NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

What Does Health Reform Mean for the Healthcare Industry? Evidence from the Massachusetts Special Senate Election

Mohamad Al-Ississ, Nolan H. Miller

NBER Working Paper No. 16193
Issued in July 2010
NBER Program(s):   HC

The recent reform of the U.S. health care system has been described both as a boon and a death blow for the healthcare industry and for private insurers in particular. We exploit the surprise election of Republican Scott Brown to the U.S. Senate, which dealt a serious blow to the prospects for reform by depriving Democrats of their 60-vote “filibuster-proof” majority, to evaluate the market's assessment of Health Reform’s impact on the health care industry. We find that Scott Brown’s election was associated with an abnormal return of 2.2 percent for a typical dollar invested in health care stocks and an abnormal return of 6.3 percent for a typical dollar invested in managed care firms. A typical dollar invested in the pharmaceutical sector experienced abnormal returns of 2.9 percent, while investments in healthcare facilities (including hospitals) experienced abnormal losses of 3.4 percent. Analysis of firms participating in government programs show that firms involved with Medicare Advantage experienced gains while those involved with Medicaid Managed Care experienced losses due to the election.

download in pdf format
   (329 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (329 K) or via email.

This paper was revised on December 5, 2011

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Users who downloaded this paper also downloaded these:
Kolstad and Kowalski w16012 The Impact of Health Care Reform On Hospital and Preventive Care: Evidence from Massachusetts
Card, Dobkin, and Maestas w10365 The Impact of Nearly Universal Insurance Coverage on Health Care Utilization and Health: Evidence from Medicare
Gaynor, Moreno-Serra, and Propper w16164 Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service
Snowberg, Wolfers, and Zitzewitz w16949 How Prediction Markets Can Save Event Studies
Courtemanche and Zapata w17893 Does Universal Coverage Improve Health? The Massachusetts Experience
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us