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Medicare fees and physicians’ medicare service volume: Beneficiaries treated and services per beneficiary

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  • Jack Hadley

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  • James Reschovsky

    ()

Abstract

Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians’ fee-for-service Medicare service volume. We find that Medicare fees are positively related to both the number of beneficiaries treated (η=0.12 to 0.61) and service intensity (η=1.04–1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee. Finally, several market factors appear to influence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicare’s fee-for-service program. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Jack Hadley & James Reschovsky, 2006. "Medicare fees and physicians’ medicare service volume: Beneficiaries treated and services per beneficiary," International Journal of Health Economics and Management, Springer, vol. 6(2), pages 131-150, June.
  • Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:2:p:131-150
    DOI: 10.1007/s10754-006-8143-z
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    References listed on IDEAS

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    1. Thomas G. McGuire & Mark V. Pauly, 1991. "Physician Response to Fee Changes with Multiple Payers," Papers 0015, Boston University - Industry Studies Programme.
    2. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    3. 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.
    4. 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.
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    Citations

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    Cited by:

    1. Erickson Kevin F. & Winkelmayer Wolfgang C. & Chertow Glenn M. & Bhattacharya Jay, 2014. "Medicare Reimbursement Reform for Provider Visits and Health Outcomes in Patients on Hemodialysis," Forum for Health Economics & Policy, De Gruyter, vol. 17(1), pages 1-25, January.
    2. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Do treatment decisions depend on physicians' financial incentives?," Journal of Public Economics, Elsevier, vol. 155(C), pages 74-92.
    3. Échevin, Damien & Fortin, Bernard, 2014. "Physician payment mechanisms, hospital length of stay and risk of readmission: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 36(C), pages 112-124.
    4. Louise Sheiner, 2014. "Why the Geographic Variation in Health Care Spending Cannot Tell Us Much About the Efficiency or Quality of Our Health Care System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(2 (Fall)), pages 1-72.
    5. Damien Échevin & Bernard Fortin, 2011. "Physician Payment Mechanisms, Hospital Length of Stay and Risk of Readmission: a Natural Experiment," CIRANO Working Papers 2011s-44, CIRANO.
    6. Louise Sheiner, 2014. "Why the Geographic Variation in Health Care Spending Cannot Tell Us Much About the Efficiency or Quality of Our Health Care System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 1-72.
    7. repec:eee:jhecon:v:57:y:2018:i:c:p:147-167 is not listed on IDEAS
    8. repec:nip:nipewp:07/2015 is not listed on IDEAS
    9. Ian McRae & James Butler, 2014. "Supply and demand in physician markets: a panel data analysis of GP services in Australia," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 269-287, September.
    10. Devlin, Rose Anne & Sarma, Sisira, 2008. "Do physician remuneration schemes matter? The case of Canadian family physicians," Journal of Health Economics, Elsevier, vol. 27(5), pages 1168-1181, September.
    11. Larry Howard, 2014. "Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 229-250, September.

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