Medicare Policy in the 1990s

92 Pages Posted: 11 Oct 2001 Last revised: 25 Apr 2021

See all articles by Joseph P. Newhouse

Joseph P. Newhouse

Harvard Medical School; Harvard Kennedy School (HKS); National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Date Written: October 2001

Abstract

I describe several changes to Medicare in the 1990s, their rationale, and their likely effects. I focus principally on issues in the administered price systems Medicare uses to pay medical providers, especially those used for post-acute care providers, Health Maintenance Organizations (HMOs), and physicians. The changes to these systems in the 1990s, although directed at important problems, have introduced new and serious problems of their own. For example, the post-acute care system now pays different amounts for the same service, depending on the site of care, and the HMO system is on a trajectory to pay substantially less than traditional Medicare in high rate areas and more in low rate areas, thereby unbalancing local medical markets. I consider future directions for the program, including its long-term financing and a prescription drug benefit.

Suggested Citation

Newhouse, Joseph P., Medicare Policy in the 1990s (October 2001). NBER Working Paper No. w8531, Available at SSRN: https://ssrn.com/abstract=286956

Joseph P. Newhouse (Contact Author)

Harvard Medical School; Harvard Kennedy School (HKS) ( email )

Department of Health Care Policy
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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