Healing the Poor: The Influence of Patient Socioeconomic Status on Physician Supply Responses

Alice Chen and Darius Lakdawalla

No 21930, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: A longstanding literature explores how altruism affects the way physicians respond to incentives and provide care. We analyze how patient socioeconomic status mediates these responses. We show theoretically that patient socioeconomic status systematically influences the way physicians respond to reimbursement changes, and we identify the channels through which these effects operate. We use two Medicare reimbursement changes to investigate these insights empirically. We confirm that a given physician facing an increase in reimbursement boosts utilization by more when treating richer patients. We show that average supply price elasticities vary from 0.02 to 0.18 for a given physician, depending on the patient’s socioeconomic status. Finally, we show that the Medicare reforms we study led to overall reimbursement increases that raised healthcare utilization by 10% more for high-income patients compared to their low-income peers.

JEL-codes: I11 I12 I18 (search for similar items in EconPapers)
Date: 2016-01
New Economics Papers: this item is included in nep-hea
Note: AG EH
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Published as Alice Chen & Darius N. Lakdawalla, 2019. "Healing the poor: The influence of patient socioeconomic status on physician supply responses," Journal of Health Economics, vol 64, pages 43-54.

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Journal Article: Healing the poor: The influence of patient socioeconomic status on physician supply responses (2019)
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