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Medicare fees and physicians’ medicare service volume: Beneficiaries treated and services per beneficiary

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  • Jack Hadley
  • James Reschovsky

Abstract

Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians’ fee-for-service Medicare service volume. We find that Medicare fees are positively related to both the number of beneficiaries treated (η=0.12 to 0.61) and service intensity (η=1.04–1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee. Finally, several market factors appear to influence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicare’s fee-for-service program. Copyright Springer Science + Business Media, LLC 2006

Suggested Citation

  • Jack Hadley & James Reschovsky, 2006. "Medicare fees and physicians’ medicare service volume: Beneficiaries treated and services per beneficiary," International Journal of Health Economics and Management, Springer, vol. 6(2), pages 131-150, June.
    • Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:2:p:131-150
    DOI: 10.1007/s10754-006-8143-z
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    1. Yip, Winnie C., 1998. "Physician response to Medicare fee reductions: changes in the volume of coronary artery bypass graft (CABG) surgeries in the Medicare and private sectors," Journal of Health Economics, Elsevier, vol. 17(6), pages 675-699, December.
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    1. Jack Hadley & James Reschovsky & James O’Malley & Bruce Landon, 2014. "Factors associated with geographic variation in cost per episode of care for three medical conditions," Health Economics Review, Springer, vol. 4(1), pages 1-19, December.
    2. Erickson Kevin F. & Winkelmayer Wolfgang C. & Chertow Glenn M. & Bhattacharya Jay, 2014. "Medicare Reimbursement Reform for Provider Visits and Health Outcomes in Patients on Hemodialysis," Forum for Health Economics & Policy, De Gruyter, vol. 17(1), pages 53-77, January.
    3. Jeffrey Clemens & Joshua D. Gottlieb & Jeffrey Hicks, 2021. "How Would Medicare for All Affect Health System Capacity? Evidence from Medicare for Some," Tax Policy and the Economy, University of Chicago Press, vol. 35(1), pages 225-262.
    4. Échevin, Damien & Fortin, Bernard, 2014. "Physician payment mechanisms, hospital length of stay and risk of readmission: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 36(C), pages 112-124.
    5. Christopher S. Brunt, 2015. "Medicare Part B Intensity and Volume Offset," Health Economics, John Wiley & Sons, Ltd., vol. 24(8), pages 1009-1026, August.
    6. Daniel Burkhard & Christian P. R. Schmid & Kaspar Wüthrich, 2019. "Financial incentives and physician prescription behavior: Evidence from dispensing regulations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1114-1129, September.
    7. Louise Sheiner, 2014. "Why the Geographic Variation in Health Care Spending Cannot Tell Us Much About the Efficiency or Quality of Our Health Care System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(2 (Fall)), pages 1-72.
    8. Damien Échevin & Bernard Fortin, 2011. "Physician Payment Mechanisms, Hospital Length of Stay and Risk of Readmission: a Natural Experiment," CIRANO Working Papers 2011s-44, CIRANO.
    9. David Bruce Matchar & Wei Xuan Lai & Ashish Kumar & John Pastor Ansah & Yeuk Fan Ng, 2023. "A Causal View of the Role and Potential Limitations of Capitation in Promoting Whole Health System Performance," IJERPH, MDPI, vol. 20(5), pages 1-13, March.
    10. Alice J. Chen & Elizabeth L. Munnich & Stephen T. Parente & Michael R. Richards, 2022. "Do Physicians Warm Up to Higher Medicare Prices? Evidence from Alaska," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(2), pages 394-425, March.
    11. Louise Sheiner, 2014. "Why the Geographic Variation in Health Care Spending Cannot Tell Us Much About the Efficiency or Quality of Our Health Care System," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 45(2 (Fall)), pages 1-72.
    12. Munnich, Elizabeth L. & Parente, Stephen T., 2018. "Returns to specialization: Evidence from the outpatient surgery market," Journal of Health Economics, Elsevier, vol. 57(C), pages 147-167.
    13. Devlin, Rose Anne & Sarma, Sisira, 2008. "Do physician remuneration schemes matter? The case of Canadian family physicians," Journal of Health Economics, Elsevier, vol. 27(5), pages 1168-1181, September.
    14. Brekke, Kurt R. & Holmås, Tor Helge & Monstad, Karin & Straume, Odd Rune, 2017. "Do treatment decisions depend on physicians' financial incentives?," Journal of Public Economics, Elsevier, vol. 155(C), pages 74-92.
    15. Robert Town & Roger Feldman & John Kralewski, 2011. "Market power and contract form: evidence from physician group practices," International Journal of Health Economics and Management, Springer, vol. 11(2), pages 115-132, June.
    16. Christopher S. Brunt & Joshua R. Hendrickson, 2021. "Geographic variation in Part B reimbursement and physician offsetting behavior: a physician matching approach," International Journal of Health Economics and Management, Springer, vol. 21(2), pages 115-188, June.
    17. Louise Sheiner, 2013. "Why the geographic variation in health care spending can't tell us much about the efficiency or quality of our health care system," Finance and Economics Discussion Series 2013-04, Board of Governors of the Federal Reserve System (U.S.).
    18. repec:nip:nipewp:07/2015 is not listed on IDEAS
    19. Ian McRae & James Butler, 2014. "Supply and demand in physician markets: a panel data analysis of GP services in Australia," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 269-287, September.
    20. Larry Howard, 2014. "Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998–2004," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 229-250, September.

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