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Physician pricing behavior: Evidence from an Australian experiment

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  • Yu, Serena
  • van Gool, Kees
  • Hall, Jane
  • Fiebig, Denzil G.

Abstract

We examine the unregulated pricing behavior of physicians in response to an exogenous decrease in patient entitlements under a government scheme providing insurance for high out-of-pocket medical costs. We use survey-linked administrative data to estimate the causal effects of the policy change on consultation fees. Adopting a quasi-experimental difference-in-difference model, we find that in response, physicians with knowledge of the patient's eligibility raised consultation fees by an average 12%. The results show significant unintended consequences of the policy change, indicating that a physician's knowledge of patient eligibility for healthcare benefits may allow them to affect demand for their services.

Suggested Citation

  • Yu, Serena & van Gool, Kees & Hall, Jane & Fiebig, Denzil G., 2019. "Physician pricing behavior: Evidence from an Australian experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 20-34.
    • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:20-34
    DOI: 10.1016/j.jebo.2019.03.008
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    Cited by:

    1. Naghsh Nejad, Maryam & Van Gool, Kees & Haywood, Philip & Hall, Jane, 2024. "Medicare Austerity Reforms and Patient Out-of-Pocket Costs: The Experience from Australian Cancer Patients," IZA Discussion Papers 16844, Institute of Labor Economics (IZA).
    2. Naghsh Nejad, Maryam & Van Gool, Kees, 2024. "Impact of Time of Diagnosis on Out-of-Pocket Costs of Cancer Treatment, a Side Effect of Health Insurance Design in Australia," IZA Discussion Papers 16879, Institute of Labor Economics (IZA).
    3. Naghsh Nejad, Maryam & Yu, Serena & Haywood, Philip, 2023. "Provider Responses to the Expansion of Public Subsidies in Healthcare: The Case of Oral Chemotherapy Treatment in Australia," IZA Discussion Papers 16060, Institute of Labor Economics (IZA).
    4. Olukorede Abiona & Phil Haywood & Serena Yu & Jane Hall & Denzil G. Fiebig & Kees van Gool, 2024. "Physician responses to insurance benefit restrictions: The case of ophthalmology," Health Economics, John Wiley & Sons, Ltd., vol. 33(5), pages 911-928, May.

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    More about this item

    Keywords

    Health providers; Policy evaluation; Health insurance; Applied microeconomics;
    All these keywords.

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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