We uncover political dynamics that reward and reinforce increases in US health spending by studying the passage of the 2003 Medicare Modernization (MMA). We focus on a provision added to the MMA, which allowed hospitals to apply for temporary Medicare payment increases. Hospitals represented by...

In this paper, we analyze the interplay between Congressional politics, the actions of the executive branch, and hospitals’ regulated Medicare fee-for-service payments. We focus on the 2003 Medicare Modernization Act (MMA) and analyze a provision in the law—Section 508—that raised certain...