TY  - JOUR
AU  - Finkelstein,Amy
TI  - The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11619
PY  - 2005
Y2  - September 2005
UR  - http://www.nber.org/papers/w11619
L1  - http://www.nber.org/papers/w11619.pdf
N1  - Author contact info:
Amy Finkelstein
Department of Economics
MIT E52-274C
50 Memorial Drive
Cambridge, MA 02142
Tel: 617/253-4149
Fax: 617/868-2742
E-Mail: afink@mit.edu
M2  - featured in NBER digest on 2005-09-19
AB  - This paper investigates the effects of market-wide changes in health insurance by examining the single largest change in health insurance coverage in American history: the introduction of Medicare in 1965. I estimate that the impact of Medicare on hospital spending is substantially larger than what the existing evidence from individual-level changes in health insurance would have predicted. Consistent with a disproportionately larger impact of aggregate changes in health insurance, the evidence suggests that the introduction of Medicare altered the practice of medicine. For example, I find that the introduction of Medicare is associated with an increase in the rate of adoption of then-new medical technologies. A back of the envelope calculation based on the estimated impact of Medicare suggests that the overall spread of health insurance between 1950 and 1990 may be able to explain at least forty percent of the increase in real per capita health spending over this time period.
ER  -