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Do Physicians' Financial Incentives Affect Treatment Patterns and Patient Health?
American Economic Review (2014)
  • Joshua D Gottlieb, University of British Columbia
  • Jeffrey Clemens, University of California - San Diego
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.
Publication Date
April, 2014
Citation Information
Joshua D Gottlieb and Jeffrey Clemens. "Do Physicians' Financial Incentives Affect Treatment Patterns and Patient Health?" American Economic Review Vol. 2014 Iss. 4 (2014) p. 1320 - 1349
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