Vogel, Ronald J., and John F. Morall, III. 1973. "The Impact of Medicaid on State and Local Health and Hospitals Expenditures, with Special Reference to Blacks." Journal of Human Resources 8(2):202-211.

A simple demand and supply model is proposed to "explain" the wide variations in state and local government expenditures on health and hospitals, and to assess the impact of Medicaid in satisfying the health needs of blacks. The model shows that a large percentage of the variation can be explained and that blacks tend to demand and evidently receive a higher proportion of public health care on the basis of their income than one would expect. The discriminatory effects of Medicare are more than offset by a combination of Medicaid and state and local spending on health care, although the continuing racial health gap indicates that state and local spending has not offset the wide differences between blacks and whites in private and Medicare spending.

Mr. Vogel is a Brookings Economic Policy Fellow, Office of the Secretary, U.S. Department of Health, Education, and Welfare. Mr. Morrall is Assistant Professor of Economics, University of Florida. The authors would like to thank their University of Florida colleagues, Roger Blair, David Denslow, Robert Firestine, Irving Goffman, and Milton Kafoglis, for their useful comments on various drafts of this paper.

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