Essays on Physician Practice Style

Healthcare is a large and important part of the United States economy. In 2013, the healthcare sector accounted for 17.4% of GDP and employed 13% of the US workforce. Healthcare expenditures grew at an annual rate of 3.6%, faster than both the economy's growth rate (2.2%) and the rate of inflation (1.5%). As Americans spend more on healthcare, policymakers are faced with the challenge of guaranteeing health insurance coverage to all Americans, while also making it affordable (Sanger-Katz et al. 2014). However, research shows that the US spends more on healthcare than any other OECD country, and yet our health outcomes are no better than most OECD countries (Squires 2012). Therefore, policymakers are looking to reform the healthcare system in ways that will make it more efficient and improve the quality of care that it provides.;My research focuses on how healthcare providers decide to treat their patients. It contributes to a growing literature in health economics that identifies inefficiencies in the healthcare system by identifying inefficiencies in how providers treat patients. Examples of inefficiencies include situations in which healthcare providers supply medical care that does not provide health benefits or situations in which the same medical care could have been provided in a lower cost setting. Inefficiencies persist in healthcare markets due to information asymmetries. Healthcare providers know more about medical care than their patients and patients are often unable to differentiate between high and low-quality providers. As a result, research has shown that similar patients often receive different care from different healthcare providers.;Motivated by the idea that the same patients can receive different medical care from different healthcare providers, my dissertation discusses three reasons why physicians have different practice styles. The first chapter focuses on the fact that physicians have different medical training and experience. The second chapter discusses how physicians are exposed to different degrees of medical malpractice liability. The third chapter describes how physicians are members of different health insurance networks. I find that all three reasons explain physician practice style, but that health insurance networks have the largest effects on healthcare efficiency.;As a health economist, it is important to use quasi-experimental research methods to isolate the determinants of physician practice style, so each chapter in my dissertation relies on a different quasi-experimental method to show how physicians make decisions involving patient care. These methods help to overcome the biases inherent in health economics research, such as when patients select their physicians or when physicians select their patients. My dissertation also uses detailed data on physicians and patients to show not only how patient care varies across physicians, but also how patient care varies within physicians over time. In this way, my dissertation reveals the degree to which physician practice style is malleable and responsive to incentives. In the following paragraphs, I provide a brief description of each dissertation chapter and I discuss my goals for future research.;Chapter 1 asks whether physician characteristics explain efficient practice style, where an efficient physician generates the lowest possible costs for a given set of health outcomes. This chapter was motivated by the economics of education literature where researchers seek to find the characteristics of effective teachers. Chapter 1 focuses on patients with minor injuries who should not receive different medical care from different physicians. The quasi-experimental method uses the fact that, within hospital emergency rooms (ERs), patients with minor injuries are as good as randomly assigned to ER physicians. The results reveal that the only observable physician characteristic that explains differences in practice style across physicians within the same ER is physician experience. Experienced physicians prescribe fewer procedures and charge less per visit, with no differences in health outcomes. Similar to the teacher experience literature, however, the gains to physician experience are largest within the first two years and then they quickly taper off after that. Therefore, inexperienced physicians are the least efficient providers of urgent, but routine healthcare.