The Production of and Market for New Physicians&Apos; Skill
44 Pages Posted: 5 Jan 2013
Date Written: January 2013
Our understanding of the determinants of physician skill and the extent to which skill is valued in the marketplace is superficial. Using a large, detailed panel of new obstetricians, we find that, even though physicians' maternal complication rates improve steadily with years of practice, initial skill (as measured by performance in a physician's first year of practice) explains most of the variation in physician performance over time. At the same time, we find that the trajectories of new physicians' delivery volume develop in a way partially consistent with Bayesian learning about physician quality. In particular, as physicians gain experience, their volume becomes increasingly sensitive to the information in their accumulated prior.
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