UC Berkeley

This dissertation studies marginal returns to healthcare in a large but under-explored segment of the healthcare sector -- the emergency department (ED). My empirical strategy exploits quasi-random assignment of physicians to coworker teams to generate instruments for case-level inputs based on workplace peer effects. I use time-stamped case-level data on millions of ED visits across New York State from 2005-2013 to infer time-varying coworker groups. In Chapter 1, I find that a physician’s peers are influential in determining her pace of work and the intensity with which she treats each patient. I find robust evidence that physicians in fast-paced team environments ration care on other dimensions (tests and spending). I argue that these peer influences largely represent differential levels of peer pressure that a physician faces when working in different team configurations. Peer effects are estimated to be large in this setting, as they have a variance one quarter to one third as large as physician effects within a hospital.

In the second chapter, I use peer-induced variation in a physician’s intensity of care to estimate impacts on patient outcomes, namely 30-day mortality. Reducing the amount of time and testing that a physician spends on cases leads to increases in mortality among at-risk patients and cases with particularly vague symptoms. Among fast, low-spending physicians, marginal returns to time are high, whereas among slower physicians marginal returns are 0. At first glance, this is strong evidence of diminishing returns to treatment. However, the cross-physician relationship between intensity of care and patient outcomes is flat, suggesting that physicians operate on very different production functions, even within hospitals, and even within a single department of the hospital. Reallocation of time and testing away from slow physicians to fast physicians could produce efficiency gains. I discuss implications for increasingly popular physician-targeted incentives to cut back on wasteful care.