Health spending during Medicare coverage and associated health change

TitleHealth spending during Medicare coverage and associated health change
Publication TypeJournal Article
Year of Publication2013
AuthorsChao, Y-S, Wu, C-J
JournalJournal of Global Health Care Systems
KeywordsHealth Conditions and Status, Healthcare, Medicare/Medicaid/Health Insurance

Introduction: Medicare spending growth is creating financial and fiscal issues in the US, but health returns from the spending under Medicare were not clear. This study aims to quantify the returns to mortality, self-rated health status and mental health, from the spending on health care in the first four years of Medicare coverage. Method: Eligible Medicare enrollees in the Health and Retirement Study (HRS) from 1992 to 2008 were chosen to understand the returns to health after four years of Medicare coverage, while controlling for individual characteristics before Medicare coverage (pre-Medicare characteristics). Ordered logit models were used for 4,099 eligible Medicare enrollees. Results: Health spending was associated with a higher likelihood of mortality in total spending model (n=1752, odds ratio OR =1.0044 per 1,000, p 0.01); out-of-pocket spending was not significant (n=4032, OR=1.0027 per 1,000, p=0.12). For health status, total and out-of-pocket spending were associated with worsening (n=1731, OR=1.0056, p=0.001; n=4029, OR=1.0154, p 0.01), while this association was confirmed for mental health only in total spending model (n=1658, OR=1.0018, p 0.001 and n=3922, OR=1.0029, p=0.06). Conclusion: there is an association between health spending and worsening of three health dimensions after first four years of Medicare coverage, as pre-Medicare characteristics also play a role in these health outcomes. Medicare could be more efficient in improving health outcomes if there are incentives to adopt effective care and a focus on the temporal externality from pre-Medicare health coverage and pre-Medicare characteristics.

Endnote Keywords

Medicare/Health returns/Mortality/Health status/Mental health/health expenditures/CESD scale

Endnote ID


Citation Key7890