Providers, peers and patients. How do physicians' practice environments affect patient outcomes?

We study how physicians' practice environments affect their treatment decisions and quality of care. Using clinical registry data from Sweden, we compare stent choices of cardiologists moving across hospitals over time. To disentangle changes in practice styles attributable to hospital- and peer group-specific factors, we exploit quasi-random variation on cardiologists working together on the same days. We find that migrating cardiologists' stent choices rapidly adapt to their new practice environment after relocation and are equally driven by the hospital and peer environments. In contrast, while decision errors increase, treatment costs and adverse clinical events remain largely unchanged despite the altered practice styles.