FAIR Health Board Access Interview with Marcella Alsan, MD, PhD

March 17, 2022

A prominent applied microeconomist and Professor of Public Policy at the Harvard Kennedy School, Dr. Marcella Alsan was elected to the FAIR Health Board of Directors in June 2021. With a primary research focus in health inequality and structural racism, Dr. Alsan was honored as a September 2021 MacArthur “Genius” Fellow for her work in examining health disparities resulting from discrimination. Prior to becoming an educator, Dr. Alsan served in an Infectious Disease Fellowship at Massachusetts General Hospital. Having published broadly about her research in health inequality and racism, Dr. Alsan currently serves on the editorial boards of Science and the Journal of Health Economics. She also serves as Co-Chair of the US Health Care Delivery Initiative of Abdul Latif Jameel Poverty Action Lab based out of the Massachusetts Institute of Technology. She received her undergraduate, master’s and doctoral degrees from Harvard University and her MD from Loyola University. Dr. Alsan spoke recently with FAIR Health Access about her economic research regarding health disparities and its implications for the future of the healthcare landscape.

FAIR Health: What led you to pursue a career in medicine and applied microeconometrics research?

Marcella Alsan: My lifelong dream was to be a doctor working in underserved areas in developing countries. I had opportunities through my medical school and residency to work in parts of the South Side of Chicago, Ecuador, what was formerly known as Swaziland, Uganda and Peru. All of these experiences led me to believe that although medicine was part of the solution in terms of helping people recover when they were ill or preventing disease, many of the problems in terms of who was at risk and outcomes conditional on getting sick were associated with socioeconomic status and the distribution of resources. That led me to believe that I needed to understand economics at a high level. I could have gone in a lot of different directions, but I ended up doing a PhD in Economics. It was not at all a calling. But I've come to realize just how useful a tool it is both to framing the different social dilemmas in the world—on the conceptual side, how to break them down, understand and digest them a little bit better, and formalize and highlight the real underlying issues—and on the empirical side, to drawing causal inferences using a variety of different methods.

FH: You received the MacArthur “Genius” Award in September 2021 for your research on the role of structural racism in health inequality. Your research on the United States Public Health Service’s Syphilis Study at Tuskegee1 has received particular attention. How did the syphilis study affect health-seeking behaviors among Black males since the time that the study’s purpose became known in the early 1970s?

MA: You can sometimes understand problems and social dilemmas using the frameworks from microeconomics theory. The syphilis study was a perfect example of that. Marianne Wannamaker’s and my hypothesis was that, just like any sort of negative information shock that is more relevant for a particular group, you would expect that group to rationally update their beliefs and their behaviors would follow accordingly. That's actually a very rational, Bayesian framework. In this case, it was being applied to the situation of a horrific, exploitative experiment that targeted poor Black men in the South. [The nature of the study] was disclosed at a particular point of time in 1972.

We hypothesized that individuals who felt more socially proximate to the people who were experimented on would, once the information was revealed, update their beliefs accordingly based on the presumed beneficence or malfeasance associated with the healthcare sector, and that would affect their utilization. From a theoretical aspect, these are completely rational, predictable behavioral responses to a negative shock. From a metrics standpoint, because the disclosure event happened at a particular time and because this experiment itself targeted certain types of people in terms of their demographics and geographical location, we could leverage all of those things in our analysis to draw causal inference. Our baseline result was that we could explain about a third of the life expectancy gap between Black and white older men for the ensuing decade or so after the 1972 revelation based on both lower utilization patterns, delayed care and possibly—and this was harder to identify with the data we had at hand—less trust in the public health messaging regarding smoking behavior, etcetera. That was the work that we published in the Quarterly Journal of Economics.

One of the limitations of the methods that we used was that we couldn’t bring the analysis to the modern period. Generally, a lot of things start to shift over time, but anecdotally, it does seem like people still talk about Tuskegee as something that influences their views. In addition, we actually had quite a bit of outpouring from people whose family members were involved in some way or touched by the experiment. As a doctor, I’ve had people come up to me to express their gratitude, but as a research economist, that was a new experience for me.

