Do Physicians Engage in Offsetting Behavior? Empirical Evidence from Medicare Part B
29 Pages Posted: 1 Dec 2016
Date Written: November 29, 2016
Historically, Medicare has operated under the assumption that health care providers respond to reductions in reimbursement through increased provision of services to offset declines in practice revenue; however, recent empirical work has found either small offsetting effects or evidence supporting a traditional supply response. Using multiple identification techniques and datasets, including distance matching a sample of physicians in close proximity but subject to distinct reimbursement rates and approximating physician practice costs, this study finds strong evidence in support of the offsetting assumption.
Keywords: Medicare Part B, Fee-For-Service, Offsetting, Supplier Induced Demand
JEL Classification: I11, I18
Suggested Citation: Suggested Citation