Quality in Markets for American Physicians, 1880-1914

Andrews, Brendon Patrick

doi:https://doi.org/10.21985/n2-vcey-ty47

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Quality in Markets for American Physicians, 1880-1914

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Chapter 1: If patients can be persuaded to switch between licensed providers on the basis of authoritative opinions, policy-makers can harness such reporting as a tool to implement incentives for high-quality care. I employ the landmark Flexner Report (1910) medical school evaluations to show that existing consumer beliefs and market-specific capital such as established reputations are primary threats to effective reporting. This historic report did not target specific physicians, but ruthlessly disparaged the quality of American medical schools and recommended the vast majority be closed. Using linked individual-level data from medical directories, I show that doctors who recently entered a local geographic market and who attended poorly-reviewed schools -- not just the recent graduates thereof -- were about three times more likely to relocate or retire after the report's release. Expert recommendations have considerably less impact when providers have established themselves in a local area, and no impact on market exit can be detected. These heterogeneous effects imply that policy-makers are unlikely to dramatically alter consumer demand with expert quality information when trust and reputation are important market features. Chapter 2: Physicians often disagree on controversial medical policies, but data limitations introduced through anonymous voting and coordinated action prevent understanding which doctors dissent. This chapter harnesses a unique episode of medical history for which comprehensive individual-level data on physician support for a collective policy choice exists: whether regular doctors be permitted to consult with homeopaths in the early 1880s state of New York. As homeopaths and similar non-regular physicians represented more than 10% of the market for physician services, the pre-existing national ban imposed by the American Medical Association was a significant restriction on physician agency. Combining information from multiple historical sources, I use a novel dataset of about 5,000 physicians to show that physician eminence, distance to regular & homeopathic competitors, and private economic costs associated with a change in policy are associated with physician voting behavior. While contemporary ethical arguments highlight patient welfare, the results suggest that at least some doctors: (i) value distant patient benefit to a lesser degree than local patient benefit; or (ii) exhibit minimal concern for all patients. Finally, I further demonstrate that prior exposure to homeopathy in the city where a physician attended medical school significantly increases their advocacy for liberalization in consultation policy, suggesting that increased social ties within a professional market can mitigate certain forms of collusive behavior. While it is not possible to determine whether this statistical relationship is causal or driven by selection, I find that prior exposure increases political agitation among physicians favoring the ban, a result consistent with a polarization channel and the updating of physician beliefs. Chapter 3: Recent global experiences have sparked debate on various medical ethics, but economic theory underpinning professional position on these issues is underdeveloped. This chapter provides a general framework for the evolution of medical ethics: ethical policies are partitions of a set of possible physician actions into ethical and unethical subsets, where unethical actions are unavailable (or sufficiently heavily penalized) in future decision-making, and individual doctors' preferences over these policies combined with a political process determine equilibrium restrictions on physician agency. Example models for the ethics Provide Free Care to Physicians and Duty to Treat in a Pandemic demonstrate how shifting economic parameters predict the realized evolution of these rules. I then describe a general model of physician support for liberal versus restrictive ethics and show that altruism with respect to own-patient welfare and concern for all patients have different implications. The latter orientation, which I call Extended Altruism, may sometimes be invoked as justification for restricting physician agency, but this argument rests on heavy assumptions. Even identical physicians might ban actions they would otherwise optimally select for reasons varying from solving commons-type problems in patient welfare to differences in policy costs, but heightened extended altruism makes the former reasoning less credible. Intuition and results extend to institutional change in any organization of agents which are similarly other-oriented.

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