Physician Practice Style and Healthcare Costs: Evidence from Emergency Departments

Abstract: We examine the impact of emergency department (ED) treatment on future healthcare costs and outcomes. We postulate that ED physicians may affect patient outcomes through acumen in diagnosis and appropriate disposition conditional on diagnosis. We make use of a unique dataset and quasi-experiment on patients who seek treatment at an ED in Montreal, Canada. Physicians there rotate across shifts between simple cases and difficult cases, implying that the assignment of patients will be quasi-random across physicians in an ED. We examine how the initial assignment of ED physician affects the use of resources (what we call physician practice style) during the initial ED visit and the patient outcomes (what we call physician skills). We consider three serious conditions, that present frequently in the ED, angina, appendicitis, and transient ischemic attacks. We find that physician practice style and outcomes (from ED revisits to hospitalizations) vary across ED physicians practicing in the same ED. We also find a strong correlation of physician practice style across the three illness categories. Similarly, we find that physician skills correlate positively across outcomes and (weakly) across illness categories. Our results also suggest that physicians associated with costly practice styles are not associated with better outcomes. Finally, our results suggest that differences in outcomes when treating patients who may be suffering from angina or TIA are driven by diagnostic ability.