title: Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?
abstract: We investigate whether physicians' financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 3 percent increase in care provision. Elective procedures such as cataract surgery respond much more strongly than less discretionary services. Non-radiologists expand their provision of MRIs, suggesting effects on technology adoption. We estimate economically small health impacts, albeit with limited precision.
authors.affiliation: Department of Economics, University of California, San Diego, 9500 Gilman Drive #0508, La Jolla, CA 92093, and NBER.
authors.forename: Jeffrey
authors.initials: J
authors.lastname: Clemens
authors.affiliation: Vancouver School of Economics, University of British Columbia, 997-1873 East Mall, Vancouver, BC V6T 1Z1, Canada.
authors.forename: Joshua D
authors.initials: JD
authors.lastname: Gottlieb
mesh_terms: D017130:Angioplasty / Q000191:economics / Q000706:statistics & numerical data; D001416:Back Pain / Q000000981:diagnostic imaging; D006328:Cardiac Catheterization / Q000191:economics / Q000706:statistics & numerical data; D003695:Delivery of Health Care / Q000191:economics* / Q000706:statistics & numerical data*; D005080:Exercise Test / Q000191:economics / Q000706:statistics & numerical data; D006304:Health Status; D006801:Humans; D008279:Magnetic Resonance Imaging / Q000191:economics* / Q000706:statistics & numerical data*; D006278:Medicare / Q000191:economics; D017063:Outcome Assessment, Health Care / Q000191:economics; D010818:Practice Patterns, Physicians' / Q000191:economics*; D012052:Reimbursement, Incentive; D014481:United States; D019564:Unnecessary Procedures / Q000191:economics / Q000706:statistics & numerical data