Chicago Booth Review Podcast Why Is US Healthcare So Expensive?

Matthew Notowidigdo: I see insurance as something that's valuable, and I think there's a lot of individuals living in the United States that just fundamentally don't see health insurance as valuable to them. I'm tempted, just to be completely candid, to just see it as a bit of a mistake. Or maybe you're just not informed of what you need to do. But to me it's a really important outstanding policy issue is just how to complete what Obamacare started and get all of the individuals that are eligible for either free or heavily subsidized insurance to actually get them insured.

Hal Weitzman: Nearly a fifth of all Americans have medical debt. A hospital stay in the US on average leads to about $6,000 in unpaid medical bills for the uninsured and more than $18,000 for about one in 10 uninsured patients. Meanwhile, the process of consolidation that has produced giant health insurance companies is pushing costs up by about $30 billion per year, or about $200 per person with employer-sponsored health insurance. So, why is US health care so expensive?

Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I'm Hal Weitzman, and today I'm talking with Chicago Booth's, Matt Notowidigdo in the first of two podcasts about his new book, Better Health Economics: An Introduction for Everyone, co-written with Boston University's Tal Gross. Matt Notowidigdo, welcome to the Chicago Booth Review Podcast.

Matthew Notowidigdo: Thanks for having me.

Hal Weitzman: Now, congratulations on this book. It doesn't sound perhaps like it would be a fun read, but it is a very fun read. It's lively, it's easy to read, lots of fun examples, stories, lots of fun thought experiments, and you sift through the evidence very carefully and systematically. But let's start right at the beginning. Your book is called Better Health Economics. Why should those of us who are not economists or not in the healthcare world care about health economics? And what is it that's better about your health economics than other people's? Or why should we get better?

Matthew Notowidigdo: Yeah, I would say there's a couple ways to interpret the title. It's about trying to get us to have better health outcomes. And another way of thinking about the title is it's a better way of thinking about the economics of the healthcare sector. And I think our book tries to do both. We've taught health economics for many years and we've got a lot of papers that we're proud of, papers that our friends have written. And my goal for the book was to try to summarize those papers in a way that people could see why it's useful to think about the healthcare system, the way economists think about it.

Hal Weitzman: Okay. And you definitely do that. And as I say, it's fun. And one of the stories that you start with is about your, now wife, buying a dining room table, right? And betting on the White Sox winning the 2007 World Series, which they did, right?

Matthew Notowidigdo: It's the Red Sox, not the White Sox. You're such a Chicagoan.

Hal Weitzman: Even though I had in my notes Red Sox, I'm saying White Sox because of course, we're on the south side of Chicago. My mistake. Okay, let me start again. The Red Sox winning the 2007 World Series, which they did. So tell us about that story and then sort of what it tells us about US healthcare.

Matthew Notowidigdo: Yeah, would love to. The story's true. My students have asked me that a few times. It is true that when I was in graduate school, my wife bought a new table from a furniture store that was running a promotion that would give you the table for free in the event that the Red Sox won the World Series.

Hal Weitzman: So, I should explain, sorry, because I said White Sox. So, you were living in Cambridge or Boston at the time, correct?

Matthew Notowidigdo: Correct. And so the promotion was that if you bought furniture in the springtime and then the Red Sox went on to win the World Series, then you would get reimbursed the full price, i.e. the furniture would be for free. So, we needed a new table, so she bought a table, and then as the season went on, the Red Sox kept doing well. They went to the American League Championship Series, they went to the World Series, and at that point we realized that there was some risk. There was risks that the Red Sox would lose the World Series and then we'd end up having to pay the full price of the table and there's a chance they'd win the World Series and we'd get it for free. And so the reason why I talk about this at the beginning of the book is that essentially I was able to buy insurance against this risk by betting against the Red Sox.

And that way, no matter what, whether the Red Sox won or lost the World Series, we'd end up getting our table for about 50% off. And that's a pretty good deal for a poor struggling graduate student to get a table at half price. One reason why I think the story is memorable is that the Red Sox went on to win the World Series, which means that had we not bought the insurance at all, we would've gotten the table for free. But that's just how insurance works. Sometimes it works out in your favor, sometimes it doesn't, but the insurance is providing you value no matter what happens.

Hal Weitzman: Okay. So, it helps us to understand why insurance is important.

Matthew Notowidigdo: Correct.

