Association for Public Policy Analysis & Management

Panel: Physician Incentives and Responses to Health Policies

(Health Policy)

The US health care system is entering a time of extensive policy activity as well as considerable uncertainty. Many reforms have already been implemented through the Affordable Care Act, while other potential policies and related questions loom on the horizon. As the system and larger country adjust and adapt to these changes, policy-makers will need timely and empirically rigorous studies that can help inform new waves of legislation that go beyond insurance coverage expansions to tackle accompanying issues, such as cost, quality, resource allocation, treatment choice, and enhanced patient decision-making. Although many of these issues have been on the minds of policy-makers for some time, new empirical work can provide methodological improvements as well as uncover insights previously overlooked. The three papers belonging to this panel satisfy these aims. Each exploits a quasi-natural experiment to improve identification and generate credible estimates of policy effects. The papers also offer considerable conceptual development to not only enrich the paper’s contribution but also to illustrate deeper insights and nuance that are useful ingredients for future policy-making. The first paper captures a detailed and robust look at the complexities within physician-patient shared decision-making over treatment choices. The authors diagram the altruistic and financial motive tensions within physicians as well as how these tensions can vary across different clinical settings and patient groups. They then use changes in Medicare payments to present a clever analysis that complements their theoretical work. The panel’s second paper also explores physicians’ sensitivity to financial incentives belonging to different treatment options. The authors leverage a unique health care setting that provides exogenous variation in financial incentives and allows the authors to separate the financial motivations facing the provider from those facing the larger institution (i.e., the hospital) – something not done in prior studies. The final paper uses a recent policy devoted to health insurance for children to study the supply-side effects of public insurance expansions. While much work has focused on the demand-side, limited work has explored the implications for those who actually delivery health services. An incomplete understanding of both the demand- and supply-side responses to these policies challenges any cost-benefit conclusions. With the recent insurance expansions happening in the US, along with the introduction of new health care financing models, the findings imbedded within each of these three papers are highly relevant to current and future policy considerations. Although each paper focuses on some dimension of physician behavior, the panel speaks to a wide variety of contemporary health policy topics.