A new look at physicians’ responses to financial incentives: Quality of care, practice characteristics, and motivations

Jeannette Brosig-Koch, Heike Hennig-Schmidt, Nadja Kairies-Schwarz, Johanna Kokot and Daniel Wiesen

Journal of Health Economics, 2024, vol. 94, issue C

Abstract: There is considerable controversy about what causes (in)effectiveness of physician performance pay in improving the quality of care. Using a behavioral experiment with German primary-care physicians, we study the incentive effect of performance pay on service provision and quality of care. To explore whether variations in quality are based on the incentive scheme and the interplay with physicians’ real-world profit orientation and patient-regarding motivations, we link administrative data on practice characteristics and survey data on physicians’ attitudes with experimental data. We find that, under performance pay, quality increases by about 7pp compared to baseline capitation. While the effect increases with the severity of illness, the bonus level does not significantly affect the quality of care. Data linkage indicates that primary-care physicians in high-profit practices provide a lower quality of care. Physicians’ other-regarding motivations and attitudes are significant drivers of high treatment quality.

Keywords: Pay for performance; Behavioral experiment; Data linkage; Practice characteristics; Physician characteristics; Attitudes; Motivations (search for similar items in EconPapers)
JEL-codes: C93 I11 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:94:y:2024:i:c:s0167629624000079

DOI: 10.1016/j.jhealeco.2024.102862

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