Hal Weitzman: Is there something particularly about health insurance that relates to that story or is that just-

Matthew Notowidigdo: Yeah, that's a great question in the sense that I think one of the things we try to communicate at the beginning is that even though it's called health insurance, it's not about insuring your health. It's about insuring you financially against all of the financial risks associated with your healthcare use. And so at the end of the day, health insurance is first and foremost a financial product. And in the same way that I insured the value of my table against the Red Sox losing the World Series, I was insuring myself against that financial risk. Health insurance works very much the same way. It's not about giving you insurance against your health, because your health is affected by your own decisions as well as the healthcare that you get. Health insurance is first and foremost a financial product. I think that's an important perspective to have at the outset.

Hal Weitzman: And I want to ask you in a second about the unique situation of America, but just as someone who uses it, why is US healthcare so expensive? And we know that the US spends so much more than other countries on its healthcare.

Matthew Notowidigdo: Yeah, I mean, that's a big question. So, there's not a single answer to why we spend so much more than other countries. There's a couple of partial answers we discussed in the book. So, one is that our doctors simply get paid a lot. If you want to look at the occupations that are over represented in the top 1% or top 0.1% of the income distribution, you find a lot of different healthcare occupations. You find physicians and specialists, you find dentists. And so one reason we pay a lot, is that every time we go to the doctor, the doctor's getting paid a lot. That's part of it. Another thing was, we pay a lot more for our prescription drugs. That turns out to be part of it, but it's a small part because drugs are a small part of overall health spending. So, basically there's a lot of different things you need to pay attention to sort of wrap your head around why we end up spending so much more than other countries. It's the doctors, it's the hospitals, it's the drugs. It's a little bit of everything to be honest.

Hal Weitzman: So, obviously healthcare is slightly different everywhere. Your book focuses on US healthcare. And it certainly appears from the outside, and I grew up in the UK where we have a very different system, but most developed countries do have a different system. At least partially public system or public insurance or something like that. So, is the US system unique or is it just a little different?

Matthew Notowidigdo: I think it's a little bit of both. One of the things that's very unique about the US healthcare system is that a lot of people receive insurance through their job. So, they have employer-sponsored health insurance. That's incredibly unique. But the fact that the United States has a mix of public and private hospitals, the fact that there's a public insurance system that some, but not everybody qualify for. That's not so unusual. So, there's some features that have some overlap with what you see in other countries. And then there's some things like the fact that your health insurance is literally tied to your job, that's quite unique.

Hal Weitzman: But in terms of the cost, we were talking a second ago about why it's so expensive. Does it just feel more expensive? It seems to be more expensive.

Matthew Notowidigdo: No, no. We spend a lot. When I teach this to my students, I describe it as a levels and a slopes argument. So, the level of our healthcare spending is like a share of GDP is much higher in the United States and in other high-income countries. So, we just spend a lot more. Spend a lot more overall and as a share of our economy. And that share is going up, but it's also going up all over the world in all other high-income countries as well. So, there's something common across all high-income countries that we're just spending a lot more and more on healthcare over time. But the US is starting from a much higher level. And why we got to where we started requires you to kind of go back in time and understand, "Well, what kind of decisions did the United States make to end up with such expensive doctors, expensive hospitals, and spending so much more on prescription drugs?"

Hal Weitzman: Okay. Well, maybe tell us a little bit of that history just at a high level. How did we arrive where we are?

Matthew Notowidigdo: The economist, Milton Friedman, decades ago wrote about the fact that the American Medical Association through a lot of targeted lobbying efforts, was able to sharply restrict the supply of doctors by basically restricting the number of medical residents that could get trained every year. I think a lot of health economists would agree that that's a major factor in essentially ending up with too few physicians to go around, which is driving up physician incomes in the United States much higher than virtually anywhere else in the world. On the prescription drug side, we've designed a system where the federal government, for the most part is not involved in negotiating drug prices. In many other countries the government ends up playing a much more active role. We're starting to see a little bit of this in Medicare where the federal government's going to start essentially as a trial run, negotiating prices for certain drugs. And I think if that turns out to go well, I think you'll see more of that going forward.

Hal Weitzman: Just as a side note, I'm guessing a lot of medical professionals, because you work at the University of Chicago?

Matthew Notowidigdo: That's right.

Hal Weitzman: There's a giant hospital here. How have they reacted when you've told them your ideas about doctors' salaries and the restrictions on doctors?

