How robust are reference pricing studies on outpatient medical procedures? Three different preprocessing techniques applied to difference‐in differences

Timothy Tyler Brown and Juan Pablo Atal

Health Economics, 2019, vol. 28, issue 2, 280-298

Abstract: The evaluation of policies that are not randomly assigned on outcomes generated by nonlinear data generating processes often requires modeling assumptions for which there is little theoretical guidance. This paper revisits previously published difference‐in‐differences results of an important example, the introduction of reference pricing to common outpatient procedures, to assess the robustness of the estimated impacts by using different matching, and reweighting techniques to preprocess the data. These techniques improve covariate balance and reduce model dependence. Specifically, we examine the robustness of the effect of reference pricing on patient site‐of‐care choice, total expenditures, and complication rates. We apply three preprocessing methods: propensity score reweighting, exact matching, and genetic matching. Propensity score reweighting is a technique for achieving covariate balance but does not balance higher‐order moments and may lead to bias and inefficiency in estimating treatment effects in the context of nonlinear data generating processes. In contrast, exact matching and genetic matching are designed to balance higher‐order moments. We find that although the use of the preprocessing techniques is a valuable robustness check showing that some results are sensitive to the method used, the three approaches generally yield results that do not statistically differ from the published results.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1002/hec.3841

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:28:y:2019:i:2:p:280-298

Access Statistics for this article

Health Economics is currently edited by Alan Maynard, John Hutton and Andrew Jones

More articles in Health Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().