The Effect of Medicare Advantage on Hospital Admissions and Mortality

28 Pages Posted: 8 Jun 2013 Last revised: 12 Jun 2013

See all articles by Chris Afendulis

Chris Afendulis

Harvard University - Department of Health Care Policy

Michael Chernew

Harvard University - Department of Health Care Policy; National Bureau of Economic Research (NBER)

Daniel P. Kessler

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: June 2013

Abstract

Medicare currently allows beneficiaries to choose between a government-run health plan and a privately- administered program known as Medicare Advantage (MA). Because enrollment in MA is optional, conventional observational estimates of the program's impact are potentially subject to selection bias. To address this, we use a discontinuity in the rules governing MA payments to health plans that gives greater payments to plans operating in counties in Metropolitan Statistical Areas with populations of 250,000 or more. The sharp difference in payment rates at this population cutoff creates a greater incentive for plans to increase the generosity of benefits and therefore enroll more beneficiaries in MA in counties just above versus just below the cutoff. We find that the expansion of MA on this margin reduces beneficiaries' rates of hospitalization and mortality.

Suggested Citation

Afendulis, Chris and Chernew, Michael E. and Kessler, Daniel Philip, The Effect of Medicare Advantage on Hospital Admissions and Mortality (June 2013). NBER Working Paper No. w19101. Available at SSRN: https://ssrn.com/abstract=2276365

Chris Afendulis (Contact Author)

Harvard University - Department of Health Care Policy ( email )

180 Longwood Avenue
Boston, MA 02115
United States

Michael E. Chernew

Harvard University - Department of Health Care Policy ( email )

25 Shattuck Street
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

Daniel Philip Kessler

Stanford Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States
650-723-4492 (Phone)
650-725-6152 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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