What Gas Stoves, Minimum Wage Laws and the Military Teach Us About Health Policy
June 8, 2023
Photo by Justin Leitner
Health economist Sayeh Nikpay gives us a sneak peek at some exciting papers coming out of one of the country’s premier health economics conferences.
Scroll down to listen to the full episode, read the transcript and get more information.
Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!
Dan Gorenstein: School’s wrapping up. The sun is shining. The ocean is calling. And for America’s health economists, that can only mean one thing.
Sayeh Nikpay: It’s time for ASHEcon, baby!
DG: Put down that popsicle. Pick up that laser pointer. Today, exciting new research from one of the premier health economics conferences. From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.
DG: We’re joined by Tradeoffs Senior Research Advisor and University of Minnesota health economist Sayeh Nikpay. Welcome back, Sayeh.
SN: Thanks, Dan. Nice to see you.
DG: And I hear some congrats are in order. You’re officially a tenured professor? Big stuff!
SN: Guess the news is out of the bag. Thanks so much.
DG: It must be a huge relief and you must be really excited that you’re a tenured professor.
SN: Very excited and very tired. It’s been many years.
DG: Very cool. So look Sayeh — again congratulations — next week is the annual meeting of the American Society of Health Economists, also known as ASHEcon.
And we asked you to wade through some of the many, many studies being presented there. Actually, do you know exactly how many there are?
SN: So I asked the organizers for the official count and it’s a whopping 637 new pieces of research.
DG: That is astounding and I hope we didn’t ruin too many of your weekends with this assignment.
SN: Oh, no actually it was just a couple of super long transatlantic flights, so it’s all good. It was either reading abstracts or watching Top Gun for nine hours straight.
DG: Yes, right. Definitely. Abstracts top, top Gun. Ten times out of ten. So here you are. You’ve got your papers, you’ve got your favorite studies. What do we start with?
SN: So this first paper is by Mark Meiselbach of Johns Hopkins and Jean Abraham of my very own University of Minnesota. Not trying to stack the deck by picking my own colleague, Dan, it only happened because I covered up the authors of all these abstracts before I reviewed them!
DG: The more people from the Land of 10,000 Lakes, the better. So tell me, what’s it all about?
SN: Well lucky for me, it combines a couple of economists’ favorite topics: minimum wage laws and employer-sponsored health insurance.
DG: Oofta! That was a little Minnesota reference for you there, Sayeh.
SN: Yes, thank you! I feel seen!
DG: But that is a wonky one-two punch right out of the gate.
SN: I know, but these issues also affect a ton of people. I mean, more than 150 million of us get health insurance through work including me. And about 1 in 3 workers in the U.S. make less than 15 dollars an hour. So this study tackles this kind of perennial debate that comes up when states or even Congress consider raising the minimum wage.
News montage: Crowd: Hey McDonalds, you can’t hide, we can see your greedy side // Trump: We have to help our small businesses. How are you helping small businesses when you’re forcing wages? // Sanders: $7.25 an hour is a starvation wage. That’s what it is.
DG: Ah yes, the age old will higher wages actually be bad for workers debate.
SN: Right, and there’s actually a puzzle here, Dan, because economic theory tells us that increasing the minimum wage should cause businesses to cut jobs. But loads of real world data shows us that they actually don’t do that. One possibility here is that employers are actually just responding to these laws in some other way than cutting jobs. And this paper shows that yes, indeed they are.
DG: Interesting. So if they’re not laying people off then how are they — pardon the pun — compensating for this rise in wages?
SN: Very good, Dan. What these researchers find, Dan, is that for every one dollar a state’s minimum wage goes up, we see fewer employers offer health insurance — almost a one percentage point decrease.
DG: Got it. So instead of laying people off, these employers are paring back their benefits.
SN: Exactly, and not surprisingly, we’re more likely to see this reaction at small employers and those with a lot of low wage workers — precisely the kinds of businesses most sensitive to the effects of these laws and to the price of health insurance.
DG: Which, I think last I checked, now costs employers something like 16 grand a year to cover a worker and their family, right?
SN: Yeah, now there is an oofta! And among those firms that do still offer health insurance, the study’s authors find that they tend to actually raise their deductibles. It’s not by a lot, but it’s a little. Overall, though, what’s heartening is that this paper finds that there’s no change in the uninsured rate in states that pass these minimum wage mandates.
DG: Wow, so that means people are finding insurance somewhere else when their boss stops offering it. Sayeh, what’s the big takeaway for policymakers who might be considering a minimum wage hike?
SN: Well, there’s a lot of good reasons to raise people’s pay. I think that’s why state policymakers are thinking about this a lot. But if lawmakers do it, they might want to bolster people’s insurance options outside of work. That could mean bigger state subsidies in the ACA marketplace or maybe, expanding Medicaid.
DG: Help soften the blow for workers whose employers do back out of the insurance game.
DG: Okay, strong first paper. What’s next?
