The Consequences of Medicare Pricing: An Explanation of Treatment Choice

30 Pages Posted: 24 Aug 2020

See all articles by Elena Falcettoni

Elena Falcettoni

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: August, 2020

Abstract

Primary care physicians (PCPs) provide more specialty procedures in less-urban areas, where specialists are fewer. Using a structural random-coefficient model and the demographic and time variation in the data, this paper shows that changes in policy-set reimbursements lead to a reallocation of the suddenly-more-remunerative procedures away from specialists and toward PCPs, and this effect is stronger, the more rural an area is. A reimbursement-unit increase for a given procedure leads to outside-metro PCPs gaining 7-15% market share more than metro PCPs in that procedure, at the expense of specialists. Small metropolitan areas and very rural areas are the most affected.

JEL Classification: I18, I13, J20, R12

Suggested Citation

Falcettoni, Elena, The Consequences of Medicare Pricing: An Explanation of Treatment Choice (August, 2020). FEDS Working Paper No. 2020-63, Available at SSRN: https://ssrn.com/abstract=3679205 or http://dx.doi.org/10.17016/FEDS.2020.063

Elena Falcettoni (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

HOME PAGE: http://www.elenafalcettoni.com

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