Matthew Notowidigdo: So, the chapter on doctor salaries I don't think has been well received by the doctors I've talked to. I don't think they like drawing attention to the fact that they are incredibly well paid. One of the statistics that we point to is compare doctors to lawyers. On average, doctors are paid substantially more. And I don't think that that's widely understood or recognized. So, I think that part maybe is a bit provocative to them. But when I talk to the doctors at our healthcare system, I think they've generally found the book very informative. And it may be surprisingly informative, I think. Because there's just a lot of basic economic features and incentives that I think they were not aware of.

Just to give one example, large companies that offer insurance to their employees, typically those large companies use what are called self-insured plans. This is getting a little bit in the weeds, but I think it's important because self-insured plan means that the large employer is essentially on the hook for all of their employees' medical expenses. And I think a lot of doctors just didn't realize that when I, as a University of Chicago employee go to the emergency room, university of Chicago is the one that's ultimately stuck with the bill, not an insurance company. And that creates a lot of interesting trade-offs and incentives for large employers in terms of trying to manage the healthcare costs of their workforce.

Hal Weitzman: And you talk about that a lot in the book. So, something that is very obvious to anyone who knows anything about US healthcare is that insurance companies are, in spite of what you just said, are at the heart of it. They're really important. And you have to get insured, right? And Obamacare was really important. And one of the aims of Obamacare was that everybody should be insured, of course, didn't quite work, but it did significantly increase the number of people who insured. So, before Obamacare, we had about 50 million uninsured. That was a common number. Now we have about 25 million uninsured. Why are there still so many people?

Matthew Notowidigdo: Oh, that's a great question.

Hal Weitzman: Without health insurance.

Matthew Notowidigdo: In the book and in my class, I love talking about this because I honestly see it as a bit of a puzzle. And just to restate those numbers, so the 50 million uninsured, that was our estimate prior to Obamacare. And it was roughly cut in half in two ways. One is that Obamacare expanded Medicaid, which is the public health insurance system for low-income adults. And the other was, Obamacare created these new exchanges where people could go get insurance. People have probably seen the ads on television during the annual open enrollment periods. If you don't have insurance through your job, and your income is too high to qualify for Medicaid, then you can go and purchase insurance on these exchanges.

The insurance is pretty good, and it's heavily subsidized, meaning you pay much less than the cost to the insurance companies that are providing you with this insurance. And the federal government essentially picks up the rest of the tab by financing the subsidies. So, then to get to your question, "Well, what's going on with the rest of the 25 million Americans that are not signing up for insurance?" Some of those individuals are not just not going to qualify for Medicaid, not going to qualify for the subsidies. Like undocumented immigrants, for example. So, that explains maybe about 10 million or so of that number. The rest of it are people who qualify for subsidized insurance or qualify for Medicaid and just aren't signing up. And to me, it's a real puzzle to economists because I bought insurance from my table.

I see insurance as something that's valuable. And I think there's a lot of individuals living in the United States that just fundamentally don't see health insurance as valuable to them. I'm tempted just to be completely candid, to just see it as a bit of a mistake. Or maybe you're just not informed of what you need to do. But to me, it's a really important, outstanding policy issue is how to complete what Obamacare started and get all of the individuals that are eligible for either free or heavily subsidized insurance to actually get them insured. And I think it's work for the future.

Hal Weitzman: Is there any sense to which it might be connected to people just not liking government and regulation and bureaucracy?

Matthew Notowidigdo: People don't like being told what to do, so that could certainly be part of it. So, one of the papers I talk about in my course is a paper on flood insurance. For reasons I don't fully understand, in the United States, we actually subsidize flood insurance. It seems like a weird policy choice because why would you want to encourage people to be living in areas that are high risk of flood? But in any event, this is what the government is doing, is that they're subsidizing flood insurance. And yet people still don't take it up.

There's a lot of different types of insurance that we think people should be getting that they're not getting. So, I don't think it's specific to health insurance, to be honest. I think there's just a lot of choices. A lot of economic decisions that people of all income types are making on a day-to-day basis, that from my perspective, it looks like they're under appreciating the value of the insurance that's available to them. And whether that's through outreach efforts or assisting people in the application effort, or just maybe just doing some public service announcements, just reminding people about the value of insurance maybe could help close some of this gap.

Hal Weitzman: If you're enjoying this podcast, there's another University of Chicago podcast network show that you should check out. It's called Not Another Politics Podcast. Not Another Politics Podcast provides a fresh perspective on the biggest political stories. Not through opinions and anecdotes, but through rigorous scholarship, massive data sets, and a deep knowledge of theory. If you want to understand the political science behind the political headlines, then listen to not another politics podcast part of the University of Chicago Podcast Network.

