Discontinuous system of allowances: The response of prosocial health-care professionals

Helena M. Hernández-Pizarro, Catia Nicodemo and Guillem López Casasnovas

Journal of Public Economics, 2020, vol. 190, issue C

Abstract: This paper examines the unintended strategic effects of non-linear incentives in public policies. A system of health care subsidies structured into discrete intervals may lead to strategic behaviour. We provide new evidence on this issue, focusing on a case where strategic actions are taken by healthcare providers (HCPs). We show that HCPs adjust the score of claimants in long-term care needs assessments, allowing claimants to access higher levels of care benefits. This adjustment does not bring any pecuniary gain for HCPs. In a quasi-natural experimental setting –the implementation of Spanish long-term care (LTC)– we show that the distribution of the claimants' needs includes kinks around the thresholds set for the LTC system. These kinks reveal that healthcare providers adopt prosocial behaviour, helping claimants jump to a higher level of benefits without discriminating by health status, residence, or gender. By developing a new non-parametric estimator, we prove that these adjustments increase the public LTC spending, which is equivalent to moving thresholds to the left. The additional cost per adjusted claimant per annum is approximately 1000 euro on average. Finally, we also explore empirically whether the number of thresholds could affect such behaviour, by exploiting a reform that eliminated some thresholds. We find that the lower number of thresholds is associated with an increase of adjustment around the thresholds that remain.

Keywords: Long-term care; Non-linear incentives; Needs assessment; Prosocial behaviour (search for similar items in EconPapers)
JEL-codes: D61 D63 D82 H51 I38 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272720301122
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Discontinuous System of Allowances: The Response of Prosocial Health-Care Professionals (2020)
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:eee:pubeco:v:190:y:2020:i:c:s0047272720301122

DOI: 10.1016/j.jpubeco.2020.104248

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().