Interactive result

The Private Provision of Public Services (AER, 2026)

Nearly 100,000 Medicaid enrollees were randomly assigned between a publicly operated fee-for-service system and private managed care. Points show the effect of managed care on annual spending by category; hover for the 95% confidence interval.

Takeaway: managed care lowered total spending (−5.6%), driven almost entirely by pharmacy management (−18%). Outpatient spending fell modestly and inpatient was essentially unchanged. Yet privatizing medical benefits was associated with lower measured quality and consumer satisfaction — the savings did not come free. Read the paper →

95% confidence intervals are derived from the standard errors reported in NBER WP30390 and are pending final verification against the published tables.