Department of Economics
University of Toronto
150 St. George Street
NBER Working Papers and Publications
|March 2015||Physician Incentives and the Rise in C-sections: Evidence from Canada|
with Sara Allin, Michael Baker, Mark Stabile: w21022
More than one in four births are delivered by Cesarean section across the OECD where fee-for-service remuneration schemes generally compensate C-sections more generously than vaginal deliveries. In this paper, we exploit unique features of the Canadian health care system to investigate if physicians respond to financial incentives in obstetric care. Previous studies have investigated physicians' behavioral response to incentives using data from institutional contexts in which they can sort across remuneration schemes and patient types. The single payer and universal coverage nature of Medicare in Canada mitigates the threat that our estimates are contaminated by such a selection bias. Using administrative data from nearly five million hospital records, we find that doubling the compensatio...