Working Paper: NBER ID: w31749
Authors: Ivan Badinski; Amy Finkelstein; Matthew Gentzkow; Peter Hull
Abstract: We study the role of physicians in driving geographic variation of US healthcare utilization. We estimate a model that separates variation in average utilization of Medicare beneficiaries due to physicians, non-physician supply side factors, and patient demand. The model is identified by migration of patients and physicians across areas, as well as by variation in within-area matching. We find that physicians vary greatly in the intensity with which they treat otherwise similar patients, and that at least a third of geographic differences in healthcare utilization can be explained by differences in average physician treatment intensity. Conservatively, physicians are three times as important as non-physician supply-side factors in explaining geographic variation. Around three-fifths of physicians’ role comes from differences across areas in physician practice styles within the same specialty, while the other two-fifths reflects differences across areas in physician specialty mix.
Keywords: Healthcare Utilization; Physician Practice Intensity; Geographic Variation; Medicare
JEL Codes: H51; I1; I11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| physician practice intensity (I11) | healthcare utilization (I11) |
| differences in average physician treatment intensity (I11) | geographic differences in healthcare utilization (I11) |
| physicians (I11) | non-physician supply-side factors (I11) |
| physician practice styles (I11) | healthcare utilization (I11) |
| physician specialty mix (I11) | healthcare utilization (I11) |
| matching patients to physicians (I11) | healthcare utilization (I11) |