Okay. Matt, you mentioned that one reason that healthcare is so expensive in the US is because of the cost of drugs. And obviously that's been a huge political issue both on the right and the left. But you also point out the very common argument that one of the results of having high drug prices is that pharmaceutical companies are constantly looking for new medicines, which we all want. So, if we want to lower the price of drugs, we could. But we better be prepared to have fewer new medicines. So, just talk a little bit about that. Because for me, it captures some of the trade-offs that you're trying to talk about in this book.

Matthew Notowidigdo: Yeah, it was a great summary. And I think that for us, as we were writing that chapter, that was the main trade-off that we wanted to highlight. Which is the way the economists talk about it is static versus dynamic efficiency and just what that terminology means. Static efficiency means we don't want to let monopolists exercise their market power to raise prices. And what is a drug company with a drug that has a patent, if not a monopolist? So, that's a concern. But on the flip side, these profits that you can earn when you have a very profitable drug that's on patent in a sense, gives you the incentive to invest R&D to discover new drugs.

And that's the trade-off. And I think that trade-off can be resolved in different ways, but I don't think you can completely avoid it. Any attempt to really regulate drug prices and bring down drug prices substantially, is likely to reduce the pipeline of future drugs. Now, we don't quite know how strong that effect is, which is why this trade-off is hard. But it does exist, and it doesn't just exist. In theory, it exists because there's some very good evidence that drug companies direct their clinical trials and their investments to markets and consumers where they can expect to earn the greatest profits on their drugs. And so this is not just a hypothetical trade-off, I think it's a very real trade-off. And so that's what we wanted to try to highlight in the book.

Hal Weitzman: And it's just one of several of trade-offs that you talk about, right?

Matthew Notowidigdo: Yeah, that's right.

Hal Weitzman: So, talk about some of the others.

Matthew Notowidigdo: Oh, even outside of drugs?

Hal Weitzman: Yeah.

Matthew Notowidigdo: Yeah, sure. So, one of the examples from the history of Medicare, so when Medicare first started, the way it was designed was what health economists call a fee-for-service system. Meaning every time you went to the hospital, every time you went to a doctor's office, the hospital or doctor got a fixed fee paid for by Medicare. And the concern with that kind of system is that, well, now the hospital has an incentive to keep you in the hospital as long as possible because every day you're in the hospital, they're getting an extra fee from Medicare. Medicare completely transformed that system in the 1980s to what's called a prospective payment system. Where then, every time you were admitted to the hospital, you got paid a fixed lump sum payment based on whatever you went to the hospital for. You had a heart attack, here's a payment you get for every patient that gets a heart attack. Come in with pneumonia, here's another payment for everything with pneumonia.

It completely flips the incentives around because now, every day the hospital keeps you for a day longer it's racking up costs for the hospital, but they don't get paid anymore. They get paid this fixed lump sum. And so, we like talking about these as two extremes or two very different payment models you could think about that have their own trade-offs. The trade-off is do you want hospitals to try to keep people in the hospital as long as possible? Or on the other extreme hospitals in the current regime, Medicare currently, it gets reimbursed. Now hospitals essentially have an incentive to kick you out of the hospital as soon as possible. Which leads to people complaining about things like the so-called drive-through pregnancies where you're admitted as soon as you give birth and as soon as you're safe to get sent home. Now the hospital really has an incentive to send you home as soon as possible. They're not getting paid anymore if you happen to stay there longer.

Hal Weitzman: Right. I remember with my son, we were praying that he would come 20 minutes later so we could get another night in the hospital, because otherwise we would get kicked out.

Matthew Notowidigdo: And that's a wonderful example because some evidence that indicates that could actually be good for the mother and the child, but it's not in the hospital's financial interest to do that. And so this is the trade-off that we want the readers to struggle with, which is... Well, suppose you were running Medicare, which seems like a fun job. How would you think about the trade-off between hospitals being overly incentivized to keep people in the hospital longer than necessary? Or on the other hand, having an incentive to discharge people as soon as it's medically ethical to do it?

Hal Weitzman: And I love the way you talk about the trade-off there, because people would want both of those things. They would both want a nice long hospital stay so they could relax and convalesce, but they also wouldn't want it to be expensive.

