Affiliation:
1. Department of Health Policy and Management, Harvard T. H. Chan School of Public Health (email: )
2. Department of Economics, Lehigh University (email: )
3. Department of Health Policy and Management, Columbia University Mailman School of Public Health; National Bureau of Economic Research; and J-PAL North America (email: )
Abstract
Efforts to raise US health-care productivity have proceeded slowly, potentially due to the fragmentation of payment across insurers. Each insurer’s efforts to improve care could influence how doctors practice for other insurers, leading to unvalued externalities. We study a randomized letter intervention by Medicare to curtail overuse of antipsychotics. The letters did not mention private insurance but reduced prescribing to these patients by 12 percent, much like the 17 percent effect in Medicare. We cannot reject onefor-one spillovers, suggesting that physicians use similar medical practice styles across insurers. Our findings establish that insurers can affect health care well outside their direct purview. (JEL D24, G22, I11, I13, I18)
Publisher
American Economic Association
Subject
General Economics, Econometrics and Finance
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