I just finished my internal medicine clerkship a week ago. One of the more frustrating yet interesting things I noticed was how one attending physician would praise me for a suggestion while another would gently chastise me for making the same point. That physician behavior varies from one area to the next is well known. However, the kind of variation I experienced - within area variation is less well studied. This sort of variation is equally interesting and important for policy. Do physicians in the same area vary in practice styles because of their baseline experiences and subsequent Bayesian updating? Will physicians converge to the same set of practices or beliefs by learning from their peers?
Andrew Epstein and Sean Nicholson attempt to quantify and explain within area variation in an interesting paper forthcoming in the Journal of Health Economics. From their abstract:
Small-area-variation studies have shown that physician treatment styles differ substantially both between and within markets, controlling for patient characteristics. Using a data set containing the universe of deliveries in Florida over a 12-year period with consistent physician identifiers and a rich set of patient characteristics, we examine why treatment styles differ across obstetricians at a point in time, and why styles change over time. We find that the variation in c-section rates across physicians within a market is two to three times greater than the variation between markets. Surprisingly, residency programs explain less than four percent of the variation between physicians in their risk-adjusted c-section rates, even among newly-trained physicians. Although we find evidence that physicians, especially relatively inexperienced ones, learn from their peers, they do not substantially revise their prior beliefs regarding how patients should be treated due to the local exchange of information. Our results indicate that physicians are not likely to converge over time to a community standard; thus, within-market variation in treatment styles is likely to persist.
What is fascinating is that (a) early-career variation in treatment styles cannot be explained by the place and nature of training and (b) that while there is considerable cross talk across attending physicians, doctors are reluctant to change their beliefs. This makes things difficult from a policy standpoint: how do you get physicians on board with new guidelines or encourage local diffusion of best practices when the rate of change is so slow and the variation apparently idiosyncratic?