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Fiscal Shenanigans, Targeted Federal Health Care Funds, and Patient Mortality

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  • Katherine Baicker
  • Douglas Staiger

Abstract

We explore the effectiveness of matching grants when lower levels of government can expropriate some of the funds for other uses. Using data on the Medicaid Disproportionate Share program, we identify states that were most able to expropriate funds. Payments to public hospitals in these states were systematically diverted and had no significant impact on patient mortality. Payments that were not expropriated were associated with significant declines in patient mortality. Overall, subsidies were an effective mechanism for improving outcomes for the poor, but the impact was limited by the ability of state and local governments to divert the targeted funds. © 2005 MIT Press

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Bibliographic Info

Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 120 (2005)
Issue (Month): 1 (January)
Pages: 345-386

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Handle: RePEc:tpr:qjecon:v:120:y:2005:i:1:p:345-386

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  1. Cutler David M. & Meara Ellen, 2000. "The Technology of Birth: Is It Worth It?," Forum for Health Economics & Policy, De Gruyter, vol. 3(1), pages 1-37, January.
  2. Mark Duggan, 2000. "Hospital Ownership and Public Medical Spending," NBER Working Papers 7789, National Bureau of Economic Research, Inc.
  3. Hope Corman & Theodore Joyce & Michael Grossman, 1987. "A Cost-Effectiveness Analysis of Strategies to Reduce Infant Mortality," NBER Working Papers 2346, National Bureau of Economic Research, Inc.
  4. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December.
  5. David M. Cutler & Ellen Meara, 1999. "The Technology of Birth: Is it Worth it?," NBER Working Papers 7390, National Bureau of Economic Research, Inc.
  6. Nicholson, Sean & Song, David, 2001. "The incentive effects of the Medicare indirect medical education policy," Journal of Health Economics, Elsevier, vol. 20(6), pages 909-933, November.
  7. Janet Currie & Jonathan Gruber, 1997. "The Technology of Birth: Health Insurance, Medical Interventions, and Infant Health," NBER Working Papers 5985, National Bureau of Economic Research, Inc.
  8. Kominski, Gerald F. & Long, Stephen H., 1997. "Medicare's disproportionate share adjustment and the cost of low-income patients," Journal of Health Economics, Elsevier, vol. 16(2), pages 177-190, April.
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Cited by:
  1. Ferraz, Claudio & Finan, Frederico S. & Moreira, Diana B., 2012. "Corrupting Learning: Evidence from Missing Federal Education Funds in Brazil," IZA Discussion Papers 6634, Institute for the Study of Labor (IZA).
  2. Anthony T. Lo Sasso & Bruce D. Meyer, 2006. "The Health Care Safety Net and Crowd-Out of Private Health Insurance," Working Papers 0417, Harris School of Public Policy Studies, University of Chicago.
  3. Daron Acemoglu & Amy Finkelstein, 2006. "Input and Technology Choices in Regulated Industries: Evidence From the Health Care Sector," NBER Working Papers 12254, National Bureau of Economic Research, Inc.
  4. Jeffrey Clemens & David M. Cutler, 2013. "Who Pays for Public Employee Health Costs?," NBER Working Papers 19574, National Bureau of Economic Research, Inc.
  5. Evans, William N. & Owens, Emily G., 2007. "COPS and crime," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 181-201, February.
  6. Marianne P. Bitler & Madeline Zavodny, 2014. "Medicaid: A Review of the Literature," NBER Working Papers 20169, National Bureau of Economic Research, Inc.
  7. Daysal, N. Meltem, 2012. "Does Uninsurance Affect the Health Outcomes of the Insured? Evidence from Heart Attack Patients in California," IZA Discussion Papers 6418, Institute for the Study of Labor (IZA).
  8. Yu-Chu Shen & Karen Eggleston, 2008. "The Effect of Soft Budget Constraints on Access and Quality in Hospital Care," NBER Working Papers 14256, National Bureau of Economic Research, Inc.
  9. Ginger Zhe Jin & Alex Whalley, 2007. "The Power of Attention: Do Rankings Affect the Financial Resources of Public Colleges?," NBER Working Papers 12941, National Bureau of Economic Research, Inc.
  10. Mark McClellan & Jonathan Skinner, 1997. "The Incidence of Medicare," NBER Working Papers 6013, National Bureau of Economic Research, Inc.
  11. Baicker, Katherine & Clemens, Jeffrey & Singhal, Monica, 2012. "The rise of the states: U.S. fiscal decentralization in the postwar period," Journal of Public Economics, Elsevier, vol. 96(11), pages 1079-1091.
  12. Eric Zitzewitz, 2012. "Forensic Economics," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 731-69, September.
  13. Ferraz, Claudio & Finan, Frederico & Moreira, Diana B., 2012. "Corrupting learning," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 712-726.

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