IDEAS home Printed from https://ideas.repec.org/a/bpj/fhecpo/v1y1998n4.html
   My bibliography  Save this article

Managed Care and the Growth of Medical Expenditures

Author

Listed:
  • Cutler David M.

    (Harvard University and NBER)

  • Sheiner Louise

    (Federal Reserve Board of Governors)

Abstract

We use data across states to examine the relation between HMO enrollment and medical spending. We find that increased managed care enrollment significantly reduces hospital cost growth. Although increased spending on physicians offsets some of this effect, we generally find a significant reduction in total spending as well. In analyzing the sources of hospital cost reductions, we find preliminary evidence that managed care has reduced the diffusion of medical technologies. States with high managed care enrollment were technology leaders in the early 1980s; by the early 1990s those states were only average in their acquisition of new technologies. This finding suggests managed care may significantly affect the long-run growth of medical spending.

Suggested Citation

  • Cutler David M. & Sheiner Louise, 1998. "Managed Care and the Growth of Medical Expenditures," Forum for Health Economics & Policy, De Gruyter, vol. 1(1), pages 1-41, January.
  • Handle: RePEc:bpj:fhecpo:v:1:y:1998:n:4
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/fhep.1998.1.1/fhep.1998.1.1.1058/fhep.1998.1.1.1058.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Laurence Baker & Joanne Spetz, 1999. "Managed Care and Medical Technology Growth," NBER Chapters,in: Frontiers in Health Policy Research, volume 2, pages 27-52 National Bureau of Economic Research, Inc.
    2. Daron Acemoglu & Amy Finkelstein, 2008. "Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 837-880, October.
    3. Daron Acemoglu & Amy Finkelstein & Matthew J. Notowidigdo, 2013. "Income and Health Spending: Evidence from Oil Price Shocks," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1079-1095, October.
    4. Amy Finkelstein, 2005. "The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare," NBER Working Papers 11619, National Bureau of Economic Research, Inc.
    5. Vita, Michael G., 2001. "Regulatory restrictions on selective contracting: an empirical analysis of "any-willing-provider" regulations," Journal of Health Economics, Elsevier, vol. 20(6), pages 955-966, November.
    6. Núria Mas, 2013. "Responding to financial pressures. The effect of managed care on hospitals’ provision of charity care," International Journal of Health Economics and Management, Springer, vol. 13(2), pages 95-114, June.
    7. Currie, Janet & Fahr, John, 2005. "Medicaid managed care: effects on children's Medicaid coverage and utilization," Journal of Public Economics, Elsevier, vol. 89(1), pages 85-108, January.
    8. Kessler, Daniel & McClellan, Mark, 2002. "Malpractice law and health care reform: optimal liability policy in an era of managed care," Journal of Public Economics, Elsevier, vol. 84(2), pages 175-197, May.
    9. Mas, Núria & Seinfeld, Janice, 2008. "Is managed care restraining the adoption of technology by hospitals?," Journal of Health Economics, Elsevier, vol. 27(4), pages 1026-1045, July.
    10. Yu-Chu Shen & Vivian Wu & Glenn Melnick, 2008. "The Changing Effect of HMO Market Structure: An Analysis of Penetration, Concentration, and Ownership Between 1994-2005," NBER Working Papers 13775, National Bureau of Economic Research, Inc.
    11. Louise Sheiner & David M. Cutler, 1999. "The Geography of Medicare," American Economic Review, American Economic Association, vol. 89(2), pages 228-233, May.
    12. Christine Durrance, 2009. "The Impact of Pharmacy-Specific Any-Willing-Provider Legislation on Prescription Drug Expenditures," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 37(4), pages 409-423, December.
    13. Laurence C. Baker & Ciaran S. Phibbs, 2000. "Managed Care, Technology Adoption, and Health Care: The Adoption of Neonatal Intensive Care," NBER Working Papers 7883, National Bureau of Economic Research, Inc.
    14. Janet Currie & Patricia Reagan, 1998. "Distance to Hospitals and Children's Access to Care: Is Being Closer Better, and for Whom?," NBER Working Papers 6836, National Bureau of Economic Research, Inc.
    15. Daniel P. Kessler & Mark B. McClellan, 2000. "Medical Liability, Managed Care, and Defensive Medicine," NBER Working Papers 7537, National Bureau of Economic Research, Inc.
    16. Gianluca Baio & Laura Magazzini & Claudia Oglialoro & Fabio Pammolli & Massimo Riccaboni, 2005. "Medical Devices: Competitiveness and Impact on Public Health Expenditure," Working Papers CERM 05-2005, Competitività, Regole, Mercati (CERM).
    17. Baker, Laurence C., 2001. "Managed care and technology adoption in health care: evidence from magnetic resonance imaging," Journal of Health Economics, Elsevier, vol. 20(3), pages 395-421, May.
    18. Laurence Baker, 2000. "What Does HMO Market Share Measure? Examining Provider Choice Restrictions," NBER Chapters,in: Frontiers in Health Policy Research, Volume 3, pages 91-112 National Bureau of Economic Research, Inc.
    19. Mas, Nuria, 2009. "Responding to financial pressures. The effect of managed care on hospitals' provision of charity care," IESE Research Papers D/782, IESE Business School.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:fhecpo:v:1:y:1998:n:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.