Trading Spaces: Medicare’s Regulatory Spillovers on Treatment Setting for Non-Medicare Patients

Michael Geruso and Michael R. Richards

No 28576, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: H23 H42 H51 I11 I13 I18 (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-hea and nep-ias
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Published as Michael Geruso & Michael R. Richards, 2022. "Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients," Journal of Health Economics, vol 84.

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