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Effects of Health Insurance on Physicians' Fees

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  • Frank A. Sloan

Abstract

According to conventional wisdom, the growth of health insurance is partly responsible for the rise in physicians' fees; however, to date, convincing empirical evidence is lacking. A standard model of physician fee determination yields unambiguous predictions about insurance effects on fees. Empirical evidence, based on national interview surveys of physicians, shows insurance does affect fees in the predicted direction. Insurance parameter estimates imply that a 1.00 increase in an insurer's fee schedule raises physicians' fees somewhere between 0.13 and $0.35 on average. The higher fees could be associated with higher quality, an issue discussed in the last section.

Suggested Citation

  • Frank A. Sloan, 1982. "Effects of Health Insurance on Physicians' Fees," Journal of Human Resources, University of Wisconsin Press, vol. 17(4), pages 533-557.
    • Handle: RePEc:uwp:jhriss:v:17:y:1982:i:4:p:533-557
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    Cited by:

    1. Paola Bertoli & Veronica Grembi, 2018. "Medical Malpractice: How Legal Liability Affects Medical Decisions," Contributions to Economic Analysis, in: Health Econometrics, volume 127, pages 235-261, Emerald Group Publishing Limited.
    2. Gillis, Kurt D. & Lee, David W., 1997. "Medicare, access, and physicians' willingness to accept new Medicare patients," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(3), pages 579-603.
    3. Martin Gaynor, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-255, March.
    4. Brigitte Dormont & Mathilde Péron, 2016. "Does Health Insurance Encourage the Rise in Medical Prices? A Test on Balance Billing in France," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1073-1089, September.
    5. Frank A. Sloan, 1984. "State Discretion in Ftderal Categorical Assistance Programs: the Case of Medicaid," Public Finance Review, , vol. 12(3), pages 321-346, July.
    6. Louis De Alessi, 1989. "The Effect of Institutions on the Choices of Consumers and Providers of Health Care," Journal of Theoretical Politics, , vol. 1(4), pages 427-458, October.

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