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Susan Murphy to speak at U-M kickoff for data science initiative, Oct 6, Rackham

Andrew Goodman-Bacon, former trainee, wins 2015 Nevins Prize for best dissertation in economic history

Deirdre Bloome wins ASA award for work on racial inequality and intergenerational transmission

Bob Willis awarded 2015 Jacob Mincer Award for Lifetime Contributions to the Field of Labor Economics

Next Brown Bag

Monday, Oct 5 at noon, 6050 ISR
Colter Mitchell: Biological consequences of poverty

HMO participation in Medicare plus Choice

Archived Abstract of Former PSC Researcher

Cawley, J., Michael Chernew, and C. McLaughlin. 2005. "HMO participation in Medicare plus Choice." Journal of Economics and Management Strategy, 14(3): 543-574.

In recent years, many health maintenance organizations (HMOs) have exited Medicare+Choice (M+C), the program that provides a managed-care option to Medicare. This paper answers the following questions: How does the equilibrium number of HMOs participating in county M+C markets vary with the capitation payment they are offered? How large a payment is required at the margin to ensure that various percentages of county markets have a M+C HMO, or to ensure that various percentages of Medicare beneficiaries have the choice of a M+C plan in their county of residence? The strategy for identifying the effect of government payment on HMO participation relies on a natural experiment; in 1997, Congress divorced M+C payments to HMOs from changes in underlying costs. The results in this paper suggest that the Centers for Medicare & Medicaid Services (CMS) has consistently underestimated the payment necessary to support HMOs in rural, sparsely populated areas. We also find that it would require a large incremental payment to support HMOs in M+C for the final 10% of counties or final 10% of Medicare beneficiaries.

DOI:10.1111/j.1530-9134.2005.00073.x (Full Text)

Country of focus: United States of America.

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