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Medicare fees and physicians’ medicare service volume: Beneficiaries treated and services per beneficiary

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  • Jack Hadley

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  • James Reschovsky

    ()

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    Abstract

    Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians’ fee-for-service Medicare service volume. We find that Medicare fees are positively related to both the number of beneficiaries treated (η=0.12 to 0.61) and service intensity (η=1.04–1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee. Finally, several market factors appear to influence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicare’s fee-for-service program. Copyright Springer Science + Business Media, LLC 2006

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    File URL: http://hdl.handle.net/10.1007/s10754-006-8143-z
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    Bibliographic Info

    Article provided by Springer in its journal International Journal of Health Care Finance and Economics.

    Volume (Year): 6 (2006)
    Issue (Month): 2 (June)
    Pages: 131-150

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    Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:2:p:131-150

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    Web page: http://www.springerlink.com/link.asp?id=106603

    Related research

    Keywords: Supply response; Service intensity; Market factors; Demand inducement;

    References

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    1. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
    2. Yip, Winnie C., 1998. "Physician response to Medicare fee reductions: changes in the volume of coronary artery bypass graft (CABG) surgeries in the Medicare and private sectors," Journal of Health Economics, Elsevier, vol. 17(6), pages 675-699, December.
    3. McGuire, Thomas G. & Pauly, Mark V., 1991. "Physician response to fee changes with multiple payers," Journal of Health Economics, Elsevier, vol. 10(4), pages 385-410.
    4. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
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    Cited by:
    1. Damien Échevin & Bernard Fortin, 2011. "Physician Payment Mechanisms, Hospital Length of Stay and Risk of Readmission: a Natural Experiment," Cahiers de recherche 1112, CIRPEE.
    2. Échevin, Damien & Fortin, Bernard, 2013. "Physician Payment Mechanisms, Hospital Length of Stay and Risk of Readmission: Evidence from a Natural Experiment," IZA Discussion Papers 7835, Institute for the Study of Labor (IZA).
    3. Devlin, Rose Anne & Sarma, Sisira, 2008. "Do physician remuneration schemes matter? The case of Canadian family physicians," Journal of Health Economics, Elsevier, vol. 27(5), pages 1168-1181, September.

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