Equalizing Physician Fees had Little Effect on Cesarean Rates

Keeler, Emmett B.; Fok, Thomas

doi:10.1177/107755879605300405

Cited by 44 publications

(48 citation statements)

References 6 publications

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“…In current dollars, a $1000 increase in the reimbursement for performing a cesarean section would increase cesarean delivery rates by little more than one percentage point. This finding jibes with that of the closest related study, by Keeler and Fok (1996), of a cesarean/vaginal fee equalization at one insurer. It contrasts with that of Currie and Gruber (2001), who find even larger effects than GKM using a fully national dataset but a less direct research design.…”

Section: Resultssupporting

confidence: 88%

Physician financial incentives and cesarean delivery: New conclusions from the healthcare cost and utilization project

Grant

2009

Journal of Health Economics

101

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Abstract:This paper replicates Gruber, Kim, and Mayzlin's (1999) analysis of the effect of physician financial incentives on cesarean delivery rates, using their data, sample selection criteria, and specification. Coincident trends explain much of their estimated positive relation between fees and cesarean utilization, which also falls somewhat upon the inclusion of several childbirth observations that had been inadvertently excluded from their estimation sample. The data ultimately indicate that a $1000 increase, in current dollars, in the reimbursement for a cesarean section increases cesarean delivery rates by about one percentage point, one-quarter of the effect estimated originally. JEL Codes: I11; I18Keywords: cesarean section; financial incentives; HCUPThe cesarean section is one of the most common surgical procedures, and one of those most studied by economists, for good reasons: it absorbs billions of dollars of health care resources annually, is used with widely varying frequency across regions and across providers, and is potentially responsive to a variety of economic forces, including source of payment, malpractice liability, and financial incentives.Yet there are few studies of the last of these, financial incentives. One of the most recent and most expansive, by Gruber, Kim, and Mayzlin (1999, hereafter GKM) The accessible data, simple design, and striking conclusions of this study make it a suitable candidate for replication. Accordingly, we obtained the same data used by GKM originally and attempted to reproduce their results, generously assisted by the original authors, who shared their data assembly programs with us. In addition, as standard empirical practice in panel studies of this type has evolved somewhat since the original study was published, we also explored the effect of some of these changes on the findings-particularly the inclusion of state trends, which are clearly 2observable in the data, in the regression specification. These trends and, to a lesser degree, data assembly issues, are both important. We ultimately conclude that financial incentives may influence cesarean utilization in these data, but, if so, the effect is much smaller than originally advertised. This analysis related the probability of a cesarean delivery to the Medicaid physician cesarean fee premium (cesarean fee -vaginal fee) in that state in that year, FEEDIFF; state and year fixed effects, : and J; and controls for maternal demographics, hospital characteristics, and clinical indicators for cesarean section, X. Estimated using a logit model, the specification is as follows: where i, s, and t index individuals, states, and time; C is a dummy that equals one if individual i's delivery was performed by cesarean section and zero otherwise; 7 is the logistic distribution 3 function; and $ and ( are regression coefficients. We are mostly interested in the value of (. The effect of fee changes was predicted using the marginal effect of a one unit change in FEEDIFF at the mean of the independent variables. The model...

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Section: Resultssupporting

confidence: 88%

Physician financial incentives and cesarean delivery: New conclusions from the healthcare cost and utilization project

Grant

2009

Journal of Health Economics

101

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“…These weak and/or insignificant income effects are consistent with the results from the studies in the United States that found no volume response or only a weak volume response to changes in remuneration per item of treatment [8,10,11,12]. The findings are also consistent with the results from several other studies of primary physicians in Norway [1,4,5,21].…”

Section: Discussionsupporting

confidence: 90%

“…However, they say little about how great the income effects are since they do not distinguish between the substitution and income effects of changes in remuneration per item of treatment. Other studies found no volume response,or only a weak volume response to changes in remuneration per item of treatment [8,10,11,12]. For example,Hurley et al [10] studied how physicians responded to changes in remuneration per item of treatment for 28 medical procedures during the period 1977-1988 in the Canadian Province of Ontario.They found no volume response for most of the procedures.Their results are supported by similar studies from four other provinces during the period 1977-1989 [11].…”

Section: Results From Earlier Studiesmentioning

confidence: 99%

Financial incentives and the supply of laboratory tests

Carlsen

Grytten

Skau³

2003

The European Journal of Health Economics

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This study examined how the number of laboratory tests taken by a sample of Norwegian contract physicians is influenced by their private economy outside of the practice and by changes in remuneration. The data are drawn from 40,000 consultations carried out by 44 contract physicians in 1991-1994. Two factors which led to changes in the level of physicians' income are considered: changes in remuneration for consultations and laboratory tests and changes in interest rates on loans and bank deposits. The effect which changes in interest rates have on physicians' disposable income was calculated using information about their financial assets and debts obtained from tax assessments. The main finding was that changes in private economy and changes in remuneration have no or only a small effect on the number of laboratory tests taken. Our results suggest that fee regulation can be an effective means of controlling physicians' income and therefore government expenditure on primary physician services.

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“…Previous studies have found that cost is possibly associated the cesarean delivery [12,13]. Few studies have examined the relationship between the reimbursement system and the cesarean delivery rate [17][18][19]. Because, the average cost of a cesarean delivery is at least two times higher than that of a vaginal delivery, the healthcare provider may be required to perform additional unnecessary procedures due to cost differences [20].…”

Section: Introductionmentioning

confidence: 99%