How Public Policies Shape the Organizational Choices of Health Care Providers
Saturday, Jan. 7, 2017 1:00 PM – 3:00 PM
- Chair: Joshua D. Gottlieb, University of British Columbia
Income Targeting or Entrepreneurial Investments? Physicians' Short and Long Run Supply Responses
AbstractWhen physicians are also entrepreneurs, they take many decisions beyond just choosing their own labor supply. We investigate how these additional margins can shape the short-run responses of physicians' practices to reimbursement rate changes. We use a significant decline in Medicare reimbursements to surgeons relative to other physicians to examine whether fee cuts alter career investments. We find that surgeons increase patient care hours when their fees are cut. But this increase is entirely offset by a reduction in time devoted to other medical activities including continuing education. Surgeons also become less likely to take new patients, suggesting an intention to reduce the scope of their practices in the future. Short-run changes in service supply, which appear consistent with "target income" models, may generate misleading predictions about long-run access to care.
The Role of Experience in Physician Treatment Decisions: Evidence From the Introduction of Medicare Part D
AbstractHealth care spending and utilization in the United States varies substantially across regions (Fisher et al. (2003), Skinner (2011)). We examine one possible driver of this variation at the physician level: differences in physicians’ pace of adoption of new treatments and de-adoption of outmoded treatments. Using the setting of antipsychotic treatment choice, we exploit two sources of exogenous shocks to physicians’ information in this market. First, physicians received new information over time. In the mid 2000s, the FDA announced the approval of antipsychotics for several new patient populations while also warning against the use of several existing treatments for older patients. Second, with the expansion of Medicare Part D in 2006, physicians experienced sharp changes in their patient populations, in terms of both patients’ age and insurance status. Examining the time periods surrounding these shocks, we find the speed of adoption of the latest information crucially depends on a physician’s recent experience with her patients. Thus, variation in patient demographics and insurance status by region may translate into distinct physician practice styles and distinct patterns of utilization.
- I1 - Health
- L2 - Firm Objectives, Organization, and Behavior