TY  - JOUR
AU  - Gowrisankaran,Gautam
AU  - Town,Robert J.
TI  - Managed Care, Drug Benefits and Mortality: An Analysis of the Elderly
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10204
PY  - 2004
Y2  - January 2004
UR  - http://www.nber.org/papers/w10204
L1  - http://www.nber.org/papers/w10204.pdf
N1  - Author contact info:
Gautam Gowrisankaran
Professor of Economics
Department of Economics
University of Arizona
P.O. Box 210108
Tucson, AZ 85721-0108
Tel: 520/621-2529
Fax: 520/621-8450
E-Mail: gowrisankaran@eller.arizona.edu

Robert Town
Health Care Management Department
The Wharton School
University of Pennsylvania
3641 Locust Walk
Philadelphia, PA 19104
E-Mail: rtown@wharton.upenn.edu
AB  - We seek to investigate whether managed health care can affect mortality, and if so, through which mechanisms. We estimate the impact of Medicare+Choice (M+C), Medicare's managed care program, on elderly mortality, using a county-level panel from 1993 to 2000. We control for endogenous M+C penetration rates with county fixed effects and instrumental variables. We construct instruments using the identification created by the fact that M+C payment rates are based on 3   to 8  year lagged fee-for-service (FFS) costs in the county. We find that enrollment in managed care without prescription drug coverage significantly increases mortality while enrollment in managed care with drug coverage has no significant impact, both relative to FFS. The impact of managed care penetration on mortality from heart disease appears to follow a similar pattern. The estimates suggest that a 10-percentage point increase in M+C non-drug coverage would cause 51,000 additional deaths among the aged population in 2000.
ER  -