In the Shadow of a Giant: Medicare’s Influence on Private Physician Payments
Open accessAbstract
We analyze Medicare's influence on private insurers' payments for physicians' services. Using a large administrative change in reimbursements for surgical versus medical care, we find that private prices follow Medicare's lead. A $1.00 increase in Medicare's fees increases corresponding private prices by $1.16. A second set of Medicare fee changes, which generates area-specific payment shocks, has a similar effect on private reimbursements. Medicare's influence is strongest in areas with concentrated insurers and competitive physician markets, consistent with insurer-doctor bargaining. By echoing Medicare's pricing changes, these payment spillovers amplify Medicare's impact on specialty choice and other welfare-relevant aspects of physician practices.
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Private insurances often adopt Medicare models, and the study's estimates may be conservative since private insurers typically reimburse more than Medicare.
“private insurances often adopt Medicare models, and our estimates may be conservative since private insurers typically reimburse more than Medicare.”
A $1.00 increase in Medicare's fees increases corresponding private prices by $1.16.
“one study showed that a $1.00 increase in Medicare’s fees increases corresponding private prices by $1.16,37”
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References 75 · Cited by 316
Research works printed but not linked: 3
- Blue Cross and Blue Shield of Texas 2010 Fee Schedule Updates Blue Review 3 15 16 http://www.bcbstx.com/provider/pdf/bluereview/br_issue3_2010.pdf
- CSHSC (Center for Studying Health System Change) 1999 Physician Survey Summary File: User’s Guide and Codebook Community Tracking Study Physician Survey, 1996–97 (ICPSR 2597) http://doi.org/10.3886/ICPSR02597.v3 · DOI
- CSHSC (Center for Studying Health System Change) 2006 2004–05 Physician Survey Summary File: User’s Guide and Code-book Community Tracking Study Physician Survey, 2004–5 (ICPSR 4584) http://doi.org/10.3886/ICPSR04584.v2 · DOI
- Authors
- Clemens, J., & Gottlieb, J. D.
- Affiliations
- National Bureau of Economic Research (US)
- Venue
- Journal of Political Economy
- Publisher
- University of Chicago Press
- Published
- 2017-02
- Volume
- 125
- Issue
- 1
- Pages
- 1-39
- ISSN
- 0022-3808 (ISSN-L)
- 1537-534X
- PMC
- PMC5509075
- OpenAlex
- W1517698571
- Cited by
- 316
- References
- 75
- Citations by year
- 2026: 26 · 2025: 28 · 2024: 55 · 2023: 26 · 2022: 53 · 2021: 31 · 2020: 27 · 2019: 15 · 2018: 23 · 2017: 17 · 2016: 5 · 2015: 5 · 2014: 2 · 2013: 2 · 2012: 1
- FWCI
- 38.85
- Type
- journal article
- Language
- en
- Open access
- green
- www.ncbi.nlm.nih.gov
- Locations
- Journal of Political Economy (publishedVersion)
- PubMed (publishedVersion)
- PubMed Central (acceptedVersion)
- Funders
- National Institute on Aging (P01AG031098, T32AG000186)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Healthcare Policy and Management
- Social Sciences › Economics, Econometrics and Finance › Finance › Healthcare Systems and Reforms
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Pharmaceutical Economics and Policy
- Keywords
- Medicare, physician reimbursement, private insurance, market concentration, specialty choice, health care prices
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