Provider behaviour and payment reform: Evidence from the withdrawal of public

Professor Jane Hall. 11 June 2021.

This seminar will explore the impact of public subsidy withdrawal on physician behaviour, using general practitioners (GPs) as a case study. We examine whether GPs change their billing practice and/or fees for unaffected services to compensate for potential policy-induced income losses. The results show that compared to unaffected GPs’ billing practice and fees between the pre- and post-policy periods, affected GPs substantially increased medium and long consultation services across patients. They also increased the amount of fees charged and benefits claimed while out-of-pocket costs are largely unaffected. We also show heterogenous effects by exposure of treatment GPs. GPs in the upper quartiles of the income composition for the item removed exhibit larger compensating responses than those in the low quartiles.