assumption that observed medical spending fully captures the impact of the “very low birth weight” designation on mortality, our estimates suggest that the cost of saving a statistical life of a newborn with birth weight near 1,500 grams is on the order of $550,000 in 2006 dollars.