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Returns to physician human capital: Evidence from patients randomized to physician teams

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  • Doyle Jr., Joseph J.
  • Ewer, Steven M.
  • Wagner, Todd H.

Abstract

Physicians play a major role in determining the cost and quality of healthcare, yet estimates of these effects can be confounded by patient sorting. This paper considers a natural experiment where nearly 30,000 patients were randomly assigned to clinical teams from one of two academic institutions. One institution is among the top medical schools in the U.S., while the other institution is ranked lower in the distribution. Patients treated by the two programs have similar observable characteristics and have access to a single set of facilities and ancillary staff. Those treated by physicians from the higher ranked institution have 10-25% less expensive stays than patients assigned to the lower ranked institution. Health outcomes are not related to the physician team assignment. Cost differences are most pronounced for serious conditions, and they largely stem from diagnostic-testing rates: the lower ranked program tends to order more tests and takes longer to order them.

Suggested Citation

  • Doyle Jr., Joseph J. & Ewer, Steven M. & Wagner, Todd H., 2010. "Returns to physician human capital: Evidence from patients randomized to physician teams," Journal of Health Economics, Elsevier, vol. 29(6), pages 866-882, December.
  • Handle: RePEc:eee:jhecon:v:29:y:2010:i:6:p:866-882
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    Cited by:

    1. Bloom, Nicholas & Lemos, Renata & Sadun, Raffaella & Reenen, John Van, 2017. "Healthy business? Managerial education and management in healthcare," LSE Research Online Documents on Economics 86592, London School of Economics and Political Science, LSE Library.
    2. John A. Romley & Neeraj Sood, 2013. "Identifying the Health Production Function: The Case of Hospitals," NBER Working Papers 19490, National Bureau of Economic Research, Inc.
    3. Stroka-Wetsch, Magdalena A. & Talmann, Anna & Linder, Roland, 2016. "Does competition in the out-patient sector improve quality of medical care? Evidence from administrative data," Ruhr Economic Papers 638, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Marie Allard & Izabela Jelovac & Pierre-Thomas Léger, 2014. "Payment mechanism and GP self-selection: capitation versus fee for service," International Journal of Health Economics and Management, Springer, vol. 14(2), pages 143-160, June.
    5. Baldwin Kate & Bhavnani Rikhil R., 2015. "Ancillary Studies of Experiments: Opportunities and Challenges," Journal of Globalization and Development, De Gruyter, vol. 6(1), pages 113-146, June.
    6. Janet Currie & W. Bentley MacLeod & Jessica Van Parys, 2015. "Physician Practice Style and Patient Health Outcomes: The Case of Heart Attacks," NBER Working Papers 21218, National Bureau of Economic Research, Inc.
    7. Gautam Gowrisankaran & Keith A. Joiner & Pierre-Thomas Léger, 2017. "Physician Practice Style and Healthcare Costs: Evidence from Emergency Departments," NBER Working Papers 24155, National Bureau of Economic Research, Inc.
    8. 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.
    9. Baldwin, Kate & Bhavnani, Rikhil R., 2013. "Ancillary Experiments: Opportunities and Challenges," WIDER Working Paper Series 024, World Institute for Development Economic Research (UNU-WIDER).
    10. Jason Abaluck & Leila Agha & Christopher Kabrhel & Ali Raja & Arjun Venkatesh, 2014. "Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior?," NBER Working Papers 19956, National Bureau of Economic Research, Inc.
    11. David Molitor, 2016. "The Evolution of Physician Practice Styles: Evidence from Cardiologist Migration," NBER Working Papers 22478, National Bureau of Economic Research, Inc.

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