SN: So this second paper is about something you guys don’t talk about much on Tradeoffs. It’s about cooking. And just to warn you now, Dan, it’s kind of sad.
DG: Okay, alright. I’m ready.
SN: It’s by Thomas Thivillon from the Bordeaux School of Economics in France. And in it, Thomas looks at this push that the country of Peru made in 2012 to get more families to stop cooking by burning wood — something a lot of the developing world still relies on. It pollutes the air and can be dangerous to breathe, especially for kids. So the government started giving away these vouchers to low income families to buy and cook with a kind of gas called liquified petroleum instead.
DG: Makes sense — kind of like how we here in the U.S. subsidize cleaner electric cars or solar energy.
SN: Right, and these subsidies worked like a charm! People were 150% more likely to use gas as a result.
DG: I’m sensing a ‘but’…
SN: Yeah, here it is, Dan. Unfortunately, the author finds that this program — a program explicitly designed to improve child health — had these terrible unintended consequences. Babies from families who got these subsidies were actually 15 percent more likely to die. Between 2010 and 2020, the author estimates this policy might have been responsible for as many as 6,600 extra deaths.
DG: That is terrible.
SN: Yeah, and the paper also finds higher rates of respiratory infections in kids and anemia in adult women in these homes that switched to gas.
DG: Sayeh, this just sounds like the ultimate case of a well intentioned policy gone terribly wrong. Do we have any idea why it went so bad? I’m guessing policymakers were going off some evidence that gas is a cleaner and healthier option.
SN: Yeah they did. I mean this is a policy idea endorsed by the UN and the World Health Organization. The data suggest biomass cooking, where you burn wood or other stuff, releases at least 10 times more of this one especially dangerous air polluting particle compared to gas.
DG: So switching seems like kind of a no brainer.
SN: That’s right. But the hitch here, Dan, is that gas also emits some of its own nasty byproducts. And this study basically finds that in designing this policy, Peru focused on what people were cooking with — not where they were cooking. Before these subsidies arrived, most of these families cooked outdoors.
DG: Got it. So there may have been some bad stuff in the air, but at least it was outside.
SN: Exactly. When they started using gas, they were more likely to move their cooking inside. And the study finds this policy’s negative effects hit homes with no ventilation the hardest.
DG: I guess my last question here, Sayeh, is obviously this study is a good reminder for all policymakers to really think through potential unintended consequences. But are there other more specific takeaways for people in the U.S.?
SN: Yeah I think there are. Policymakers here are also grappling with a growing body of research around the potential dangers of gas stoves both for our indoor air quality and our climate. Dozens of cities in California, New York and Massachusetts have passed bans on gas appliance hookups in new buildings. I will say, for me personally, reading this study was enough of a nudge to get me to talk to my husband, who loves cooking with gas, to consider some non-gas options for our own home.
DG: Very good, Sayeh, Thanks for sharing that surprising and really sobering study. Just one paper left, and we’ll tackle it after the break.
DG: Welcome back. We’re rejoined by University of Minnesota health economist Sayeh Nikpay. She’s a longtime friend of the pod and today, she’s giving us a preview of some of exciting new health economics research — papers that will be presented next week at ASHEcon, a major meeting of the country’s health economists. So Sayeh, this year’s meeting is in St. Louis, the ol’ Gateway to the West. Before we get back to the papers, do you have a piece of trivia or a hot tip to share with people heading there next week?
Sayeh: So this isn’t about St. Louis itself, but a fun fact is I’m actually driving 9 hours to ASHE in a minivan full of grad students.
DG: Good Lord. Then you’re going to love my tip because you’re going to need it. There is this amazing bar called the Venice Cafe. It is full of the most strange and beautiful things all over the wall. It’s got a flowing fountain in the basement. Truly a one of a kind watering hole, which is my favorite thing.
SN: That sounds great. See you there for a beer next week?
DG: Probably two or three after the last couple of weeks I’ve been having.
SN: We might end up in the fountain!
DG: It is small. Okay, so we’ve got one paper left on your list of faves. What’s this one all about?
SN: So it’s called “How Power Shapes Behavior: Evidence from Physicians” and it’s by Stephen Schwab at Baylor University and Vini Singh at Carnegie Mellon University.
DG: Power huh? Like what kind of power are we talking about?
SN: Power dynamics, Dan — the kind that play out in all of our lives every day. They’re especially prevalent in health care when you think about it: dynamics between doctors and nurses, docs from one specialty versus another. And of course, between doctor and patient — and that’s the relationship at the center of this study.
DG: Fascinating. How do you measure something as amorphous as power, Sayeh?
SN: That’s one reason why I picked this study — [because] the authors did something really creative. They looked for a place where power is more out in the open making it easier to study, and that place is the military.
So the authors took data from the military health system and looked at how the rank of emergency room doctors compared to the rank of their patients.
DG: And just to sort of baseline for everybody, in the military it’s possible for a patient to outrank their doctor or vice versa?
