Leemore S. Dafny

Leemore S. Dafny

Bruce V. Rauner Professor of Business Administration

Leemore Dafny is the Bruce V. Rauner Professor of Business Administration at the Harvard Business School, and a member of the faculty of the Kennedy School of Government. Prior to joining Harvard in 2016, she served as Director of Health Enterprise Management, Herman Smith Professor of Hospital and Health Services Management, and a professor of strategy at the Kellogg School of Management at Northwestern University.

Professor Dafny’s research examines competitive interactions among payers and providers of healthcare services, and the intersection of industry and public policy. Her work has been published in academic journals such as The American Economic Review and The New England Journal of Medicine, and featured in popular media such as The New York Times and The Wall Street Journal. Current projects include studies of consolidation in the US hospital industry and the kidney dialysis industry, products and pricing on the public health insurance exchanges, co-payment coupons for prescription drugs, and the implications of for-profit ownership of insurance companies.

Professor Dafny graduated summa cum laude from Harvard College and worked as a consultant with McKinsey & Company prior to earning her PhD in economics from the Massachusetts Institute of Technology. She has won several teaching awards as well as Kellogg’s leading research prize, the Stanley Reiter Best Paper award. Professor Dafny is a research associate of the National Bureau of Economic Research, an associate editor of Management Science, and a board member of the American Society of Health Economists and the Health Care Cost Institute.

Professor Dafny’s expertise spans both the public and private sectors. She serves on the Panel of Health Advisers for the Congressional Budget Office. In 2012-2013, she was deputy director for healthcare and antitrust in the Bureau of Economics at the Federal Trade Commission. She also advises companies, government agencies, and nonprofits on a variety of issues including antitrust matters, strategic decisions, and public policy.

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When Discounts Raise Costs: The Effect of Copay Coupons on Generic Utilization

Branded pharmaceutical manufacturers frequently offer “copay coupons” that insulate consumers from cost-sharing, thereby undermining insurers’ ability to influence drug utilization. We study the impact of copay coupons on branded drugs first facing generic entry between 2007 and 2010. To overcome endogeneity concerns, we exploit cross-state and cross-consumer variation in coupon legality. We find that coupons increase branded sales by 60+ percent, entirely by reducing the sales of bioequivalent generics. During the five years following generic entry, we estimate that coupons increase total spending by $30 to $120 million per drug, or $700 million to $2.7 billion for our sample alone.
Evaluating the Impact of Health Insurance Industry Consolidation: Learning from Experience

Research shows consolidation in the private health insurance industry leads to premium increases, even though insurers with larger local market shares generally obtain lower prices from health care providers. Additional research is needed to understand how to protect against harms and unlock benefits from scale. Data on enrollment, premiums, and costs of commercial health insurance—by insurer, plan, customer segment, and local market—would help us understand whether, when, and for whom consolidation is harmful or beneficial. Such transparency is common where there is a strong public interest and substantial public regulation, both of which characterize this vital sector.
The Good Merger (with Dr. Thomas H. Lee)
Does CVS–Aetna Spell the End of Business as Usual?

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