This is the first study that assesses the relationship between psychiatrists' income and managed care. We use new data from the American Psychiatric Association to look for partial correlations between income and the percent of practitioner's patients covered under a managed care plan. The 1998 National Survey of Psychiatric Practice is a unique data set which combines responses to a nationally representative survey of the structure of psychiatrists' practices with their income. Using a standard human capital model, we regress log income on log hours, standard demographic variables, the percent of patients in managed care, and controls for the source of payment, type of practice, and environmental characteristics of the market for mental health. Our findings suggest that psychiatrists' income is affected by the percent of their patients who have managed care plans. A change of one standard deviation in the percent of patients covered under managed care (31%) is associated with a 10.5% decrease in psychiatrist's income. Our model fits the data well, and explains 27%of the variation in income. The results are nonlinear, with an amelioration of the ceterus parabus reduction in income when the percent of patients in managed care is small, and a flatter gradient for the penalty after the 30% mark. Demographic differences in income reduction are mixed. Women with patients in managed care programs seem more affected than are men. Differences between ages can be sizable, but are never statistically significant, and differences between race are neither sizable nor significant.
Learning Objectives: After this session, the participant will be able to: 1) Evaluate the empirical evidence relating managed care penetration with psychiatrists' income 2) Describe the major identifiable determinants of phychiatrists' income
Keywords: Managed Care, Economic Analysis
Presenting author's disclosure statement:
Organization/institution whose products or services will be discussed: None
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.