NBER

Andrew Olenski

Department of Economics
Columbia University
420 West 118th Street
New York, NY 10027

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Columbia University

NBER Working Papers and Publications

May 2020Common Practice: Spillovers from Medicare on Private Health Care
with Michael L. Barnett, Adam Sacarny: w27270
Efforts to raise the productivity of the U.S. health care system have proceeded slowly. One potential explanation is the fragmentation of payment across insurers. Each insurer's efforts to improve care could influence how doctors practice medicine for other insurers, leading to unvalued externalities. We study these externalities by examining the unintended private insurance spillovers of a public insurer's intervention. In 2015, Medicare randomized warning letters to doctors to curtail overuse of antipsychotics. Even though the letters did not mention private insurance, they reduced prescribing to privately insured patients by 12%. The reduction to Medicare patients was 17%, and we cannot reject one-for-one spillovers. The results imply that physicians experience large costs to setting in...

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