What Difference Does a Health Plan Make? Evidence from Random Plan Assignment in Medicaid / Michael Geruso, Timothy J. Layton, Jacob Wallace.

Format:

Book

Author/Creator:

Geruso, Michael.

Contributor:

National Bureau of Economic Research.

Layton, Timothy J.

Wallace, Jacob.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27762.

NBER working paper series no. w27762

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

Exploiting the random assignment of Medicaid beneficiaries to managed care plans, we find substantial plan-specific spending effects despite plans having identical cost sharing. Enrollment in the lowest-spending plan generates 30% lower spending--driven by differences in quantity--relative to enrollment in the highest-spending plan. Rather than reducing "wasteful" spending, lower-spending plans broadly reduce medical service provision--including the provision of low-cost, high-value care--and worsen beneficiary satisfaction and health. Consumer demand follows spending: a 10 percent increase in plan-specific spending is associated with a 40 percent increase in market share. These facts have implications for the government's contracting problem and program cost growth.

Notes:

Print version record

August 2020.