We study two mechanisms used by public health insurance programs for rationing health care: outsourcing to private managed care plans and quantity limits for prescription drugs. Leveraging a natural experiment in Texas’s Medicaid program, we find that the shift to managed care and the relaxation of a strict drug cap increased access to high-value drugs and outpatient services and reduced avoidable hospitalizations. Program costs increased significantly, indicating a trade-off between cost and quality. We provide suggestive evidence attributing the reduction in hospitalizations to the relaxation of the drug cap and much of the spending increase to the shift to managed care.
Name | URL |
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Creative Commons Attribution 4.0 International (CC BY 4.0) License | https://creativecommons.org/licenses/by/4.0/ |
Repository name | URI |
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AEA Data and Code Repository | https://www.openicpsr.org/openicpsr/aea |
Cluster size: 300 G and Equivalent RAM
Disk Size: 1,000 G
Memory Size: 200 G
Time requirement: 4 days
A readme file with detailed instructions is part of the (external) reproducibility package.
We obtained the Medicaid Analytic eXtract (MAX) through Data Use Agreement (DUA) 25543 from the Centers for Medicare and Medicaid Services (CMS) through the National Bureau of Economic Research (NBER). The data are confidential, but may be obtained with Data Use Agreements with the Centers of Medicaid and Medicare Services (CMS). The Clinical Classifications Software (CCS) is included in the replication package. The RED BOOK classifications associated with Truven Health’s MartketScan data are proprietary and confidential. We used geographic data on counties in our analysis that can be found under /raw/counties/data/ and we used geographic data on zipcodes in our analysis that can be found under /raw/zipcodes/data/ in the replication package. The Medicaid State Drug Utilization Data is freely available online from https://www.medicaid.gov/ medicaid/prescription-drugs/state-drug-utilization-data/index.html. The data must be loaded under /raw/state_drug_utilization_data/data/.
Yes, please refer to the data statement and the readme file.
Author | Affiliation | |
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Timothy J. Layton | Harvard University and NBER | layton@hcp.med.harvard.edu |
Nicole Maestas | Harvard University and NBER | maestas@hcp.med.harvard.edu |
Daniel Prinz | World Bank and Institute for Fiscal Studies | dprinz@worldbank.org |
Boris Vabson | Harvard University | vabson@hcp.med.harvard.edu |
Agency Name | Role | Affiliation |
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Francoise Becker | Data assistance | Social Security Administration (SSA) |
Julia Yates | RA |
2022-11
Location | Code |
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United States of America | USA |
The materials in the reproducibility packages are distributed as they were prepared by the staff of the International Bank for Reconstruction and Development/the World Bank. The findings, interpretations, and conclusions expressed in this event do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank does not guarantee the accuracy of the materials included in the reproducibility package.
Name | URI |
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Creative Commons Attribution 4.0 International (CC BY 4.0) License | https://creativecommons.org/licenses/by/4.0/ |
Name | Abbreviation | Affiliation |
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Krestel | CK | World Bank |
2023-07-04
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