The Effects of Physician Organization on the Disadoption of Low-Value Services: Evidence from PSA Testing and Mammography

There is limited understanding of how information diffuses across physician networks and what motivates physicians to change behavior. In particular, despite growing interest in reducing overutilization of care, physician “disadoption” of low-value technologies and services has received little empirical attention. The structure of the organization in which a physician practices is a potentially key determinant of physician behavior and, given current policy trends towards new organizational arrangements for physicians, it is increasingly important to understand the dynamics of physician relationships in different settings.

In this paper, I examine the effects of two components of group organization, peer effects and group size, on physician disadoption of low-value services in two settings: prostate cancer screening using the prostate-specific antigen (PSA) test following the 2012 guideline recommending against screening, and mammography for women under 50 following a change in the routine screening recommendation in 2009. Using claims data from 2007-2013 from a major insurer in the Southeast Pennsylvania region, I employ dynamic panel data methods and find that physicians are significantly and positively affected by peers who practice in the same physical location while the behavior of peers with whom they have a relationship (through shared patients) but are not co-located does not have a significant impact. Further, local peer effects appear to peak in medium-sized physician groups of 11-30 physicians. Finally, in the case of PSA provision, positive peer effects in medium-sized groups are stronger following the 2012 recommendation relative to before the release, suggesting that physicians will be more likely to continue testing if their local peers continue testing, even following the recommendation against screening. I do not find any differential effects of peers on mammography screening after relative to before the guideline.

Together, these findings offer insight into how physicians make decisions about what services to provide and suggest that the organizational structure of physician group practices is likely to be a contributing factor to physician disadoption decisions and, ultimately, health care quality and costs.