Moral Hazard and Less Invasive Medical Treatment for Coronary Artery Disease: The Case of Cigarette Smoking

Jesse Margolis, Jason Hockenberry, Michael Grossman, Shin-Yi Chou

NBER Working Paper No. 20373
Issued in August 2014
NBER Program(s):Health Economics

Over the last several decades, numerous medical studies have compared the effectiveness of two common procedures for Coronary Artery Disease: Percutaneous Coronary Intervention (PCI) and Coronary Artery Bypass Graft (CABG). Most evidence indicates that CABG - the more invasive procedure - leads to superior long term outcomes for otherwise similar patients, though there is little consensus as to why. In this article, we propose a novel explanation: patient offsetting behavior. We hypothesize that patients who undergo the more invasive procedure, CABG, are more likely to improve their behavior - eating, exercise, smoking, and drinking - in a way that increases longevity. To test our hypothesis, we use Medicare records linked to the National Health Interview Survey to study one such behavior: smoking. We find that CABG patients are 12 percentage points more likely to quit smoking in the one-year period immediately surrounding their procedure than PCI patients, a result that is robust to numerous alternative specifications.

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Document Object Identifier (DOI): 10.3386/w20373

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