Module 2: Physician Agency and Treatment Decisions
The narrow goal of this module is to understand the role of physicians in making treatment decisions, and how the consequences of this may differ depending on the type of payment model employed. We’ll finish the module with a discussion of current policy issues related to healthcare payments in the U.S.
The big picture economics concept of this module, or the “airport” idea that I hope you can remember several years later when we run into each other at the airport, is “behaviors can reflect both altruism and self interest.” What does that mean? In the context of physician treatment decisions, it means that physicians and hospitals can pursue treatments that offer a benefit to patients but that also offer a financial benefit to them. These aren’t mutually exclusive goals.
Readings and other links
- Readings for this module:
- Section 17.4 of R. Pindyck and D. Rubinfeld, Microeconomics (Upper Saddle River, NJ: Prentice Hall, 2018).
- Sections 5.3 and 17.2 of Frank A Sloan and Chee-Ruey Hsieh, Health Economics, MIT Press Books, vol. 1 (The MIT Press, 2012).
- Thomas G McGuire, “Physician Agency,” Handbook of Health Economics 1 (2000): 461–536. Link to Chapter here
- Jonathan Gruber and Maria Owings, “Physician Financial Incentives and Cesarean Section Delivery,” The RAND Journal of Economics 27, no. 1 (1996): 99–123. Link to paper here.
- Jeffrey Clemens and Joshua D Gottlieb, “Do Physicians’ Financial Incentives Affect Medical Treatment and Patient Health?” American Economic Review 104, no. 4 (2014): 1320–1349. We’ll discuss this paper at the end of the module. Link to paper here.
- Supplemental information we’ll use throughout this module.
- The Dartmouth Atlas
- The Atlantic, December 2013, "You’re Getting Too Much Healthcare
- MIT News Office, June 2018, “The value of late-in-life health care spending”
- All About Medicare, Podcast
- All Aboud Medicaid, Podcast
- Healthcare Triage, Pay for Performance
- NEJM Report, What is Pay for Performance
Slides
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