Amitabh Chandra Photo

Amitabh Chandra

Appointment
Malcolm Wiener Professor of Social Policy
Office Address
79 John F. Kennedy St. Taubman Bldg 344
617-496-7356
Chandra, Amitabh, Jonathan Gruber, and and Robin McKnight. "Patient Cost-Sharing and Hospitalization Offsets in the Elderly." American Economic Review 100.1 (March 2010): 193-213.

Abstract

In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial “offset” effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare.