Does Medicare Save Lives?
Published In: Quarterly Journal of Economics, v. 124, no. 2, May 2009, p. 597-636
Posted on RAND.org on December 31, 2008
Health insurance characteristics shift at age 65 as most people become eligible for Medicare. The authors measure the impacts of these changes on patients who are admitted to hospitals through emergency departments for conditions with similar admission rates on weekdays and weekends. The age profiles of admissions and comorbidities for these patients are smooth at age 65, suggesting that the severity of illness is similar on either side of the Medicare threshold. In contrast, the number of procedures performed in hospitals and total list charges exhibit small but statistically significant discontinuities, implying that patients over 65 receive more services. The authors estimate a nearly 1-percentage-point drop in 7-day mortality for patients at age 65, equivalent to a 20% reduction in deaths for this severely ill patient group. The mortality gap persists for at least 9 months after admission.