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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

  • Melissa Boyle

    ()

    (Department of Economics, College of the Holy Cross)

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://college.holycross.edu/RePEc/hcx/Boyle_VeteransHealthCare.pdf
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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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Web page: http://www.holycross.edu/departments/economics/website/
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  1. McClellan, Mark & Cutler, David & Newhous, Joseph P., 2000. "How Does Managed Care Do It?," Scholarly Articles 2643884, Harvard University Department of Economics.
  2. 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.
  3. 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.
  4. David M. Cutler & Jonathan Gruber, 1995. "Does Public Insurance Crowd Out Private Insurance?," NBER Working Papers 5082, National Bureau of Economic Research, Inc.
  5. David M. Cutler & Louise Sheiner, 1998. "Managed Care and the Growth of Medical Expenditures," NBER Chapters, in: Frontiers in Health Policy Research, Volume 1, pages 77-116 National Bureau of Economic Research, Inc.
  6. Kajal Lahiri & Guibo Xing, 2002. "An Empirical Analysis of Medicare-eligible Veterans' Demand for Outpatient Health Care Services," Discussion Papers 02-01, University at Albany, SUNY, Department of Economics.
  7. 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.
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