Matthew Notowidigdo: Exactly. So, I think that's the challenge, is how do you get that right? And Medicare, you could think of what Medicare has been doing over the last several decades is really just experimenting to find that sweet spot. It's a little bit like the Goldilocks, with the porridge being too hot, and too cold, and just right. What we wanted to describe throughout the book, are the different options, the different ways of creating payment models and incentives that try to grapple with these trade-offs. And I don't think we've gotten it just right, but we've made some progress. And I think what's neat about some of the examples we talk about is that we're continuing to experiment with different ways of doing this and maybe continuing to look to other countries for what they've done might give us some inspiration going forward.

Hal Weitzman: Well, thank you from that segue, I wanted to talk to you about Sweden. Their new sites, which Sweden we kind of think of as the anti-US, right? It's just, in terms of developed countries, it's just so different the way that societies-

Matthew Notowidigdo: Well, it's more egalitarian and you could think of as maybe more socialist than capitalist, and they have universal healthcare. So yeah, on all those dimensions, it's quite different.

Hal Weitzman: Okay. But you do talk about, there's a link between socioeconomic status, education and health. And some interesting results that come from Sweden compared to the US.

Matthew Notowidigdo: Yeah, I've been talking about Sweden a lot on this dimension recently because it really is striking to me how all those differences we just mentioned. So Sweden has a much stronger safety net, a much stronger welfare state, universal healthcare, much less income and wealth inequality. And despite that, they have virtually the same correlation between socioeconomic status and health outcomes. And what I mean by that is that in the United States, high-income people have lower mortality rates and longer life expectancy, and that's true to Sweden as well. To about the same extent. People in the lower parts of the income distribution in Sweden are more likely to end up with chronic diseases, are more likely to die early. And it's about the same... The health economists summarize this as what's called the health gradient. The gradient is kind of being the slope between your income and health outcomes.

That gradient is about the same in Sweden as it is in the United States. Let me just give one more statistic that really I find very striking. Pregnant women in Sweden. If the women are in the lower parts of the income distribution, about 30% of them smoke during pregnancy and virtually none of the pregnant women in the top parts of the income distribution smoke during pregnancy. And again, this is a country that we think is doing a lot of things right when it comes to public health and when it comes to managing the healthcare system. And so for me, what I take away from this is just there's a lot of other things outside of the healthcare system itself that we want to try to understand if we want to understand why different types of individuals have different health outcomes.

Hal Weitzman: And the reason why that example is so interesting is because particularly as being a European, you think of the US as people will say, "Well, it's got great healthcare if you can afford it. If you're at the top." But what you're suggesting is that actually some of the same sorts of outcomes pertain as well in a country like Sweden.

Matthew Notowidigdo: I think that's a good way of thinking about it. Which is that even though Sweden has a healthcare system that's equitable in the sense that the low-income and high-income Swedes have similar access to similar quality of care, that doesn't seem to do very much to close these disparities in health outcomes by socioeconomic status. And given that fact, it really makes you think about other explanations, other interventions that you want to think about for closing these gaps. And I should say, when we submitted the proposal of our book... This is my first book, so I didn't really know how this process worked, but we submitted our proposal, it goes to academic reviewers, they give comments, and then you have to address those comments as you prepare the full manuscript. The main comment we got that we were told to address was that we didn't talk about social determinants of health as a way of understanding socioeconomic disparities and health outcomes.

And to be fair, this wasn't our own expertise, but we did recognize that this was important and something that we should pay attention to. So, that was a chapter that we added, and it's probably one of my favorite ones in the book because I talk about these facts, but I also talk about the types of interventions that we've tried to close these gaps. And it's a real mixed bag. So, to me that suggests there's a lot more we have to learn about really what's the most effective way of closing these disparities in health outcomes by income and wealth.

Hal Weitzman: Now, something that you point out that we've covered a lot in Chicago Booth Review is, this idea that insurance companies emerging, getting bigger and bigger, and so are hospital systems getting bigger and bigger. And you write that that's bad for consumers and it's bad for innovation. Tell us a bit more about that on what you think should be done about it.

Matthew Notowidigdo: So, there's a standard economic logic that anytime markets become concentrated, we get concerned that in those concentrated markets, the firms are going to be exercising monopoly power. They're not going to have incentives to innovate, the markets are not going to be competitive, and they're not going to produce good outcomes for consumers. That's not unique to healthcare. So, that's true in airline markets and automobile markets, just as it would be in healthcare. We have seen ongoing consolidation in both hospitals and on the insurance side, and in both cases, it doesn't look like that's been good for consumers. Some of the evidence here is after hospital mergers, it tends to raise prices. After insurance companies merge, it tends to increase premiums. If you look at other types of mergers in more specific settings, so think about one of the case studies we go through is dialysis clinics, which have been consolidating pretty rapidly in the last couple of decades.

