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Does managed care reduce health care expenditure? Evidence from spatial panel data

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  • Andree Ehlert
  • Dirk Oberschachtsiek

Abstract

Similar to, for example, the US, Switzerland or Great Britain the German health care sector has recently undergone a series of reforms towards managed care. These measures are intended to yield both a higher quality of care and cost containment. In our study we ask whether managed care reduces health care expenditure at the market level. We apply a macroeconomic evaluation approach based on a regional panel data set which is as yet unique in the context of managed care. Econometrically, we account for both unobserved heterogeneity and spatial dependence, i.e. regional interrelations in health care. We discuss alternative model specifications and include a range of sensitivity analyses. Our results suggest that in contrast to public perception the share of managed care contracts has a positive impact on pharmaceutical spending, in particular through regional spillover effects. Copyright Springer Science+Business Media New York 2014

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  • Andree Ehlert & Dirk Oberschachtsiek, 2014. "Does managed care reduce health care expenditure? Evidence from spatial panel data," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 207-227, September.
    • Handle: RePEc:kap:ijhcfe:v:14:y:2014:i:3:p:207-227
    DOI: 10.1007/s10754-014-9145-x
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    More about this item

    Keywords

    Managed care; Health care expenditure; Pharmaceutical expenditure; Panel data; German health care reform; I11; I18; L14; O52;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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