Spillover Effects of State Mandated Benefit Laws: The Case of Outpatient Breast Cancer Surgery

This paper examines the "spillover effects" of state laws that mandate inpatient coverage for breast cancer surgery. It looks at outpatient utilization of two types of breast cancer surgery among Medicare fee-for-service patients, who are exempt from state regulation. Using data from the Surveillance, Epidemiology and End Results cancer registries and Medicare claims, we performed difference-in-differences analyses of patients in nine states from 1993 to 2002. The analyzes show, that state laws had a significant impact oil only the likelihood of outpatient mastectomy, which was reduced by five percentage points. Such a spillover effect may diminish the expected impact of federal coverage laws for inpatient breast cancer surgery, which have been proposed to achieve similar ends.