title: The spillover effects of Medicare managed care: Medicare Advantage and hospital utilization.
abstract: More than a quarter of Medicare beneficiaries are enrolled in Medicare Advantage, which was created in large part to improve the efficiency of health care delivery by promoting competition among private managed care plans. This paper explores the spillover effects of the Medicare Advantage program on the traditional Medicare program and other patients, taking advantage of changes in Medicare Advantage payment policy to isolate exogenous increases in Medicare Advantage enrollment and trace out the effects of greater managed care penetration on hospital utilization and spending throughout the health care system. We find that when more seniors enroll in Medicare managed care, hospital costs decline for all seniors and for commercially insured younger populations. Greater managed care penetration is not associated with fewer hospitalizations, but is associated with lower costs and shorter stays per hospitalization. These spillovers are substantial - offsetting more than 10% of increased payments to Medicare Advantage plans.
authors.affiliation: Harvard School of Public Health, United States. Electronic address: kbaicker@hsph.harvard.edu.
authors.forename: Katherine
authors.initials: K
authors.lastname: Baicker
authors.forename: Michael E
authors.initials: ME
authors.lastname: Chernew
authors.forename: Jacob A
authors.initials: JA
authors.lastname: Robbins
mesh_terms: D003695:Delivery of Health Care / Q000191:economics*; D036262:Empirical Research; D005260:Female; D005102:Health Expenditures / Q000706:statistics & numerical data; D006760:Hospitalization / Q000191:economics; D006761:Hospitals / Q000706:statistics & numerical data*; D006801:Humans; D008297:Male; D008329:Managed Care Programs / Q000706:statistics & numerical data*; D006278:Medicare / Q000706:statistics & numerical data; D020398:Medicare Part C / Q000706:statistics & numerical data*; D012051:Reimbursement Mechanisms; D014481:United States
keywords: I.1.0; I.1.3; I.1.8; Managed care; Medicare Advantage; Public health insurance; Spillovers