Working Paper: NBER ID: w21650
Authors: Mark Duggan; Jonathan Gruber; Boris Vabson
Abstract: There is considerable controversy over the use of private insurers to deliver public health insurance benefits. We investigate the efficiency consequences of patients enrolling in Medicare Advantage (MA), private managed care organizations that compete with the traditional fee-for-service Medicare program. We use exogenous shocks to MA enrollment arising from plan exits from New York counties in the early 2000s, and utilize unique data that links hospital inpatient utilization to Medicare enrollment records. We find that individuals who were forced out of MA plans due to plan exit saw very large increases in hospital utilization. These increases appear to arise through plans both limiting access to nearby hospitals and reducing elective admissions, yet they are not associated with any measurable reduction in hospital quality or patient mortality.
Keywords: Medicare Advantage; health care privatization; hospital utilization; health care efficiency
JEL Codes: H51; I13; I18; L33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| MA plan exits (E19) | reduced access to nearby hospitals (I14) |
| MA plan exits (E19) | restrictions on elective admissions (K16) |
| increased hospital utilization (I11) | no measurable improvement in hospital quality (I19) |
| increased hospital utilization (I11) | no significant change in mortality rates (I12) |
| MA plan exits (E19) | increased hospital utilization (I11) |