Managed Care and Medical Expenditures of Medicare Beneficiaries

32 Pages Posted: 24 Jan 2008 Last revised: 25 Jul 2022

See all articles by Michael Chernew

Michael Chernew

Harvard University - Department of Health Care Policy; National Bureau of Economic Research (NBER)

Philip DeCicca

McMaster University - Department of Economics; Ball State--Department of Economics

Robert J. Town

National Bureau of Economic Research (NBER)

Date Written: January 2008

Abstract

This paper investigates the impact of Medicare HMO penetration on the medical care expenditures incurred by Medicare fee-for-service enrollees. We find that increasing penetration leads to reduced health care spending on fee-for-service beneficiaries. In particular, a one percentage point increase in Medicare HMO penetration reduces such spending by .9 percent. We estimate similar models for various measures of health care utilization and find penetration-induced reductions, consistent with our spending estimates. Finally, we present evidence that suggests our estimated spending reductions are driven by beneficiaries who have at least one chronic condition.

Suggested Citation

Chernew, Michael E. and DeCicca, Philip and DeCicca, Philip and Town, Robert J., Managed Care and Medical Expenditures of Medicare Beneficiaries (January 2008). NBER Working Paper No. w13747, Available at SSRN: https://ssrn.com/abstract=1086998

Michael E. Chernew

Harvard University - Department of Health Care Policy ( email )

25 Shattuck Street
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Philip DeCicca

McMaster University - Department of Economics ( email )

Hamilton, Ontario L8S 4M4
Canada

Ball State--Department of Economics ( email )

United States

Robert J. Town (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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