An Empirical Evaluation of the Physician Offsetting Response

20 Pages Posted: 12 Jan 2021

See all articles by Christopher Brunt

Christopher Brunt

Georgia Southern University - Department of Economics

Joshua R. Hendrickson

University of Mississippi

Date Written: December 11, 2020

Abstract

Using data on office visits for Medicare-treating physicians, this study examines the effects of several policy changes that reduced real reimbursement for some, but not all physicians, from 2012-2017. Using genetic propensity score weighted Difference- in-Differences (DID) models that include individual physician and county fixed-effects, this study finds strong evidence that those who experienced a reimbursement reduction increased their service provision, indicative of a supplier-induced demand response. Our estimates imply that 27-33% of a reimbursement reduction will be offset through changes in provider behavior.

Keywords: Medicare Part B, Fee-for-service, Offsetting, Supplier Induced Demand

JEL Classification: I11, I18

Suggested Citation

Brunt, Christopher and Hendrickson, Joshua R., An Empirical Evaluation of the Physician Offsetting Response (December 11, 2020). Available at SSRN: https://ssrn.com/abstract=3747208 or http://dx.doi.org/10.2139/ssrn.3747208

Christopher Brunt

Georgia Southern University - Department of Economics ( email )

P.O. Box 8153
Statesboro, GA 30458
United States

Joshua R. Hendrickson (Contact Author)

University of Mississippi ( email )

Oxford, MS 38677
United States

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