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Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients

Michael Geruso and Michael R. Richards

Journal of Health Economics, 2022, vol. 84, issue C

Abstract: Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians’ outpatient surgery choices for non-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Keywords: Physician; Medicare; Healthcare regulation; Ambulatory surgery center (search for similar items in EconPapers)
JEL-codes: H44 I11 I13 I18 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1016/j.jhealeco.2022.102624

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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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