Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers
We analyze the economic consequences of rising US health care prices. By increasing the cost of employer-sponsored health insurance, rising prices serve as a de facto payroll tax on labor. Using exposure to hospital mergers as an instrument, we estimate that a 1% increase in health care prices lowers payroll and employment at non-health-care employers by 0.4%. At the county level, a 1% increase in health care prices reduces labor income by 0.27%, increases flows into unemployment by 1%, and lowers federal income tax receipts by 0.4%. The disemployment effects of rising prices are concentrated among lower- and middle-income workers.
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Copy CitationZarek Brot-Goldberg, Zack Cooper, Stuart V. Craig, Lev R. Klarnet, Ithai Lurie, and Corbin L. Miller, "Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers," NBER Working Paper 32613 (2024), https://doi.org/10.3386/w32613.
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