Working Paper: NBER ID: w13747
Authors: Michael Chernew; Philip Decicca; Robert Town
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.
Keywords: Medicare; HMO; managed care; medical expenditures
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Medicare HMO penetration (I13) | FFS expenditures (I22) |
| Medicare HMO penetration (I13) | inpatient events (I11) |
| Medicare HMO penetration (I13) | outpatient events (I11) |
| Medicare HMO penetration (I13) | spending reductions for individuals with chronic conditions (H51) |
| Medicare HMO penetration (I13) | spending reductions for individuals without chronic conditions (H51) |
| county-level Medicare payment policy (I18) | Medicare HMO penetration (I13) |