Sources of specialist physician fee variation: Evidence from Australian health insurance claims data.

This study explores the variation in specialist physician fees and examines whether the variation can be attributed to patient risk factors, variation between physicians, medical specialties, or other factors. We use health insurance claims data from a large private health insurer in Australia. Although Australia has a publicly funded health system that provides universal health coverage, about 44 % of the population holds private health insurance. Specialist physician fees in the private sector are unregulated; physicians can charge any price they want, subject to market forces. We examine the variation in fees using two price measures: total fees charged and out-of- pocket payments. We follow a two-stage method of removing the influence of patient risk factors by computing risk-adjusted prices at patient-level, and aggregating the adjusted prices over all claims made by each physician to arrive at physician-level average prices. In the second stage, we use variance-component models to analyse the variation in the physician-level average prices. We find that patient risk factors account for a small portion of the variance in fees and out-of-pocket payments. Physician-specific variation accounts for the bulk of the vari- ance. The results underscore the importance of understanding physician characteristics in formulating policy efforts to reduce fee variation.

"It's not a one operation fits all": A qualitative study exploring fee setting and participation in price transparency initiatives amongst medical specialists in the Australian private healthcare sector.

The Australian government, through Medicare, defines the type of medical specialist services it covers and subsidizes, but it does not regulate prices. Specialists in private practice can charge more than the fee listed by Medicare depending on what they feel 'the market will bear'. This can sometimes result in high and unexpected out-of-pocket (OOP) payments for patients. To reduce pricing uncertainty and 'bill shock' faced by consumers, the government introduced a price transparency website in December 2019. It is not clear how effective such a website will be and whether specialists and patients will use it. The aim of this qualitative study was to explore factors influencing how specialists set their fees, and their views on and participation in price transparency initiatives. We conducted 27 semi-structured interviews with surgical specialists. We analysed the data using thematic analysis and responses were mapped to the Theoretical Domains Framework and the Capability, Opportunity, Motivation and Behavior model. We identified several patient, specialist and system-level factors influencing fee setting. Patient-level factors included patient characteristics, circumstance, complexity, and assumptions regarding perceived value of care. Specialist-level factors included perceived experience and skills, ethical considerations, and gendered-behavior. System-level factors included the Australian Medical Association recommended price list, practice costs, and supply and demand factors including perceived competition and practice location. Specialists were opposed to price transparency websites and lacked motivation to participate because of the complexity of fee setting, concerns over unintended consequences, and feelings of frustration they were being singled out. If price transparency websites are to be pursued, specialists' lack of motivation to participate needs to be addressed.

Gender differences in physician decisions to adopt new prescription drugs.

Physician adoption of new technologies is a key issue for population health and the sustainability of the healthcare system. This paper explores gender differences in general practitioners' (GPs) adoption of new oral anticoagulants. We combine detailed individual data on physician and practice style characteristics from the Medicine in Australia: Balancing Employment and Life (MABEL) panel survey of Australian physicians with administrative prescribing data from the Australian Pharmaceutical Benefits Scheme (PBS) and the Medicare Benefits Schedule (MBS) for the period January 1, 2012 and December 31, 2015. After adjusting for various factors proposed in the literature as drivers of this gender gap, in addition to risk preferences and personality traits, we find a large statistical gender difference in the speed of adoption with men being faster than women in uptake. However, conditional on having prescribed for the first time, female and male GPs differ only slightly in the intensity of use of these new drugs. We show that the gender gap depends on the measure of uptake and discuss possible channels that could be driving the relatively large gender difference that remains in the speed of adoption.

Factors affecting general practitioners' decisions to adopt new prescription drugs - cohort analyses using Australian longitudinal physician survey data.

BACKGROUND: We investigate factors affecting Australian general practitioners' decisions to adopt novel oral anticoagulants (NOACs) for the prevention of stroke/systemic embolism among patients with atrial fibrillation. Australia has a national homogeneous review and coverage system, which enables us to distinguish physician level factors while maintaining system level factors and patient coverage information constant. METHODS: We conduct a cohort analyses by using longitudinal physician survey data from the Medicine in Australia: Balancing Employment and Life panel survey of Australian physicians (MABEL). MABEL data contain rich physician-level information such as age, gender, education, risk preferences, personality, physicians' communications with other medical professionals, and other practice characteristics. Importantly, the survey data were linked, with physician's consent, to actual utilization data from the Australian Pharmaceutical Benefits Scheme and the Medicare Benefits Schedule between January 1, 2012 and December 31, 2015. We measure speed (days until first time prescribing) of adopting NOACs. We estimate a Cox proportional hazard model to estimate factors affecting the adoption speed. RESULTS: Several factors predict earlier adoption of NOACs: being male, more likely to take clinical risk, higher prescribing volume, being a principal or partner in the practice instead of an employee, spending less time in a typical consultation, and practicing in more affluent areas or areas with a higher proportion of older patients. GPs in Queensland are more likely to adopt NOACs and more likely to be extensive early adopters compared to other GPs. Other characteristics including physician personality, family circumstances, their involvement with public hospitals and teaching activities, and the distance between physician practice location to other clinics in the area are not statistically associated with earlier adoption. CONCLUSIONS: Our paper is one of the first to study the relationship between GPs' risk preferences, personality and their decisions to adopt new prescription drugs. Because NOACs are commonly prescribed and considered more cost-effective than their older counterpart, understanding factors affecting physicians' decisions to adopt NOACs has direct policy implications. Our results also highlight that even with universal coverage for prescription drugs, access to new drugs is different among patients, partially because who their doctors are and where they practice.

Parallel trade of pharmaceuticals: The Danish market for statins.

This paper investigates and quantifies the impact of parallel trade in markets for pharmaceuticals. The paper develops a structural model of demand and supply using data on price, sales, and the characteristics of statins in Denmark and simulates outcomes under a complete ban of parallel imports, keeping other regulatory schemes unchanged. There are two sets of key results. The first set focuses on price effects. On average, prices increase more in markets where the molecule has lost patent protection; wholesale prices for both generic and original products increase after competition from parallel importers is removed, but the final price paid by consumers (after deducting reimbursement) increases more for original products than for generics because most changes in wholesale prices are absorbed by the prevailing reimbursement rules. The second set of results reports the effects on market participants. My model takes into consideration consumers' preferences, allowing them to substitute between products. Prohibiting parallel imports induces consumers to substitute towards original products for which they have stronger preferences. In sum, banning parallel imports leads to (a) an increase in variable profits for original producers and a decrease for generic firms, (b) an increase in governmental health-care expenditures, and (c) a decrease in the welfare of Danish patients and firms.

Regulation of pharmaceutical prices: evidence from a reference price reform in Denmark.

Reference price systems for prescription drugs constitute widely adopted cost containment tools. Under these regimes, patients co-pay a fraction of the difference between a drug's pharmacy retail price and a reference price that is set by the government. Reference prices are either externally (based on drug prices in other countries) or internally (based on domestic drug prices) determined. We study the effects of a change from external to internal reference pricing in Denmark in 2005. We find that the reform led to substantial reductions in retail prices, reference prices and patient co-payments as well as to sizable decreases in overall producer revenues and health care expenditures. The reform induced consumers to substitute away from branded drugs for which we estimate strong preferences. The increase in consumer welfare due to the reform therefore depends on whether or not we take perceived quality differences into account in its calculation.