From Aspirin, Angioplasty, and Proton Beam Therapy: The Economics of Smarter Health Care Spending by Baicker and Chandra:
There is also a substantial literature at the provider level showing that practice pattern norms drive similar care for all of the patients that a provider sees, regardless of individual insurance status – so that changes in the incentives applying to a large share of patients (say, Medicare beneficiaries) can drive changes in the care received by all patients (Glied and Zivin 2002; Baker and Corts 1996; Baker 1999; Frank and Zeckhauser 2007).
This is of interest because to the extent that practice patterns are good predictors of the type of treatment one might receive but not correlated with unobservable factors that drive outcomes, they make good instruments for observational comparative effectiveness studies. This likely sounds like mumbo-jumbo to some readers, but a lot of money could ride on this type of thing.
Baker, L, and K Corts. 1996. HMO Penetration and the Cost of Health Care: Market Discipline or Market Segmentation? American Economic Review 86 (2):389-394.
Baker, Laurence C. 1999. Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients. Journal of the American Medical Association 281 (5):432-437.
Glied, S., and J. Zivin. 2002. How Do Doctors Behave When Some (But Not All) of Their Patients Are In Managed Care? Journal of Health Economics 21:337-353.
Frank, Richard G., and R.P. Zeckhauser. 2007. Custom Made Versus Ready to Wear Treatments: Behavioral Propensities in Physicians Choices. Journal of Health Economics 26:1101- 1127.