It looks like after these clinics consolidate into large for-profit chains, those clinics do become more profitable, which is consistent with them having more market power and potentially just having some scale efficiencies with just being bigger. It also, quite tragically, looks bad for patient health outcomes. So, the patients actually become less likely to survive after they get treated at one of these clinics, after they've been acquired by a for-profit chain. For me, it's always raised this trade-off or this tension that when you have for-profit organizations in the healthcare sector, like any for-profit organization, they're going to have an incentive to grow in size and to get market power. And that could lead to some efficiencies, but it could also lead to some negative consequences for patient health outcomes. And if we're not paying attention to that, then we're going to get a very misleading picture of what it's like to have these businesses in the healthcare system

Hal Weitzman: And what can we do about it?

Matthew Notowidigdo: I would say, just to be candid, I've had a pretty negative view from some of these examples. So, the dialysis clinics is one example. There's also the case of firms investing in nursing homes, gobbling up nursing homes, merging together, also doesn't look like that leads to good health outcomes. And so then you might wonder, "Well, under what conditions is it good to have any corporate for-profit businesses involved in the healthcare sector?" I recently saw a presentation of a paper looking at IVF clinics, where when the IVF clinics were acquired by for-profit chains, it looks like it was good for their quality, good for their profitability, and led to a clear increase in the share of couples that actually ended up getting a live birth. So, that sounded completely transformative. So, I'm going through this to say that the way that I've started to think about this is, "Well, what types of healthcare are more like IVF?"

I should have said, this is in-vitro fertilization for couples struggling with infertility, and what types of healthcare are like dialysis and nursing homes? It's not hard to think about what some of those important differences could be. In IVF, the consumers tend to be informed, they're often using their own money, so they might be paying attention to whether that money's being spent properly. Or a lot of nursing home patients and dialysis patients might not be paying much attention to where they're going and whether the provider's any good. They might not have a lot of agency in those choices. And so these are my speculative thoughts on, "Well, what parts of the healthcare system do we want to have businesses involved in and what parts?"

Hal Weitzman: But even in the IVF example, people are paying more, you said?

Matthew Notowidigdo: No, no, they're not. They're actually not paying more. Clinics end up being more profitable, but the prices look roughly similar, and that's a price per cycle. But one of the cool things that the authors were able to show is that after the acquisition by these for-profit chains, they didn't need as many cycles and transfers in order to get a live birth. Which they interpreted not really as a response to investment or a capital infusion, the way that some of my colleagues that work in private equity would talk about it. But they actually interpreted it much more simply as just a knowledge transfer. That these chains had run this playbook before they knew the best practices, they knew the best way to space things and cycle things to give the couples the best chance of getting a live birth. And that knowledge transfer didn't happen until they'd been acquired.

And so, you could think of other examples where the best practices are diffusing slowly, and it's possible that as these clinics get gobbled up into larger organizations, that they become both more efficient in the economic sense. Like more profitable on a profits per patient sense, and the patients are happier with the quality of the care. I basically am using this IVF example as a possibility result that, that can happen. I don't want to pretend that that happens most of the time. Because there could be other settings that are more like the dialysis clinics and the nursing homes, where as soon as the for-profit organizations come in, you see a lot of these negative downstream health outcomes. In my mind, I compare this a lot to for-profits in the education sector, which has also been a huge mixed bag. And it's probably fair to say, on average, it probably hasn't been all that positive. So, you have to think about how you're going to design and regulate the market to make sure that when for-profit organizations come in, that they don't do more harm than good.

Hal Weitzman: Okay. Well, it sounds like that's a relatively positive note. So, let's leave it there on that hopeful note. Matt Notowidigdo, thank you so much for coming on the Chicago Booth Review Podcast and unpicking this complex topic with us.

Matthew Notowidigdo: Great. Thanks for having me.

Hal Weitzman: That's it for this episode of the Chicago Booth Review Podcast, part of the University of Chicago Podcast Network. To read an excerpt from Matt Notowidigdo's and Tal Gross's book, go to our website, Chicagobooth.edu/review. When you're there, sign up for our weekly newsletter, so you never miss the latest in business-focused academic research. This episode was produced by Josh Stunkel. If you enjoyed it, please subscribe, and please do leave us a five-star review. Until next time, I'm Hal Weitzman. Thanks for listening.