Posting date: April 7, 2004

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Health Affairs, 10.1377/hlthaff.w4.184
Copyright © 2004 by Project HOPE

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Medicare Spending, The Physician Workforce, And Beneficiaries’ Quality Of Care

¹ Katherine Baicker is an assistant professor of economics at Dartmouth (Hanover, New Hampshire), a senior research associate at the Center for the Evaluative Clinical Sciences at Dartmouth Medical School, and a faculty research fellow at the National Bureau of Economic Research (NBER).
² Amitabh Chandra is an assistant professor of economics at Dartmouth; a senior research associate at the center; a faculty research fellow at NBER; a research fellow of the IZA in Bonn, Germany; and coeditor of Economics Letters.

^*Corresponding author.

Abstract

The quality of care received by Medicare beneficiaries varies across areas. We find that states with higher Medicare spending have lower-quality care. This negative relationship may be driven by the use of intensive, costly care that crowds out the use of more effective care. One mechanism for this trade-off may be the mix of the provider workforce: States with more general practitioners use more effective care and have lower spending, while those with more specialists have higher costs and lower quality. Improving the quality of beneficiaries’ care could be accomplished with more effective use of existing dollars.

Key Words: Access To Care, Consumer Issues, Health Reform, Health Spending, Medicare, Physicians, Quality Of Care

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