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Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?

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  • Jeffrey Clemens

    ()
    (Stanford Institute for Economic Policy Research)

  • Joshua D. Gottlieb

    ()
    (Department of Economics, Harvard University)

Abstract

We investigate whether physicians’ financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which is adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 5 percent increase in care provision. Elective procedures such as cataract surgery respond twice as strongly as less discretionary services. Higher reimbursements increase the pace of technology diffusion, as non-radiologists acquire MRI scanners when prices increase. Incremental care has no impacts on patient health.

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Bibliographic Info

Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 11-017.

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Date of creation: Jul 2012
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Handle: RePEc:sip:dpaper:11-017

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  8. Jeffrey Clemens, 2013. "The Effect of U.S. Health Insurance Expansions on Medical Innovation," NBER Working Papers 19761, National Bureau of Economic Research, Inc.
  9. Jonathan Gruber & Maria Owings, 1994. "Physician Financial Incentives and Cesarean Section Delivery," NBER Working Papers 4933, National Bureau of Economic Research, Inc.
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Cited by:
  1. Marika Cabral & Neale Mahoney, 2014. "Externalities and Taxation of Supplemental Insurance: A Study of Medicare and Medigap," NBER Working Papers 19787, National Bureau of Economic Research, Inc.
  2. Abe Dunn & Adam Hale Shapiro, 2013. "The impact of health care reform on physician payments: evidence from Massachusetts," Working Paper Series 2013-36, Federal Reserve Bank of San Francisco.
  3. David Cutler & Jonathan Skinner & Ariel Dora Stern & David Wennberg, 2013. "Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending," NBER Working Papers 19320, National Bureau of Economic Research, Inc.
  4. Ali Yurukoglu, 2012. "Medicare Reimbursements and Shortages of Sterile Injectable Pharmaceuticals," NBER Working Papers 17987, National Bureau of Economic Research, Inc.
  5. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2013. "Healthcare Exceptionalism? Productivity and Allocation in the U.S. Healthcare Sector," NBER Working Papers 19200, National Bureau of Economic Research, Inc.
  6. Jeffrey Clemens, 2012. "The Effect of U.S. Health Insurance Expansions on Medical Innovation," Discussion Papers 11-016, Stanford Institute for Economic Policy Research.
  7. Avdic, Daniel & Lundborg, Petter & Vikström, Johan, 2014. "Learning-by-doing in a highly skilled profession when stakes are high: evidence from advanced cancer surgery," Working Paper Series 2014:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Mireille Jacobson & Tom Y. Chang & Joseph P. Newhouse & Craig C. Earle, M.D., 2013. "Physician Agency and Competition: Evidence from a Major Change to Medicare Chemotherapy Reimbursement Policy," NBER Working Papers 19247, National Bureau of Economic Research, Inc.

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