Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending

64 Pages Posted: 17 Aug 2013 Last revised: 17 Apr 2019

See all articles by David M. Cutler

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Jonathan S. Skinner

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Ariel Dora Stern

Harvard Business School

David Wennberg

Geisel School of Medicine at Dartmouth

Date Written: August 2013

Abstract

There is considerable controversy about the causes of regional variations in health care expenditures. Using vignettes from patient and physician surveys linked to fee-for-service Medicare expenditures, this study asks whether patient demand-side factors or physician supply-side factors explain these variations. The results indicate that patient demand is relatively unimportant in explaining variations. Physician organizational factors matter, but the most important factor is physician beliefs about treatment. In Medicare, we estimate that 35 percent of spending for end-of-life care, and 12 percent of spending for heart attack patients (and for all enrollees) is associated with physician beliefs unsupported by clinical evidence.

Suggested Citation

Cutler, David M. and Skinner, Jonathan S. and Stern, Ariel Dora and Wennberg, David, Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending (August 2013). NBER Working Paper No. w19320. Available at SSRN: https://ssrn.com/abstract=2311569

David M. Cutler (Contact Author)

Harvard University - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Harvard University - Harvard Kennedy School (HKS) ( email )

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Jonathan S. Skinner

Dartmouth College - Department of Economics ( email )

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National Bureau of Economic Research (NBER) ( email )

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Ariel Dora Stern

Harvard Business School ( email )

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Harvard Business School
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HOME PAGE: http://www.hbs.edu/astern

David Wennberg

Geisel School of Medicine at Dartmouth ( email )

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Hanover, NH 03755-1404
United States

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