Does Public Insurance Improve the Efficiency of Medical Care? Medicaid Expansions and Child Hospitalizations

Leemore Dafny, Jonathan Gruber

NBER Working Paper No. 7555
Issued in February 2000, Revised in September 2002
NBER Program(s):Children, Health Care, Public Economics

One of the benefits commonly claimed for expanded public health insurance is improved efficiency of medical care delivery, but this claim has little rigorous empirical support. We provide such support by assessing the impact of the Medicaid expansions over the 1983-1996 period on the incidence of avoidable hospitalizations. We find that expanded public insurance eligibility leads to a significant decline in avoidable hospitalization: over this period Medicaid eligibility expansions were associated with a 22% decline in avoidable hospitalization. But we also find that there is a countervailing and larger impact in terms of increased access to hospital care for newly eligible children, so that there is an overall 10% rise in child hospitalizations due to the expansions. The expansions have mixed implications for treatment intensity, but appear to be associated with a significant shift in the types of hospitals at which children are treated, with fewer children treated in public hospitals and more in for-profit facilities.

download in pdf format
   (341 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7555

Published: "Public Insurance and Child Hospitalizations: Access and Efficiency Effects," Journal of Public Economics, 2005, 89(1): 109-129

Users who downloaded this paper also downloaded* these:
Currie and Gruber w5052 Health Insurance Eligibility, Utilization of Medical care, and Child Health
Anderson, Dobkin, and Gross w15823 The Effect of Health Insurance Coverage on the Use of Medical Services
Gruber w7829 Medicaid
Aizer w12105 Public Health Insurance, Program Take-Up, and Child Health
Blanchard w7550 What do we know about Macroeconomics that Fisher and Wicksell did not?
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us