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Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Author

Listed:
  • Michael Chernew
  • Zack Cooper
  • Eugene Larsen-Hallock
  • Fiona Scott Morton

Abstract

We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in high-priced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients’ home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.

Suggested Citation

  • Michael Chernew & Zack Cooper & Eugene Larsen-Hallock & Fiona Scott Morton, 2018. "Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans," NBER Working Papers 24869, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24869
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    Cited by:

    1. Johannes Boehm & Jan Sonntag, 2023. "Vertical Integration and Foreclosure: Evidence from Production Network Data," Management Science, INFORMS, vol. 69(1), pages 141-161, January.
    2. Frakes, Michael & Gruber, Jonathan & Jena, Anupam, 2021. "Is great information good enough? Evidence from physicians as patients," Journal of Health Economics, Elsevier, vol. 75(C).
    3. Zhang, Angela & Prang, Khic-Houy & Devlin, Nancy & Scott, Anthony & Kelaher, Margaret, 2020. "The impact of price transparency on consumers and providers: A scoping review," Health Policy, Elsevier, vol. 124(8), pages 819-825.
    4. Kai Shen Lim & Wei Aun Yap & Winnie Yip, 2022. "Consumer choice and public‐private providers: The role of perceived prices," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1898-1925, September.
    5. Ding, Yu & Liu, Chenyuan, 2021. "Alternative payment models and physician treatment decisions: Evidence from lower back pain," Journal of Health Economics, Elsevier, vol. 80(C).
    6. Devesh Raval & Ted Rosenbaum, 2021. "Why is Distance Important for Hospital Choice? Separating Home Bias From Transport Costs," Journal of Industrial Economics, Wiley Blackwell, vol. 69(2), pages 338-368, June.
    7. Husiatyński, Maciej, 2021. "Three essays on individual behavior and new technologies," Other publications TiSEM 1a7d7036-3d54-4a7b-a425-e, Tilburg University, School of Economics and Management.
    8. Stephenson Strobel, 2023. "Waiting for Dr. Godot: how much and who responds to predicted health care wait times?," Papers 2309.13219, arXiv.org.
    9. Michael D. Frakes & Jonathan Gruber & Anupam Jena, 2019. "Is Great Information Good Enough? Evidence from Physicians as Patients," NBER Working Papers 26038, National Bureau of Economic Research, Inc.
    10. Strobel, Stephenson, 2024. "Who responds to longer wait times? The effects of predicted emergency wait times on the health and volume of patients who present for care," Journal of Health Economics, Elsevier, vol. 96(C).

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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