IDEAS home Printed from https://ideas.repec.org/a/aea/aejpol/v8y2016i1p115-41.html
   My bibliography  Save this article

Physicians Treating Physicians: Information and Incentives in Childbirth

Author

Listed:
  • Erin M. Johnson
  • M. Marit Rehavi

Abstract

This paper provides new evidence on the interaction between patient information and physician financial incentives. Using rich microdata on childbirth, we compare the treatment of physicians when they are patients with that of comparable nonphysicians. We also exploit the presence of HMO-owned hospitals to determine how the treatment gap varies with providers' financial incentives. Consistent with induced demand, physicians are approximately 10 percent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting. While financial incentives affect the treatment of nonphysicians, physician-patients are largely unaffected. Physicians also have better health outcomes. (JEL D83, I11, J16, J44)

Suggested Citation

  • Erin M. Johnson & M. Marit Rehavi, 2016. "Physicians Treating Physicians: Information and Incentives in Childbirth," American Economic Journal: Economic Policy, American Economic Association, vol. 8(1), pages 115-141, February.
  • Handle: RePEc:aea:aejpol:v:8:y:2016:i:1:p:115-41
    Note: DOI: 10.1257/pol.20140160
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/pol.20140160
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/pol/ds/0801/2014-0160_ds.zip
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/pol/data/0801/2014-0160_data.zip
    Download Restriction: no

    File URL: http://www.aeaweb.org/aej/pol/app/0801/2014-0160_app.pdf
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Currie, Janet & Lin, Wanchuan & Zhang, Wei, 2011. "Patient knowledge and antibiotic abuse: Evidence from an audit study in China," Journal of Health Economics, Elsevier, vol. 30(5), pages 933-949.
    2. Janet Currie & W. Bentley MacLeod, 2008. "First Do No Harm? Tort Reform and Birth Outcomes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 795-830.
    3. Daniel Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 353-390.
    4. Louis F. Rossiter & Gail R. Wilensky, 1984. "Identification of Physician-Induced Demand," Journal of Human Resources, University of Wisconsin Press, vol. 19(2), pages 231-244.
    5. Bart J. Bronnenberg & Jean-Pierre Dubé & Matthew Gentzkow & Jesse M. Shapiro, 2015. "Do Pharmacists Buy Bayer? Informed Shoppers and the Brand Premium," The Quarterly Journal of Economics, Oxford University Press, vol. 130(4), pages 1669-1726.
    6. Steven D. Levitt & Chad Syverson, 2008. "Market Distortions When Agents Are Better Informed: The Value of Information in Real Estate Transactions," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 599-611, November.
    7. Daniel P. Kessler & Mark McClellan, 1996. "Do Doctors Practice Defensive Medicine?," NBER Working Papers 5466, National Bureau of Economic Research, Inc.
    8. Epstein, Andrew J. & Nicholson, Sean, 2009. "The formation and evolution of physician treatment styles: An application to cesarean sections," Journal of Health Economics, Elsevier, vol. 28(6), pages 1126-1140, December.
    9. Jonathan Gruber & Maria Owings, 1996. "Physician Financial Incentives and Cesarean Section Delivery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 99-123, Spring.
    10. 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.
    11. Henry, O.A. & Gregory, K.D. & Hobel, C.J. & Platt, L.D., 1995. "Using ICD-9 codes to identify indications for primary and repeat cesarean sections: Agreement with clinical records," American Journal of Public Health, American Public Health Association, vol. 85(8), pages 1143-1146.
    12. Mark Pauly, 1980. "Appendix to "Doctors and Their Workshops: Economic Models of Physician Behavior"," NBER Chapters, in: Doctors and Their Workshops: Economic Models of Physician Behavior, pages 119-122, National Bureau of Economic Research, Inc.
    13. Hay, Joel & Leahy, Michael J., 1982. "Physician-induced demand : An empirical analysis of the consumer information gap," Journal of Health Economics, Elsevier, vol. 1(3), pages 231-244, December.
    14. Ellis, Randall P. & McGuire, Thomas G., 1986. "Provider behavior under prospective reimbursement : Cost sharing and supply," Journal of Health Economics, Elsevier, vol. 5(2), pages 129-151, June.
    15. Cromwell, Jerry & Mitchell, Janet B., 1986. "Physician-induced demand for surgery," Journal of Health Economics, Elsevier, vol. 5(4), pages 293-313, December.
    16. Kessler, Daniel P. & McClellan, Mark B., 2002. "How liability law affects medical productivity," Journal of Health Economics, Elsevier, vol. 21(6), pages 931-955, November.
    17. Grytten, Jostein & Skau, Irene & Sørensen, Rune, 2011. "Do expert patients get better treatment than others? Agency discrimination and statistical discrimination in obstetrics," Journal of Health Economics, Elsevier, vol. 30(1), pages 163-180, January.
    18. Beomsoo Kim, 2007. "The Impact of Malpractice Risk on the Use of Obstetrics Procedures," The Journal of Legal Studies, University of Chicago Press, vol. 36(S2), pages 79-119, June.
    19. Victor R. Fuchs, 1978. "The Supply of Surgeons and the Demand for Operations," NBER Chapters, in: The Economics of Physician and Patient Behavior, pages 35-56, National Bureau of Economic Research, Inc.
    20. Jeffrey Clemens & Joshua D. Gottlieb, 2014. "Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?," American Economic Review, American Economic Association, vol. 104(4), pages 1320-1349, April.
    21. Gruber, Jon & Kim, John & Mayzlin, Dina, 1999. "Physician fees and procedure intensity: the case of cesarean delivery," Journal of Health Economics, Elsevier, vol. 18(4), pages 473-490, August.
    22. Fuchs, Victor R., 2004. "Reflections on the socio-economic correlates of health," Journal of Health Economics, Elsevier, vol. 23(4), pages 653-661, July.
    23. Dranove, David, 1988. "Demand Inducement and the Physician/Patient Relationship," Economic Inquiry, Western Economic Association International, vol. 26(2), pages 281-298, April.
    24. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
    25. 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.
    26. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, January.
    27. Mark McClellan, 2011. "Reforming Payments to Healthcare Providers: The Key to Slowing Healthcare Cost Growth While Improving Quality?," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 69-92, Spring.
    28. Ronen Avraham & Leemore S. Dafny & Max M. Schanzenbach, 2012. "The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums," Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(4), pages 657-686, October.
    29. Dranove, David & Wehner, Paul, 1994. "Physician-induced demand for childbirths," Journal of Health Economics, Elsevier, vol. 13(1), pages 61-73, March.
    30. Dubay, Lisa & Kaestner, Robert & Waidmann, Timothy, 1999. "The impact of malpractice fears on cesarean section rates," Journal of Health Economics, Elsevier, vol. 18(4), pages 491-522, August.
    31. Mark Pauly, 1980. "Doctors and Their Workshops: Economic Models of Physician Behavior," NBER Books, National Bureau of Economic Research, Inc, number paul80-1, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejpol:v:8:y:2016:i:1:p:115-41. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.