Provider-induced demand

We all know that patients get loads of advice on what treatments might be best for them from physicians. It follows that the majority of care is provider-driven. Patients aren’t really demanding care so much as it is being forced down their throats by greedy doctors. That’s what’s revealed by the literature that shows tremendous variation across geographic regions in health care utilization and spending. It’s all the providers’ fault.

Ha! Did you really think I’d write that? Well, yeah, I did, but it’s meant as an example of what I’d never write. It’s not the TIE way. We need evidence of provider-induced demand, not just speculation. Variations in utilization are suggestive, but not definitive. Maybe a lot of it is due to patient culture. Maybe providers are just doing what patients want. Isn’t this the era of “patient-centeredness” anyway? (And, for the record, if provider-induced demand is a large phenomenon, greed need not be and probably isn’t the dominant motivation.)

What papers would help tease apart provider-inducement from patient culture? I emailed Chapin White this question. Here’s what he suggested. All links are ungated.

Barnato, A. E., M. B. Herndon, D. L. Anthony, P. M. Gallagher, J. S. Skinner, J. P. W. Bynum, and E. S. Fisher. 2007. “Are Regional Variations in End-of-Life Care Intensity Explained by Patient Preferences?: A Study of the US Medicare Population.” Medical Care 45(5), 386-93.

Dartmouth Center for the Evaluative Clinical Sciences, Supply Sensitive Care, Dartmouth Atlas Project Topic Brief, Lebanon, N.H. (Jan. 15, 2007).

Finkelstein, A. 2007. “The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare.” Quarterly Journal of Economics 122(1), 1-37. [Chapin says this is suggestive but not a smoking gun.]

Newhouse, J. 1992. Medical Care Costs: How Much Welfare Loss? Journal of Economic Perspectives 6(3):3-21. [Chapin says this is a classic.]

All are now on my reading list. If you’re interested in finding more literature on provider-induced demand, here are a few things you could do: (1) Search the term in Google Scholar; (2) Consult relevant citations in the above articles; (3) Find each of the above articles in Google Scholar and see what cites it. If you come across anything useful, please suggest it in the comments.


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