Bio

Matthew Grennan is an Associate Professor of Economics Analysis & Policy and Faculty Co-Director of the Robinson Life Science, Business, and Entrepreneurship program at the Haas School of the University of California, Berkeley. He was previously on the faculty at Wharton and Toronto and received his PhD from NYU Stern. He is also a Faculty Research Fellow at the National Bureau of Economic Research and a Senior Fellow at the Leonard Davis Institute of Health Economics.

Grennan’s research studies health care markets, products, and organizations using empirical and theoretical models from industrial organization economics. His work examines how complex incentives and imperfect information affect how health technologies are adopted, priced, and ultimately deliver value for society. It also informs recent business and public policy debates regarding price transparency, relationships between physicians and industry, regulation of new products, and antitrust concerns about market power in the health care sector. His research has been published in the top general interest journals in economics, management, and policy, including the American Economic Review, Journal of Political Economy, Management Science, and Health Affairs; and it has been funded through leading institutions such as the National Science Foundation and National Institute for Health Care Management.

Professor Grennan teaches in the areas of health care entrepreneurship, data analytics, and technology strategy. He has received teaching awards from Wharton, Toronto, and Poets & Quants.

 

Matthew Grennan

Associate Professor of Economic Analysis & Policy
Haas School, University of California, Berkeley
 

Research

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We develop a model where targeted payments from manufacturers have different estimated effects on prescribing for different doctors, prescribing can be biased at baseline, and prices are negotiated between payers and upstream suppliers. In estimates using market and  clinical data for statins 2011-12, AMC policy spillovers identify heterogenous payment effects, and payments are beneficial on net because they counteract under-prescribing.

Media: The Fix, LDI, MarketWatch

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Spillovers Across Categories in the Medical Device IndustryR&R @ Journal of Economics Management and Strategy, with Charu Gupta and Mara Lederman

Responses to new product introductions suggest that buyer-level spillovers represent up to half of all potential demand spillovers and one-third of the overall correlation in supplier shares across categories, with implications for firm strategy and antitrust policy for firms selling in multiple product categories.

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Relative to drug firm payments, device firm payments were: seven times as large as a percentage of industry revenue, more often related to product development and training, and more strongly correlated with physicians’ Medicare billing amounts. Top-paying firms dominate the most prominent device categories.

 

Media: Stat

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Mergers and Marginal Costs: New Evidence on Hospital Buyer PowerRAND Journal of Economics (2021), with Stuart Craig and Ashley Swanson

Mergers among a sample of US Hospitals 2009-15 result in little to no costs savings on average, despite large expected opportunities for such. Savings, when they occur, tend to be local, and offset by managerial costs of merging.

 

Media:  NBER Digest, Advisory Board, Modern Healthcare, Daily Caller, Axios

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Across a large number of important product categories, access to information on purchasing by peer hospitals leads to reductions in the prices hospitals negotiate for supplies. Asymmetric information about seller willingness to concede finds stronger support than a purchasing manager agency mechanism. Transparency decreases high prices, but does not affect low prices.

 

Media:  NYTimes, LDI, Knowledge@Wharton

Product testing can reduce consumer uncertainty, but also increase entry costs and delay entry. In a stent case study, no monitoring would severely depress demand; "post-market" monitoring would maximize welfare.

Media: AEA Research Blog, LDIKnowledge@Wharton, LSE Business Review

PURC Prize for Best Paper in Regulatory Economics (2018)

Prices vary widely across buyers of the same product. A structural model of demand and negotiated prices disentangles bargaining position variation due to heterogeneous preferences from bargaining abilities. Variation in bargaining abilities explains 79% of the price variation. Bargaining ability also has a large firm-specific component. 

Bargaining generalizes the traditional price competition model, fits this data better, and interacts with competitive effects in counterfactuals. Allowing different prices to different buyers can increase competition, so group purchasing must increase bargaining ability to compensate. 

 

Teaching

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HC Data Analytics

great mix of health data landscape, practicing data analytics in R, and bringing in experts to share their experience

Analyzing Scans

Med Tech Strategy

can't imagine a better-designed course to take before entering the medical devices industry

HC Entrepreneurship

totally changed the way I think and approach problems and business