Medicare Payments and System-Level Health-Care Use: The Spillover Effects of Medicare Managed Care

Abstract

The rapid growth of Medicare managed care over the past decade has the potential to increase the efficiency of health-care delivery. Improvements in care management for some may improve efficiency system-wide, with implications for optimal payment policy in public insurance programs. These system-level effects may depend on local health-care market structure and vary based on patient characteristics. We use exogenous variation in the Medicare payment schedule to isolate the effects of market-level managed care enrollment on the quantity and quality of care delivered. We find that in areas with greater enrollment of Medicare beneficiaries in managed care, the non-managed care beneficiaries have fewer days in the hospital but more outpatient visits, consistent with a substitution of less expensive outpatient care for more expensive inpatient care, particularly at high levels of managed care. We find no evidence that care is of lower quality. Optimal payment policies for Medicare managed care enrollees that account for system-level spillovers may thus be higher than those that do not.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 50 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.