Jonathan Gruber’s research while affiliated with Boston University and other places

Policy Points Cell and gene therapies (CGTs) offer treatment for rare and oftentimes deadly disease, but their prices are high, and payers may seek to limit spending. Total annual costs of covering all existing and expected CGTs for the entire US population 2023–2035 to amount to less than $20 per person and concentrate in commercial and state Medicaid plans. Reinsurance fees add to expected costs. Policies that improve coverage and affordability are needed to assure patient access to CGTs. Context Cell and gene therapies (CGTs) offer treatment to rare and oftentimes deadly diseases. Because of their high price and uncertain clinical outcomes, US insurers commonly restrain patient access to CGTs, and these barriers may create or perpetuate existing disparities. A reconsideration of existing insurance policies to improve access and reduce disparities is currently underway. One method insurers use to support access and protect them from large, unexpected claims is the purchase of reinsurance. In exchange for an upfront per‐member‐per‐month (PMPM) premium, the reinsurer pays the claim and rebates the insurer at the end of the contract period if there are funds leftover. However, existing reinsurance plans may not cover CGTs or charge exorbitant fees for coverage. Methods We simulate the incremental annual per‐person reinsurer costs to cover CGTs existing or expected between 2023 and 2035 for the US population and by payer type based on previously published estimates of expected US spending on CGTs, assumed US population of 330 persons, and current CGT reinsurance fees. We illustrate our methods by estimating the incremental annual per‐person costs overall payers and to state Medicaid plans of sickle cell disease–targeted CGTs. Findings We estimate annual incremental spending on CGTs 2023–2035 to amount to$20.4 billion, or $15.69 per person. Total annual estimated spending is expected to concentrate among commercial plans. Sickle cell–targeted CGTs add a maximum of$0.78 PMPM in costs to all payers and will concentrate within state Medicaid programs. Reinsurance fees add to expected costs. Conclusions Annual per‐person costs to provide access to CGTs are expected to concentrate in commercial and state Medicaid plans. Policies that improve CGT coverage and affordability are needed.

Declining labor force participation of older men throughout the 20th century and recent increases in participation have generated substantial interest in understanding the effect of public pensions on retirement. The National Bureau of Economic Research's International Social Security (ISS) Project, a long-term collaboration among researchers in a dozen developed countries, has explored this and related questions. The project employs a harmonized approach to conduct within-country analyses that are combined for meaningful cross-country comparisons. The key lesson is that the choices of policy makers affect the incentive to work at older ages and these incentives have important effects on retirement behavior.

Public health systems are dominant in much of the world, but often face fiscal constraints that lead to rationing of care. As a result, private sector healthcare providers could in theory beneficially supplement public systems, but evaluating the benefits of private alternatives has been challenging. We evaluate a private supplement to the free public health system for one of the world’s deadliest health problems, diabetes. We estimate enormous impacts of the private supplement, increasing the share of those treated who are under control by 69%. This effect arises through both improved treatment compliance and health behavior. We find diabetes complications fall in the short run, and that the net costs of this intervention are one-third of the gross costs. The returns to private care do not appear to reflect more productive delivery but rather more attachment to medical care, offering lessons for improving the public system.

Gene therapy is a new class of medical treatment that alters part of a patient’s genome through the replacement, deletion, or insertion of genetic material. While still in its infancy, gene therapy has demonstrated immense potential to treat and even cure previously intractable diseases. Nevertheless, existing gene therapy prices are high, raising concerns about its affordability for U.S. payers and its availability to patients. We assess the potential financial impact of novel gene therapies by developing and implementing an original simulation model which entails the following steps: identifying the 109 late-stage gene therapy clinical trials underway before January 2020, estimating the prevalence and incidence of their corresponding diseases, applying a model of the increase in quality-adjusted life years for each therapy, and simulating the launch prices and expected spending of all available gene therapies annually. The results of our simulation suggest that annual spending on gene therapies will be approximately $20.4 billion, under conservative assumptions. We decompose the estimated spending by treated age group as a proxy for insurance type, finding that approximately one-half of annual spending will on the use of gene therapies to treat non-Medicare-insured adults and children. We conduct multiple sensitivity analyses regarding our assumptions and model parameters. We conclude by considering the tradeoffs of different payment methods and policies that intend to ensure patient access to the expected benefits of gene therapy.

Recent debates over health care reform, including in the context of the Military Health System (MHS) and Veterans Administration, highlight the dispute between public and private provision of health care services. Using novel data on childbirth claims from the MHS and drawing on the combination of plausibly exogenous patient moves and heterogeneity across bases in the availability of base hospitals, we identify the impact of receiving obstetrical care on versus off military bases. We find evidence that off-base care is associated with slightly greater resource intensity, but also notably better outcomes, suggesting marginal efficiency gains from care privatization. (JEL H51, H56, I11, I18, J13, L33)

International Reference Prices (IRP), also called External Reference prices (ERP), are widely used across developed nations. IRPs use the prices paid in other countries to either inform negotiations with the pharmaceutical industry or as a cap on market prices. We review the application of IRPs to cap the prices of negotiated outcome in the context of U.S. proposals to change the way prescription drug prices are established for the Medicare program. We examine the economic, political and administrative issues associated with the use of IRPs and we summarize the evidence on their impacts.

We model automatic trigger policies for unemployment insurance by simulating a weekly panel of individual labor market histories, grouped by state. We reach three conclusions: (i) policies designed to trigger immediately at the onset of a recession result in benefit extensions that occur in less sick labor markets than the historical average for benefit extensions, (ii) the ad hoc extensions in the 2001 and 2007-2009 recessions compare favorably ex post to common proposals for automatic triggers, and (iii) compared to ex post policy, the cost of common proposals for automatic triggers is close to zero.