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Common practice spillovers from Medicare on private health care by Michael L. Barnett, Andrew Olenski and Adam Sacarny

By: Barnett, Michael L.
Contributor(s): Olenski, Andrew | Sacarny, Adam.
Material type: ArticleArticleSubject(s): SALUD PUBLICA | POLITICA SANITARIA | ASISTENCIA SANITARIA | SANIDAD PRIVADA | SEGUROS DE SALUD | ESTADOS UNIDOS In: American Economic Journal : Economic Policy v. 15, n. 3, August 2023, p. 65-88Summary: Efforts to raise US health-care productivity have proceeded slowly, potentially due to the fragmentation of payment across insurers. Each insurer's efforts to improve care could influence how doctors practice for other insurers, leading to unvalued externalities. We study a randomized letter intervention by Medicare to curtail overuse of antipsychotics. The letters did not mention private insurance but reduced prescribing to these patients by 12 percent, much like the 17 percent effect in Medicare. We cannot reject one-for-one spillovers, suggesting that physicians use similar medical practice styles across insurers. Our findings establish that insurers can affect health care well outside their direct purview.
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Efforts to raise US health-care productivity have proceeded slowly, potentially due to the fragmentation of payment across insurers. Each insurer's efforts to improve care could influence how doctors practice for other insurers, leading to unvalued externalities. We study a randomized letter intervention by Medicare to curtail overuse of antipsychotics. The letters did not mention private insurance but reduced prescribing to these patients by 12 percent, much like the 17 percent effect in Medicare. We cannot reject one-for-one spillovers, suggesting that physicians use similar medical practice styles across insurers. Our findings establish that insurers can affect health care well outside their direct purview.

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