TY  - JOUR
AU  - Chernew,Michael
AU  - Gowrisankaran,Gautam
AU  - Fendrick,A. Mark
TI  - Payer Type and the Returns to Bypass Surgery: Evidence from Hospital Entry Behavior
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8632
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8632
L1  - http://www.nber.org/papers/w8632.pdf
N1  - Author contact info:
Michael Chernew
Harvard Medical School
Dept. of Health Care Policy
180 Longwood Avenue
Boston, MA  02115
Tel: 617/432-0174
Fax: 617/432-2648
E-Mail: chernew@hcp.med.harvard.edu

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
AB  - In this paper we estimate the returns associated with the provision of coronary artery bypass graft (CABG) surgery, by payer type (Medicare, HMO, etc.). Because reliable measures of prices and treatment costs are often unobserved, we seek to infer returns from hospital entry behavior. We estimate a model of patient flows for CABG patients that provides inputs for an entry model. We find that FFS provides a high return throughout the study period. Medicare, which had been generous in the early 1980s, now provides a return that is close to zero. Medicaid appears to reimburse less than average variable costs. HMOs essentially pay at average variable costs, though the return varies inversely with competition.
ER  -