A Limerick on How Power Shapes Behavior
Sayeh wanted to make sure we shared with listeners a special limerick that this study’s coauthor Manasvini Singh wrote about her paper’s findings. Here it is:
Is power too beckoning a call?
Since doctors are human after all,
We took the military’s example
Rank predicted care in our sample,
The mighty were heeded o’er the small.
SN: Yeah, I actually didn’t know that, but it is. And since doctors and patients are randomly assigned to each other in the ER, that creates an ideal experimental setup to answer this question: Do doctors care for patients differently given their patients’ power status?
DG: Okay, and just because there are lots of sort of moving parts, I want to make sure I’ve got this. These authors are using the differences in military rank as a way to study power dynamics between doctors and patients. And the question [is]: Do doctors treat their patients differently if, for example, they’re a lieutenant but their patient is an admiral?
SN: That’s exactly right. And what the researchers find is that when a patient outranks their doctor, that doctor spends about 5 percent more resources on that patient. In other words, higher powered patients are more likely to get prescribed opioids, to have tests run, and get this Dan, they’re even less likely to end up in the hospital within 30 days.
DG: This is amazing. I mean, this power dynamic has real measurable effects on people’s health.
SN: Yes! And the researchers also find this thing we call in economics a spillover effect. When that higher ranking patient shows up in the ER, their doc also spends 2% fewer resources on other lower ranked patients.
DG: Right, and I’m betting lots of us have felt at one time or another the effects of this. So obviously, Sayeh, there are lots of layers here and I got to imagine there’s more power at play than just a person’s rank. Did the authors look at how this interacts with factors like race or gender?
SN: Great question, Dan. The researchers do slice and dice this data in a bunch of ways. Here’s a couple topline findings.
White doctors spend more effort on lower ranking patients who are white than on those who are Black. They also find that female doctors treat male patients about the same regardless of rank. And that female doctors spend more effort overall — even doing more for their lower ranking patients than male doctors do for their higher ranking male patients.
DG: A lot to chew on with this one paper, and the paper will be linked in the show notes for today’s episode and on our website at tradeoffs.org. Just to wrap up here, Sayeh, I guess I’m wondering how this paper applies to the rest of us because the military is obviously a specific place, a unique culture.
SN: You’re totally right, Dan. The setting is unique. But I think this study adds to the broader literature in a couple of important ways. One, it reinforces other research on implicit biases…
DG: Real quick, Sayeh, and implicit biases are basically subconscious assumptions we have about other people.
SN: Right, and this study shows those invisible biases have real effects on people’s health care experiences. Second, the paper builds on some other studies suggesting that at least some patients may do better when their provider is the same race or perhaps is similar in other ways.
DG: I wonder if people are going to try to recreate this sort of study to try to build off of it. This is important, fascinating work. And just in general, thank you so much for taking us on this tour of some of these papers. It just gives some insight into just what interesting, fascinating, important questions economists like you and your colleagues are asking. Sayeh, thanks so much and really looking forward to seeing you in St. Louis next week.
SN: Thanks Dan. See you under the Arch!
DG: I thought we were going to the bar. For more information about the papers discussed on today’s episode, including a limerick, visit tradeoffs.org.
And if you want more recaps of new studies, make sure you’re subscribed to our weekly Research Corner newsletter at tradeoffs.org/research. If you’re attending ASHE in person, check out our table in the exhibit hall and don’t miss our plenary session during lunch on Monday.
I’m Dan Gorenstein. This is Tradeoffs.
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Working Papers Featured in the Episode:
Do Minimum Wage Laws Affect Employer-Sponsored Insurance Provision? (Mark Meiselbach and Jean Abraham, 1/16/2023)
Saving lives with cooking gas? Unintended effects of targeted LPG subsidies in Peru (Thomas Thivillon, 9/6/2022)
How Power Shapes Behavior: Evidence from Physicians (Stephen Schwab and Manasvini Singh, 3/20/2023)
Select Other Research and Reporting on Gas Stoves, Minimum Wage Laws and the Provider-Patient Relationship:
How the Minimum Wage Affects the Health Insurance Coverage, Safety Net Program Participation, and Health of Low-Wage Workers and Their Families (Fredric Blavin and Anuj Gangopadhyaya, Urban Institute, 7/29/2022)
The gas stove regulation uproar, explained (Rebecca Leber, Vox, 1/11/2023)
Racial Concordance and the Quality of Medical Care: Evidence from the Military (Michael Frakes and Jonathan Gruber, NBER, 12/2022)
Sayeh Nikpay, PhD, MPH, Tradeoffs Senior Research Advisor; Associate Professor, University of Minnesota School of Public Health
The Tradeoffs theme song was composed by Ty Citerman, with additional music this episode from Blue Dot Sessions and Epidemic Sound.
This episode was produced by Leslie Walker and mixed by Andrew Parrella.
Additional thanks to: Michelle Avaroma and David Slusky