TY  - JOUR
AU  - Gruber,Jonathan
AU  - Adams,Kathleen
AU  - Newhouse,Joseph P.
TI  - Physician Fee Policy and Medicaid Program Costs
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6087
PY  - 1997
Y2  - July 1997
UR  - http://www.nber.org/papers/w6087
L1  - http://www.nber.org/papers/w6087.pdf
N1  - Author contact info:
Jonathan Gruber
MIT Department of Economics
E52-355
50 Memorial Drive
Cambridge, MA 02142-1347
Tel: 617/253-8892
Fax: 617/253-1330
E-Mail: gruberj@mit.edu

Kathleen Adams
E-Mail: adams@fox.sph.emory.edu

Joseph P. Newhouse
Division of Health Policy  Research and Education
Harvard University
180 Longwood Avenue
Boston, MA  02115-5899
Tel: 617/432-1325
Fax: 617/432-3503
E-Mail: newhouse@hcp.med.harvard.edu
AB  - We investigate the hypothesis that increasing access for the indigent to physician offices shifts care from hospital outpatient settings and lowers Medicaid costs (the so-called offset effect').  To evaluate this hypothesis we exploit a large increase in physician fees in the Tennessee Medicaid program, using Georgia as a control.  We find that beneficiaries shifted care from clinics to offices, but that there was little or no shifting from hospital outpatient departments or emergency rooms. Thus, we find no offset effect in outpatient expenditures. Inpatient admissions and expenditures fell, reducing overall program spending eight percent.  Because the inpatient reduction did not occur in ambulatory-care-sensitive diagnoses, however, we cannot demonstrate a causal relationship with the fee change.
ER  -