What Does Health Reform Mean for the Health Care Industry? Evidence from the Massachusetts Special Senate Election

Mohamad M. Al-Ississ and Nolan H. Miller

American Economic Journal: Economic Policy, 2013, vol. 5, issue 3, 1-29

Abstract: We exploit the surprise election of Republican Scott Brown to the US Senate to evaluate the market's assessment of the impact of the recent US health reform legislation on the health care industry. We find that Brown's election was associated with abnormal returns of 2.1 percent and 6 percent for investments in the health care sector overall and managed care firms, respectively. Investments in the pharmaceutical sector experienced abnormal returns of 2.8 percent, while health care facilities (e.g., hospitals) experienced abnormal losses of 3.5 percent. Firms involved with Medicare Advantage benefitted more, while those involved with Medicaid Managed Care benefitted less from the election.

JEL-codes: D72 H51 I11 I18 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/pol.5.3.1
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Citations: View citations in EconPapers (8)

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