Academic journal article Contemporary Economic Policy

Medicare and Inequalities in Health Outcomes: The Case of Breast Cancer

Academic journal article Contemporary Economic Policy

Medicare and Inequalities in Health Outcomes: The Case of Breast Cancer

Article excerpt

Carol Rapaport (*)

This article evaluates whether expanding Medicare to cover those between ages 55 and 64 will improve the health status of these near-elderly individuals. We compare the experiences of near-elderly and elderly women with breast cancer and pay special attention to those demographic groups traditionally thought to be disadvantaged. Using unique individual-level data from the National Cancer Institute, we find that expanding Medicare does not improve the probability that a black woman will have her cancer diagnosed early However, if she does happen to be diagnosed early a discrete-time hazard model of survival finds that the price effects of insurance will improve her odds of survival. (JEL 113)


Lack of health insurance is widely thought to decrease utilization of health services and therefore result in worse health outcomes. At the same time, no public programs currently guarantee health insurance to nonelderly, nondisabled adults. Congress has begun to focus on the incomplete health insurance coverage of the "near-elderly," or those between ages 55 and 64 who have not yet reached the age of Medicare eligibility. This article provides one estimate of the possible benefits of extending Medicare to the nonelderly.

We examine the benefits of public insurance on breast cancer outcomes. Using population data collected by the National Cancer Institute (NCI), we compare the severity of the disease at the time of initial diagnosis and the probability of survival of the cancer for two groups of woman--the near-elderly between ages 55 and 64 and the elderly between ages 65 and 74. The research pays particular attention to those groups of women thought to be generally disadvantaged, including the poor, the poorly educated, and blacks.

The enormous increase in public concern over women's health in general and breast cancer in particular makes this disease an ideal case study. Funding for breast cancer research has risen significantly over the past 20 years. Medical researchers have attempted to both increase breast cancer survival conditional on incidence and to lower the incidence of the disease (Love and Lindsey, 1995). At the same time, economists are only beginning to study the relationships between health insurance, health production functions and outcomes, and public policy. For example, Hurd and McGarry (1997) demonstrate that those elderly who are the most heavily insured have the greatest utilization of health services. Stoner et al. (1998) show that vouchers for free mammograms will increase compliance with the recommended mammography screening guidelines. Mitchell and Hadley (1997) demonstrate that the characteristics of a woman's insurance influence her breast cancer treatment decisions.

The current research, however, concentrates not on elements of the health production process but rather on indicators of good cancer outcomes. This article evaluates whether reaching the age of Medicare eligibility improves a woman's probability of early detection and ultimate survival. To preview the results, a Medicare expansion to near-elderly white women would increase slightly the probability that these women are diagnosed at an early stage of the disease. In addition, white women would be more likely to survive for five and ten years following diagnosis. On the other hand, a Medicare expansion would not affect whether black women are diagnosed early. Conditional on early diagnosis, however, the expansion would slightly improve black women's survival rates.

The article proceeds as follows. Section II explores the insurance status of near-elderly women and describes the main insurance source (Medicare) for elderly woman. Section III discusses the data and provides background information on breast cancer severity and survival, conditional on diagnosis. Section IV estimates the probability that a woman's cancer is diagnosed at a late stage, and section V estimates annual survival functions using a flexible functional form. …

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