Fee cuts for radiology and low-value imaging

David H. Howard (), Michal Horný () and Marcus Dillender ()
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David H. Howard: Emory University
Michal Horný: University of Massachusetts
Marcus Dillender: Vanderbilt University

International Journal of Health Economics and Management, 2025, vol. 25, issue 3, No 4, 383-406

Abstract: Abstract Based on the belief that fee-for-service reimbursement contributes to the overuse of costly medical procedures, policymakers have sought to cut payments for low-value services. Using a difference-in-differences model and Medicare claims linked with cancer registry records, we evaluate the impact of a large payment reduction for an imaging procedure commonly used in prostate cancer patients. We find that the payment cut did not affect imaging use, even in low-risk patients for whom imaging is not recommended. Our results suggest that supply may be relatively insensitive to fee levels when decisions about the use of a service are made exclusively by referring physicians, not the physicians who deliver and receive payment for it.

Keywords: Reimbursement; Payment policy; Physician-induced demand; Physician behavior; Supply of health care services; Overuse (search for similar items in EconPapers)
JEL-codes: I11 I18 L51 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10754-025-09398-3

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