Working Paper: NBER ID: w24869
Authors: Michael Chernew; Zack Cooper; Eugene Larsen-Hallock; Fiona Scott Morton
Abstract: We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in high-priced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients’ home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.
Keywords: Health Care Services; MRI Scans; Consumer Behavior; Cost Sharing; Referring Physicians
JEL Codes: I11; I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| referring physicians (I11) | patients' choices of MRI providers (I11) |
| referring physicians' fixed effects (C23) | variance in MRI prices (P22) |
| referring physicians (I11) | higher costs for patients (I11) |
| vertically integrated referring physicians (L42) | patient costs (H51) |
| vertically integrated referring physicians (L42) | likelihood of hospital care (I11) |
| patients' choices of MRI providers (I11) | costs incurred by patients (H51) |