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

45 Pages Posted: 27 Jul 2006 Last revised: 20 Nov 2022

See all articles by Gautam Gowrisankaran

Gautam Gowrisankaran

Columbia University; HEC Montreal; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Robert J. Town

National Bureau of Economic Research (NBER)

Date Written: January 2004

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

Gowrisankaran, Gautam and Town, Robert J., Managed Care, Drug Benefits and Mortality: An Analysis of the Elderly (January 2004). NBER Working Paper No. w10204, Available at SSRN: https://ssrn.com/abstract=486208

Gautam Gowrisankaran (Contact Author)

Columbia University ( email )

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HEC Montreal ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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United Kingdom

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
United States

Robert J. Town

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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