Doctors as Gatekeepers in Social Insurance: Evidence from Workers’ Compensation Insurance

In many social insurance programs, eligibility for disability benefits depends on medical evaluations performed by doctors. This paper studies the role of doctors as gatekeepers in workers’ compensation insurance and quantifies the discretion they exercise in medical evaluations of physical impairments. Using comprehensive administrative data and random assignment of doctors to independent medical examinations, we identify substantial systematic variation in evaluation decisions across doctors and estimate its consequences for claimant outcomes and program costs. Being evaluated by a one standard-deviation more generous doctor increases subsequent cash benefits by about 20%, compensated time out of work by 20%, injury-related medical spending by 12%, and total workers’ compensation costs by 17%. Doctor effects vary meaningfully with observable characteristics. We further examine how discretion interacts with institutional rules and economic incentives when claimants can select their own doctors. More generous doctors attract more claimants, while insurers are more likely to dispute their evaluations, indicating that both parties influence the allocation of gatekeepers in line with their incentives and thereby shape the distribution of program benefits. Finally, we show that alternative evaluator assignment rules can substantially affect claimant outcomes and program costs, underscoring the importance of policies governing the allocation and oversight of gatekeepers in the design of workers’ compensation and other disability-related social insurance programs.