Essays on Healthcare Access, Use, and Cost Containment

Abstract

This dissertation is composed of two essays that examine the role of public and private health insurance on healthcare access, use, and cost containment. In Chapter 1, Dugan, Virani, and Ho examine the impact of Medicare eligibility on healthcare utilization and access. Although Medicare eligibility has been shown to generally increase health care utilization, few studies have examined these relationships among the chronically ill. We use a regression-discontinuity framework to compare physician utilization and financial access to care among people before and after the Medicare eligibility threshold at age 65. Specifically, we focus on coronary heart disease and stroke (CHDS) patients. We find that Medicare eligibility improves health care access and physician utilization for many adults with CHDS, but it may not promote appropriate levels of physician use among blacks with CHDS. My second chapter examines the extent to which the managed care backlash affected managed care's ability to contain hospital costs among short-term, non-federal hospitals between 1998 and 2008. My analysis focuses on health maintenance organizations (HMOs), the most aggressive managed care model. Unlike previous studies that use cross-sectional or fixed effects estimators to address the endogeneity of HMO penetration with respect to hospital costs, this study uses a fixed effects instrumental variable approach. The results suggest two conclusions. First, I find the impact of increased HMO penetration on costs declined over the study period, suggesting regulation adversely impacted managed care's ability to contain hospital costs. Second, when costs are decomposed into unit costs by hospital service, I find the impact of increased HMO penetration on inpatient costs reversed over the study period, but HMOs were still effective at containing outpatient costs.