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Johnson and Rehavi found that non-physician mothers who gave birth in non-HMO-owned hospitals were indeed more likely to have C-sections than non-physician mothers with similar characteristics who gave birth in HMO-owned hospitals. That supports the claim that doctors' financial incentives play at least some role in their treatment of uninformed patients. But there's even stronger evidence for the physician-induced demand hypothesis: it turns out that physician-mothers were about equally likely to have C-sections regardless of whether they gave birth at an HMO-owned hospital. In other words, financial incentives don't seem to affect the choice of treatment for informed patients.

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