Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending
AbstractThere is considerable controversy about the causes of regional variations in healthcare expenditures. We use vignettes from patient and physician surveys, linked to Medicare expenditures at the level of the Hospital Referral Region, to test whether patient demand-side factors, or physician supply-side factors, explains regional variations in Medicare spending. We find patient demand is relatively unimportant in explaining variations. Physician organizational factors (such as peer effects) matter, but the single most important factor is physician beliefs about treatment: 36 percent of end-of-life spending, and 17 percent of U.S. health care spending, are associated with physician beliefs unsupported by clinical evidence.
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Date of creation: Aug 2013
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- H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
- I1 - Health, Education, and Welfare - - Health
- I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-24 (All new papers)
- NEP-HEA-2013-09-24 (Health Economics)
- NEP-URE-2013-09-24 (Urban & Real Estate Economics)
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