Do Treatment Decisions Depend on Physicians` Financial Incentives?

Kurt Brekke (), Tor Helge Holmäs (), Karin Monstad () and Odd Rune Straume
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Tor Helge Holmäs: Uni Rokkan Centre; and Health Economics Bergen
Karin Monstad: Uni Rokkan Centre; and Health Economics Bergen

No 7/2015, NIPE Working Papers from NIPE - Universidade do Minho

Abstract: We study whether and how physicians respond to nancial incentives, making use of detailed register data on the health-care services provided to patients by general practitioners (GPs) in Norway over a six-year period (2006-11). To identify GPs' treatment responses, we exploit that specialisation in general medicine entitles the GPs to a higher consultation fee, implying a change in total and relative fee payments. To control for demand and supply factors related to becoming a specialist, we estimate a GP fixed effect model focusing on anarrow time window around the date of specialist certi cation. Our results show a sharp response by the GPs immediately after obtaining specialist certi fication and thus a higher consultation fee: the number of visits increase, while the treatment intensity (prolonged consultations, lab tests, medical procedures) decline. These fi ndings are consistent with theory model where (partly) profit motivated GPs face excess demand and income effects are sufficiently small. Finally, we find no evidence for adverse health effects (measured by emergency care centre visits) on patients due to the change in GPs' treatment behaviour after becoming a specialist.

Keywords: General Practitioners; Fee-for-service; Profit-motivation (search for similar items in EconPapers)
JEL-codes: H42 H51 I11 I18 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-hea and nep-hrm
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Related works:
Journal Article: Do treatment decisions depend on physicians' financial incentives? (2017)
Working Paper: Do Treatment Decisions Depend on Physicians’ Financial Incentives? (2015)
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