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The persistence of medicare advantage spillovers in the post‐Affordable Care Act era

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  • Yevgeniy Feyman
  • Steven D. Pizer
  • Austin B. Frakt

Abstract

Spillovers can arise in markets with multiple purchasers relying on shared producers. Prior studies have found such spillovers in health care, from managed care to nonmanaged care populations—reducing spending and utilization, and improving outcomes, including in Medicare. This study provides the first plausibly causal estimates of such spillovers from Medicare Advantage (MA) to Traditional Medicare (TM) in the post‐Affordable Care Act era using an instrumental variables approach. Controlling for health status and other potential confounders, we estimate that a one percentage point increase in county‐level MA penetration results in a $64 (95% CI: $18 to $110) (0.7%) reduction in standardized per‐enrollee TM spending. We find evidence for reductions in utilization both on the intensive and extensive margins, across a number of health care services. Our results complement and extend prior work that found spillovers from MA to TM in earlier years and under different payment policies than are in place today.

Suggested Citation

  • Yevgeniy Feyman & Steven D. Pizer & Austin B. Frakt, 2021. "The persistence of medicare advantage spillovers in the post‐Affordable Care Act era," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 311-327, February.
  • Handle: RePEc:wly:hlthec:v:30:y:2021:i:2:p:311-327
    DOI: 10.1002/hec.4199
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    References listed on IDEAS

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    1. Chris Sampson’s journal round-up for 8th March 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-03-08 12:00:01

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    2. Momotazur Rahman & David Meyers & Elizabeth M. White & Brian E. McGarry & Christopher Santostefano & Linda Resnik & David C. Grabowski, 2023. "Spillover effect of the Patient Drive Payment Model on skilled nursing facility therapy delivery among Medicare Advantage enrollees," Health Economics, John Wiley & Sons, Ltd., vol. 32(9), pages 1887-1897, September.

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