Get to know Dr. Nicholas Tilipman, Assistant Professor at the Johns Hopkins University Carey School of Business and member of HBHI's core faculty. His work explores the effects of competition and regulation on the behavior of employers, insurers, and providers. He earned his master's and doctorate degrees in economics at Cornell University. Before coming to Johns Hopkins in August 2024, Dr. Tilipman was an assistant professor at the University of Illinois at Chicago, and he served as a staff economist on the Council of Economic Advisers from 2012-2013.

Where did you grow up? Tell us a little bit about your childhood and early career.

I grew up in Livingston, New Jersey, a suburb outside New York City. It was a relatively ordinary middle-class suburban childhood. Studying economics as an undergrad, I wanted to do international trade, which is a normal way people perceive economics. It feels very big. After I got my degree, I took a few years off before going to graduate school to make sure it was right for me. During that time, I started working as a research assistant for a professor at Columbia University, and she was a health economist. It was something I had no knowledge about going into it, but I fell in love with the field and almost immediately abandoned any passion for international anything.

Part of that was because it was a genuinely exciting time for health economics. This was around 2007, and the Affordable Care Act hadn't passed yet, but a bunch of states individually, like Massachusetts, started doing their own reform efforts. And New York, where I was working at the time, was very interested in doing something like that at the state level, and that's largely what I was working on modeling: what would happen if we did in New York what Massachusetts did the year before? And it was super interesting. After Obama became president and the ACA passed, there were even more exciting things to do. By that point, I was fully committed. I went to get my PhD in economics with an explicit health focus, and I started studying what's known as the industrial organization of healthcare–health IO, for short, which is basically just the segment of healthcare economics that focuses on how firms behave. In my case, I study health insurance providers, hospitals, and physician groups and how they interact with each other and negotiate.

In the process, I've also become very interested in healthcare policymaking. When Obama was president, I spent a year working at the Council of Economic Advisors in D.C., helping with ACA implementation issues. To this day, I still work extensively with state governments like California and Washington, helping them design subsidy policies for people purchasing health insurance. I'm deeply passionate about this area, having done this work for nearly two decades.

What are some of the challenges being studied in economics associated with the fact that most Americans get their health coverage through their employers?

Much of the economic research over the past decade or so has been focused on Medicare and Medicaid, which are very important. That's where a lot of the costs go, and it's where a lot of the vulnerable populations are, along with ACA exchanges. There's been relatively less interest in the employer market in the last decade, even though that's where most people get their insurance from. What I find fascinating about this area is that for a very long time, health economists and IO economists had this assumption that the health plans that employers provide to their employees are, more or less, in line with what the employees want. My research is largely focused on: to what extent is that actually true?

The way that I like to think about it is, do employers or other actors that they might be associated with have their own sort of incentives or distortions that might inhibit them from offering the menu of health plans that employees would pick for themselves, absent these other agents, and more broadly speaking, how much does that affect affordability? How much does that raise health care costs and premiums relative to a world where these incentives were fully aligned between the employer and the employee? Employer and provider incentives are not necessarily aligned with the patient's; if they were, we know that healthcare costs would go down. That's been the genesis of a lot of these value-based reimbursement programs, and my research is basically thinking about similar issues but in the employer market.

In the U.S., pharmacy benefit managers and insurance brokers are often named as some of the culprits driving up insurer plan costs. Who are the other players who are even less well-known and are also contributing to higher costs?

Pharmacy benefit managers are, for sure, huge in this. Now that brokers are getting more attention, we're only starting to uncover what they're really doing under the hood. Most employers use a broker to help them manage their health insurance benefits because health insurance is very complicated and very costly to figure out. You want experts to help you. So, they offer a really valuable service, but like with anything, these intermediaries are not doing this out of the goodness of their hearts. They have their own incentives at play. And with brokers, many people don't realize that it's not like the employer pays them a fee, and then the broker says, 'Aha, here is the best plan for you to offer your employees.'

In fact, brokers often have these hidden contracts with insurance companies, and the insurer pays them on a commission basis. Sometimes, they pay them on a flat fee per enrollee head or something like that, but essentially, it's commissioned based on the premium. So, if I'm a broker and I'm serving an employer, I'm heavily incentivized to recommend the insurance carrier that offers me the highest commission. If I'm an employer, I might not know that my broker is heavily incentivized to only offer me like x or y carrier, and to the extent that these brokers dominate certain geographic markets, you see premiums go way, way, way up. And if that's the case, what's the incentive for those plans to keep costs low? There's no real competition.

What kind of economic policy changes could shift how we afford health care in the U.S.?

The challenge of reforming the healthcare system is that it's not really a system; it's a patchwork of various elements smushed together. So, it's hard to distill it down to singular solutions, but two specific changes could do a lot of good.

One of them is related to the employer market. People may or may not realize the magnitude to which the tax system greatly favors employers offering very generous health insurance. It's extremely regressive. Offering $1 of health insurance is cheaper for most firms than providing $1 of wages, even if the health insurance is in some sense not what employees would want to spend that dollar of wages on. So here is one very clear way a government policy provides employers an incentive against their employees to offer health insurance instead of higher wages. There has been talk of getting rid of this for a long time, but the issue has lost steam or political capital.

Another area of my research, one that I'm deeply passionate about, is antitrust in healthcare. We're seeing way more hospitals, physician groups, and insurers merging at astronomical rates. Generally speaking, this is bad for everybody, particularly for patients and consumers. What is the way to stop this? Stronger antitrust enforcement and more scrutiny of these mergers.

Tell us about the subject matter you'll be teaching at Hopkins.

In the spring, I'll begin teaching a class called Frameworks for Healthcare Analysis in our Master of Science in Healthcare Management program. It's basically a health economics course, but unlike a traditional one focused on supply and demand graphs and that stuff, this one is more topic focused. One week, we'll cover hospitals and one week, we'll cover insurance, and there's a lot more emphasis on reading and thinking rather than just equations. I'm excited about it.

Last question. What do you enjoy doing outside of work, and what do you like best about living here?

I consider myself a basic person, so I don't have the best answer to this. I have a wife I love and a son who just turned one, and I love spending time with them. I'm an avid board game player–it's a sickness. I have a big collection of games that keeps growing, and someone needs to stop me. We live in Arlington, Virginia, and I commute into Baltimore. The D.C. metroplex is an area that's just very special to us because it's where my wife and I first met back in 2012. All our friends live here. We got engaged here. Since moving to Chicago, we've been dying to come back and couldn't be happier that we're here.