The effect of managed care on use of health care services: Results from two contemporaneous household surveys

This paper estimates treatment effects of managed care plans on the utilization of health care services using data from two contemporaneous, nationally representative household surveys from the USA. The paper exploits recent advances in simulation-based econometrics to take the endogencity of enrollment into managed care plans into account and identify the causal relationship between managed care enrollment and utilization. Overall, results from the two surveys are remarkably similar, lending credibility to their external validity and to the econometric model and estimation methods. There is significant evidence of self-selection into managed care plans. After accounting for selection, an individual enrolled in an health maintenance organization (HMO) plan has 2 more visits to a doctor and has 0. 1 more visits to the emergency room per year than would the same individual enrolled in a nonmanaged care plan. Copyright (c) 2006 John Wiley & Sons, Ltd.