Essays on health care delivery and financing

Abstract

This thesis contains essays on health care delivery and financing. Chapter 1 studies the effect of organizational structure on physician behavior. I investigate this by studying emergency department (ED) physicians who work in two organizational systems that differ in the extent of physician autonomy to manage work: a "nurse-managed" system in which physicians are assigned patients by a triage nurse "manager," and a "self-managed" system in which physicians decide among themselves which patients to treat. I estimate that the self-managed system increases throughput productivity by 10-13%. Essentially all of this net effect can be accounted for by reducing a moral hazard I call "foot-dragging": Because of asymmetric information between physicians and the triage nurse, physicians delay discharging patients to appear busier and avoid getting new patients. Chapter 2 explores the development of physician practice styles during training. Although a large literature documents variation in medical spending across areas, relatively little is known about the sources of underlying provider-level variation. I study physicians in training ("housestaff") at a single institution and measure the dynamics of their spending practice styles. Practice-style variation at least doubles discontinuously as housestaff change informal roles at the end of the first year of training, from "interns" to "residents," suggesting that physician authority is important for the size of practice-style variation. Although practice styles are in general poorly explained by summary measures of training experiences, rotating to an affiliated community hospital decreases intern spending at the main hospital by more than half, reflecting an important and lasting effect of institutional norms. Chapter 3, joint with Jonathan Gruber, examines insurance enrollee choices in a "defined contribution exchange," in which low-income enrollees are responsible for paying for part of the price of insurance. Estimating the price-sensitivity of low-income enrollees for insurance represents a first step for understanding the implications of such a system that will soon become widespread under health care reform. Using data from Massachusetts Commonwealth Care, we find that low-income enrollees are highly sensitive to plan price differentials when initially choosing plans but then exhibit strong inertia once they are in a plan.