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Essays in Health Economics

  • Author(s): Kwok, Jennifer Helen
  • Advisor(s): Handel, Benjamin R
  • Card, David
  • et al.
Abstract

The influence of individual healthcare providers on healthcare utilization has important implications for healthcare systems and cost savings policies. Primary care physicians may be particularly influential because they have central, coordination roles in medicine, yet little is known about their impacts on healthcare utilization. This dissertation provides new empirical evidence on two fundamental questions. First, to what extent do differences in practice styles of individual primary care physicians, as measured by their patients' spending, explain variation in healthcare utilization? Second, do patients incur switching costs in the form of temporarily higher healthcare utilization when they switch PCPs? Specifically, I study the long-run and short-run effects of switching to different primary care physicians on patient healthcare utilization among traditional fee-for-service Original Medicare patients who are ages 65-99 in the United States.

In the first chapter, I show that patients who switch from a primary care physician whose other patients have low utilization to one whose other patients have high utilization experience increases in long-run utilization, whereas patients who switch in the opposite direction experience decreases. Regardless of the direction of the change, patients experience short-run increases in utilization around the switch. Using a model that includes both patient and physician fixed effects, I find that differences in primary care physician practice styles, as measured by spending, explain about 2% of the variation in long-run total utilization and about 13% of the variation in long-run primary care utilization within regional markets.

In the second chapter, I estimate the short-run effects of switching primary care physicians on patient utilization. I focus on patients who involuntarily switch because their physicians relocate or retire, such that the timing of the switches is exogenous. Each primary care physician switch leads to approximately $500-725 in additional total utilization, and 20-30% comes from temporary increases in primary care utilization. Combining my findings from these two chapters, I construct counterfactuals and find that policies that reallocate patients across primary care physicians could potentially be counterproductive due to modest long-run savings and substantial short-run switching costs. Finally, I discuss potential mechanisms that could generate these switching costs and their welfare implications.

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