How do doctors behave when some (but not all) of their patients are in managed care?

Most physicians today treat a variety of patients within their practices where a variety of insurance arrangements co-exist. In this paper, we propose several theoretical explanations for physician treatment patterns when the patient population is heterogeneous at the practice level. Data from the 1993-1996 National Ambulatory Medical Care Survey (NAMCS) are used to test how practice level managed care penetration affects treatment intensity. Practice composition has strong effects on treatment. Visit duration appears to be constant across patients within a practice, while medications prescribed appear to be converging as managed care penetration increases.