Here’s an interesting paper from Jeffrey Clemens and Joshua Gottlieb.
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 5 percent increase in care provision. Elective procedures such as cataract surgery respond twice as strongly as less discretionary services. Higher reimbursements increase the pace of technology diffusion, as non-radiologists acquire MRI scanners when prices increase. Incremental care has no impacts on patient health.
You should read up on supplier induced demand. Frakt has gone over papers on this at his site.
Steve
I’d be curious to know whether primary care physicians at HMO’s have incentives to NOT order diagnostics and NOT refer to specialists.
I don’t think so there should be no impact on patients health…because health is wealth…! http://www.ucomparehealthcare.com/drs/oklahoma/
I hardly drop comments, however i did some searching and wound up here Do Physicians’ Financial Incentives Affect Medical Treatment and Patient Health?
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