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Physicians Treating Physicians: Information and Incentives in Childbirth

49 Pages Posted: 19 Jul 2013  

Erin Johnson

Wellesley College - Center for Research on Women

M. Marit Rehavi

University of British Columbia; Canadian Institute for Advanced Research

Erin M. Johnson

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Date Written: July 2013

Abstract

This paper provides new evidence on the interaction between patient information and financial incentives in physician induced demand (PID). Using rich microdata on childbirth, we compare the treatment of physicians when they are patients with that of comparable non-physicians. We exploit a unique institutional feature of California to determine how inducement varies with obstetricians' financial incentives. Consistent with PID, physicians are almost 10 percent less likely to receive a C-section, with only a quarter of this effect attributable to differential sorting of patients to hospitals or obstetricians. Financial incentives have a large effect on C-section probabilities for non-physicians, but physician-patients are relatively unaffected. Physicians also have better health outcomes, suggesting overuse of C-sections adversely impacts patient health.

Suggested Citation

Johnson, Erin and Rehavi, M. Marit and Johnson, Erin M., Physicians Treating Physicians: Information and Incentives in Childbirth (July 2013). NBER Working Paper No. w19242. Available at SSRN: https://ssrn.com/abstract=2295856

Erin Johnson (Contact Author)

Wellesley College - Center for Research on Women ( email )

United States

M. Marit Rehavi

University of British Columbia ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada

Canadian Institute for Advanced Research

180 Dundas Street West, Suite 1400
Toronto, Ontario
Canada

Erin M. Johnson

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

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