Physician Influence on the Cost, Quality and Organization of Healthcare Delivery

Paper Session

Saturday, Jan. 7, 2017 2:30 PM – 4:30 PM

Hyatt Regency Chicago, Grand Suite 5
Hosted By: International Health Economics Association
  • Chair: James B. Rebitzer, Boston University

Coordination Within Teams and The Cost of Health Care

Leila Agha
,
Boston University
Keith Marzilli Ericson
,
Boston University
Kimberley Geissler
,
University of Massachusetts-Amherst
Benjamin Lubin
,
Boston University
James B. Rebitzer
,
Boston University

Abstract

We examine how primary care physicians (PCPs) assemble teams of specialists to care for their patients. In our model, PCPs can invest in a relationship with specialists that requires upfront costs but has benefits for care coordination. PCPs who work with fewer specialists (have higher referral concentration) invest more in relationship-specific capital. Using the Massachusetts APCD, we show that this team-based coordination of care measure is virtually uncorrelated with existing patient-based coordination of care measures. We identify the effect of referral concentration on spending by comparing the spending of individuals who see the same specialist, but come from PCPs with different referral concentration. We use the same technique with standardized prices to distinguish whether the effects are a result of specialist prices or utilization effects.

Causes and Consequences of Fragmented Care Delivery: Theory, Evidence and Public Policy

Leila Agha
,
Boston University
Brigham Frandsen
,
Brigham Young University
James B. Rebitzer
,
Boston University

Abstract

The US Healthcare delivery system is famously inefficient, but the causes of the inefficiencies are poorly understood. In this paper, we analyze one widely discussed source of inefficiency, the “fragmentation hypothesis”. According to this hypothesis healthcare is spread out across an excessively large number of poorly coordinated providers leading to low quality and high costs. The fragmentation hypothesis is widely discussed and has motivated important policy initiatives, but theoretical and evidentiary support are weak. This paper addresses three fundamental questions for the economic analysis of care fragmentation: (1) to what extent are observed patterns of care fragmentation the result physician practice styles that are independent of a patient’s clinical condition and preferences; (2) does fragmentation influence utilization independent of a patient's clinical condition and preferences; and (3) under what circumstances will public policy interventions seeking to reduce fragmented care lead to lower-cost and more efficient healthcare delivery.

Information or Compensation? Understanding the Role of Information Technology in Physician Response to Pay-For Performance

Ben Handel
,
University of California-Berkeley
Igal Hendel
,
Northwestern University
Jonathan Kolstad
,
University of California-Berkeley
Michael D. Whinston
,
Massachusetts Institute of Technology

Abstract

Preventive health care services are often under-provided, due both to physician incentives and patient behavior regarding such services. We study the impact of physician financial incentives and physician use of information technology on preventive service take up using a unique proprietary data set from a large insurer that covers most of the population for the state of Hawaii. The data contain micro-level information on patient claims, physician financial incentives / payments, and physician logins to an IT platform designed to help them improve their use of preventive services. We leverage these data, together with exogenous variation in the financial incentives and adoption of IT to quantify the impact of these factors on physician preventive care utilization. We study how IT and financial incentives complement each other for this purpose, and use the micro-data to study physician heterogeneity in use of preventive care as a function of these factors. Finally, we study the relationship between patient cost-sharing incentives, physician use of IT, and physician financial incentives.

Physician Investment in Hospitals: Specialization, Incentives, and the Quality of Cardiac Care

Ashley Swanson
,
University of Pennsylvania

Abstract

Physician ownership of hospitals involves several competing economic forces. Physician-owners may be incentivized to “cherry-pick" and treat profitable patients at their facilities. However, physician-owned hospitals are often specialized and may provide higher-quality care. This paper uses a structural choice-outcome model to estimate hospital quality, patient-hospital matching, and preferences for treating patients at owned vs. competing hospitals. Instrumental variables analysis of cardiac mortality is used to capture quality; I document a significant mortality improvement at physician-owned hospitals. I use new data on ownership to estimate physician-owner preferences; controlling for matching and baseline patient preferences, there is little evidence of physician-owner cherry-picking.
JEL Classifications
  • I1 - Health