Table 2. Effect of Reimbursement Rates on log Health Care per Patient.
| Aggregate health care supply: ln(relative value units per patient) | ||||||||
|---|---|---|---|---|---|---|---|---|
|
| ||||||||
| County level (1) | Baseline (2) | Weighted (3) | Unmatched counties (4) | w/ HMO control (5) | No demog. Controls (6) | No comorb. Controls (7) | Population controls (8) | |
| Price change × short run | 0.801 (0.531) | 0.817 (0.596) | 1.010 (0.721) | 0.454 (0.554) | 0.741 (0.598) | 0.763 (0.596) | 0.776 (0.579) | 1.223** (0.653) |
| Price change × medium run | 1.966*** (0.650) | 2.012*** (0.770) | 1.952** (0.825) | 1.676** (0.701) | 1.876** (0.762) | 1.956** (0.770) | 1.996*** (0.750) | 2.583*** (0.827) |
| Price change × long run | 1.423* (0.735) | 1.464* (0.884) | 2.686** (1.211) | 1.391* (0.790) | 1.405 (0.888) | 1.405 (0.880) | 1.423 (0.889) | 2.268** (0.938) |
| Old MPLs | 177 | 177 | 177 | 200 | 177 | 177 | 177 | 177 |
| Estimation | OLS | OLS | OLS | OLS | OLS | OLS | OLS | OLS |
| Standard errors | Clustered | Bootstrap | Bootstrap | Bootstrap | Bootstrap | Bootstrap | Bootstrap | Bootstrap |
| Observations | 28,340 | 2,301 | 2,301 | 2,600 | 2,301 | 2,301 | 2,301 | 2,301 |
Notes: This table reports coefficients from ordinary least squares regressions in which log health care quantity supplied per Medicare patient is the dependent variable. This quantity is regressed on reimbursement rate shocks resulting from the consolidation of Medicare's fee schedule areas in 1997, as interacted with indicators for time relative to the payment area consolidation. “Short Run” following the consolidation refers to 1997 and 1998, “Medium Run” refers to 1999 and 2000, while “Long Run” refers to 2001 through 2005. In column 1, this regression is run at the county level, as described in Section IA. In columns 2 through 8, it is run at the payment area level after partialing out the following controls, as described in Section IB: county fixed effects, state-by-year effects, and a set of year dummy variables interacted with the county's 1990 urban population share and an indicator for metropolitan status. For all regressions except column 4, we restrict the sample to counties satisfying the matching criterion described in Section IA. Column 5 adds as a control the share of Medicare beneficiaries enrolled in an HMO. The demographic controls used in all regressions except column 6 are the fraction of the county's sample beneficiary pool aged 65–59, 70–74, 75–79, and 80–84, the fraction black, Hispanic, female, eligible for Medicare due to end-stage renal disease or due to disability. All regressions except column 7 control for the share of beneficiaries with 2 or more, 3 or more, 4 or more, and 6 or more comorbidities as defined by Elixhauser et al. (1998). Column 8 controls for year interacted with county population instead of urban share. Standard errors are calculated with the bootstrap from online Appendix B.1.
Significant at the 1 percent level.
Significant at the 5 percent level.
Significant at the 10 percent level.
Sources: Price change: Federal Register, various issues; Medicare claims data: Medicare Research Identifiable Files, 5 percent sample, described in Section IC; county characteristics: Ruggles et al. (2010).