Returns to physician human capital: evidence from patients randomized to physician teams

J Health Econ. 2010 Dec;29(6):866-82. doi: 10.1016/j.jhealeco.2010.08.004. Epub 2010 Aug 24.


Physicians play a major role in determining the cost and quality of healthcare, yet estimates of these effects can be confounded by patient sorting. This paper considers a natural experiment where nearly 30,000 patients were randomly assigned to clinical teams from one of two academic institutions. One institution is among the top medical schools in the U.S., while the other institution is ranked lower in the distribution. Patients treated by the two programs have similar observable characteristics and have access to a single set of facilities and ancillary staff. Those treated by physicians from the higher ranked institution have 10-25% less expensive stays than patients assigned to the lower ranked institution. Health outcomes are not related to the physician team assignment. Cost differences are most pronounced for serious conditions, and they largely stem from diagnostic-testing rates: the lower ranked program tends to order more tests and takes longer to order them.

Publication types

  • Randomized Controlled Trial

MeSH terms

  • Adolescent
  • Adult
  • Aged
  • Aged, 80 and over
  • Efficiency, Organizational*
  • Empirical Research
  • Female
  • Health Care Costs / statistics & numerical data*
  • Humans
  • Length of Stay
  • Male
  • Middle Aged
  • Patient Care Team* / economics
  • Patient Care Team* / organization & administration
  • Physician's Role*
  • Program Evaluation
  • Quality of Health Care
  • Schools, Medical / classification*
  • Treatment Outcome
  • United States
  • Young Adult