Incentivizing Physicians’ Diagnostic Effort and Test with Moral Hazard and Adverse Selection

David Bardey, Philippe De Donder and Marie-Louise Leroux

CIRANO Working Papers from CIRANO

Abstract: In this paper, the authors study the following : Doctors with different levels of altruism put in varying amounts of effort to diagnose patients before deciding on tests. The diagnostic effort gives an imperfect idea of the patient's condition, while tests are perfect. Without regulation, doctors don't put in enough diagnostic effort and rely too much on tests. The optimal outcome can be achieved with a payment system that includes: Pay-for-performance (P4P) based on correctly treated patients to encourage proper diagnostic effort. Capitation to ensure the right testing decisions and doctor participation. When doctors' altruism levels cannot be observed, a uniform P4P component encourages more altruistic doctors to make more diagnostic efforts. The capitation part should depend on test costs to motivate the optimal testing decisions. Dans ce cahier, les auteurs étudient les éléments suivants : les médecins avec différents niveaux d'altruisme exercent des efforts variables pour diagnostiquer leurs patients avant de décider de leur faire passer éventuellement un test. L'effort de diagnostic donne une idée imparfaite de l'état du patient, tandis que les tests sont parfaits. Sans régulation, les médecins n’exercent pas assez d'effort de diagnostic et utilisent trop souvent les tests. Le résultat optimal en termes d’effort et de tests peut être obtenu avec un système de paiement qui inclut : Un Paiement à la performance (P4P) basé sur les patients correctement traités pour encourager un effort de diagnostic approprié. Un paiement par capitation pour assurer les bonnes décisions de test et la participation des médecins. Lorsque les niveaux d'altruisme des médecins ne sont pas observables, une partie P4P uniforme encourage les médecins plus altruistes à faire plus d’effort de diagnostic. La capitation doit dépendre des coûts des tests pour motiver les décisions optimales de test.

Keywords: diagnostic risk; personalized medicine; non-responsiveness; capitation payment; pay-for-performance; hidden action and hidden information; risque de diagnostic; médecine personnalisée; non-réponse; paiement par capitation; paiement à la performance; action cachée et information cachée (search for similar items in EconPapers)
JEL-codes: D82 D86 I18 (search for similar items in EconPapers)
Date: 2025-02-03
New Economics Papers: this item is included in nep-cta
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cirano.qc.ca/files/publications/2025s-02.pdf

Related works:
Working Paper: Incentivizing Physicians’ Diagnostic Effort and Test with Moral Hazard and Adverse Selection (2025)
Working Paper: Incentivizing Physicians’ Diagnostic Effort and Test with Moral Hazard and Adverse Selection (2025)
Working Paper: Incentivizing Physicians' Diagnostic Effort and Test with Moral Hazard and Adverse Selection (2024)
Working Paper: Incentivizing Physicians' Diagnostic Effort and Test with Moral Hazard and Adverse Selection (2024)
Working Paper: Incentivizing Physicians' Diagnostic Effort and Test with Moral Hazard and Adverse Selection (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2025s-02

Access Statistics for this paper

More papers in CIRANO Working Papers from CIRANO Contact information at EDIRC.
Bibliographic data for series maintained by Webmaster ().