This study examines the effects of a public subsidy withdrawal on provider behaviour, focusing on General Practitioners (GPs) in Australia. Specifically, it explores changes in GP billing practices following the removal of an item on the Medicare Benefits Schedule that subsidises joint injections (intra‐articular steroids). Using a difference‐in‐differences approach and linked administrative data, the analysis focuses on GPs who continued prescribing intra‐articular steroids after the policy change. The findings indicate that GPs maintained their service volumes but adjusted their billing strategies to mitigate potential income losses, without increasing patients' out‐of‐pocket costs. These results highlight the adaptive responses of healthcare providers to policy‐induced financial incentives, offering valuable insights for healthcare policy design and economic sustainability.
Abiona et al. (Wed,) studied this question.