American Economic Journal: Economic Policy
no. 3, August 2023
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.
Barnett, Michael L., Andrew Olenski, and Adam Sacarny.
"Common Practice: Spillovers from Medicare on Private Health Care."
American Economic Journal: Economic Policy,
Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
Insurance; Insurance Companies; Actuarial Studies
Analysis of Health Care Markets
Health Insurance, Public and Private
Health: Government Policy; Regulation; Public Health