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What do we really know about trends in outpatient medical expenditures for children, 1977-1987?

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  • Carol Rapaport
  • Christopher A. Trenholm
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    Abstract

    This analysis of outpatient medical expenditures for children identifies which children experience a relative decline in medical expenditures between 1977 and 1987. The paper also evaluates some standard methodologies used in medical demand estimation. Our semiparametic approach models expenditures simultaneously with the choice of insurance plan and the decision to incur any expenditures. Children in poor families and Hispanic children witness a decline in expenditures relative to other children. Children on Medicaid and black children experience stable expenditures over time. These results imply that the recent Medicaid expansions may not help all children attain good health. The results are sensitive to assumptions of insurance exogeneity, but are insensitive to the assumptions governing the decision to incur any expenditures. The general emphasis in the health economics literature on sample selection instead of insurance endogeneity therefore seems misguided.

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    Bibliographic Info

    Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 97.

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    Date of creation: 2000
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    Handle: RePEc:fip:fednsr:97

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    Keywords: Medical care ; Medical care; Cost of ; Insurance; Health;

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    1. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
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    4. Janet Currie & Duncan Thomas, 1995. "Medical Care for Children: Public Insurance, Private Insurance, and Racial Differences in Utilization," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 135-162.
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    6. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    7. 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.
    8. Gritz, R. Mark, 1993. "The impact of training on the frequency and duration of employment," Journal of Econometrics, Elsevier, vol. 57(1-3), pages 21-51.
    9. Mroz, Thomas A., 1999. "Discrete factor approximations in simultaneous equation models: Estimating the impact of a dummy endogenous variable on a continuous outcome," Journal of Econometrics, Elsevier, vol. 92(2), pages 233-274, October.
    10. Manning, W. G. & Duan, N. & Rogers, W. H., 1987. "Monte Carlo evidence on the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 35(1), pages 59-82, May.
    11. Janet Currie & Jonathan Gruber, 1995. "Health Insurance Eligibility, Utilization of Medical care, and Child Health," NBER Working Papers 5052, National Bureau of Economic Research, Inc.
    12. Duan, Naihua, et al, 1983. "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 1(2), pages 115-26, April.
    13. Manning, Willard G, et al, 1987. "Health Insurance and the Demand for Medical Care: Evidence from a Randomized Experiment," American Economic Review, American Economic Association, vol. 77(3), pages 251-77, June.
    14. Kenkel, Don, 1990. "Consumer Health Information and the Demand for Medical Care," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 587-95, November.
    15. Hay, Joel W & Olsen, Randall J, 1984. "Let Them Eat Cake: A Note on Comparing Alternative Models of the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 279-82, July.
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