TY  - JOUR
AU  - Skinner, Jonathan
AU  - Fisher, Elliott
AU  - Wennberg, John E
TI  - The Efficiency of Medicare
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8395
PY  - 2001
Y2  - July 2001
DO  - 10.3386/w8395
UR  - http://www.nber.org/papers/w8395
L1  - http://www.nber.org/papers/w8395.pdf
N1  - Author contact info:
Jonathan S. Skinner
Department of Economics
6106 Rockefeller Hall
Dartmouth College
Hanover, NH 03755
Tel: 603/646-2535
Fax: 603/646-2122
E-Mail: jonathan.skinner@dartmouth.edu

Elliott S. Fisher
Dartmouth College
E-Mail: Elliott.S.Fisher@Dartmouth.edu
M1  - published as Jonathan S. Skinner, Elliott S. Fisher, John Wennberg. "The Efficiency of Medicare," in David A. Wise, editor, "Analyses in the Economics of Aging" University of Chicago Press (2005)

AB  - Technological advances in health care have been shown to yield large average health benefits for the U.S. elderly population. However, less is known about the marginal or incremental benefits of health care spending.  We use geographical variations in health care spending to measure the marginal value of greater health care intensity among the elderly Medicare population.  To correct for the reverse causation problem -- that sicker areas tend to require more health care -- we use regional averages of physician visits in the last six months of life as a natural randomization for health care intensity.  Using linear and semiparametric instrumental variables, we find that a large component of Medicare expenditures -- $26 billion in 1996 dollars, or nearly 20 percent of total Medicare expenditures -- appears to provide no benefit in terms of survival, nor is it likely that this extra spending improves the quality of life. While secular trends in health care technology have delivered large health benefits, variation in health care intensity at a point in time have not.
ER  -