Physician decision-making
This session focuses on physician decision making in treatment. The first paper reconsiders Phelps and Mooney’s “school of thought” model. Epstein shows that (1) among VA hospitals with tight academic affiliation, the nearby unaffiliated hospitals have as much influence on practice patterns, (2) that as trainees at a particular academic medical school progress through training their propensity to order tests does not converge, and (3) among cardiologists the place of training has no discernible influence on a particular technology upon reaching independent practice. This evidence casts doubt on the ‘schools of thought’ hypothesis in medicine. Howard and Hockenberry test for inertia in physician practice. Accumulated evidence indicates episiotomy is not an appropriate procedure in many births. It is an uncompensated procedure, so its use should be responsive to physician beliefs. The authors show that physicians that have been practicing longer do respond, but not reduce use of the procedure to the levels of physicians who are more recently trained. The authors estimate a structural model that shows that absent inertia episiotomy rates would be 2% lower than they are. Foo, Lee and Fong test for price effects in labor and delivery choices. Using private contract price data for vaginal and cesarean deliveries, the authors show that the average physician price elasticity for cesarean section is 0.08. They show the average hospital price elasticity for cesarean section is 0.20. These findings suggest hospitals are able to act as principals and incent other agents to adopt the favored procedure.