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The Efficiency of Medicare

The Efficiency of Medicare

Chapter:
(p.129) 4 The Efficiency of Medicare
Source:
Analyses in the Economics of Aging
Author(s):
Jonathan Skinner, Elliott S. Fisher, John E. Wennberg
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226903217.003.0005

This chapter evaluates the efficiency of Medicare using the idea of natural randomization. It examines whether the Medicare program is consistent with the efficiency criterion commonly used in public economics using data on survival rates, Medicare expenditures and health status measures across 306 hospital referral regions in the U.S. The findings indicate that the inefficiency inherent in the Medicare program is as much as 20 percent of total Medicare expenditures.

Keywords:   Medicare, natural randomization, efficiency criterion, public economics, Medicare expenditures, health status measures, U.S.

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