Abstract
One question which has been the subject of debate, without resolution, in the health economics literature is whether physicians face distorted incentives. This paper examines the possible effects of an attempt to “correct” the incentives facing physician firms: namely the use of a relative valued fee schedule. Though a type of relative value scale is currently under implementation for the Medicare system, little is known about the effects of such mechanisms. This paper attempts to glean information from natural experiments by several state Medicaid programs that have used relative value scales in the past.
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The author would like to express his appreciation to Karen Smith Conway, Thomas Hoerger, and Torsten Schmidt for their helpful comments and suggestions. Valuable research assistance was provided by Sharon Kunz. All remaining errors are, of course, the sole responsibility of the author.
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Bradford, W.D. The effects of a relative value reimbursement scheme on the medical market: Lessons from medicaid. Rev Ind Organ 10, 511–532 (1995). https://doi.org/10.1007/BF01024233
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DOI: https://doi.org/10.1007/BF01024233