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Trading Spaces: Medicare’s Regulatory Spillovers on Treatment Setting for Non-Medicare Patients

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Listed:
  • Michael Geruso
  • Michael R. Richards

Abstract

Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians' outpatient surgery choices for non­-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-­targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Suggested Citation

  • Michael Geruso & Michael R. Richards, 2021. "Trading Spaces: Medicare’s Regulatory Spillovers on Treatment Setting for Non-Medicare Patients," NBER Working Papers 28576, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28576
    Note: AG EH PE
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    More about this item

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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