The Effects of Competition on Physician Prescribing

This study investigates how competition influences the prescribing practices of physicians. U.S. state law changes granting nurse practitioners (NPs) the ability to prescribe controlled substances without physician oversight generate exogenous variation in competition. In response, we find that general practice physicians (GPs) prescribe significantly more opioids and controlled anti-anxiety medications. GPs also increase their co-prescribing of opioids and benzodiazepines, a practice that is against prescribing guidelines. These effects are more pronounced in areas with more NPs per GP at baseline, are concentrated in physician specialties that compete most directly with NPs, are not observed for many non-controlled drug classes, and lead to sizable increases in fatal drug overdoses. Our findings are consistent with a simple model of physician behavior in which competition for patients leads physicians to move toward the preferences of marginal patients. These results demonstrate that more competition will not always lead to improvements in patient care and can instead lead to excessive service provision.