Gottlieb talks health care labor markets and shares his interest in economics.
Headshot of Associate Professor Joshua Gottlieb
Harris Public Policy Associate Professor Joshua Gottlieb

Associate Professor Joshua Gottlieb joined the University of Chicago Harris School of Public Policy faculty in the 2020 academic year. An applied micro-economist, his research focuses on the economics of the U.S. health care system, including the organization of insurance markets, physician behavior, administrative costs, and the labor markets for physicians and other health care workers. 

Professor Gottlieb recently sat down with Harris Public Policy to answer questions about his work and research agenda: 

What got you interested in economics?

I was lucky enough to take a seminar with Larry Summers in my freshman year of college. I saw that this was a field that cared about obtaining rigorous answers to real world problems. Larry taught me that economics allows you to ask any question, however impolitic the question or answer. Economists care about truth and questions that matter to the real world. 

Another influential professor was Ed Glaeser, who showed me how Chicago price theory brings analytical rigor to these answers.

Now you work primarily on health economics. Why is that?

Because it’s hard. Health policy is a genuinely complex area, with difficult tradeoffs and opaque institutions. To even think about the right policies, we need answers to empirical questions about how the health sector works. This means that rigorous empirical work is extremely valuable in this area, which makes me excited to work on it.

What is your current research about?

One of the areas that I’m quite excited about researching now is the administrative challenges that pervade the US health care system. For instance, figuring out who is paid, and how much, through billing process. This issue is much harder and much richer than previous work has recognized. In general, because there is such substantial administrative complexity in health care, measuring it is very difficult. It has been an eye-opening project as we struggle to make sense of the data, and figure out how we can use messy data about a messy system to learn about and better inform policy.

Are there any initial conclusions you’ve been able to draw from this work?

One of the most striking things we’ve observed in this research agenda is how extreme the paperwork challenges seem to be in Medicaid. It appears to be a real issue for doctors and health care providers and influences how they think about doing business with Medicaid. While the research does suggest that we should be very cautious about jumping to conclusions that public insurance programs are going to be run less efficiently than private ones, it also points to ways that policy makers can think about improving Medicaid. It has also opened up new types of questions to think about in health care economics.

The prices that doctors charge seem obscure and arbitrary to many people. Have you learned where these prices come from?

Much of my research identifies classic economic forces that operate in health care settings. This is what I’ve found in my work on physician pricing. We have shown that Medicare is such a large participant in these markets that its prices act as a clear reference point for private negotiations. This means that, as large as Medicare is on its own, its influence over the health care sector extends even to the private market. At the same time, we find that private contracts do negotiate around the Medicare rates in light of particular market conditions. For example, when physicians get closer to having a local monopoly, Medicare’s rates become less influential and the physicians negotiate higher markups. All of these responses are exactly what economic theory would predict. Even with the health care system’s complexity, the outcomes we see reflect these pressures.

Can you tell us about your ongoing work on health care labor markets?

Health care is an exciting setting to consider how labor markets operate. First of all, it’s large—in terms of its share of GDP and its share of the labor market. It encompasses a huge range of skills from low skill occupations to doctors and executives.

At the high end, it has a set of workers who have very substantial periods of training and investments in their human capital. Doctors are one of the most common occupations in the top one percent of the income distribution. If physicians are spending a long time in training compared to other high earners, then it’s quite instructive to think about what kind of return they receive on that time, and how it differs across doctors and specialties. 

You have also worked on urban and housing economics. What are your major conclusions in that area? 

In many parts of the U.S., the process of getting a permit to build, for example, an apartment building is extremely onerous. And while there may be some justification for each individual rule, when you put it all together it looks a lot less like an effort to ensure safe housing than an effort to impose death by a thousand cuts.  The cities with the best job opportunities put so many rules on these projects, imposing high costs to comply with all of them, that we’re practically banning new housing where it’s most needed.