Visiting Fellow Spotlight: Veronica Grembi

Wednesday, Jun 3, 2020
by Aimee Bronfeld

Veronica Grembi, Ph.D., Associate Professor of Economics at the University of Milan, is the first to admit she did not have a plan, at least when it came to her career. While she eventually uncovered a passion for health economics and political economy, she took the road less traveled – citing a series of choices that reflect “crimes of opportunity” as opposed to a linear path. Her studies and aspirations have evolved alongside her interests, guiding her to a law degree, a pair of master’s degrees (in law and economics), a doctorate probing the history of economic thought, and a visiting fellowship at Princeton’s Center for Health and Wellbeing (CHW).

In this Spotlight, Professor Grembi offers a candid glimpse into her background and research investigating issues at the intersection of law and economics, from medical malpractice to fiscal rules.

Q. What inspired your undergraduate education, and how did you launch your career?  

A. I was a first-generation student, so attending university was big – for me and my family. Growing up on the outskirts of Florence, Italy shaped my love for the arts and history, but I chose to study law because I felt it would provide more opportunities for getting a proper job.

After obtaining my law degree from the University of Florence, I joined a firm specializing in contracts, property, insurance, and other civil matters.

Q. What led you to economics?

A. I quickly realized that I was unhappy practicing law, so I decided to return to the University of Florence. It was a school I could afford, I lived nearby, and it had a program on the history of economic thought, which was very interesting to me. I studied how the discipline of economics – during the 1950s and 1960s – became a colonizer of other fields and how we use economic tools to explain decisions and policies.

When I was young, I thought that economics was about accounting. I understood later that economics is about incentives, and how people react to incentives that are defined and measured through costs and benefits. Economics is a universal method applicable to any kind of decision or problem in the context of any other field. Naturally, I was drawn to economics of law, which exploits my area of expertise.

Q. What piqued your curiosity about health economics?

A. I remember the exact moment that captured my interest. One day, while driving and listening to the radio, I heard a discussion about an article published in Time Magazine. It was about so-called medical malpractice in the United States – how fear of litigation affects how doctors select and treat their patients. Given my background in law, I was struck by this issue of medical liability. At first, I thought it was a problem specific to the U.S., but soon recognized that policy makers in Italy and throughout Europe were also taking notice. I was intrigued by the idea of using economic tools to analyze how the legal system affects health care decisions.

Q. As part of your doctoral studies, you traveled to Yale University as a visiting scholar. Was this your first trip to the United States? What brought you there?

A. I’ve always felt connected to the United States, which has a lot to do with my grandpa. He moved to New York City just after World War II to trade Italian fabrics. He was very impressed, always telling me that the U.S. was the land of opportunity.

In 2001, I went to Yale for two reasons: I was eager to see this land of opportunity, and the university had a strong program in economics of law. I arrived a couple of weeks prior to 9/11, so it was quite a unique experience. In terms of my research, traveling abroad allowed me to study economics and law outside the European context, to see different applications and to discuss problems with scholars in other fields.

Q. Following a postdoctoral fellowship at the University of Rome, you worked for the Italian Ministry of Economy. What guided you there, and how did that experience influence your thinking?

A. Again, this was not part of a plan. I ended up there mostly because I was unemployed and the opportunity arose, though it turned out to be a valuable experience. At the Ministry, I worked for a special commission dealing with public expenditures and how to make them more efficient. This provided deeper insight into the complexities of government, where policy guidelines and limitations force decision makers to consider the big picture and do the best with what they have. I learned that what works in theory may not work in reality, and that compromising is an important and useful skill.

Q. You subsequently completed several appointments at universities in Italy and Denmark. Why did you pivot your career to academia?

A. In Europe, unlike the United States, there are very few research centers; universities provide the best environment for research, which has become the focus of my career. At the same time, I taught various courses within the field of economics, including public economics, health economics, and law and economics, at both the undergraduate and graduate levels. I especially enjoy my role as a Ph.D. supervisor. Advising in that capacity has been very rewarding.

Q. Does your research – concentrated in health economics, political economy, and public economics – explore issues within the European framework or does it offer a more global perspective? What intrigues you about these areas of specialization?

A. My research relates to both sides of the Atlantic, although most of my data comes from a European context. Health economics has been at the forefront because it shapes people’s lives. Access to a good health care system matters, even in the womb. Prenatal care can impact the proper development of a human being and the rest of that person’s life. For instance, how does the method of delivery affect the health of a newborn, and are there lasting implications? The emergence of artificial intelligence and digitized medical records has made it easy to collect large amounts of patient data and to study outcomes.

Health economics, public economics and political economy are all intertwined, particularly in Europe where there is universal health care. Much of my research analyzes health care from a political economy perspective, addressing the incentives of politicians and how those incentives influence health care decisions at federal, state, and local levels. I also look at the consequences of those decisions, how they impact health and lives.

Q. Perhaps you could share a couple of your most recent studies related to global health and health policy?

A. My paper on diagnostic-related groups (DRGs) is interesting, investigating standardized prices in health care. Under this system of reimbursement, utilized in both the U.S. and Europe, every health care provider receives the exact same rate for a given procedure or service. The U.S. federal government introduced DRGs to address waste and inefficiencies within the health care system, particularly those driven by the Medicare and Medicaid programs. In Italy, unlike the United States, regional governments can decide whether to adopt the national DRG system, or to adjust or waive it. Consequently, there are huge variations from region to region in the average DRG rate. I conducted an Italian case study to help me understand this phenomenon, exploring whether the composition and characteristics of regional governments influence prices and, if so, why. The study revealed that the average rate per procedure is higher in regions in which more physicians serve in political governing roles. This finding provides evidence that a system of standardized prices, such as DRGs, is not immune to manipulation or political pressures. Similar conclusions have been reached through U.S. studies.

