Lessons from variations in state Medicaid expenditures

Jane Sneddon Little

New England Economic Review, 1992, issue Jan, 43-66

Abstract: Because Medicaid is absorbing a large and growing share of government spending in every state, policymakers are under intense pressure to control the cost of this budget-breaking program. In search of clues concerning Medicaid cost containment, this article examines state data on per-recipient Medicaid spending by type of service. This effort suggests focusing on nursing homes, because per-recipient payments to these institutions are highly variable across states. Indeed, the article concludes that a key explanation for cross-state differences in per-recipient Medicaid expenses is the reimbursement rate for the nursing homes. ; The article then explores why nursing home reimbursement rates differ widely across states, when personal health care costs show more limited variation. It suggests that the industrys costs may come to reflect the states reimbursement rates in an interactive cycle. The article recommends that regulators reexamine their nursing home reimbursement policies from the ground up. Finally, the article tries to draw lessons for the rest of the U.S. health care system. In particular, it suggests that the Medicaid dollar has lost its ability to serve as a standard of value; the U.S. health care dollar is in danger of following suit.

Keywords: Insurance, Health; state finances; Medical care, Cost of (search for similar items in EconPapers)
Date: 1992
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.bostonfed.org/economic/neer/neer1992/neer192c.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedbne:y:1992:i:jan:p:43-66

Ordering information: This journal article can be ordered from

Access Statistics for this article

More articles in New England Economic Review from Federal Reserve Bank of Boston Contact information at EDIRC.
Bibliographic data for series maintained by Catherine Spozio ().