Healthcare is full of good intentions. It is also full of incentives.
In this episode of the Decode Econ Podcast, we sit down with Beth Munnich, Associate Professor of Economics at the University of Louisville, to discuss her research published in the American Economic Review on physician ownership of outpatient surgery centers.
The question is straightforward:
When doctors own the facilities where they operate, does behavior change?
The answer, as in most markets, comes down to incentives.
Outpatient (ambulatory) surgery centers have expanded rapidly over the past two decades. Advances in medical technology now allow many procedures to be performed safely without overnight hospital stays.
This shift matters for three reasons:
Cost: Outpatient centers typically operate at lower overhead than hospitals.
Access: Patients benefit from shorter stays and quicker turnaround.
Market Structure: Increasingly, physicians are not just providers; they are also the owners.
Ownership changes the economic equation.
We also discuss teaching and advice for students and economists starting their academic journey.
Key Takeaways
Physician ownership changes financial incentives in outpatient surgery markets.
Incentives influence referral patterns and potentially spending.
Healthcare markets are deeply shaped by ownership structure and insurance design.
Rigorous empirical research is essential to move beyond speculation.
Mentorship and persistence are critical in academic careers.
This episode is about how markets respond when incentives change.
And as Beth reminds us, incentives are always the key
Chapters
00:00 Introduction to Decode Econ and Guest Beth Munnich
00:12 Guest introduction and research overview
01:06 Why Beth Munnich was drawn to healthcare economics
01:35 The rise of outpatient surgery and its implications
03:22 The importance of data and research questions
05:18 Incentives and physician ownership in surgery centers
07:44 Potential outcomes of ownership incentives
08:31 Research findings on ownership and healthcare costs
10:40 Doctor behavior and the principal-agent problem
12:06 Insurance and patient financial incentives
12:38 Research process and data collection challenges
15:41 Long-term research journey and data acquisition
20:46 Economic lesson: Always incentives
22:06 Aligning incentives for better patient care
23:22 Beth Munnich’s teaching philosophy and course design
28:33 Target audience and topics of her new course
30:00 Flipping the classroom: Relevance first in economics education
31:35 Favorite subfields: Labor economics and social issues
32:42 Impact of research on teaching and curriculum
33:31 Career advice for students and early professionals
35:44 Path to a PhD and career in economics
38:02 Skills needed in modern economics
39:44 Misconceptions about academic life
41:38 Advice to younger self and career reflections
45:05 Mentorship and networking in academia
45:26 Connecting with Beth Munnich
46:37 Closing remarks and gratitude
resources
Beth Munnich’s website
