Payer Type and the Returns to Bypass Surgery: Evidence from Hospital Entry Behavior
AbstractIn this paper we estimate the returns associated with the provision of coronary artery bypass graft (CABG) surgery, by payer type (Medicare, HMO, etc.). Because reliable measures of prices and treatment costs are often unobserved, we seek to infer returns from hospital entry behavior. We estimate a model of patient flows for CABG patients that provides inputs for an entry model. We find that FFS provides a high return throughout the study period. Medicare, which had been generous in the early 1980s, now provides a return that is close to zero. Medicaid appears to reimburse less than average variable costs. HMOs essentially pay at average variable costs, though the return varies inversely with competition.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8632.
Date of creation: Dec 2001
Date of revision:
Publication status: published as Chernew, Michael, Gautam Gowrisankaran and A. Mark Fendrick. "Payer Type And The Returns To Bypass Surgery: Evidence From Hospital Entry Behavior," Journal of Health Economics, 2002, v21(3,May), 451-474.
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Find related papers by JEL classification:
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-12-14 (All new papers)
- NEP-HEA-2001-12-14 (Health Economics)
- NEP-IAS-2001-12-14 (Insurance Economics)
- NEP-MIC-2001-12-14 (Microeconomics)
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