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Effects of Health Insurance on Physicians' Fees


  • Frank A. Sloan


According to conventional wisdom, the growth of health insurance is partly responsible for the rise in physicians' fees; however, to date, convincing empirical evidence is lacking. A standard model of physician fee determination yields unambiguous predictions about insurance effects on fees. Empirical evidence, based on national interview surveys of physicians, shows insurance does affect fees in the predicted direction. Insurance parameter estimates imply that a 1.00 increase in an insurer's fee schedule raises physicians' fees somewhere between 0.13 and $0.35 on average. The higher fees could be associated with higher quality, an issue discussed in the last section.

Suggested Citation

  • Frank A. Sloan, 1982. "Effects of Health Insurance on Physicians' Fees," Journal of Human Resources, University of Wisconsin Press, vol. 17(4), pages 533-557.
  • Handle: RePEc:uwp:jhriss:v:17:y:1982:i:4:p:533-557

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    References listed on IDEAS

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    6. Richard B. Freeman, 1982. "Economic Determinants of Geographic and Individual Variation in the Labor Market Position of Young Persons," NBER Chapters,in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 115-154 National Bureau of Economic Research, Inc.
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    Cited by:

    1. Paola Bertoli & Veronica Grembi, 2017. "Medical Malpractice: How Legal Liability Affects Medical Decisions," CERGE-EI Working Papers wp600, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    2. Gillis, Kurt D. & Lee, David W., 1997. "Medicare, access, and physicians' willingness to accept new Medicare patients," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(3), pages 579-603.
    3. Gaynor, Martin, 1994. "Issues in the Industrial Organization of the Market for Physician Services," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 211-255, Spring.

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