Healing the poor: The influence of patient socioeconomic status on physician supply responses

Alice Chen and Darius Lakdawalla

Journal of Health Economics, 2019, vol. 64, issue C, 43-54

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.

Keywords: Physician supply; Altruism; Patient socioeconomic status; Medicare (search for similar items in EconPapers)
JEL-codes: I11 I12 I18 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Healing the Poor: The Influence of Patient Socioeconomic Status on Physician Supply Responses (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:64:y:2019:i:c:p:43-54

DOI: 10.1016/j.jhealeco.2019.02.001

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