Physician Beliefs Drive Health Care Spending

It's not patients, but physicians who cause the variation in Medicare expenditures by region, according to a National Bureau of Economic Research study.

"Differences in physician beliefs about the effectiveness of treatments are the primary source of variation in Medicare expenditures," say the researchers. "As much as 36 percent of end-of-life Medicare expenditures, and 17 percent of overall Medicare expenditures, are explained by physician beliefs that cannot be justified either by patient preferences or by clinical effectiveness."

Source: National Bureau of Economic Research, Physician Beliefs and Patient Preferences: A New Look at Regional Variation in Health Care Spending, NBER Working Paper 19320