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Physician agency, consumerism, and the consumption of lower-limb MRI scans

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  • Chernew, Michael
  • Cooper, Zack
  • Hallock, Eugene Larsen
  • Scott Morton, Fiona

Abstract

We study where privately insured individuals receive planned MRI scans. Despite significant out-of-pocket costs for this undifferentiated service, privately insured patients often receive care in high-priced locations when lower priced options were available. The median patient in our data has 16 MRI providers within a 30-minute drive of her home. On average, patients bypass 6 lower-priced providers between their homes and their actual treatment locations. Referring physicians heavily influence where patients receive care. The share of the variance in the prices of patients’ MRI scans that referrer fixed effects (52 percent) explain is dramatically greater than the share explained by patient cost-sharing (< 1 percent), patient characteristics (< 1 percent), or patients’ home HRR fixed effects (2 percent). In order to access lower cost providers, patients must generally diverge from physicians’ established referral patterns.

Suggested Citation

  • Chernew, Michael & Cooper, Zack & Hallock, Eugene Larsen & Scott Morton, Fiona, 2021. "Physician agency, consumerism, and the consumption of lower-limb MRI scans," Journal of Health Economics, Elsevier, vol. 76(C).
  • Handle: RePEc:eee:jhecon:v:76:y:2021:i:c:s0167629621000126
    DOI: 10.1016/j.jhealeco.2021.102427
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    Cited by:

    1. Janet Currie & Anastasia Karpova & Dan Zeltzer, 2021. "Do Urgent Care Centers Reduce Medicare Spending?," NBER Working Papers 29047, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Provider prices; Shopping; Price transparency; Vertical integration; Agency;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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