Working Paper: NBER ID: w19247
Authors: Mireille Jacobson; Tom Y. Chang; Joseph P. Newhouse; Craig C. Earle, MD
Abstract: We investigate the role of physician agency and competition in determining health care supply and patient outcomes. A 2005 change to Medicare fees had a large, negative impact on physician profit margins for providing chemotherapy treatment. In response to these cuts, physicians increased their provision of chemotherapy and changed the mix of chemotherapy drugs they administered. The increase in treatment improved patient survival. These changes were larger in states that experienced larger decreases in physician profit margins. Finally while physician response was larger in more competitive markets, survival improvements were larger in less competitive markets.
Keywords: Physician Agency; Medicare; Chemotherapy Reimbursement; Health Outcomes; Competition
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 2005 change in Medicare fees (I18) | increase in provision of chemotherapy treatment among oncologists (I11) |
| increase in provision of chemotherapy treatment among oncologists (I11) | improved patient survival rates (I14) |
| reduction in profit margins (D49) | changes in chemotherapy treatment (C22) |
| changes in chemotherapy treatment (C22) | patient survival (I12) |
| 2005 change in Medicare fees (I18) | changes in chemotherapy drug mix (C22) |