Magazine article Regulation

Health Care Expenditures

Magazine article Regulation

Health Care Expenditures

Article excerpt

"Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending," by David Cutler, Jonathan Skinner, Ariel Dora Stern, and David Wennberg. August 2013. NBER #19320.

Price-adjusted Medicare expenditures per beneficiary vary across metropolitan areas from $7,000 to $14,000 per year. Why? One possibility is patient demand. Another is physician preferences. John Wennberg, the intellectual father of the evidence-based medicine movement at Dartmouth's Geisel School of Medicine, has always thought that physician preferences rather than scientific evidence played a large role. In this paper, David Cutler (professor of economics at Harvard), Wennberg's son David (Dartmouth medical school), Dartmouth economist Jonathan Skinner, and Kennedy School of Government doctoral candidate Ariel Dora Stern attempt to document the relative role of patient demand and physician preferences through two surveys merged with geographically coded Medicare expenditure data for the last two years of life. The authors survey doctors (using actual patient vignettes that test for implementation of clinical guidelines) and patients (random sample of Medicare beneficiaries) to ascertain their preferences about hypothetical end-of-life decisions and find that doctor preference variation accounts for more of the expenditure variation than patient preference variation. …

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