THE IMPACT OF MEDICAID ON STATE AND LOCAL HEALTH AND HOSPITAL EXPENDITURES, WITH SPECIAL REFERENCE TO BLACKS.

ABSTRACT A simple demand and supply model is proposed to "explain" the wide variations in state and local government expenditures on health and hospitals, and to assess the impact of Medicaid in satisfying the health needs of blacks. The model shows that a large percentage of the variation can be explained and that blacks tend to demand and evidently receive a higher proportion of public health care on the basis of their income than one would expect. The discriminatory effects of Medicare are more than offset by a combination of Medicaid and state and local spending on health care, although the continuing racial health gap indicates that state and local spending has not offset the wide differences between blacks and whites in private and Medicare spending. [ABSTRACT FROM AUTHOR]