Common Practice: Spillovers from Medicare on Private Health Care
American Economic Journal: Economic Policy
vol. 15,
no. 3, August 2023
(pp. 65-88)
Abstract
Efforts to raise US health-care productivity have proceeded slowly, potentially due to the fragmentation of payment across insurers. Each insurer's efforts to improve care could influence how doctors practice for other insurers, leading to unvalued externalities. We study a randomized letter intervention by Medicare to curtail overuse of antipsychotics. The letters did not mention private insurance but reduced prescribing to these patients by 12 percent, much like the 17 percent effect in Medicare. We cannot reject one-for-one spillovers, suggesting that physicians use similar medical practice styles across insurers. Our findings establish that insurers can affect health care well outside their direct purview.Citation
Barnett, Michael L., Andrew Olenski, and Adam Sacarny. 2023. "Common Practice: Spillovers from Medicare on Private Health Care." American Economic Journal: Economic Policy, 15 (3): 65-88. DOI: 10.1257/pol.20200553Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- G22 Insurance; Insurance Companies; Actuarial Studies
- I11 Analysis of Health Care Markets
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
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