Article: Volume responses to exogenous changes in Medicare's payment policies.

The purpose of this study is to obtain estimates of the "volume offset," which is the slippage in the costs or the savings that would, in the absence of behavioral responses, result from exogenous changes in Medicare's payment policies. An estimate of this offset is essential to accurate cost estimation for fee proposals under Medicare. Estimates are obtained using Medicare claims data from Colorado for 1976 and 1978, before and after implementation of an abrupt and substantial change in the way Medicare's fees were determined. Reliable estimates could be obtained only for two specialty groups -- general practitioners and internists. For these physicians, the results ...

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