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The effect of managed care on use of health care services: results from two contemporaneous household surveys

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Author Info
Partha Deb (Department of Economics, Hunter College, City University of New York, USA)
Chenghui Li (Ernest Mario School of Pharmacy, Rutgers University, USA)
Pravin K. Trivedi (Department of Economics, Indiana University, USA)
David M. Zimmer (Department of Economics, Indiana University, USA)

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Abstract

This paper estimates treatment effects of managed care plans on the utilization of health care services using data from two contemporaneous, nationally representative household surveys from the USA. The paper exploits recent advances in simulation-based econometrics to take the endogeneity of enrollment into managed care plans into account and identify the causal relationship between managed care enrollment and utilization. Overall, results from the two surveys are remarkably similar, lending credibility to their external validity and to the econometric model and estimation methods. There is significant evidence of self-selection into managed care plans. After accounting for selection, an individual enrolled in an health maintenance organization (HMO) plan has 2 more visits to a doctor and has 0.1 more visits to the emergency room per year than would the same individual enrolled in a nonmanaged care plan. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1096
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 15 (2006)
Issue (Month): 7 ()
Pages: 743-760
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:wly:hlthec:v:15:y:2006:i:7:p:743-760

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Martin Schellhorn, 2001. "The effect of variable health insurance deductibles on the demand for physician visits," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 441-456. [Downloadable!]
  2. Alberto HOLLY & Lucien GARDIOL & Gianfranco DOMENIGHETTI & Brigitte BISIG, 1998. "An Econometric Model of Health Care Utilization and Health Insurance in Switzerland," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9803, Université de Lausanne, Faculté des HEC, DEEP.
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  3. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August. [Downloadable!] (restricted)
  4. Donna B. Gilleskie, 1998. "A Dynamic Stochastic Model of Medical Care Use and Work Absence," Econometrica, Econometric Society, vol. 66(1), pages 1-46, January.
  5. Gruber, Jonathan, 2000. "Health insurance and the labor market," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 12, pages 645-706 Elsevier. [Downloadable!] (restricted)
  6. Windmeijer, F A G & Silva, J M C Santos, 1997. "Endogeneity in Count Data Models: An Application to Demand for Health Care," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 281-94, May-June. [Downloadable!]
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  7. Cutler, David M. & Zeckhauser, Richard J., 2000. "The anatomy of health insurance," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 11, pages 563-643 Elsevier. [Downloadable!] (restricted)
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  8. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470. [Downloadable!]
  9. Jonathan Meer & Harvey S. Rosen, 2003. "Insurance and the Utilization of Medical Services," NBER Working Papers 9812, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. McFadden, Daniel, 1980. "Econometric Models for Probabilistic Choice among Products," Journal of Business, University of Chicago Press, vol. 53(3), pages S13-29, July. [Downloadable!] (restricted)
  11. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, March. [Downloadable!]
  12. Glied, Sherry, 2000. "Managed care," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 13, pages 707-753 Elsevier. [Downloadable!] (restricted)
  13. Cameron, A C & P. K. Trivedi & Frank Milne & J. Piggott, 1988. "A Microeconometric Model of the Demand for Health Care and Health Insurance in Australia," Review of Economic Studies, Blackwell Publishing, vol. 55(1), pages 85-106, January. [Downloadable!] (restricted)
  14. Deb, Partha & Trivedi, Pravin K, 1997. "Demand for Medical Care by the Elderly: A Finite Mixture Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(3), pages 313-36, May-June. [Downloadable!]
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  1. Denzil Fiebig & Elizabeth Savage & Rosalie Viney, 2006. "Does the reason for buying health insurance influence behaviour? CHERE Working Paper 2006/1," Working Papers 2006/1, CHERE, University of Technology, Sydney. [Downloadable!]
  2. Andrew M. Jones, 2007. "Identification of treatment effects in Health Economics," Health Economics, John Wiley & Sons, Ltd., vol. 16(11), pages 1127-1131. [Downloadable!]
  3. Chantal Grandchamp & Lucien Gardiol, 2008. "Does a mandatory telemedicine call prior to visiting a physician reduce costs or simply attract good risks?," Working Papers 0801, University of Lausanne, Institute of Health Economics and Management (IEMS). [Downloadable!]
  4. Shenyi Jiang & Randall P. Ellis & Tzu-chun Kuo, 2007. "Does service-level spending show evidence of selection across health plan types?," Boston University - Department of Economics - Working Papers Series wp2007-43, Boston University - Department of Economics. [Downloadable!]
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