Hedging or Healing: How Business Cycle Exposure Affects the Safety Net
Release time：28 January 2026
Jan
30
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Time & Date
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10:30 am
-
12:00 pm,
January
30,
2026
(Friday)
|
|
Venue
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Room 904, Teaching Complex D Building
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| TOPIC | Hedging or Healing: How Business Cycle Exposure Affects the Safety Net |
| TIME&DATE | 10:30 am-12:00 pm, January 30, 2026 (Friday) |
| Venue | Room D904, Teaching Complex D Building |
| Speaker |
Xuelin Li Columbia University |
| Abstract | Tax exemption and government support are intended to insulate non-profit hospitals from business cycles, who are expected to provide stable community benefits. This paper documents erosion in the stability of this social safety net. The rising popularity of high-deductible health plans (HDHPs) reduces insurance risk sharing and increases the cyclicality of hospital operations. Realized income shocks induce more ex post procyclical responses in hospital revenues and utilization in markets with higher pre-shock HDHP penetration. Claims data confirm that HDHP enrollees reduce inpatient visits in downturns. Ex ante, hospitals hedge this exposure by cutting staff, investment, uncompensated care, and Medicare admissions. Surprisingly, mission-driven non-profit hospitals hedge more aggressively, reflecting their lack of geographic diversification and internal capital markets compared to large for-profit systems. Counties with higher pre-pandemic HDHP prevalence and non-profit dominance experienced greater COVID-19 mortality. |
| Biography | Xuelin Li is an Assistant Professor of Finance at Columbia Business School, Columbia University. He is also a faculty member of the Healthcare and Pharmaceutical Management Program at Columbia Business School. His research interests include innovation, healthcare finance, and entrepreneurial finance, and his work has been published in journals such as the American Economic Review, the Journal of Financial Economics, and the Review of Financial Studies. Li holds a Ph.D. from the Carlson School of Management, University of Minnesota, and a bachelor’s degree from Peking University. |