I just completed another project investigating the effect of Ramadan on occupational injuries. This study tracked the number of workplace accidents during the 30-day fasting period that involved Muslim workers in Spain, a country with a very lively Muslim community. Surprisingly, my co-workers and I found a decrease in the amount of accidents involving these workers during Ramadan, with no spillover effects on co-workers. The results suggest that policies supporting religious diversity and accommodations in the workplace do not incur any health burdens. In fact, such policies can benefit both staff and employers, having a positive impact on the health of employees while possibly reducing health care costs related to occupational injuries.

Q. Your work also probes medical malpractice. You wrote a book chapter on how legal liability impacts medical decisions and studied the effect of medical liability on C-section rates. Can you share a bit about your research in this area?

A. When looking at data and outcomes, it is apparent that doctors are very much concerned about the legal consequences of their actions. That can be good in a sense, pressuring them to provide the best treatment possible. At the same time, however, concerns about medical liability can affect the distribution of doctors across specialties. For instance, a region may have too many dermatologists and not enough neurosurgeons, partly due to the costs of malpractice insurance. 

Medical liability can also affect health care decisions. In the field of obstetrics, for example, there has been a huge debate regarding traditional versus alternative methods of delivery. In both the U.S. and Europe, C-section rates have increased exponentially over the last few decades. While this is partially explained by maternal risk factors, the higher incidence is also correlated to fear of malpractice claims.

Q. You arrived at Princeton last September on a Fulbright Grant. What attracted you to the Center for Health and Wellbeing?

A. I was excited about the opportunity to work with Janet Currie, who is an amazing scholar within the field of health economics, as well as other faculty. I was also attracted to the idea of interacting with different disciplines, which is not fully embraced in Europe. I knew this collaborative approach would be valuable in furthering my research.

Q. What was the focus of your research at Princeton?

A. I spent a lot of my time on inappropriate health care provisions. Particularly, I explored the prevalence of hysterectomies, which is the second most common surgical procedure faced by women. In both Europe and the United States, the incidence of hysterectomies is huge and disproportionate, especially in cases where there are no malignant pathologies. I sought to explain why hysterectomies are performed so frequently in the absence of a life-threatening medical condition, while also looking at geographic variations. 

Secondly, I dug deeper into the high incidence of C-section rates and the possible rationales coming from the demand side. My research in this area continues, using Italian data to analyze the reasons for this surge.

Q. Who has been your greatest inspiration? Is there anyone in your field – or beyond – who has had a profound impact on your career, work, or life’s journey?

A. Overall, I have always admired Hannah Arendt, a German-American philosopher who escaped from Germany, as a Jew, after World War II. She was a very smart woman who never gave up on the use of reason, despite her hardships, and led an adventurous life. As a woman, I appreciate Arendt’s independent thinking and consider her a role model.

Q. Within the context of health economics, are there any pressing issues or growing challenges that may drive your future research?

A. I am definitely interested in the appropriate provision of medical personnel. Mobility, which has become easier over time, is a big issue, at least in Europe. Many doctors and nurses receive their training in “giver” countries, like Spain, Italy and Portugal, and then work in “taker” countries, like Germany or the U.K., due to better opportunities. This has resulted in a lack of highly skilled medical personnel in rural areas and other places. I would like to analyze the geographical variations and underlying motivations to help find solutions. For example, would more residencies or better schools help retain workers and improve access to health care?

As a global community, we also will need to confront the effects of the coronavirus pandemic, which will have short-term and long-term consequences. Right now we are focused on ICU [Intensive Care Unit] beds. It is still puzzling how the virus affects people, with many patients requiring hospitalization and intensive care. Some countries are facing shortages of beds and critical supplies, as well as inequities within their health care systems. Quite dramatically, decisions about who receives those beds and medical equipment will impact who lives and who dies. At the same time, I am concerned about people with chronic conditions and those requiring assistance, such as the elderly, who cannot access health care. It is the worst moment possible to have a heart attack or another problem because our medical facilities and personnel are focused on something else. Long-term, I worry about the virus’s impact on mental health as well as preventive care. A lack of health screenings, elective procedures and other services during the pandemic may worsen health outcomes in the future.

Q. Many economists agree that the United States and other countries have already slid into a pandemic-induced recession, which will continue through the first half of the year – at least. Do you concur, and is that likely to affect global health?    

A. Yes. Literature and historical evidence, such as the 2008 recession, prove a strong connection between economic recessions and health. Unemployment often leads to higher rates of depression, alcohol consumption, and addiction. Reduced income also influences behaviors and access to health care. Those suffering from poverty or food insecurity might not eat well or go to the doctor. We could see lower levels of fertility or disruptive effects on newborns because mothers could not afford prenatal care or proper nutrition. A significant decrease in access to hospitals and regular screenings could affect cancer mortality among other health outcomes. The silver lining of this situation, on the other hand, could be a decreased incidence of pollution associated with respiratory diseases, fewer road traffic accidents, and more healthful, home-cooked meals.

It is difficult to see the big picture, in the long run, because we cannot anticipate which elements and scenarios will prevail. The impact on global health remains an empirical question dependent on the interventions of the U.S., the European Union, and other states. In the aftermath of the pandemic, we can evaluate the success of those interventions and understand how they affected people’s lives.