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Managed Care, Drug Benefits and Mortality: An Analysis of the Elderly

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  • Gautam Gowrisankaran
  • Robert J. Town

Abstract

We seek to investigate whether managed health care can affect mortality, and if so, through which mechanisms. We estimate the impact of Medicare+Choice (M+C), Medicare's managed care program, on elderly mortality, using a county-level panel from 1993 to 2000. We control for endogenous M+C penetration rates with county fixed effects and instrumental variables. We construct instruments using the identification created by the fact that M+C payment rates are based on 3 to 8 year lagged fee-for-service (FFS) costs in the county. We find that enrollment in managed care without prescription drug coverage significantly increases mortality while enrollment in managed care with drug coverage has no significant impact, both relative to FFS. The impact of managed care penetration on mortality from heart disease appears to follow a similar pattern. The estimates suggest that a 10-percentage point increase in M+C non-drug coverage would cause 51,000 additional deaths among the aged population in 2000.

Suggested Citation

  • Gautam Gowrisankaran & Robert J. Town, 2004. "Managed Care, Drug Benefits and Mortality: An Analysis of the Elderly," NBER Working Papers 10204, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:10204
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    References listed on IDEAS

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    Cited by:

    1. Blázquez-Fernández, Carla & González-Prieto, Noelia & Moreno-Mencía, Patricia, 2013. "Pharmaceutical Expenditure as a Determinant of Health Outcomes in EU Countries/El gasto farmacéutico como determinante de los resultados en salud en países de la UE," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 31, pages 379-396, Septiembr.
    2. Duggan, Mark & Starc, Amanda & Vabson, Boris, 2016. "Who benefits when the government pays more? Pass-through in the Medicare Advantage program," Journal of Public Economics, Elsevier, vol. 141(C), pages 50-67.
    3. Chernew, Michael & DeCicca, Philip & Town, Robert, 2008. "Managed care and medical expenditures of Medicare beneficiaries," Journal of Health Economics, Elsevier, vol. 27(6), pages 1451-1461, December.
    4. Vincenzo Atella & Francesco D'Amico, 2010. "Who is responsible for your health: You, your doctor or new technologies?," CEIS Research Paper 167, Tor Vergata University, CEIS, revised 28 May 2010.
    5. repec:eee:jhecon:v:53:y:2017:i:c:p:17-37 is not listed on IDEAS

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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