HCA 6013 Dynamics of Healthcare Markets
Module Six: Competition in the Supply of Healthcare
Instructions: Answer the following questions fully. Provide citations where appropriate.
This document contains all answers in one file.
, 1) Factors Influencing a Physician’s Ordering of Services
Physicians’ decisions to order services (tests, imaging, procedures, referrals, medications)
are influenced by a combination of clinical, economic, behavioral, and organizational
factors. Key influences include:
Clinical uncertainty and diagnostic need: When clinical presentation is ambiguous,
physicians may order more diagnostic tests to reduce uncertainty and confirm or exclude
diagnoses.
Financial incentives and payment systems: Fee-for-service (FFS) payment models
financially reward higher volumes of billable services, which can encourage greater
ordering. Conversely, capitation or bundled payments can disincentivize unnecessary
services.
Defensive medicine and malpractice concerns: Fear of malpractice suits leads some
clinicians to order extra tests or consults to document thoroughness and reduce legal risk.
Patient expectations and demand: Patients often request tests or imaging; physicians may
acquiesce to preserve satisfaction and adherence.
Practice culture and peer norms: Local norms, specialist availability, and practice patterns
influence ordering behaviors; physicians adapt to local standards of care.
Technology availability and supply-sensitive care: The local supply of imaging machines,
laboratories, and specialists leads to higher utilization where capacity exists (supply-
induced demand).
Clinical guidelines and decision support: Presence of evidence-based guidelines,
integrated clinical decision support (CDS), and prior authorization can standardize and
reduce unnecessary ordering.
Time pressures and convenience: Limited time with patients may prompt ordering tests as
a substitute for longer diagnostic conversations or follow-up arrangements.
Incentives from industry and marketing: Pharmaceutical and device marketing can subtly
influence prescribing and test-ordering behaviors.
Regulatory and payer policies: Prior authorization requirements, utilization management
policies, and coverage decisions can limit or steer ordering patterns.
Module Six: Competition in the Supply of Healthcare
Instructions: Answer the following questions fully. Provide citations where appropriate.
This document contains all answers in one file.
, 1) Factors Influencing a Physician’s Ordering of Services
Physicians’ decisions to order services (tests, imaging, procedures, referrals, medications)
are influenced by a combination of clinical, economic, behavioral, and organizational
factors. Key influences include:
Clinical uncertainty and diagnostic need: When clinical presentation is ambiguous,
physicians may order more diagnostic tests to reduce uncertainty and confirm or exclude
diagnoses.
Financial incentives and payment systems: Fee-for-service (FFS) payment models
financially reward higher volumes of billable services, which can encourage greater
ordering. Conversely, capitation or bundled payments can disincentivize unnecessary
services.
Defensive medicine and malpractice concerns: Fear of malpractice suits leads some
clinicians to order extra tests or consults to document thoroughness and reduce legal risk.
Patient expectations and demand: Patients often request tests or imaging; physicians may
acquiesce to preserve satisfaction and adherence.
Practice culture and peer norms: Local norms, specialist availability, and practice patterns
influence ordering behaviors; physicians adapt to local standards of care.
Technology availability and supply-sensitive care: The local supply of imaging machines,
laboratories, and specialists leads to higher utilization where capacity exists (supply-
induced demand).
Clinical guidelines and decision support: Presence of evidence-based guidelines,
integrated clinical decision support (CDS), and prior authorization can standardize and
reduce unnecessary ordering.
Time pressures and convenience: Limited time with patients may prompt ordering tests as
a substitute for longer diagnostic conversations or follow-up arrangements.
Incentives from industry and marketing: Pharmaceutical and device marketing can subtly
influence prescribing and test-ordering behaviors.
Regulatory and payer policies: Prior authorization requirements, utilization management
policies, and coverage decisions can limit or steer ordering patterns.
