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Presented By: Department of Economics

The Productivity of Professions: Evidence from the Emergency Department

Yiqun Chen, University of Illinois Chicago

The Productivity of Professions: Evidence from the Emergency Department The Productivity of Professions: Evidence from the Emergency Department
The Productivity of Professions: Evidence from the Emergency Department
Professions play a key role in determining the division of labor and the returns to work. This paper studies the productivity difference between two distinct professions performing overlapping tasks—physicians and nurse practitioners (NPs)—but with stark differences in background, training, and pay. Using data from the Veterans Health Administration and quasi-experimental variation in patient probability of being treated by physicians versus NPs in the emergency department, we find that, compared to physicians, NPs significantly increase patient length of stay (by 11 percent) and medical costs (by 7 percent). Despite higher medical resource use, NPs achieve less favorable patient outcomes: They increase patient 30- day preventable hospitalization rate by 20 percent. We find evidence suggesting channels related to lower human capital among NPs relative to physicians. Our estimates suggest a net increase in medical costs with the use of NPs, even when accounting for NP salaries that are half as much as physician salaries. Despite large productivity differences between professions, we find even larger productivity differences within professions and substantial productivity overlap between professions. We find little overlap in wages between NPs and physicians and, within professions, no significant correlation between productivity and wages.
The Productivity of Professions: Evidence from the Emergency Department The Productivity of Professions: Evidence from the Emergency Department
The Productivity of Professions: Evidence from the Emergency Department

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