Title

Does Physician Compensation Impact Procedure Choice and Patient Health?

Author(s)

Diane Alexander Diane Alexander (Princeton University)

Abstract

I find that compensation structure impacts a doctor?s decision to perform a Cesarean section (C-section). Using Medicaid reimbursement and vital statistics data, I find that fee-for-service doctors respond to an increase in the relative reimbursement for C-sections by increasing their use of the procedure. These incentives are not passed through to salaried doctors ? their Csection use remains constant at the same lower rate as fee-for-service doctors who are paid the same for both procedures. For fee-for-service doctors who face pay differentials, however, the increase in C-section use due to increases in the pay difference is associated with fewer infant deaths. Thus, this paper demonstrates the difficulty in lowering procedure use while holding patient health constant; from a policy perspective, the consequences for patients of changing physician behavior must always be kept in mind.

Creation Date

2013-07

Section URL ID

CHWB

Paper Number

JUL2013

URL

https://drive.google.com/a/princeton.edu/file/d/0BwjFN4HbBrDBTm9uVzVFd1h4M0E/view

File Function

Jel

I11; I12; I18

Keyword(s)

Medicaid, health costs, c-section, cesarean section, births, reimbursement, compensation, doctors

Suppress

false

Series

9