Unbiased Analysis of Today's Healthcare Issues

Forthcoming in Health Economics…

Written By: Jason Shafrin - Jan• 21•09

Today, my paper titled “Operating on commission: How physician financial incentives affect surgery rates” was accepted for publication in the journal Health Economics. ¬† A summary of the paper’s findings is below.

This paper employs a nationally representative, household-based dataset in order to test how the compensation method of both specialists and primary care providers affects surgery rates. After controlling for adverse selection, I find that when specialists are paid through a fee-for-system scheme rather than on a capitation basis, surgery rates increase 78%. The impact of primary care physician compensation on surgery rates depends on whether or not referral restrictions are present.

You can read the full text of a working paper version here.  Other research by Jason Shafrin can be found at JasonShafrin.com.

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  1. Congratulations! I know the long, hard road to publication (vicariously through my husband), and it’s a major accomplishment to be accepted!

  2. Greg Vachon says:

    Congrats! Nice piece of work. 78%! Yikes. This means that either a lot of surgeries are not done that ought to be done under capitation or that the lure of extra pay causes surgeons to do unnecessary surgery. I’d bet it is a bit of both with some very grey areas. But shows us how important the financing structure is. Whether it is a single payor system or a private insurance system, it would make sense to have more nuanced incentives than either capitation or fee for service that induce the “right” number of surgeries to be done – clinically and economically speaking. Sure would be interesting to look at actual cases and categorize (blindly) on levels of appropriateness/need and what compensation model was used. One could empirically see what is most appropriate amongst the choices in our current financing environment. Interesting – thanks.

  3. Jaime Thomas says:

    Congratulations, Jason! What an accomplishment!

  4. Jason Shafrin says:

    Thanks Jaime!

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