Subsidies for health insurance for chronically ill, high-cost individuals may increase coverage in the broader population by improving the functioning of insurance markets. In this paper, we assess an historical example of a policy intervention of this sort, the extension of Medicare to the...

One of the key terms in contracts between hospitals and insurers is how the parties apportion the financial risk of treating unexpectedly costly patients. "Prospective" payment contracts give hospitals a lump-sum amount, depending on the medical condition of the patient, with limited adjustment...

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...

We estimate the increment in Massachusetts Medicaid program costs attributable to smoking from December 20, 1991, to 1998. We describe how our methods improve upon earlier estimates of analogous costs at the national level. Current costs to the Massachusetts Medicaid program approximate the...

We study the consequences of hospital competition for Medicare beneficiaries' heart attack care from 1985 to 1994. We examine how relatively exogenous determinants of hospital choice such as travel distances influence the competitiveness of hospital markets, and how hospital competition...

Although economic theory suggests that the federal government can influence spending by states through subsidies to programs that states operate, no recent work has quantified the magnitude of this effect for Medicaid, the largest program of this type in the U.S. We find that Medicaid spending...

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),...

We investigate the hypothesis that increasing access for the indigent to physician offices shifts care from hospital outpatient settings and lowers Medicaid costs (the so-called offset effect'). To evaluate this hypothesis we exploit a large increase in physician fees in the Tennessee Medicaid...

Variation in HCC margins does not predict differences between an HCC's share of MA and TM enrollees, although one cannot a priori sign a relationship between margin and service-level selection. Margins are negatively associated with the importance of post-acute care in the HCC. Margins among...

There are two types of selection models in the health economics literature. One focuses on choice between a fixed set of contracts. Consumers with greater demand for medical care services prefer contracts with more generous reimbursement, resulting in a suboptimal proportion of consumers in such...