• Cost shifting by physicians [FAQ]

    This is a FAQ entry. See the main FAQ index for others.

    There are many posts on cost shifting. Here’s one focused on physicians. In general, physicians do not have the requisite market power to shift costs, as explained in one of my cost shifting working papers.


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    • Claims of cost shifting are yet another idea that seems reasonable to those who don’t understand basic economics. Bank fees are another recent example – if we don’t let banks overcharge for debit card, they’ll just make it up by charging more elsewhere.

      If doctors, banks, etc. had enough market power to increase other charges, they would have already done so. Restrictions on the ability to charge there won’t magically give them the ability to charge here.

    • The paper cited is old and not very helpful. It is derived from hospital data. Your article is about hospitals. Do you have other studies? Are there papers addressing stand-alone physician services or other outpatient services, like dialysis for instance?

      • The working paper at the link is not only about hospitals. It includes a section on studies about physician cost shifting. There you will find all studies that met the criteria for inclusion in the paper. I am aware of no others that shed light on this issue.