Working Paper: NBER ID: w11549
Authors: Andrew Epstein; Sean Nicholson
Abstract: Small-area-variation studies have shown that physician treatment styles differ substantially both between and within markets, controlling for patient characteristics. Using a data set containing the universe of deliveries in Florida over a 12-year period with consistent physician identifiers and a rich set of patient characteristics, we examine why treatment styles differ across obstetricians at a point in time, and why styles change over time. We find that the variation in c-section rates across physicians within a market is two to three times greater than the variation between markets. Surprisingly, residency programs explain less than four percent of the variation between physicians in their risk-adjusted c-section rates, even among newly-trained physicians. Although we find evidence that physicians, especially relatively inexperienced ones, learn from their peers, they do not substantially revise their prior beliefs regarding how patients should be treated due to the local exchange of information. Our results indicate that physicians are not likely to converge over time to a community standard; thus, within-market variation in treatment styles is likely to persist.
Keywords: physician treatment styles; cesarean sections; health economics
JEL Codes: I11; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Variation in c-section rates across physicians within a market (I11) | Variation observed between markets (F61) |
| Residency programs (I23) | Variation in risk-adjusted c-section rates among physicians (I11) |
| Time-invariant physician-specific factors (I11) | Variation in risk-adjusted c-section rates (C46) |
| One-standard deviation increase in risk-adjusted c-section rate of a local peer group (C92) | New obstetrician's risk-adjusted c-section rate (J19) |
| One-standard deviation increase in risk-adjusted c-section rate of a local peer group (C92) | More experienced obstetrician's risk-adjusted c-section rate (J19) |