Which is, they see just rate discrimination

Which is, they see just rate discrimination

Cross-Sectional Degree

The newest study of cost progressing is that from the Stensland, Gaumer, and you will Miller (2010), in which they establish several hypotheses to spell it out the fresh new detailed proof that is apparently sensed the new trademark out of cost shifting. One hypothesis, promoted from the hospital and you can insurance rates areas otherwise contacting firms toward its behalf (Fox and you may Pickering 2008; PWC 2009; discover also Dobson mais aussi al. 2009), would be the fact costs are perhaps not influenced by Medicare costs (i.age., is exogenous) and this down Medicare commission-to-prices margins trigger healthcare facilities to look for highest costs out of individual sources. The alternative vibrant, demonstrated prior to, is the fact medical facilities that have solid business electricity and a profitable payer merge provides good savings, high will set you back, and therefore lowest Medicare margins.

Even in the event these are, purely talking, active cost-shifting hypotheses, Stensland, Gaumer, and you may Miller take to just static designs ones. Pooling all over age, brand new authors illustrate just how margins correlate across the payers as well as how they connect with can cost you and industry electricity. Their descriptive conclusions are derived from Medicare hospitals’ cost accounts between 2002 and you may 2006. While they stratify its investigation by standard of Medicare margin, it’s (weakly) cross-sectional. It data is actually supplemented with a couple instance training out of Chicago-town and you will Boston-city healthcare facilities predicated on 2005 Irs filings and you will newsprint profile to characterize qualitative variations in market power around the medical facilities. Read more