Real Effects of Financial Conditions: How Does Provider Financial Health Affect Opioid Prescription?

Isil Erel, Shan Ge and Pengfei Ma
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Isil Erel: Ohio State U and ECGI
Shan Ge: New York U

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: We examine how healthcare providers' financial health affects their opioid prescription decisions, using changes in house prices in providers' residential neighborhoods as shocks to their wealth. We find that providers increase opioid prescriptions when experiencing adverse financial conditions: a one-standard-deviation decrease in house price growth leads to a 3% increase in opioid prescriptions. Results are robust to including provider office-year fixed effect and using the subsample of providers who live far away from their offices, which largely rules out a patient-demand explanation. Providers living in zip codes with price changes in the bottom half during 2007-2009 increased their opioid prescriptions by approximately 16% more in 2010-2012 than others. The effect is stronger among providers with greater home equity, those in competitive markets, and those serving vulnerable populations. Our findings reveal a previously undocumented channel through which providers' financial incentives affect opioid prescriptions.

JEL-codes: G51 I11 I13 I14 I18 L15 R30 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-hea and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2024-27

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