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Who Ordered That? The Economics of Treatment Choices in Medical Care

In: Handbook of Health Economics

Author

Listed:
  • Chandra, Amitabh
  • Cutler, David
  • Song, Zirui

Abstract

In the United States, two patients with the same medical condition can receive drastically different treatments. In addition, the same patient can walk into two physicians’ offices and receive equally disparate treatments. This chapter attempts to understand why. It focuses on three areas: the patient, the physician, and the clinical situation. Specifically, the chapter surveys patient or demand-side factors such as price, income, and preferences; physician or supply-side factors such as specialization, financial incentives, and professionalism; and situational factors including behavioral influences and systems-level factors that play a role in clinical decision making. This chapter reviews theory and evidence, borrowing heavily from the clinical literature.

Suggested Citation

  • Chandra, Amitabh & Cutler, David & Song, Zirui, 2011. "Who Ordered That? The Economics of Treatment Choices in Medical Care," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 397-432, Elsevier.
    • Handle: RePEc:eee:heachp:2-397
    DOI: 10.1016/B978-0-444-53592-4.00006-2
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    More about this item

    Keywords

    variations; decision making; demand heterogeneity; preferences; income; supply-side incentives; payment systems; specialization; behavioral economics;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services

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