Operating on Commission

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My paper on how physician compensation affects surgery rates is being published in the May 2010 edition of Health Economics.  The abstract from the article is below:

This paper employs a nationally representative, household-based dataset in order to test how the compensation method of both the specialists and the 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.

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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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