Physician Agency, Training, and Location
Ian McCarthy | Emory University
Variation in Health Care
Consequences of physician agency:
- Patients subjected to information frictions or financial incentives of physicians
- The types of care people receive will depend on the physician
- Potential variation in health care utilization and spending across and even within markets
Variation in Health Care
Consequences of physician agency:
- Patients subjected to information frictions or financial incentives of physicians
- The types of care people receive will depend on the physician
- Potential variation in health care utilization and spending across and even within markets
Areas of “training”
- Medical education
- Choice of specialization
- Personal biases (not really training, but important nonetheless)
Examples
- Team effects and influence during residency (Chan, 2021)
- Physicians following treatment patterns of advisors in residency (Pany, 2023)
- PCP training associated with less healthcare utilization (Kravitz and Greenfield, 1995)
Physician Location and Practice
Peer effects
- Peer effects pervasive in many areas
- Do they apply to physicians in terms of their treatment decisions?
- Physicians adopting practice patterns of peers in new practice (Molitor, 2018)
Molitor (2018)
- The evolution of physician practice styles: evidence from cardiologist migration
- Study cardiologist practice styles upon joining new practices (physician movers)
- Practice environment can explain 60-80% of “supply-side” variation, at least in cardiology
Badinski, et al. (2023)
- Geographic Variation in Healthcare Utilization: The Role of Physicians
- New work effectively combining lots of prior approaches into one coherent study
- Illustrates significant heterogeneities across types of physicians
- For cardiologists:
- Practice environment a major factor
- Individual physician practice style less relevant
- For PCPs:
- Practice environment less critical
- Individual physician practice style more important (explains around 20% of observed variation)
The problem
- Significant variation in healthcare utilization across and within markets
- Not explained by patient need or quality of care
- Points to clear inefficiencies (can reduce utilization without sacrificing quality)
Sources of inefficiency
- Learning and information
- Practice environment and peer effects
- Physician training and prior beliefs
Potential solutions
- Information transparency (FDA, rating systems, etc.)
- Opportunity for spillovers, but changing practice patterns is hard
- Checklists, EHRs, etc.
- Physicians don’t always like them


Physician Agency, Training, and Location Ian McCarthy | Emory University