July 30, 2013

CAAR – National Bureau of Economic Research Working Papers – July 30, 2013

Filed under: Working Papers — Tags: , — admin @ 4:21 pm

A. “Evidence for Significant Compression of Morbidity In the Elderly U.S. Population,” by David M. Cutler, Kaushik Ghosh, and Mary Beth Landrum (w19268, July 2013, .pdf format, 51p.).


The question of whether morbidity is being compressed into the period just before death has been at the center of health debates in the United States for some time. Compression of morbidity would lead to longer life but less rapid medical spending increases than if life extension were accompanied by expanding morbidity. Using nearly 20 years of data from the Medicare Current Beneficiary Survey, we examine how health is changing by time period until death. We show that functional measures of health are improving, and more so the farther away from death the person is surveyed. Disease rates are relatively constant at all times until death. On net, there is strong evidence for compression of morbidity based on measured disability, but less clear evidence based on disease-free survival.

B. “Physician Agency and Competition: Evidence from a Major Change to Medicare Chemotherapy Reimbursement Policy,” by Mireille Jacobson, Tom Y. Chang, Joseph P. Newhouse, and Craig C. Earle, M.D. (w19247, July 2013, .pdf format, 71p.).


We investigate the role of physician agency and competition in determining health care supply and patient outcomes. A 2005 change to Medicare fees had a large, negative impact on physician profit margins for providing chemotherapy treatment. In response to these cuts, physicians increased their provision of chemotherapy and changed the mix of chemotherapy drugs they administered. The increase in treatment improved patient survival. These changes were larger in states that experienced larger decreases in physician profit margins. Finally while physician response was larger in more competitive markets, survival improvements were larger in less competitive markets.

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