Doctors as Gatekeepers in Social Insurance: Evidence from Workers’ Compensation Insurance

In many social insurance programs, eligibility for disability benefits depends on medical evaluations performed by doctors. This paper studies doctors as gatekeepers in workers’ compensation insurance. Using comprehensive administrative data and random assignment of doctors to independent medical examinations, we identify substantial systematic variation across doctors in evaluation decisions: after accounting for estimation error, the standard deviation in doctor generosity—their tendency to assess claimants as having continued physical impairment—is 10.2 percentage points, equal to 13% of the mean. This variation has large consequences for claimants and program costs. Being evaluated by a doctor who is one standard deviation more generous increases subsequent cash benefits by about 21%, compensated time out of work by 20%, injury-related medical spending by 12%, and total workers’ compensation costs by 17%. Doctor generosity also varies meaningfully with observable doctor characteristics commonly used to define evaluator eligibility. We further examine how discretion interacts with claimant and insurer behavior in the broader workers’ compensation market, where claimants can select their own doctors. More generous doctors treat more claimants while insurers are more likely to dispute claims involving more generous doctors, suggesting that both parties influence doctor allocation when given scope to do so. Finally, we show that commonly debated alternative evaluator eligibility and assignment rules can substantially affect claimant outcomes and program costs, illustrating that social insurance outcomes depend not only on formal eligibility and benefit rules but also on how discretionary authority is delegated and how gatekeepers are assigned.