ABSTRACT: During the late 1990s, there was a substantial cultural, media and legal backlash against the cost-containment practices of managed care organizations (particularly, HMOs). Most states passed a variety of laws in this period that restricted the cost-cutting measures that managed care firms could use. I exploit panel variation in the passage of these regulations across states and over time to investigate the effects of the managed care backlash, as proxied by this legislation, on health care cost growth. I find that the backlash had a strong effect on health care costs, and can statistically explain much of the rise in health spending as a share of U.S. GDP between 1993 and 2005 (amounting to 1% – 1.5% of GDP). I also investigate the effects of the managed care backlash on intensity of care, hospital salaries and technology adoption. I conclude that managed care was largely successful in keeping health care costs on a sustainable path relative to the size of the economy.
I'm an Economics Ph.D. student at UC Berkeley focusing on public finance topics at the intersection of labor economics and macroeconomics. My current research focus is on the interaction of corporate taxation, firm location decisions, and the location and scale of economic activity. You can follow me on twitter @omzidar.
- 2012 Alan Auerbach Baumol's cost Brad Delong Budget Capital capital income taxation Capital Taxation Christy Romer College Corporate Taxes Crime David Card debt Dylan Matthews Economic Policy Education Emmanuel Saez Enrico Moretti Europe Finance Fiscal Cliff Fiscal Policy Government Government Spending Great Recession Growth Hamilton Project Healthcare Healthcare Costs Health Insurance Housing Housing Finance Immigration Incidence inequality Innovation Investment Jeremy Stein Job Market Paper Jobs Justin Wolfers Labor Labor Markets Labor Share larry summers Laura Tyson Local Labor Markets Macroeconomics Medicare Middle Class mobility Monetary Policy NYTimes Obama Pat Kline Paul Krugman Political Economy Politics Productivity Profits Raj Chetty Regulation Robots Romney Spending States Stimulus Tax Cuts for Whom Taxes Tax Reform Technological Change Unemployment Wages Yuriy Gorodnichenko
- Retirement Security in an Aging Society
- Poverty and the Tax Code
- Weekend reading
- Use-it-or-Lose-it Budget Rules
- Isolated Capital Cities, Accountability and Corruption Evidence from US States
- From Natural Variation to Optimal Policy? The Importance of Endogenous Peer Group Formation
- “Cash on Hand” and Consumption: Evidence from Mortgage Refinancing
- US inequality due to assortative marriages | vox
- RT @profsufi: ICYMI we launched our blog today: houseofdebt.org. Posts today related to wealth inequality and economic recovery. 4 hours ago
- RT @ezraklein: Zeke Emanuel on how politics undermined policy in Obamacare: online.wsj.com/news/articles/… 6 hours ago
- Retirement Security in an Aging Society wp.me/p2otxR-yO 10 hours ago
- RT @AtifRMian: Wealth inequality matters for how macro shocks propagate. houseofdebt.org/2014/03/07/is-… 13 hours ago
- Poverty and the Tax Code wp.me/p2otxR-yL 1 day ago