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Physician division of labor and patient selection for outpatient procedures

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  • David, Guy
  • Neuman, Mark D.

Abstract

Little is known about the ability of incentives to influence decisions by physicians regarding choices of settings for care delivery. In the context of outpatient procedural care, the emergence of freestanding ambulatory surgery centers (ASCs) as alternatives to hospital-based outpatient departments (HOPDs) creates a unique opportunity to study this question. We advance a model where physicians' division of labor between ASCs and HOPDs affects the medical complexity of patients treated in low-acuity settings (i.e. ASCs). Analyses of outpatient surgical procedure data show that physicians working exclusively in low-acuity settings (i.e. ASCs) treat patients of significantly higher medical complexity in these settings than do physicians who also practice in higher-acuity settings (i.e. HOPDs). This discrepancy shrinks with increasing procedural risk and with increasing distance between ASCs and acute care hospitals.

Suggested Citation

  • David, Guy & Neuman, Mark D., 2011. "Physician division of labor and patient selection for outpatient procedures," Journal of Health Economics, Elsevier, vol. 30(2), pages 381-391, March.
  • Handle: RePEc:eee:jhecon:v:30:y:2011:i:2:p:381-391
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    References listed on IDEAS

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    1. McGuire, Thomas G., 2000. "Physician agency," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 9, pages 461-536, Elsevier.
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    Cited by:

    1. David H. Howard & Jason Hockenberry & Guy David, 2018. "Physicians’ Financial Incentives to Personalize Medicine," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 217-235, National Bureau of Economic Research, Inc.
    2. Geruso, Michael & Richards, Michael R., 2022. "Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients," Journal of Health Economics, Elsevier, vol. 84(C).
    3. Ellerie Weber, 2014. "Measuring Welfare from Ambulatory Surgery Centers: A Spatial Analysis of Demand for Healthcare Facilities," Journal of Industrial Economics, Wiley Blackwell, vol. 62(4), pages 591-631, December.
    4. Munnich, Elizabeth L. & Parente, Stephen T., 2018. "Returns to specialization: Evidence from the outpatient surgery market," Journal of Health Economics, Elsevier, vol. 57(C), pages 147-167.
    5. David H. Howard & Jason Hockenberry & Guy David, 2017. "Personalized Medicine When Physicians Induce Demand," NBER Working Papers 24054, National Bureau of Economic Research, Inc.
    6. Aouad, Marion & Brown, Timothy T. & Whaley, Christopher M., 2019. "Reference pricing: The case of screening colonoscopies," Journal of Health Economics, Elsevier, vol. 65(C), pages 246-259.
    7. Yee, Christine A., 2011. "Physicians on board: An examination of physician financial interests in ASCs using longitudinal data," Journal of Health Economics, Elsevier, vol. 30(5), pages 904-918.

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