Table 1.

First stage estimates^*

Variables	(1)	(2)	(3)	(4)
Variables	Main Simulated Benchmark		Alternate Simulated Benchmark
Sim Benchmark	0.939^*** (0.0486)	0.925^*** (0.0482)	0.934^*** (0.0650)	0.921^*** (0.0627)
Risk (FFS)	−90.88^** (41.82)	−84.13^** (34.90)	−100.7^*** (33.76)	−96.88^*** (31.32)
Risk (Plan)	31.73^*** (8.989)	29.98^*** (9.471)	49.06^*** (12.43)	48.05^*** (12.41)
FFS cost	0.106^** (0.0431)	0.100^** (0.0378)	0.127^*** (0.0370)	0.124^*** (0.0355)
Pop (1000s)	−0.0119 (0.0202)	−0.0221 (0.0270)	−0.0327 (0.0367)	−0.0378 (0.0382)
Insurers	0.183 (0.331)	0.302 (0.377)	0.0886 (0.286)	0.160 (0.299)
HHI (beds)		−0.00550 (0.00375)		−0.00322^* (0.00175)
Market FE	Y	Y	Y	Y
Year FE	Y	Y	Y	Y
Observations	7,669	7,669	7,669	7,669
Partial R-squared	0.628	0.622	0.571	0.558
F-statistic	258.92	250.57	302.44	263.82

Robust standard errors in parentheses clustered by state.

^***

p<0.01,

^**

p<0.05,

p<0.1

The dependent variable is actual (observed) changes in benchmarks. The main simulated benchmark strips out the “own-county” FFS update path and replaces it with the “state-not-self” FFS update path, as described in the text. The alternate simulated benchmark omits the “own-county” FFS update without replacing it with anything, allowing all benchmark updates to follow the 2%, national FFS growth rate, or floor updates. Both instruments are also discussed in Baicker, Chernew, and Robbins (2013, same issue). All covariates are at the market level. FFS costs are actual realized Medicare Part A and Part B costs among fee-for-service beneficiaries. Markets are determined using HMO plans in the Medicare Advantage program. All amounts are inflated to 2012 U.S. dollars.