Physician performance pay: Experimental evidence

Jeannette Brosig-Koch (), Heike Hennig-Schmidt, Nadja Kairies-Schwarz (), Johanna Kokot and Daniel Wiesen
Additional contact information
Jeannette Brosig-Koch: University of Duisburg-Essen and Health Economics Research Center, Postal: Berliner Platz 6-8, 45127 Essen, Germany
Nadja Kairies-Schwarz: University of Duisburg-Essen and CINCH Essen, Postal: Berliner Platz 68, 45127 Essen, Germany
Daniel Wiesen: University of Cologne, Department of Health Care Management, Postal: Albertus-Magnus-Platz, 50923 Cologne , Germany

No 2020:3, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: We analyze the causal effect of performance pay on physicians’ medical service provision and the quality of care. To address this effect, which is difficult to study in the field we conducted an online experiment with primary care physicians randomly drawn from a representative resident physician sample in Germany. Linking individual physicians’ behavioral data with administrative data enables us to identify how practice charac teristics account for the heterogeneity in individual physicians’ responses to performance incentives, which field data do not allow in general. We find that performance pay reduces underprovision of medical care compared to lump-sum capitation. The effect increases with patients’ severities of ill ness. Already small incentives are effective in enhancing the quality of care. Our results further indicate that physicians in high-profit practices and practicing in cities are most responsive to incentives.

Keywords: pay for performance; behavioral experiment; practice charac teristics (search for similar items in EconPapers)
JEL-codes: C93 I11 (search for similar items in EconPapers)
Pages: 97 pages
Date: 2020-07-09
New Economics Papers: this item is included in nep-exp, nep-hea and nep-hrm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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