Go your own way? The importance of environment in the formation of - - PowerPoint PPT Presentation

Go your own way? The importance of environment in the formation of physician practice styles

Avdic, Ivets and Sriubaite Discussion by Amitabh Chandra

Source: Chandra, Staiger and Skinner (IOM, 2010)

Lowest Performance

Highest Performance

Primary PCI Stable Angina # Patients Cost per PCI

Stents are Highly Cost-Effective for some

Marginal Benefit from Treatment

# Patients Cost per PCI Total Cost X’

But less so for the marginal patient

Marginal Benefit from Treatment

# Patients

Cost per PCI

Total Cost X Z

Different beliefs about benefits

Small Differences in Beliefs have large cost-implications

Marginal Benefit from Treatment

“By all means, dear – buy it if you really want it. We’ll find the money for it somehow”

The New Yorker 1950-55 Collection

Average who say yes: 57%

Our Enterprise

• Are Physician Factors Independent of Hospital/Environment factors?
• What is the mechanism behind differences in physician factors
• Peers versus capacity?
• Peers versus environment?
• Peers versus training?
• Peer versus beliefs?
• Is there heterogeneity across physicians in these factors?
• What is the impact of this variation on patient outcomes?

Id Identification

∆j =Time-invariant difference between a migrating cardiologist’s

• rigin (O) and destination (D) hospitals’ risk-adjusted cath rates

Using data on dates and peers, can be redefined as difference between a migrating cardiologist’s peers in origin and destination Diff-in-Diff: How much does a physician change her practice style after migrating? Coefficient of 1 means that 1 pp change in physician’s environment corresponds to a 1 pp change in physician behavior

Three suggestions

• Approximately 160 cardiologists per year and 40 movers per year. So

lots of noise in CATH rates

• Even more noise in difference in CATH rates (subtracting signal+noise

from signal + noise = noise)

• Maybe use empirical bayes for shrinkage
• Not sure whether peer effects are genuine peer effects or something

else- maybe downplay these or show that they have variation above and beyond hospital level variation

• Use simple theory to help understand null results on patient
• utcomes

Hospital Closures and Patient Mortality

Predictions of Hospital 30-day AMI Mortality, 2000

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Example Empirical Bayes predictions of hospital mortality rate in 2000, accounting for volume and drift, using data from 1992-1999 & 2003-2013

Prototypical Roy Model of Treatment

How one gets treated depends on X’s, hurdle, TFP and comparative advantage

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