Evidence of Cost Shifting in California Hospitals

Published in: Health Affairs, v. 25, no. 1, Jan./Feb. 2006, p. 197-203

Posted on RAND.org on December 31, 2005

by Jack Zwanziger, Anil Bamezai

Read More

Access further information on this document at Health Affairs

This article was published outside of RAND. The full text of the article can be found at the link above.

The authors used 1993-2001 data from private hospitals in California to investigate whether decreases in Medicare and Medicaid prices were associated with increases in prices paid for privately insured patients. They found that a 1 percent relative decrease in the average Medicare price is associated with a 0.17 percent increase in the corresponding price paid by privately insured patients; similarly, a 1 percent relative reduction in the average Medicaid price is associated with a 0.04 percent increase. These relationships imply that cost shifting from Medicare and Medicaid to private payers accounted for 12.3 percent of the total increase in private payers' prices from 1997 to 2001.

This report is part of the RAND Corporation external publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.