TY  - JOUR
AU  - Clemens, Jeffrey
AU  - Gottlieb, Joshua D
TI  - In the Shadow of a Giant: Medicare's Influence on Private Physician Payments
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 19503
PY  - 2013
Y2  - October 2013
DO  - 10.3386/w19503
UR  - http://www.nber.org/papers/w19503
L1  - http://www.nber.org/papers/w19503.pdf
N1  - Author contact info:
Jeffrey Clemens
Department of Economics
University of California, San Diego
9500 Gilman Drive #0508
La Jolla, CA 92093
Tel: 858/534-5713
E-Mail: jeffclemens@ucsd.edu

Joshua D. Gottlieb
University of Chicago
Harris School of Public Policy
1307 E. 60th St.
Chicago, IL 60637
E-Mail: jgottlieb@uchicago.edu
AB  - We demonstrate Medicare's influence on private insurers' payments for physicians' services. Using a large administrative change in payments for surgical versus medical care, we find that private prices follow Medicare's lead. A $1 change in Medicare's fees moved private prices by $1.16. A second set of Medicare payment changes, which generated area-specific reimbursement shocks, had a similar effect on private sector prices. Medicare's influence is strongest in areas with concentrated insurers, small physician groups, and competitive physician markets. The public sector's influences on system-wide resource allocation and costs extend well beyond the share of health expenditures it finances directly.
ER  -