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Real Effects of Financial Conditions: How Does Provider Financial Health Affect Opioid Prescription?

Author

Listed:
  • Erel, Isil

    (Ohio State U and ECGI)

  • Ge, Shan

    (New York U)

  • Ma, Pengfei

    (Singapore Management U)

Abstract

We examine how healthcare providers' financial health affects their opioid prescription decisions, using changes in house prices in providers' residential neighborhoods as shocks to their wealth. We find that providers increase opioid prescriptions when experiencing adverse financial conditions: a one-standard-deviation decrease in house price growth leads to a 3% increase in opioid prescriptions. Results are robust to including provider office-year fixed effect and using the subsample of providers who live far away from their offices, which largely rules out a patient-demand explanation. Providers living in zip codes with price changes in the bottom half during 2007-2009 increased their opioid prescriptions by approximately 16% more in 2010-2012 than others. The effect is stronger among providers with greater home equity, those in competitive markets, and those serving vulnerable populations. Our findings reveal a previously undocumented channel through which providers' financial incentives affect opioid prescriptions.

Suggested Citation

  • Erel, Isil & Ge, Shan & Ma, Pengfei, 2025. "Real Effects of Financial Conditions: How Does Provider Financial Health Affect Opioid Prescription?," Working Paper Series 2024-27, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    • Handle: RePEc:ecl:ohidic:2024-27
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    More about this item

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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