Northwestern Health Insurance Research Finds More Costs – Chicago News

Health Insurance Research

Let’s explore some of the most interesting stories that have emerged from Chicago business schools this week.

Even for the Insured, a Hospital Stay Has Surprising CostsKellogg Insight

Health insurance is truly a magical mystery tour of breathtaking anxiety, sometimes worse than you might think! New research explores the consequences of hospitalization on insured versus uninsured patients, which “stretch well beyond out-of-pocket costs to include impacts on credit and long-term earnings.”

In a study co-authored by Northwestern Kellogg Associate Professor of Strategy Matthew Notowidigdo, UC-Santa Cruz’s Carlos Dobkin, and MIT’s Amy Finkelstein and Raymond Kluender, the researchers found that “those without insurance ended up, on average, with $6,000 more in unpaid debt four years after being hospitalized than if there had been no admission. That is 20-times higher than those with insurance, who averaged a $300 increase in such debt four years post-hospitalization.”

Notowidigdo writes:

“We could really see how a person’s financial picture evolved after they spent time in the hospital. Hospital admissions have both financial and labor market consequences that go well beyond out-of-pocket costs but may stop short of bankruptcy. Health insurance, while beneficial, doesn’t cover all of these well enough. Individuals and policymakers need to understand that.”

You can read the full article here.

Historically Black Schools Pay More to Issue Bonds, Researchers FindMendoza Ideas & News

A new Journal of Financial Economics paper finds that racial animus is the primary driver of why “historically black colleges and universities (HBCUs) pay higher fees to issue tax-exempt bonds than non-HBCUs.”

What’s in a (School) Name? Racial Discrimination in Higher Education Bond Markets,” co-authored by Viola D. Hank Associate Professor of Finance at Notre Dame‘s Paul Gao, along with Drexel’s Casey Dougal, Duke’s William J. Mayer, and the University of Washington’s Christopher A. Parsons, found evidence that contradicts a passage from Milton Friedman’s book Capitalism and Freedom, which contends that “economic development deters the expression of discrimination, racial or otherwise.”

After the researchers reviewed underwriting fees—“the fees that underwriters charge a school to bring a bond offering to investors”—they discovered that “HBCU issuance costs were about 20 percent higher than for non-HBCUs,” largely due to the fact that it’s “more difficult for underwriters to find buyers for the HBCU bonds,” particularly in.

Louisiana, Alabama, and Mississippi, where HBCUs pay “underwriters three times more to place their bonds relative to HBCUs in other states.”

According to the article:

“The paper presents several potential solutions to the problem, from lowering the price point for investors to enter this market, to making the associated state tax benefit transferable, to a federal law that designates HBCU bonds as triple tax exempt, applying to federal, state and local taxes.”

You can read more about the research here.

Red Clover Reader Creates An Online Marketplace for Diverse, Educational Children’s BooksGies School of Business Blog

The Gies-operated iVenture Accelerator enabled early stage education tech startup Red Clover Reader to secure $15,000 in marketing and product development funding.

Co-founded by University of Illinois students Melanie Keil (a master’s student in applied health sciences) and her fiancé Armand Tossou (a Ph.D. in applied economics), Red Clover Reader “solves the lack of cultural diversity in children’s literature by connecting parents and self-published and independent authors of children’s books on an online platform that facilitates the co-creation and dissemination of more culturally diverse and value-focused content.”

Keil and Tossou / Photo via

Toussou writes, “iVenture has been a tremendous help for us because it’s both an accelerator and incubator for top student ventures. It’s provided us with mentorship and connected us with a lot of people. It’s a cohort thing. We can interact with anyone on other teams in terms of feedback and connections.”

Red Clover Reader’s goal to capture 5 percent of the $1 billion market for books and related merchandise.

Toussou adds, “We are trying to help parents discover a better alternative to the content they find online that they don’t feel good about letting their kids consume.”

You can read the full article here.


About the Author

Jonathan Pfeffer

Jonathan Pfeffer joined the Clear Admit and MetroMBA teams in 2015 after spending several years as an arts/culture writer, editor, and radio producer. In addition to his role as contributing writer at MetroMBA and contributing editor at Clear Admit, he is co-founder and lead producer of the Clear Admit MBA Admissions Podcast. He holds a BA in Film/Video, Ethnomusicology, and Media Studies from Oberlin College.

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