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Health and Utilization Effects of Increased Access to Publicly Provided Health Care: Evidence from the U.S. Department of Veterans Affairs

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Author Info
Melissa Boyle () (Department of Economics, College of the Holy Cross)
Abstract

During the mid-1990s, the U.S. Department of Veterans Affairs overhauled its health care system in an attempt to increase quality and efficiency. The restructuring involved the adoption of a capitated payment system and treatment methods based on the managed care model. This reorganization was accompanied by a major expansion in the population eligible to receive VA care. Using the National Health Interview Survey and VA medical claims data, this study analyzes both the efficiency of providing public health care in a managed care setting and the effectiveness of expanding coverage to healthier and wealthier populations. I estimate that between 35 and 70 percent of new take-up of VA care was the result of individuals dropping private health insurance. While utilization of services increased, estimates of the impact on aggregate veteran health imply that the policy change did not result in net health improvements. Regions providing more care to healthier, newly-eligible veterans had bigger reductions in hospital care and larger increases in outpatient services for previously-eligible veterans. This shift away from specialty care may help to explain the aggregate health declines.

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File URL: http://www.holycross.edu/departments/economics/RePEc/Boyle_VeteransHealthCare.pdf
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Publisher Info
Paper provided by College of the Holy Cross, Department of Economics in its series Working Papers with number 0902.

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Length: 48 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:hcx:wpaper:0902

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Related research
Keywords: Medicare; elderly; veteran; VA healthcare;

Find related papers by JEL classification:
J2 - Labor and Demographic Economics - - Demand and Supply of Labor
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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References listed on IDEAS
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  1. David M. Cutler & Louise Sheiner, 1997. "Managed Care and the Growth of Medical Expenditures," NBER Working Papers 6140, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. David M. Cutler & Mark McClellan & Joseph P. Newhouse, 2000. "How Does Managed Care Do It?," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 526-548, Autumn.
  3. Eze, Pius & Wolfe, Barbara, 1993. "Is dumping socially inefficient? : An analysis of the effect of Medicare's prospective payment system on the utilization of Veterans Affairs inpatient services," Journal of Public Economics, Elsevier, vol. 52(3), pages 329-344, October. [Downloadable!] (restricted)
  4. Cutler, David M & Gruber, Jonathan, 1996. "Does Public Insurance Crowd Out Private Insurance?," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 391-430, May. [Downloadable!] (restricted)
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  5. Duggan, Mark, 2004. "Does contracting out increase the efficiency of government programs? Evidence from Medicaid HMOs," Journal of Public Economics, Elsevier, vol. 88(12), pages 2549-2572, December. [Downloadable!] (restricted)
    Other versions:
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