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Michael Chernew, Philip DeCicca, Robert Town
NBER Working Paper No. 13747*
Issued in January 2008
NBER Program(s): HC
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---- 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.
*Published: Chernew, Michael & DeCicca, Philip & Town, Robert, 2008.
"Managed care and medical expenditures of Medicare beneficiaries,"
Journal of Health Economics,
Elsevier, vol. 27(6), pages 1451-1461, December.
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