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Walking the Tightrope on Medicare Reform

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  • David M. Cutler

Abstract

A central controversy in the debate about Medicare is whether the program spends too much money or whether instead it should be expanded to cover more. I consider the value of increased Medicare spending. I argue that on average Medicare spending is worth it: the health gains brought by medicare have been greater than their cost. At the margin, however, services are overused and have low value. Medicare reforms need to promote the high average value of care while eliminating care of low value. Many of the proposed reforms fall short of this goal.

Suggested Citation

  • David M. Cutler, 2000. "Walking the Tightrope on Medicare Reform," Journal of Economic Perspectives, American Economic Association, vol. 14(2), pages 45-56, Spring.
    • Handle: RePEc:aea:jecper:v:14:y:2000:i:2:p:45-56
    Note: DOI: 10.1257/jep.14.2.45
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.14.2.45
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    References listed on IDEAS

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    11. repec:max:cprpbr:007 is not listed on IDEAS
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    Cited by:

    1. Louise Sheiner & David M. Cutler, 2000. "Generational Aspects of Medicare," American Economic Review, American Economic Association, vol. 90(2), pages 303-307, May.
    2. Khwaja, Ahmed, 2010. "Estimating willingness to pay for medicare using a dynamic life-cycle model of demand for health insurance," Journal of Econometrics, Elsevier, vol. 156(1), pages 130-147, May.
    3. Roger D. Congleton & Alberto Batinti & Rinaldo Pietratonio, 2017. "The Electoral Politics and the Evolution of Complex Healthcare Systems," Kyklos, Wiley Blackwell, vol. 70(4), pages 483-510, November.
    4. Sherry Glied, 2003. "Health Care Costs: On the Rise Again," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 125-148, Spring.
    5. Jonathan S. Skinner & Elliott S. Fisher & John Wennberg, 2005. "The Efficiency of Medicare," NBER Chapters, in: Analyses in the Economics of Aging, pages 129-160, National Bureau of Economic Research, Inc.
    6. Michel Grignon, 2005. "Aging, Health and Aggregate Medical Care Spending in France," Department of Economics Working Papers 2005-05, McMaster University.

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    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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