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Socioeconomic Status and Medical Care Expenditures in Medicare Managed Care

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  • Kanika Kapur
  • Jeannette A. Rogowski
  • Vicki A. Freedman
  • Steven L. wickstrom
  • John L. Adams
  • Jose J. Escarce

Abstract

This study examined the effects of education, income, and wealth on medical care expenditures in two Medicare managed care plans. The study also sought to elucidate the pathways through which socioeconomic status (SES) affects expenditures, including preferences for health and medical care and ability to navigate the managed care system. We modeled the effect of SES on medical care expenditures using Generalized Linear Models, estimating separate models for each component of medical expenditures: inpatient, outpatient, physician, and other expenditures. We found that education, income, and wealth all affected medical care expenditures, although the effects of these variables differed across expenditure categories. Moreover, the effects of these SES variables were much smaller than the effects found in earlier studies of fee-for-service Medicare. The pathway variables also were associated with expenditures. Accounting for the pathways through which SES affects expenditures narrowed the effect of SES on expenditures; however, the change in the estimates was very small. Thus, although our measures of preferences and ability to navigate the system were associated with expenditures, they did not account for an appreciable share of the impact of SES on expenditures.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10757.

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Date of creation: Sep 2004
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Publication status: published as Kapur, Kanika, Jeannette A. Rogowski, Vicki A. Freedman, Steven L. Wickstrom, John L. Adams and Jose J. Escarce. "Socioeconomic Status and Medical Care Expenditures in Medicare Managed Care." Journal of Health Care for the Poor and Underserved 17, 4 (November 2006): 876-898.
Handle: RePEc:nbr:nberwo:10757

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  1. 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.
  2. Dana P. Goldman & James P. Smith, 2004. "Can Patient Self-Management Help Explain the SES Health Gradient?," HEW 0403004, EconWPA.
  3. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-55, March-Apr.
  4. Willard G. Manning & John Mullahy, 1999. "Estimating Log Models: To Transform or Not to Transform?," NBER Technical Working Papers 0246, National Bureau of Economic Research, Inc.
  5. Blough, David K. & Madden, Carolyn W. & Hornbrook, Mark C., 1999. "Modeling risk using generalized linear models," Journal of Health Economics, Elsevier, vol. 18(2), pages 153-171, April.
  6. James P. Smith, 2004. "Wealth Inequality Among Older Americans," Labor and Demography 0403003, EconWPA.
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