Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending

David  Cutler; Jonathan  Skinner; Ariel Dora Stern; David  Wennberg

Article | American Economic Journal: Economic Policy | February 2019

Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending

by David Cutler, Jonathan Skinner, Ariel Dora Stern and David Wennberg

Abstract

There is considerable controversy about the causes of regional variations in health care expenditures. Using vignettes from patient and physician surveys linked to fee-for-service Medicare expenditures, this study asks whether patient demand-side factors or physician supply-side factors explain these variations. The results indicate that patient demand is relatively unimportant in explaining variations. Physician organizational factors matter, but the most important factor is physician beliefs about treatment. In Medicare, we estimate that 35% of spending for end-of-life care and 12% of spending for heart attack patients (and for all enrollees) is associated with physician beliefs unsupported by clinical evidence.

Keywords: Health Care and Treatment; Spending; Geographic Location; Values and Beliefs;

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Citation:

Cutler, David, Jonathan Skinner, Ariel Dora Stern, and David Wennberg. "Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending." American Economic Journal: Economic Policy 11, no. 1 (February 2019): 192–221.

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Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending

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