Volume 20, Number 2 (Spring) 1985
Yett, Donald E., William Der, Richard L. Ernst, and Joel W. Hay. 1985. "Fee-Screen Reimbursement and Physician Fee Inflation." Journal of Human Resources 20(2):278-291.
Empirical tests of the physician fee-screen inflation hypothesis are applied to insurance claims data for three Blue Shield plans for 1973 to 1978. A framework for physician pricing behavior is developed, which includes a two-period model of inflationary pricing based on fee-screen updating, and some alternatives, including a myopic (single-period) price formulation model. Each of these models is shown to be a testable parameter subset of the general estimation equation. The results generally conform with the fee- screen inflation hypothesis, suggesting that the current Medicare and Blue Shield VCR physician reimbursement systems encourage excessive price increases.
Yett and Ernst are Director and Research Associate, respectively, in the
Human Resources Research Center and Yett is on the Economics faculty at the
University of Southern California, Der is an economist with Fireman's Fund
Insurance Companies, and Hay is an economist with Project HOPE and the
University of Connecticut Health Center.
The research was supported under Contract No. 600-76-0160 by
the Health Care Financing Administration, U.S. Department of Health and Human
Services. Data for this study were provided by the Blue Shield Association, now
a part of the Blue Cross and Blue Shield Association.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X