Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

37 Pages Posted: 1 Aug 2018 Last revised: 15 Jun 2022

See all articles by Michael Chernew

Michael Chernew

Harvard University - Department of Health Care Policy; National Bureau of Economic Research (NBER)

Zack Cooper

Princeton University

Eugene Larsen-Hallock

Columbia University

Fiona M. Scott Morton

Yale School of Management; National Bureau of Economic Research (NBER)

Date Written: July 2018

Abstract

We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in high-priced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients’ home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.

Suggested Citation

Chernew, Michael E. and Cooper, Zack and Larsen-Hallock, Eugene and Scott Morton, Fiona M., Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans (July 2018). NBER Working Paper No. w24869, Available at SSRN: https://ssrn.com/abstract=3222416

Michael E. Chernew (Contact Author)

Harvard University - Department of Health Care Policy ( email )

25 Shattuck Street
Boston, MA 02115
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Zack Cooper

Princeton University ( email )

22 Chambers Street
Princeton, NJ 08544-0708
United States

Eugene Larsen-Hallock

Columbia University

Fiona M. Scott Morton

Yale School of Management ( email )

New Haven, CT 06520
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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