Figure 8. Impact of Price Change on Back Pain Treatment.

Notes: These graphs show coefficients from regressions in which the treatment received by each Medicare patient in the back pain cohorts defined in online Appendix D.1 are the dependent variables. The sample is restricted to patients living in counties that satisfy our matching criterion, as described in the text (the results are essentially unchanged when we include the complete cohort defined in online Appendix D.1). The dependent variables are expressed as indicators for having received a given treatment at least once in the year after diagnosis, with the exception of panel E, which is a count of office visits. Panel C is conditional on having some MRI taken during the year following diagnosis; all other columns include the entire cohort. These variables are regressed on reimbursement rate shocks resulting from the consolidation of Medicare's fee schedule areas in 1997, in the county where the patient was first diagnosed, as interacted with indicators for time relative to the payment area consolidation. All specifications control for county fixed effects, state-by-year effects, a set of year dummy variables interacted with an indicator whether the patient resides in a metropolitan area, and indicators for the patient's age, race, gender, and whether or not the individual was eligible for Medicare due to end-stage renal disease. The results are robust to controlling additionally for each patient's health as proxied for by a set of indicators for having the individual comorbidities defined by Elixhauser et al. (1998), as well as having 2 or more, 3 or more, 4 or more, and 6 or more comorbidities. Standard errors are clustered by pre-consolidation payment area.

Sources: Price change: Federal Register, various issues; Medicare claims data: Medicare Research Identifiable Files, 5 percent sample, described in Section IC; county demographics: Ruggles et al. (2010).