The Impact of Changes in a Physician Fee Schedule on Medical Expenditures, Fees, and Volume of Services: Evidence from a National Fee Schedule Reform in Australia

We examine the impact of changes to a national physician fee schedule on total medical expenditures, the volume of services, and fees charged. In our context, changes to the fee schedule were designed to promote value-based health care, and so included different types of changes to subsidised medical services, including changes to fees. Using claims data from a sample of doctors linked to a physician survey, we use difference-in-difference methods with a staggered adoption design to compare medical services which were affected with those which were not. We show that medical expenditures and the volume of affected services fell, though there is uncertainty about the magnitude of the fall. For GPs, we find evidence of increases in expenditures and fees and an increase in fees for some services provided by specialists.