Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans

Abstract

We study how privately insured individuals choose lower-limb MRI scan providers. Despite significant out-of-pocket costs and little variation in quality, patients often received care in highpriced locations when lower priced options were available. The choice of provider is such that, on average, patients bypassed 6 lower-priced providers between their homes and treatment locations. We show that referring physicians heavily influence where patients receive care. The influence of referring physicians is dramatically greater than the influence of patient cost-sharing or patients' home zip code fixed effects. Patients with vertically integrated referring physicians are also more likely to receive costlier hospital-based scans.

Distinguishing moral hazard from access for high-cost healthcare under insurance

“…Countries with insubstantial patient cost exposure have some of the most efficient healthcare systems, delivering impressive health outcomes at lower overall costs than in the United States [56]. Our data is also consistent with research findings that providers drive consumptions much more than patients [18,19] and that patients exposed to cost decline both high-value and low-value are alike. [15,16,17] These studies have been unable to distinguish the access function of insurance in particular.…”

“…[17] Recent research suggests that providers may drive spending choices to a much greater degree than patients. [18,19] Our study adds to the literature in the following two ways. First, we use indemnities as an alternative theory-driven counterfactual in two vignette-based survey experiments with a high-dollar healthcare setting.…”

Is great information good enough? Evidence from physicians as patients

“…Perhaps one interpretation of these findings is that patients remain generally deferential to the care recommendations of their treating physicians, even in the case of near fully-informed patients. This interpretation would be consistent with other recent findings in the health economics literature, including recent research by Chernew et al (2018) Finally, it is important to note that this particular generalizability concern does not extend to the high-value care analysis. If anything, the fact that cost-sharing is lower in the MHS should only elevate the role of information in encouraging greater guideline adherence.…”

Social Solidarity in Health Care, American-Style

“…84 A consumer approach, however, ignores the realities that patients are largely unable to act as consumers due to widespread market failures and non-shoppability of health care and that many illnesses or conditions are not manageable with lifestyle changes. 85 As a result, though insurance coverage increased under the ACA, a growing number of people are underinsured, driving a health care affordability crisis. 86 Public opinion may be turning against consumerism as a panacea to health system dysfunction, but the narrative of personal responsibility and a stubborn faith in markets remain embedded in debates over how to distribute health care resources and control system costs.…”