FH: One of the courses that you teach at the Harvard Kennedy School is titled “The Economics of Infectious Disease.” What are some of the concepts and takeaways from the course?

MA: The course I teach involves understanding externalities—this idea that actors can take actions that affect the payoff, utility, profit of others who are not outside the price system. That basically encompasses all of infectious disease. It poses complications for classic basic welfare theorems of economics and a lot of measurement challenges. In the class, we talk about infectious disease as it relates to the welfare theorems, to measurement and randomized trials and quasi-experimental analyses.

We also discuss network analysis. Much of network theory was developed from infection models and how things spread throughout networks. Now it’s being used by social scientists to look at social networks. It comes full circle because you can leverage a social network to make progress on containing infectious diseases, for example. We also look at the challenges that infectious disease poses for things like market power. For most infectious diseases, unlike incentives for pharmaceutical innovation and research and development, we either want to prevent the disease through a vaccine, which is not a drug taken daily, or preclude the development of resistance [to a drug that treats infectious disease] and so should be used sparingly and only when absolutely necessary. That model, due to externalities and differential elasticity, predicts underinvestment. In the class, we discuss: What are the public policy responses to improve investment in preventives and in antibiotics? What are the current policy responses, and have they worked or have they failed?

FH: Given your role on the editorial board of the Journal of Health Economics, what areas of research in health economics do you think are under-studied and warrant greater attention?

MA: There's been a large amount of research on selection and health insurance markets. I think the Affordable Care Act brought that into sharp relief, because it had different plans, so you could look at selection on the types of provider networks, or the types of drug formularies. You also could look at the economics of developing these star ratings. I think the frontier is hopefully to look at what this all means for health equity, and the right way to structure a health plan at the local, state and national levels to ensure that we don’t see these rates of deaths that we've seen with COVID-19 that are so differential across race, ethnicity and socioeconomic groups. I think that's a health policy failure and I really hope that we see a lot of research trying to understand and correct that in economics and in health services research.

FH: To what extent has the uncertainty that pervades today’s healthcare landscape affected the way in which cost transparency is figuring into the national conversation on costs? What is the future of healthcare cost transparency?

MA: [Healthcare cost transparency] is an exciting example of how economic research really can matter. And that, paired with investigative journalism on topics like surprise billing and work that has looked at the variation in price more broadly, has been hugely informative and impactful for thinking about policy. I do think we need to understand that information on prices and plans is helpful, but possibly not enough, because how can people make time to acquire all that information? How do people know how to integrate over that information and decide the best thing that maximizes their welfare?

So, I think this transparency will be helpful. But I’m hoping it’s something we feed into policy and institutional changes, rather than putting the onus on individuals to try and sort through, because I think it will then probably widen gradients, as opposed to reducing them.

FH: FAIR Health has continued to lead as a source of independent and objective price and utilization information. How do you predict FAIR Health’s role in the healthcare sector will evolve?

MA: FAIR Health has a big role to play as a nonprofit and as a trusted resource. FAIR Health can inform and provide updates regarding the health of the country on an aggregate level—that’s a service that cannot easily be provided through any other institution. There is no national electronic medical system or national claims system. Obviously, some have access to data on fee-for-service Medicare, but that only covers people 65 and older. All-payer claims databases also are generally state by state. You’re really only getting snapshots of different populations. FAIR Health has the opportunity to paint a much more comprehensive picture of health and of illness, and I think they have a demonstrated track record and are broadly trusted, which is also important.

*FAIR Health Board interviews reflect the views of the Board member in his or her individual capacity and not necessarily those of FAIR Health or other organizations with which the Board member is affiliated.

1 The syphilis study, which took place between 1932 and 1972, was originally intended to study the natural history of untreated syphilis in Black males. Six hundred Black men, 399 of whom had syphilis, were originally enrolled. Participants were not provided with information about the study’s purpose and did not give informed consent. When penicillin became the common treatment for syphilis in the 1940s, participants with the disease were not given treatment. In 1972, the study was made public and was terminated shortly thereafter. See Centers for Disease Control and Prevention, “The Tuskegee Timeline.”