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Do public health activities pay for themselves? The effect of county‐level public health expenditures on county‐level public assistance medical care benefits in California
Author(s) -
Brown Timothy Tyler,
Murthy Vishnu
Publication year - 2020
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.4130
Subject(s) - medicaid , payment , public health , business , health care , instrumental variable , environmental health , panel data , actuarial science , public economics , economics , medicine , finance , economic growth , nursing , econometrics
This study estimates the effect of county‐level public health expenditures in reducing county‐level public assistance medical care benefits (public assistance medical care benefits is a measure compiled by the US Bureau of Economic Analysis and includes Medicaid and other medical vendor payments). The effect is modeled using a static panel model and estimated using two‐stage limited information maximum likelihood and a valid instrumental variable. For every $1 invested in county‐level public health expenditures, public assistance medical care benefits are reduced by an average of $3.12 (95% confidence interval: −$5.62, −$0.94). Because Medicaid in California is financed via an approximate 50% match of federal dollars with state dollars, savings to the state are approximately one‐half of this, or $1.56 for every $1 invested in county‐level public health expenditures.