Haste or Waste? Peer Pressure and Productivity in the Emergency Department. (28th August 2020)

• Record Type: Journal Article
• Authors: Silver, David
• Is Part Of: Review of economic studies. Volume 88:Number 3(2021)
• Page Start: 1385
• Page End: 1417
• Publication Date: 2020-08-28
• Subjects: Peer effects -- Productivity -- Health care; I11 -- J24 -- M54; Economics -- Periodicals; 330
• DOI: 10.1093/restud/rdaa054
• Languages: English
• ISSNs: 0034-6527

Abstract

Abstract: Motivated by wide cross-sectional variations in intensity of care that are unrelated to quality of care, researchers and policymakers commonly claim that healthcare providers waste considerable resources, engaging in so-called "flat-of-the-curve" medicine. A key yet elusive prediction of this hypothesis is that providers ought to be able to cut back on care without sacrificing quality. This article examines the effects of a particular form of provider cutbacks—those generated by physicians working in high-pressure peer group environments. Using expansive, time-stamped discharge data from 137 hospital-based emergency departments, I document that physicians systematically alter their pace and intensity of care across frequently shuffled peer groups. Peer groups that induce a physician to work faster also induce her to order fewer tests and spend less money. Contrary to the flat-of-the-curve hypothesis, these cutbacks lead to large reductions in quality of care. This evidence, paired with the fact that slower physicians do not produce better average outcomes, suggests that cross-physician differences in resource utilization reflect substantial differences in physician productivity within a hospital.